The European Union has allocated nearly 170 million euros to Kosovo, as part of its Growth Plan, for the second half of 2026. However, Kosovo risks losing a significant amount of these funds if the political crisis and the dysfunction of state institutions continue. It can only benefit from the financial means from the EU if it undertakes the necessary reforms.

More than two months after the snap parliamentary elections, the Kosovo Assembly has still not been constituted. The constitutive session, which began on August 6, was postponed twice, at the request of the leader of the winning party, the Vetevendosje Movement. Albin Kurti requested additional time for consultations with other parties regarding the achievement of a broad political agreement, which also includes the issue of choosing the next president. It was precisely the lack of consensus on the president that led Kosovo to the snap elections.

The European Commission (EC) warns that the delay in the formation of new institutions, following the June 7 elections, could have direct consequences for the implementation of reforms and Kosovo’s access to EU funds. The institution’s spokesman, Guillaume Mercier, reiterates Brussels’ regular call to political actors in Kosovo to ensure institutional stability. “It is essential that Kosovo’s institutions are constituted without further delay, in accordance with the constitutional framework and established procedures,” Mercier told Radio Free Europe (RFE/RL).

“Delays in the formation of institutions risk hindering important reforms and could affect Kosovo’s ability to fully benefit from the opportunities offered by the EU, including the Growth Plan for the Western Balkans,” he adds. In December of this year, the deadline for the fulfillment of a total of 27 reform steps by official Pristina, with a total value of 165.9 million euros, expires. Many European officials, with whom REL has spoken, are already talking about multi-million losses that Kosovo could suffer as a result of the institutional crisis.

"While the European Commission is assessing Kosovo's reporting on these steps, the political situation in the country has inevitably affected the pace of implementation and has limited progress on a number of key reforms, putting at risk part of the financing under the Reform and Growth Instrument," a European official tells REL, on condition of anonymity.

First in drafting the Reform Agenda, last in reporting
Kosovo was among the first to submit the Reform Agenda in 2024, but was the last to report on the level of its implementation. The Kosovo authorities submitted the first request for the allocation of funds, shortly before the deadline, on 15 July 2026, reporting on the steps of the Reform Agenda that were initially foreseen to be fulfilled in December 2024, June 2025, December 2025 and June 2026.

“To maintain the available funding, it will be essential to ensure the effective functioning of institutions and the political consensus needed to maintain a sustained focus on implementing the agreed reform agenda,” a European source underlines. EC spokesman Mercier stresses that a swift agreement between political parties on a unifying presidential candidate is of particular importance. “Only an effective inter-party dialogue and a shared sense of purpose will allow Kosovo to pursue common objectives and deliver the reforms demanded by its citizens,” he tells REL.

Within 18 months, Kosovo went through three electoral processes, holding two parliamentary elections, as well as local elections (two rounds). Fulfilling the reform steps, within the framework of the EU Growth Plan, requires the commitment of both powers: the Government – ​​which drafts, negotiates and implements concrete policy objectives – and the Assembly, which approves the relevant reforms.

December and the risk of permanent loss of funds
The end of 2026 marks the end of the grace period, known in Brussels as the "gray period", for reform steps that were originally due to be completed in the countries of the region, including Kosovo, in December 2024 and December 2025. The European Commission enabled this grace period, which refers to the time after the expiration of a deadline, during which delayed actions can still be corrected without incurring the consequences that would result from not meeting the deadline.

According to this principle, all reform steps that had an initial deadline in 2024 have an additional deadline of 24 months for implementation. Meanwhile, for steps that had a deadline in 2025, the tolerance is 12 months. For all reforms foreseen for implementation by December 2024, respectively December 2025, the final deadline is the end of 2026, when the permanent loss of funds is at risk. If the beneficiary countries do not meet the conditions, respectively do not implement the foreseen reforms, the European Commission has the right to withhold the funds intended for these reform steps. These funds can be distributed to other countries that are more successful in the reform process.

Kosovo, the biggest beneficiary only in theory
The EU Western Balkans Package is planned for the period 2024–2027. It is worth 6 billion euros and represents the most ambitious financial package for the region. The allocation of Growth Plan funds is based on population and Gross Domestic Product. From this package, 882.6 million euros have been allocated to Kosovo, making it the largest beneficiary per capita. In previous periods, Kosovo did not qualify for receiving funds from the Growth Plan, since – also due to political deadlock – the relevant agreements for this European package were not approved.

After the Kosovo Assembly ratified the agreements related to the Growth Plan in February this year, Kosovo qualified to benefit from European funds. So far, Kosovo has only received pre-financing funds worth 61.8 million euros, representing 7 percent of the total amount allocated. For the remaining funds, Kosovo must demonstrate the implementation of reform steps, by submitting a report on the reforms made. The European Commission decides on the distribution of funds twice a year, but only after verifying that a country has successfully fulfilled the concrete steps and objectives set out in the Reform Agenda. /REL