Get To Know The EU Pillar

What is EU Pillar?

The creation of a robust, modern economy in Kosovo will be an important stepforward in the stabilisation of the Balkans; an important step forward for the creation of a tolerant, multi-ethnic society; and an important step towards integration in Europe.The EU Pillar (Pillar IV) is part of the United Nations Mission in Kosovo. It is geared towards modernising the economic framework of Kosovo, with a view to developing the structures and instruments that form the basis of a competitive, efficient market economy. The EU Pillar has laid a solid foundation for Kosovo’s economic and fiscal framework. Included among the many achievements attributed to the EU Pillar are:

the creation of a modern market economy through the introduction of commercial and economic legislation conforming to European Standards;
the launch of the privatisation process stimulating economic development and investment;
the successful changeover to the euro as the single currency;
the creation of a working banking system with nine commercial banks including over 240 branches;
the initiation of free trade agreements and integration of Kosovo into various regional and European economic structures;
the transformation of the customs service into a modern organisation collecting over 70% of the Kosovo Consolidated Budget (KCB) funds;
the introduction of various measures to counter economic crime and corruption; and
the stabilisation of Kosovo’s fragile power situation.

For more detailed information on these areas, visit the Documentation section of this website.

EU Pillar focus

EU Pillar activities help to foster reconstruction and economic development across Kosovo. Working hand in hand with the Kosovo Provisional Institutions of Self-Government (PISG), and other major stakeholders, the EU Pillar has undertaken a numerous initiatives to help Kosovo integrate into the regional and global marketplace.

Indeed, the EU Pillar has assumed the leadership of a massive privatisation programme through the staffing and management of the Kosovo Trust Agency (KTA). The KTA was established to preserve or enhance the value, viability, and corporate governance of socially owned and public enterprises in Kosovo. Enterprises included for privatisation among the former Socially Owned Enterprises (SOEs) under the system set up during communist-era Yugoslavia, range from mining facilities to glass production factories, warehouses to wineries and hotels to construction companies.

The Kosovo Trust Agency is responsible for privatising these enterprises and putting them on a solid legal footing. Some of these enterprises are inefficient and dilapidated after years of neglect hence the need for investment. The KTA also administers and restructures the Publicly Owned Enterprises (POEs) including the big public utilities such as the Kosovo Electricity Company (KEK), the Post and Telecommunications Company (PTK), and Pristina International Airport.

The EU Pillar also supervises the Banking and Payment Authority of Kosovo (BPK); international trade relations and borrowing as well as management of the UNMIK customs administration. Through its European Office, the EU Pillar deals also with the integration of Kosovo into the regional initiatives under the Stabilisation and Association Tracking Mechanism (STM) and Stability Pact initiatives with an economic dimension. The operational expenditure of the Pillar is almost fully financed by the European Commission (EC).

The EU Pillar also works closely with a number of economic regulators including:

Civil Aviation Regulatory Authority (CARO) in charge of regulating civil aviation issues in Kosovo;
Energy Regulatory Office (ERO) in charge of regulating activities in the energy sector;
Frequency Management Office (FMO) which exercises administrative control and authority over frequency management;
Independent Commission for Mines and Minerals (ICMM) which oversees and administers mining and mineral exploration and extraction; and
Water and Waste Regulatory Office (WWRO) which acts as a regulatory authority for all Publicly and Socially Owned Enterprises that provide water, wastewater, and solid waste collection services in Kosovo.

For more information, visit the Documentation section of this site.

Transferring competencies

While some areas of the economy remain reserved powers of the Special Representative of the Secretary General (SRSG) and are thus managed and administered by the EU Pillar, a large number of competencies have, in fact, been transferred to Kosovos Provisional Institutions of Self-Government (PISG).

The EU Pillar is also active with respect to the transferred competencies and provides capacity building through regular cooperation and joint initiatives with a number of economic line ministries, particularly the Ministry of Finance and Economy (MFE) and the Ministry of Trade and Industry (MTI). Together with them, the EU Pillar has led Free Trade negotiations and facilitated Kosovos involvement in a number of regional and wider-European initiatives, such as the Regional Energy Market, the South East European Transport Observatory (SEETO), the European Common Aviation Area (ECAA), and the European Charter for Small Enterprises (ECSE). For more information, visit the Documentation section of this site.

EU contribution to Kosovo

Since the outset of the crisis, the European Union has taken the lead in the enormous effort of reconstruction of Kosovo. It is devoting the lion’s share of the resources – military, financial and human- to repair the damage of war and of decades of under investment and neglect and to increase capacity of local administration and foster reforms.

Since 1999, the European Community has devoted over €1.6 billion Kosovo that has been channelled via:

ECHO (in 2003, it was phased out of the province as the humanitarian crisis was over);
The European Agency for Reconstruction (managing the bulk of CARDS funds);
The funding of the operating costs of the EU Pillar of the United Nations Mission in Kosovo; and
The financing of the Kosovo Consolidated budget via ECFIN’s decision on exceptional financial assistance.