European Union punitive measures against Kosovo have had severe financial and developmental consequences, with suspended or indefinitely delayed projects amounting to approximately €613.4mn, according to a new report released by Pristina-based think-tank the GAP Institute.

The restrictions, imposed since June 2023 following heightened tensions in northern Kosovo, have stalled critical investments in key sectors. The most affected include the environment (€350.7mn), energy (€114.4mn), digitalisation (around €57mn) and culture (€15mn). Due to missed deadlines, €7.1mn of funding has been lost entirely.

Around €218mn of the affected projects fall under the EU’s Instrument for Pre-Accession Assistance (IPA II and III), while another €395.5mn are linked to the Western Balkans Investment Framework (WBIF). The total package was expected to be financed through EU grants (€421mn), contributions from international financial institutions (€162mn) and self-financing (€31mn).

The EU, a long-standing partner in Kosovo’s reform process, provided over €1.5bn in support between 2007 and 2020. However, relations deteriorated in 2023, leading to a freeze in IPA funds, Kosovo’s exclusion from WBIF project approvals and a suspension of bodies under the Stabilisation and Association Agreement until May 2025.

Kosovo has also been sidelined from high-level EU events, except those focused on the northern crisis or regional integration. EU member states must unanimously agree to lift the sanctions, but no consensus has yet been reached.

The delays in project implementation mean postponed or lost opportunities for economic growth and improved public services, while also hindering Kosovo’s progress towards EU integration.