Tuesday, May 03, 2005

U.N. mission in Kosovo signs framework agreement with European Investment Bank

PRISTINA, Serbia-Montenegro (AP) - The United Nations mission in Kosovo signed an agreement with the European Investment Bank Tuesday enabling this economically depressed province to receive loans from the bank despite its unresolved status.

Soren Jessen-Petersen, the top U.N. official of this disputed province, said he hopes the agreement will boost economic growth in Kosovo, where unemployment rate is over 50 per cent.

"Signing of this framework agreement today will serve as an important precedent that will help attract other international financial institutions extending loans for Kosovo," Jessen-Petersen said.

The European Investment Bank finances investments that promote European integration.

Kosovo is the poorest region in the Western Balkans with an annual gross domestic product per capita of around €1,000 (US$1,300) according to EU figures.

Support from the international financial institutions is indispensable as the U.N. tries to create a sustainable economy in Kosovo, Jessen-Petersen said at the signing ceremony.

Until now, the province could not tap into the international financial institutions because of its unresolved international status. This has been "undoubtedly a serious impediment to economic development," a European Union report last month said.

Kosovo became an international protectorate, run by the United Nations and NATO-led peacekeepers, in 1999 after a NATO air war ended a Serb crackdown on ethnic Albanian separatists. Ethnic Albanians want full independence, while Serbs insist the province remain part of Serbia.

Talks on the province's future status are expected later this year, if Kosovo meets human rights and democracy standards to safeguard the future of its minority Serbs. The minority has often faced violence from the ethnic Albanian majority in reprisals after the end of the 1998-99 war.

Since the end of that conflict the EU has granted €1.6 billion in humanitarian and economic aid for the province, which has a population of some 2 million people.

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