Kosovo on the verge of losing 60 million from the Growth Plan

Kosovo risks losing 60 million euros in June, and up to 250 million euros by the end of the year, funds from the European Union's Growth Plan. The consequence is due to delays in the implementation of reforms and the dysfunction of institutions. At the meeting of the European Union-Kosovo Monitoring Committee for the Reform and Growth Instrument, the deadlines of June 30, July 15 and the end of the year were mentioned as key dates for fulfilling obligations, on which hundreds of millions of euros depend for Kosovo.

A meeting of the European Union-Kosovo Monitoring Committee for the Reform and Growth Instrument was held with warnings of losses of hundreds of millions of euros from the growth plan. 

Jeton Zulfaj, national coordinator for the Instrument for Reform and Economic Growth (IRRrE), stated that there is a risk of losing 60 million euros by the end of the month.

"Unfortunately, the blockade in the Assembly continued this year, further delaying the necessary reforms, which are mainly laws that must be passed in the Assembly. As a result of this blockade, at the end of this month, that is, in June, 9 steps in the amount of approximately 60 million euros from the Growth Plan may already be at risk," said Zulfaj.

Until June 30, when the deadline to complete these steps, including the Energy Law, is, Kosovo cannot have a functional assembly and government.

According to the Central Election Commission's plan, the deadline for certifying the results of the June 7 election is July 6, if there are no complaints.

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But another 90 million euros are at risk if steps are not taken by mid-July, according to Jiri Plecity, Head of Unit in the European Commission's Directorate-General for Enlargement and Eastern Neighbourhood.

"Let me remind you that the next reporting deadline is July 15 of this year and this will be the first opportunity for Kosovo to request payments from this instrument. This is also a critical deadline, because it marks the end of the grace period for the 13 steps that were originally due in June 2025. These steps, in total, correspond to a total value of 91 million euros. So, this means that up to this amount is at risk if these steps are not implemented on time," Plecity said.

He emphasized that another grace period for 27 other reform steps runs until the end of the year, and their failure to implement them could cost Kosovo over 100 million euros. 

"And I would also like to emphasize that perhaps even more importantly, the end of this year marks the end of the grace period for another 27 reform steps with a total value of 166 million euros. There is still time until the end of this year, so I would encourage you and your colleagues to remember this and to redouble their efforts on these 27 reform steps as well," Plecity said.

Zulfaj emphasized that within the framework of the implementation of the growth plan, meetings will be held every three months between the Prime Minister and ministers to review the implementation of reforms.

He also announced that all ministers responsible for implementing the growth plan have appointed an advisor responsible for the reform agenda.

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Previously, he said that Kosovo was among the first countries in the region to successfully conclude negotiations with the European Union on the reform agenda, but that the process of ratifying the agreements was delayed due to blockades in the Assembly.

"The government approved the reform agenda without delay on October 9, 2024. Then the blockades that go to the Assembly delayed ratification, thus delaying the implementation of the reforms, delaying this meeting which certainly should have been held earlier," he said.

Zulfaj recalled that the Parliament ratified the agreements for the instrument and the loan on February 13 of this year, while the first pre-financing funds were received in April.

"On February 13 of this year, the Parliament ratified the two agreements of this instrument, the agreement on the instrument and the loan agreement. Immediately after that, on March 19 of this year, the Government approved the decision on the system for the implementation of this instrument. Then, on April 16, we began to receive the first pre-financing funds from the Growth Plan in the amount of 61.8 million euros," he added.

According to Zulfaj, the current blockade in the Assembly prevents the adoption of reforms that are mainly related to legislation and could have financial consequences for the country.

The Growth Plan for the Western Balkans is a European Commission initiative that aims to bring the region closer to the European Union before full membership, by promoting economic growth and reforms.

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The plan was presented in 2023 and is supported by a fund of 6 billion euros for the period 2024-2027. Of this, Kosovo was expected to benefit from 900 million euros.

The European Commission has warned several times since the end of 2024 that internal political problems in the countries of the region could also have consequences for the use of funds from the Growth Plan.