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EU pledges 500 million EUR for Kosovo

Latest update : 2008-07-11

The European Union has pledged 500 million EUR in aid to Kosovo, which is newly independent after seceding from Serbia in February. The funds are designed to help the state build its economy.

BRUSSELS - The European Union pledged 500 million euros
($789 million) to help newly independent Kosovo ahead of an
aid conference on Friday billed as the first step to rebuilding
its shattered economy.

A spokeswoman for the European Commission said the EU's 27
member states were also expected to make their own pledges on
top of that.

EU sources say donors will look to provide close to 1.5
billion euros ($2.4 billion) of funds for Kosovo.

The United States has pledged some $400 million, leaving the
European Union to cover the bulk of the needs of the territory,
which seceded from Serbia in February after nine years as a U.N.

"Kosovo is a profoundly European matter. The EU is ready to
use all instruments to help Kosovo realise its European
perspective," EU Enlargement Commissioner Olli Rehn said in a
statement ahead of the one-day conference in Brussels.

For decades the poorest part of Yugoslavia, Kosovo is still
weighed down by the destruction of the 1998-99 war and a legacy
of waste and corruption under international stewardship.
The government has identified its main priorities and
prepared a 145-page document outlining its plans for the donor
conference hosted by the European Commission.

A large part of the total sum, meant to plug holes in the
budget until 2011, will go to servicing Kosovo's share of the
Yugoslav debt it inherited from Serbia on independence.

Analysts say that regardless of the amount raised, the
government will have a tough job fulfilling the expectations of
its 2 million people, the youngest population in Europe but one
struggling with over 40 percent unemployment.

It applied for membership of the International Monetary Fund
and World Bank on Thursday, Prime Minister Hashim Thaci said on
Friday, adding that he expected a positive response soon.

Despite being recognised by 43 mostly Western states, a
post-independence investment boom has not materialised.

Legal challenges by Serbia and its ally Russia also threaten
to keep Kosovo out of some international bodies for the near
future, robbing it of the legitimacy it needs to attract loans
and investors put off by its limbo status.

Date created : 2008-07-11