Political paralysis in Kosovo is deepening, raising concerns about stalled reforms, lost investment and deteriorating relations with the European Union, almost four after the February general election failed to deliver a workable majority.

Kosovo’s parliament has now failed no less than 25 times to elect a speaker and begin formal work, prolonging a constitutional impasse that has left the country without a functioning government since the February 9 vote. 

The Assembly’s ninth legislature has been unable to form a ruling majority, preventing the appointment of a new cabinet and delaying urgent policy decisions.

The attempt to constitute the parliament and put in place a speaker has become a farce, with vote after vote yielding no result. 

In the February general election, Prime Minister Albin Kurti’s Vetevendosje won the most seats — 48 in the 120-seat Assembly — but fell short of the 61 required for a majority. Attempts to form a coalition with minority deputies have failed. Similarly, the opposition has so far been unable to coalesce around a common platform or candidate for prime minister to replace Kurti.

The ongoing impasse has financial and diplomatic consequences. Kosovo remains under EU punitive measures introduced in mid-2023 following violence in the Serb-majority north. According to a report by the Pristina-based GAP Institute, the sanctions have delayed or suspended projects worth €613.4mn, including €350.7mn in environmental programmes, €114.4mn in energy, and €57mn in digitalisation.

“The delays in project implementation mean postponed or lost opportunities for economic growth and improved public services,” the GAP report said, warning that Kosovo risks falling behind other Western Balkan countries on EU convergence.

“We need a partner – not just the president, but also executive power,” said EU ambassador Aivo Orav at a conference on May 28. “The government must be formed as soon as possible.” 

As pointed out in a new paper published by the Netherlands-based Clingendael Institute at the end of May, no political bloc currently appears able or willing to engage seriously with the Serb community or resume meaningful dialogue with Belgrade. Relations with Serbia remain frozen, with little movement toward normalisation or mutual recognition.

Orav also reiterated the EU’s insistence that Kosovo deliver on the establishment of the long-promised Association of Serb-majority Municipalities (ASM): “It must be done – and the sooner, the better.”

Most recently, EU Enlargement Commissioner Marta Kos told MEPs that “A functioning government and parliament are essential for Kosovo to benefit from the EU’s Reform and Growth Plan”. Kos also stipulated that to progress on its EU path, Kosovo must work towards the normalisation of relations with Serbia. 

“Uncertainty hovers over politics in Prishtina,” says the Clingendael report. Despite Vetevendosje’s strong base, the paper noted the party’s appeal is “receding”, while opposition forces remain fragmented. A grand coalition appears unlikely, as opposition leaders view Kurti as a divisive figure and a liability in Kosovo’s strained relations with the West. A fourth possibility—a snap election—is increasingly being discussed if a parliamentary speaker cannot be elected or a coalition formed.

The authors also warned that Kosovo’s road to EU membership is effectively blocked unless it makes tangible progress on the ASM and regains the trust of its Western partners. “There is a real risk of another year being wasted at a critical juncture for European security amid fundamental shifts in global politics,” the report said.

Despite the political turbulence, international financial institutions expect Kosovo’s economy to continue growing in 2025 and 2026, but caution that uncertainty could undercut this progress.

The European Bank for Reconstruction and Development (EBRD) revised its 2025 and 2026 GDP growth forecasts downward to 3.9%, citing weaker remittances and delays in public investment. “The caretaker government’s mandate is limited, significantly hindering the implementation of structural reforms and capital expenditure projects,” the bank said.

The International Monetary Fund (IMF) remains more upbeat, projecting 4% growth in 2025 with inflation stabilising at 2.25%. The World Bank forecasts 3.8% growth this year and next, driven by consumption and investment, but flagged “a high degree of uncertainty” due to domestic and external factors.

Structural bottlenecks, from weak tax mobilisation to dependence on imports and remittances, continue to weigh on long-term convergence with EU income levels. The World Bank has warned that without reforms, Kosovo risks stagnation in poverty reduction and income growth.

It’s not yet clear whether the political uncertainty will affect investment in Kosovo as the latest figures on foreign direct investment (FDI) are from February, when the statistics office recorded €161.6mn in FDI in the first two months of the year, virtually unchanged compared to 2024. Much of this continues to flow into real estate and financial services. 

While efforts to form a new government drag on, tensions have erupted over the liberalisation of Kosovo’s energy market. Hundreds of business owners blocked main roads into Pristina in protest as subsidies are removed and larger companies required to buy electricity on the open market. They argue the shift is too abrupt and will drive up energy costs, calling for a one-year transition period.

The stalemate could drag on into 2026. A presidential election is due in February or March next year. This requires cross-party cooperation for MPs to put together the required majority to appoint a new president. If the Assembly fails to elect a head of state — highly likely in the absence of a governing majority — fresh parliamentary elections would be triggered. The Clingendael report suggests some opposition parties may prefer to wait it out, leaving Kurti in power as a caretaker prime minister, or at the head of a weak coalition.

In the meantime, observers warn, key issues — including the EU-led dialogue with Serbia, economic reforms, and the status of northern Kosovo — will remain on hold.