PRISTINA -- A senior U.S. diplomat on March 14 said a regulation on the use of the Serbian dinar in northern Kosovo has caused problems for some citizens in the region and challenges for the U.S.-Kosovo relationship.
Deputy Assistant Secretary of State Gabriel Escobar said Kosovo’s controversial decision on the dinar is “an issue that we need to address immediately.”
Escobar, speaking to reporters after a meeting with Prime Minister Albin Kurti, said that the United States remains the most reliable and committed partner of Kosovo, but the dinar issue has presented challenges in the relationship.
"To be honest, these challenges are due to the current treatment of the Serbian minority. It is unfortunate that we have to go through this situation," he said.
Escobar, who is on the second day of a visit aimed at restarting normalization talks between Kosovo and Serbia, told reporters that he had a good and open conversation with Kurti, who he said promised to review some of his proposals related to the issue of prohibiting the use of the Serbian dinar.
Even though Kosovo is not a member of the European Union or its currency zone, it unilaterally adopted the euro in 2002 to help bring monetary stability and to simplify and reduce transaction costs inside and outside the country.
Belgrade, which has never acknowledged Kosovo's 2008 declaration of independence, still pays many ethnic Serbs at institutions in Serb-dominated parts of Kosovo in dinars. Many also hold their pensions and get child allowances in dinars.
Escobar said no one can remain unaffected to hear how the most vulnerable people in the Serb community are being affected by the new dinar regulation. The decision “has caused some real hardship for some of the citizens of this country," he said.
"The prime minister accepted this and promised to look at some of the proposals I presented to him today," Escobar said after the nearly two-hour meeting with Kurti.
The restriction, which bans financial institutions from using any currency other than the euro for local transactions, took effect on February 1.
It has also fueled Western concerns about regional tensions escalating as a full-scale war rages in Ukraine, while Washington and Brussels struggle to get the Pristina-Belgrade dialogue back on track.
Brussels has warned both that refusal to compromise jeopardizes both countries’ chances of joining the bloc.
Kurti said that during his meeting with Escobar he expressed readiness to address current issues and informed Escobar of the steps taken to facilitate the implementation of the regulation on the dinar.
"Great to meet with...Escobar. Thanked him for U.S. support and stressed the need to hold Serbia accountable for the Banjska attack,” Kurti said on X, formerly Twitter, referring to a deadly attack on September 24 by an armed group on Kosovar police officers in the village of Banjska in northern Kosovo.
Escobar also said he hoped the Kosovar government would be flexible during a dialogue meeting on March 19 in Brussels.
Diplomatic sources told RFE/RL that the meeting will be at the level of chief negotiators. It is expected to cover the sequencing plan for the implementation of the agreement on the path toward normalization of relations between Kosovo and Serbia among other issues, including the dinar.