PRISTINA -- Frustration is growing among Kosovo's Western backers, a senior U.S. diplomat told RFE/RL's Balkan Service, because of Prime Minister Albin Kurti's refusal to reverse a ban on the use of Serbia's dinar in the country's ethnic-Serb dominated north.
The restriction, which bans financial institutions from using any currency other than the euro for local transactions, took effect on February 1, ratcheting up tensions between Serbia and Kosovo in the face of efforts by Washington and Brussels to get the dialogue between Pristina and Belgrade back on track.
"What is happening now with the decision of the Central Bank [of Kosovo] is that there are many [Kosovar] citizens who are feeling a lot of pain, people who are not getting their modest salaries," Deputy Assistant Secretary of State and U.S. envoy for the Western Balkans U.S. Gabriel Escobar told RFE/RL after meeting with Kurti on March 15 at the end of a three-day visit.
Kosovo is not a member of the European Union or its common currency area, the eurozone, but it unilaterally adopted the euro in 2002 to help bring monetary stability and to simplify and reduce transaction costs inside and outside the country.
SEE ALSO: Ban On Serbian Dinar Has Created Challenges In U.S. Relations With Kosovo, Envoy SaysBelgrade, which has never acknowledged its former province'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 told RFE/RL during the interview in Pristina that Kurti had told him the decision to reverse the ban was not his to make.
"The prime minister said that it was the decision of an independent institution (the central bank)," Escobar said.
"We are talking about [people] with disabilities, pensioners, students -- the most vulnerable people -- and this decision has affected them very deeply," he said.
The central bank argues that the change doesn’t stop anyone from accepting money from any country, it just means the money is converted into euros. Still, it adds a layer of cost and complication to the daily lives of ethnic Serbs still tied to the dinar.
The U.S. diplomat, however, said the dinar issue "will be a topic of discussion in Brussels" on March 19 when the chief negotiators of Kosovo and Serbia are scheduled to meet, and that he still hopes a solution will be reached.
Escobar decried what he called the lack of communication between Kurti's government and the United States, one of Kosovo's key Western allies.
"We will always be a close friend of Kosovo, but that doesn't mean we're not going to have differences with individuals and with individual governments. And I think that's where we are right now, we are entering a period of a lack of communication. And we, at least from the American side, are doing everything that we can to repair that relationship," he said.
Referring to Kurti's ruling party, Escobar admitted there is a "lot of frustration with this Vetevendosje government not just in Washington, but in Brussels, Rome, Berlin, and Paris as well."
Escobar has previously warned that the ban on the circulation of the Serbian dinar impacts the most vulnerable people in the Serb community.
The decision "has caused some real hardship for some of the citizens of this country," he said.
Separately, the EU has warned both Kosovo and Serbia that refusal to compromise on the issue jeopardizes both countries' chances of joining the 27-member bloc.
Diplomatic sources have told RFE/RL the March 19 meeting in Brussels 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.