NORTH MITROVICA — A brand-new post office brightens the main street of this small city in northern Kosovo. To its left, a branch of the Eurosig insurance company has just opened its doors. Further down, there’s a new fast-food spot, a café from the Missini chain and an “everything-for-one-euro store.”
Though North Mitrovica, the “capital” of the Kosovo Serbs, is hardly renowned for its economic dynamism, it has been experiencing unusual activity in recent months.
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“Anything in euros is new around here,” says Aleksandar Sljuka, a member of the NGO New Social Initiative, with a smile.
In the Serbian part of this industrial town in northern Kosovo, the dinar used to be the only currency. But daily life has been turned upside down since Prime Minister Albin Kurti came to power in 2021.
Known for his unwavering stance, the Albanian nationalist leader, who is seeking reelection on Feb. 9, has one obsession: to re-establish the rule of law and the euro, Kosovo’s official currency since 2002, in the parts of his territory illegally controlled by Serbia.
If you don’t like it, you can leave
Almost 17 years after the small Balkan state’s declaration of independence, Serbia still refuses to recognize its neighbor and continues to exert de facto control over a small portion of Kosovar territory, including North Mitrovica and four neighboring municipalities. Pensions, social benefits, banks, identity documents, telecommunications, schools, hospitals and even currency — for the roughly 40,000 Serbs living here, every aspect of daily life operates on Belgrade’s terms.
Neither part of Kosovo nor Serbia, the region has long existed in a precarious gray zone, fertile ground for clientelism, trafficking and mafia networks — at least until recently.
Kosovo’s prime minister has been steadily chipping away at Serbian influence.
“For the past two years, Kurti has done everything to show that he has ‘conquered’ the North, particularly North Mitrovica, the only urban area in Kosovo for Serbs. Living a normal life here is no longer possible. The message is clear: ‘If you don’t like it, you can leave,’” says Ana-Maria Ivanovic, founder of the local media outlet Alternativna.
Elected in a landslide four years ago and backed by Kosovo’s overwhelming Albanian majority (over 90% of the population), the prime minister has been steadily chipping away at Serbian influence — one bold move at a time. But his hardline approach risks fueling a dangerous cycle of escalation.
Heavily armed commando
In 2022, the end of tolerance for “RKS” license plates, a relic from former President Slobodan Milosevic’s Serbia, and the turbulent installation of Albanian mayors, elected after a boycott by Serbs (with only 3.75% voter turnout), sparked the first rifts. As a form of protest, Serb civil servants in the only public institutions integrated into the Kosovar system (police, judicial functions) all resigned en masse.
That was followed by the removal of identity documents and a ban on importing goods from Serbia. The region has slipped into violence multiple times, reviving the specter of the last Yugoslav war and ethnic conflicts. At the height of tensions in late December 2022, the Serbian army went on high alert at the border, ready to intervene. About 30 NATO soldiers, stationed in the region since 1999, were also injured after a protest in May 2023.
On Sept. 24, 2023, a heavily armed Serbian commando attempted to take control of the territory, resulting in the death of a Kosovar police officer. One of the perpetrators, now on the run in Serbia, is a key member of the Serbian List, loyal to Serbian President Aleksandar Vucic, who has been buying votes and monopolizing political representation for 12 years.
The dinar remains tolerated
Faced with this “escalation,” which further shatters hopes for reconciliation, Western partners have issued threats and warnings, eventually hitting Kosovo in the pocket by freezing several tens of millions of euros in EU pre-accession funds. But nothing has shaken Kurti’s determination, whose political commitment against Serbia dates back to the 1990s.
“These territories have been lawless zones for years, a no man’s land where no one paid for electricity for twenty-four years and where many illegal activities thrived. Kurti is enforcing Kosovo’s 2008 declaration of independence. It’s basic,” said an advisor to the prime minister.
To further consolidate sovereignty and perhaps fuel his electoral campaign, the leader recently started using another lever: currency. After the breakup of Yugoslavia and the war between the UCK paramilitaries and Yugoslav forces, Kosovo unilaterally adopted the deutsche mark and then the euro in 2002. Yet the use of the dinar remained tolerated in the various Serbian enclaves in the country.
Ethnic cleansing
That was until Feb. 1, 2024: Just a year ago, the Central Bank of Kosovo announced it would ban the use of any currency other than the euro for all cash transactions, in accordance with its Constitution. Initially delayed by three months, the decision, which targets the dinar without directly mentioning it, has multiple consequences. One visible impact is the police tape blocking the entrance to the Postal Savings Bank, located on the heights of Mitrovica-North.
In this gloomy building, the Serbian government had been distributing salaries, pensions, disability benefits, family allowances and social welfare until recently. Funded by Belgrade, which allocates 120 million euros annually from its budget, millions of euros crossed the border every month to supply these dozens of “parallel institutions,” all fully connected to the Serbian system.
Banks, post offices: In recent months, the Kosovar police have carried out numerous operations to empty and shut down these financial institutions operating in each of the Serbian enclaves. Vucic, who had warned that he would use “all available means” to fight this ban, ultimately proved powerless. For the tens of thousands of Serbs in Kosovo, the vast majority of whom rely on public sector jobs and benefits, they had to improvise overnight.
An economy in decline
“To withdraw money, I now have to drive more than 30 kilometers to Merdare, the only open border crossing with Serbia. For me, it’s still manageable, but what about those who can’t afford gas or are too vulnerable to travel? This is a violation of our human rights,” says Ana Murgaric, a 45-year-old translator.
In practical terms, the use of the dinar is not outright banned in the territory. In Mitrovica-North, euros are accepted, but most transactions, price displays and receipts are still in the Serbian currency. The few savers with Kosovar bank accounts can keep their dinars there. The real issue is transferring money from Serbia to the Serbian population.
Brussels, Belgrade and Pristina have been unable to reach a compromise.
Cash funding routes are now severely restricted, and bank transfers must be sent to institutions whose addresses state “Republic of Kosovo,” which would mean Belgrade de facto recognizing the independence of its former province.
To access their money, Kosovo Serbs are forced to travel dozens of kilometers across the border. Despite seven rounds of negotiations, Brussels, Belgrade and Pristina have been unable to reach a compromise, bogged down in this currency “war.” As a result, the already fragile economy of Kosovo’s Serb community — poorly integrated with the rest of the country — continues to decline.
Keep their dinars in Serbia
Ljiljana Drazevic’s small shop is packed to the brim. Stacked in cabinets, hanging from racks and hangers, kilos of woolen clothing pile up in this colorful store in North Mitrovica. But despite the vibrant display of scarves, shawls, and hats, the owner finds little reason to smile.
“Since they implemented these measures, my sales have dropped by 70%, and the store is overflowing. But I keep going to show them that we won’t give in,” explains the 60-year-old, the last person in Kosovo to master the art of the razboj, the traditional Serbian loom.
In North Mitrovica, Ljiljana Drazevic is one of the few still managing to keep her business running. The seven shops run by women that she had helped launch through her NGO have all closed. “People keep their dinars in Serbia and spend them there,” sighs the seamstress. According to her, not a week goes by without another store shutting down.
According to Serbian legal experts, the directive from the Central Bank of Kosovo violates fundamental human rights such as the right to property, the right to work, the right to practice a profession, and the right to social and healthcare protection.
Freeing the citizens from crime
Deputy Interior Minister Bardhyl Dobra strongly disagrees. “After closing all the illegal routes that led from northern Kosovo to Serbia, which were used for smuggling, we are freeing citizens from the criminal structures that ruled the north. The region had become a breeding ground for all sorts of mafia activities.”
The authorities believe they have provided alternatives: dozens of withdrawal points (in euros) are available in Mitrovica. To replace the Postal Savings Bank, a brand new Kosovar post office has opened on the main street of Mitrovica-North. Boycotted by the population, however, the establishment remains desperately empty, as do the small number of Albanian-run businesses that have opened in recent months.
The ban on the dinar has solved nothing.
Convinced that they are being pushed out of the country, many Kosovo Serbs denounce “systemic discrimination of Kosovo Serbs, whether it be in economic, cultural or in terms of human rights,” says Stefan Veljkovic, vice-president of the newly created Serbian Democracy party, which aims to defend the interests of the Serbian community.
For Visar Ymeri, a former ally of Kurti and now director of the think tank Musine Kokalari, “The Kosovar government is addressing a political issue with the rule of law, which has never worked. The ban on the dinar has solved nothing, nor has it fundamentally changed the situation on the ground. It has only made the lives of ordinary people more difficult.“
