Institutional crisis puts more than 100 million euros from the EU at risk, experts warn of consequences for the economy and integration

Institutional deadlock in Kosovo is threatening the implementation of the Reform Agenda and the country’s access to millions of euros in European Union funds. Experts say the continuation of the political crisis could have direct consequences for the economy, investment and the path toward European integration.

Kosovo’s chief negotiator with the EU, Jeton Zulfaj, has announced that the country must implement 61 reforms, while failure to complete them by December 2026 could expose Kosovo to the loss of more than 100 million euros.

Besar Gërgi, a researcher at the Kosovo-based Group for Legal and Political Studies (GLPS), stressed that fulfilling these reforms depends directly on the functioning of the institutions. According to him, some of the measures require approval by the Assembly, while others can be implemented only through decisions taken by a government with a full mandate.

Gërgi warned that Kosovo could lose more than 100 million euros under the Reform Agenda.

He said the first consequence would be financial, while another impact would involve damage to Kosovo’s reputation in the European integration process. According to him, opening negotiations for EU membership requires proof that the country is capable of implementing the laws, regulations and legislation of the European Union. Gërgi described the Reform Agenda as a test in this regard, assessing that the level of implementation so far remains very low.

Even if the institutions became functional within a short period, Gërgi believes the time available to complete all the steps would be extremely limited.

According to him, Kosovo must complete the measures due in December of this year and those due in June, while the measures from the previous two semesters, namely December ’24 and December ’25, have still not been completed. This means that the reform steps from four semesters have accumulated and that the volume of work is exceptionally large.

Gërgi said that, even in the most optimistic scenario, if a government were formed in the middle of next month, around two and a half months would remain to implement all the measures. For this reason, he considers their full completion almost impossible. Nevertheless, if the reform process were treated as a priority by the government and the legislature, Kosovo could achieve a satisfactory level of implementation, around 70 or 80%.

Economist Nagip Skenderi said that the dysfunction of the institutions would affect infrastructure investment, economic growth and the activities of the private sector.

According to Skenderi, the EU funds are intended for infrastructure and development projects. Failure to implement them would also affect the companies engaged in these projects.

Skenderi said that the loss of European funds would harm businesses and employment. He warned that, in addition to EU financing, other important financial resources could also be lost.

He explained that projects financed by the European Union create opportunities for companies, particularly construction firms, as well as for the employment of architects, engineers, consultants and other professional staff. If the funds are not disbursed, these businesses will not have the opportunity to benefit from them.

The economist also warned of consequences for foreign direct investment, the energy sector, employment and the state budget. According to him, a Kosovo seen as incapable of cooperating with the EU could lose credibility among foreign investors, who might delay or cancel their investments or choose other countries in the Balkans and outside the region, where investments are considered safer.

Skenderi added that the energy sector, which is of great importance, would be among the areas affected. In his view, rising costs and the inability to fulfill investors’ energy ambitions could lead to irreversible consequences and major losses.

He said that citizens would feel the most serious consequences, as they are waiting for funds to expand their businesses and adapt them to the European market. This applies particularly to those seeking to be competitive in that market or beyond.

Meanwhile, Skenderi stressed that other Western Balkan states are moving forward in the European integration process, while Kosovo is remaining at the bottom of the list of beneficiaries.

The political crisis of recent months has affected the fulfillment of the planned measures. Of the 13 steps that were supposed to be completed by June 30, seven have been implemented, while six others remain pending. For this reason, 40 million euros have been blocked for Kosovo from the European Fund under the Growth Plan.

Jeton Zulfaj said on the program “Interview of the Week” on July 4 that 61 steps under the Reform Agenda have yet to be completed.

Zulfaj warned that Kosovo risks losing more than 100 million euros by December.

He explained that another 61 steps must be completed by December 31. Only 22 or 27 of them have an extended deadline until December 31. If the measures with this deadline are not fulfilled, the amount that could be lost at the end of December may exceed 100 million euros.

Zulfaj stressed that these funds are intended for infrastructure investments, including electricity, roads, kindergartens, courts, procurement, schools and digitalization. According to him, these are projects that help accelerate reforms, while the absence of the Assembly makes it impossible to approve the necessary laws.

The chief negotiator called on the opposition parties, even if they decide not to provide a quorum for the election of the president and to take the country to elections, not to block the approval of reforms in the Assembly.

Zulfaj said that the reforms are not in the interest of the government or political parties, but of the citizens. According to him, if opposition lawmakers do not want to participate in the quorum for the election of the president and are seeking new elections, they should show responsibility toward the reforms under the Growth Plan, since these measures are linked to the well-being of citizens and infrastructure projects. He said there should always be consensus on reform issues and that responsibility lies with all lawmakers.

Kosovo’s next request for the release of funds is expected to be submitted on January 15, 2027. Meanwhile, dozens of reform steps must be completed by December 31 of this year, some of which have a deadline at the end of this year.

The Growth Plan is a new European Union mechanism aimed at accelerating reforms for the European integration of Western Balkan countries. It links the implementation of reforms to direct EU financial support for the budgets of beneficiary countries and for investment projects.

By carrying out the required reforms, which are in the state’s own interest, Kosovo could benefit from up to 882,6 million euros in EU funds. Of this amount, 253,3 million euros are grants, while 629,3 million euros consist of long-term loans.

In April of this year, Kosovo received 61.8 million euros from the European Union’s first payment, marking the start of the transfer of pre-financing funds under the Reform and Growth Facility of the EU Growth Plan for Economic Growth in the Western Balkans.

The Assembly of Kosovo has still not been constituted. In the two attempts held so far, the election of the speaker of the Assembly and the completion of the constitution of the 11th Legislature, for which elections were held on June 7, have not been achieved.

The constitutive session remains part of the political confrontation between the parliamentary parties, while the failure to form the institutions is prolonging the crisis in the country. Acting Prime Minister Albin Kurti has called for time to reach a political agreement that would pave the way for the constitution of the Assembly and the creation of new institutions. Meanwhile, the Democratic Party of Kosovo and the Alliance have continued their political actions, calling for the constitutive session to be held.