KOSOVO^[1]

Kosovo is a democratic parliamentary republic, which declared its independence in February 2008. From 1999 to 2008, Kosovo was an internationally-administered territory based on UNSC Resolution 1244 (1999), ruled by a bifurcated central government composed of the United Nations Mission in Kosovo (UNMIK) and the Kosovo Provisional Institutions of Self-Government (PISG).

Since 2008, legislative power has been vested in the unicameral National Assembly, composed of 120 deputies (including 20 seats reserved for minority representatives), while the executive power is exercised by the prime minister, indirectly elected by the Assembly, and ministers of Kosovo. Early presidential elections were held in 2017 due to a no-confidence vote and internal crisis regarding Kosovo’s borders. The EU-Kosovo Stabilization and Association Agreement (SAA) entered into force in 2016 as the first contractual relationship between the European Union and Kosovo. Moreover, Kosovo is expected to apply to become a member of the Council of Europe (CoE) in the coming years.

Decentralisation in Kosovo has been a top-down process. Based on the 2007 Comprehensive Proposal for the Kosovo Status Settlement of President Ahtisaari, the 2008 Constitution recognises municipalities as the basic territorial unit of local self-governance, and states that their organisation and powers are specified by law (Art. 12). Chapter 10 of the Constitution guarantees the right to local self-government, as exercised by representative bodies elected through general, equal, free, direct, and secret ballot elections (Art. 123). The governing body of the municipalities are the municipal assembly (Kuvendi I Komunës in Albanian and Skupstina Opstine in Serbian) with members (from 15 to 51) directly elected by universal suffrage for four-year terms. The mayor (Kryetar/Gradonacelnik), who is the highest executive of the municipality, is elected through direct elections also for a four-year term.

Law 03/L-040 on Local Self Government (enforced in 2008), defines the legal status of municipalities, their competencies, general principles pertaining to municipal finances, the organisation and functioning of municipal bodies, intra-municipal arrangements and inter-municipal co-operation. Other basic laws were adopted in June 2008 as part of the "Ahtisaari Package laws", in particular Law 03/L- 049 on local government finance, Law 03/L-041 on administrative municipal boundaries and Law 03/L-072 on local elections.

In 2016, the government launched a second phase of its decentralisation process through the Ministry of Local Government Administration. To this end, it has defined a Strategy and an Action Plan for local self-government for 2016-2026, aimed at promoting the role and consolidating the functions of municipalities. It has five main components: (i) Increasing economic, social and local structural sustainability; (ii) Creating a framework for good governance and effective regulation; (iii) Strengthening institutional capacities of local self-government; (iv) Strengthening partnerships between local government, civil society and businesses; (v) Promoting cultural and natural heritage and affirmation of cultural, ethnic and linguistic diversity in municipalities. Within the framework of the Strategy, municipalities also have a responsibility for meeting the criteria required by the EU by the SAA agreement, in particular, political, economic and EU specific standard criteria. According to the 2019 Report on the Functioning of the Municipalities of Kosovo, municipalities managed to realize 71% of activities in the field of political criteria for that specific year, 71% of the activities related to economic criteria and 66% of activities in the field of European specific standards. In 2021, the overall fulfilment rate of the SAA agreement activities was 62%.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2020)
38 municipalities (Komunë in Albanian and Opstina in Serbian)
Average municipal size: 46 720 inhabitants
38			38

OVERALL DESCRIPTION: Kosovo has a single-tier subnational government system made up of 38 municipalities. Territorial decentralisation in Kosovo merges with ethnic decentralisation, considering that the 10 Serbian-majority municipalities, including the four municipalities located in the northern part of Kosovo, are clearly distinct from their Albanian-majority counterparts.

In 2013, Kosovo-Albanian and Serbian government representatives signed the so-called Brussels Agreement. The accord envisages the integration of the four municipalities with a Kosovo-Serb majority, in the north of Kosovo, into Kosovo’s institutional system. It also devolved enhanced powers in terms of secondary health services and university education (see below). However, the Serbian-majority municipalities operate largely outside the control of Kosovo Government institutions. In 2015, through an EU facilitated dialogue based on the Brussels Agreement, the Prime Ministers of Kosovo and Serbia agreed on the general principles for the creation of an Association or Community of Serb majority municipalities in Kosovo, but its creation has been indefinitely postponed as these principles have been recognised by the Constitutional Court of Kosovo as not completely compatible with the spirit of the Constitution.

MUNICIPAL LEVEL: Municipalities in Kosovo are large by international standards (more than 46 000 inhabitants on average, with a median size of 39 518 inhabitants, vs 10 254 inhabitants on average in the OECD and 5 959 in the EU). More than three-quarters of municipalities have more than 10 000 inhabitants. The capital city, Pristina, which had around 217 000 inhabitants in 2019, is followed by Prizren (193 000 inhabitants) and three cities with between 90 000 and 105 000 inhabitants (Gjakovë, Pejë and Ferizajof). A separate law for the Capital City of Pristina was approved in 2018 with budgetary effects starting in 2019.

Municipalities are subdivided into settlements (villages and urban areas) to ensure that services are offered to all citizens on a local basis. With the approval of the municipality, villages and urban areas, alone or in co-operation, may carry out some tasks that are within the responsibilities and powers of the municipality. Each municipality regulates the division of its sub-localities.

In 2020, there were 1 469 settlements in Kosovo at the sub-municipal level (villages / fshat in Albanian and selo in Serbian).

HORIZONTAL COOPERATION: In 2001, the Assembly of the Republic adopted a law to regulate inter-municipal cooperation. The law enables municipalities to develop inter-municipal co-operation structures on matters of mutual interest in the delivery of their competences. The law defines several forms of co-operation such as joint working bodies, joint administrative bodies, joint public institutions, joint public enterprises and joint public-private partnerships. It also indicates that the government can encourage and support financially inter-municipal co-operation through financial and administrative incentives. Inter-municipal co-operation is regulated by the Ministry of Local Government Administration and the Ministry of Finance, both of which monitor the implementation and financial management of inter-municipal co-operation projects. In terms of budget management, inter-municipal co-operation bodies must follow the budget practices of the municipalities, in accordance with the budget instructions or circulars coming from the Ministry of Finance.

During the year 2019, 27 Inter-Municipal Co-operation Initiatives were undertaken by 29 municipalities with the purpose of co-operation in the area of prevention, response and recovery from natural and/or other disasters.

The Law on Local Self-Government (2008) transferred significant functions to local governments, primarily in the social sector. Local responsibilities are divided into three types: own competences, delegated powers and enhanced powers. Own competencies are granted by law as sectors for which local governments have full power. They may include local economic development, education and health, tourism, and cultural and leisure activities, based on each municipality’ own Development Plans, which set budget priorities.

Delegated competences are mainly performed by municipalities on behalf of the central level, such as distribution of social assistance and administrative duties. Finally, enhanced (or extended) competences are entrusted to certain municipalities with a Serbian majority in the areas of health, education and cultural affairs. These competences also enable constituents, for instance, to select local police station commanders (in an example of a sort of asymmetric decentralisation). Some municipalities in Kosovo also deliver certain services through local public enterprises (e.g., local economic development).

However, the basic legislation on the functioning and the transfer of competencies from the central to the local level in Kosovo has not been fully implemented yet. New laws affecting the powers of municipalities are still being adopted. Lack of capacity and inter-institutional co-ordination, intercommunity tensions and the insufficient involvement of citizens undermine the efficiency of municipalities to deliver the services they are in charge of. In fact, many municipalities are facing significant difficulties in areas such as education, environmental protection (to comply with the requirement to draw Air Quality Action Plans), waste collection, air protection and illegal landfills.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Municipal level
1. General public services (administration)	Delegated: Cadastral records; Civil registry; Voter registration; Business registration and licensing Own: Municipal general administration; Licensing of local services and facilities; Promotion and protection of human rights
2. Public order and safety	Own: Local emergency response; Enforcement of civil protection; Fire-fighting
3. Economic affairs / transports	Own: Local economic development; Tourism; Local roads; Local public transportation
4. Environment protection	Delegated: Forestry protection Own: Local environmental protection; Provision and maintenance of public parks and spaces; Sewerage and drainage; Waste management
5. Housing and community amenities	Own: Urban and rural planning; Land use and development; Implementation of building regulations and building control standards; Water supply; Local heating schemes; Public housing
6. Health	Own: public health; Public primary health care Expanded: Secondary health care
7. Culture & Recreation	Own and expanded: Culture and leisure Own: Sports
8. Education	Own: Provision of public pre-primary, primary and secondary education, including registration and licensing of educational institutions, recruitment, payment of salaries and training ofeducators and administratorsExpanded: higher education
9. Social Welfare	Own: Provision of family and other social welfare services, such as care for the vulnerable, foster care, child care, elderly care, including registration and licensing of these care centres, recruitment,payment of salaries and training of social welfare professionals Delegated: Distribution of social assistance payments (excluding pensions)

Scope of fiscal data: Municipalities

Kosovo Statistics Institute

Availability of fiscal data: Medium

Quality/reliability of fiscal data: Medium

GENERAL INTRODUCTION: Since 2006, Kosovo has been transitioning from having the least decentralised government system in South-East Europe to one of the most decentralised, along with the Republic of North Macedonia. However, while local governments in Kosovo are devolved a large array of competences, their autonomy is limited in terms of financial resources and capacities. The Constitution recognises the need to specify the financial resources available to municipalities in Kosovo, including municipal own-source revenues, grants, and other sources of finance. In addition, law no. 03/L-048 on Public Financial Management and Accountability (last amended in 2013) and the 2008 Law on Local Government Financing (LGF) describe budget management procedures and set the general principles regarding fiscal decentralisation. Article 2 of the LGF defines “Municipal Financial Autonomy” whereby municipalities in Kosovo shall be entitled to adequate financial resources of their own, that they are free to use as they see fit in the delivery of the municipal services that are part of their remit.

Municipal financial revenue is required to be equivalent to municipal competencies, as set out in the Law on Local Self-Government. Local finances are an integral part of the Medium-Term Expenditure Framework (MTEF), a three-year strategic document drafted based on government priorities and objectives, as well as macro-fiscal projections. According to the 2021-2023 MTEF, the municipal budgeting process must: (i) work at the level of programs and sub-programs; (ii) promote results-oriented and performance-oriented budgeting approaches; (iii) implement multi-year concept on capital project planning; and, (iv) determine the structure of expenditure according to expenditure categories. The principles, criteria and formulas applied for the allocation of government grants for financing the municipalities, as well as the participation, are based on the LGF.

Subnational government expenditure by economic classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure	923	8.1%	23.5%	100%
Inc. current expenditure	673	5.9%	20.2%	73.0%
Compensation of employees	463	4.1%	41.7%	50.2%
Intermediate consumption	135	1.2%	35.1%	14.6%
Social expenditure	23	0.2%	2.0%	2.5%
Subsidies and current transfers	52	0.5%	11.4%	5.6%
Financial charges	0	0.0%	0.0%	0.0%
Others	0	0.0%	0.1%	0.0%
Incl. capital expenditure	250	2.2%	42.1%	27.1%
Capital transfers	4	0.0%	13.0%	0.4%
Direct investment (or GFCF)	246	2.2%	43.7%	26.6%

EXPENDITURE: Despite large transfers of responsibilities in key areas, the share of subnational expenditure in GDP and public expenditure is relatively low, in particular compared to the EU27 average (18.3% of GDP and 34.3% of public expenditure in 2020). Half of municipalities’ expenditure goes to staff expenditure, which can be partly explained by the fact that municipalities are responsible for teachers’ and health workers’ salaries, among others. However, the share of staff expenditure as a percentage of total subnational government expenditure has decreased in comparison with 2016 (- 10%).

DIRECT INVESTMENT: In 2020, total public investment in Kosovo attained 4.6% of the GDP, of which 2.2% corresponds to subnational government investment, above the EU27 average (1.8% of GDP in 2020). In addition, the share of local investments in the total public investment has increased from 22% in 2009 to 44% in 2020.

Kosovo's law on Public-Private Partnerships (PPP) allows private participation for investments in the provision of Public Services and/or Public Infrastructure in all economic and social sectors. Municipalities can sign a PPP contract with a private company directly, in accordance with the provisions of the law. Alternatively, municipalities can establish an “Institutional Public-Private Partnership”, being the acquisition by one or more private partners of shares owned by a Municipality in an existing publicly-owned-enterprise, with the sole purpose of increasing the performance of a public service or infrastructure management, provided that the private partner also participates in the management of such publicly-owned-enterprise, or participates in the provision of the public service or infrastructure. However, for either of the two mechanisms, the municipalities can only participate in the PPP decision committees when the investment projects concern municipal services or infrastructure and only as an observer, without voting power. Between 2016 and 2020, only two PPP projects were carried out in Kosovo, none of them municipal initiatives.

Subnational government expenditure by functional classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure by economic function	-	-	-	-
1. General public services	125	1.1%	19.7%	13.5%
2. Defence	0	0.0%	0.0%	0.0%
3. Security and public order	13	0.1%	3.7%	1.4%
4. Economic affairs/transports	195	1.7%	25.1%	21.2%
5. Environmental protection	0	0.0%	0.0%	0.0%
6. Housing and community amenities	50	0.4%	79.1%	5.4%
7. Health	134	1.2%	30.3%	14.5%
8. Recreation, culture and religion	23	0.2%	26.6%	2.5%
9. Education	371	3.3%	70.4%	40.1%
10. Social protection	14	0.1%	1.5%	1.5%

Local governments in Kosovo are primarily responsible for expenditure in the education sector, and in particular for the financing of all pre–university schooling, which accounts for 40% of their total spending. Between 2016 and 2020 the share of total municipal spending dedicated to education increased from 65% in 2016 to 70.4% in 2020). The share of municipalities in total public spending has also increased in other main policy areas, in particular economic affairs and transports (21.2%), which has increased considerably in 2020 (in 2016, it represented only 4.3% of total public expenditure in economic affairs and 5.5.% of total municipal expenditure).

The third most important area of spending is health (14.5%), mostly in primary and secondary healthcare. However, local spending in healthcare remains supervised, in large part, by the central government. Subnational governments in Kosovo also play a significant role in expenditure in housing and community amenities (79.1% of total public spending in this sector).

Subnational government revenue by category
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	906	8.0%	24.8%	100%
Tax revenue	57	0.5%	2.2%	6.3%
Grants and subsidies	788	6.9%	-	87.0%
Tariffs and fees	44	0.4%	-	4.8%
Income from assets	3	0.0%	-	0.4%
Other revenues	13	0.1%	-	1.5%

OVERALL DESCRIPTION: According to Article 7.1 of the LGF Law, the resources of municipalities consist of own source revenues, the operating grant, grants for enhanced competences, transfers for delegated competences, extraordinary grants, financial assistance from the Republic of Serbia and proceeds from municipal borrowing. According to the 2018 Budget Law, all revenue from healthcare and education are to be dedicated to these two respective sectors only.

The share of subnational government revenue in total public revenues in Kosovo is well below the EU27 average (34.3% in 2020). It is important to note that Kosovo has the smallest ratio of total public revenue as a percentage of GDP within South-East Europe. The share of local revenue in GDP was stable between 2010 and 2016, at around 7%, and has since then increased to 8%, which is still far below the EU27 average (18.3% of GDP in 2020). This is due to the devolution of new responsibilities to subnational governments, including paying the wages of workers in the education and health sectors. This devolution was accompanied by the introduction of conditional (education and healthcare block grants) and unconditional intergovernmental transfers. While subnational governments are strongly dependent on central government subsidies, this was reinforced in 2020 during the COVID-19 pandemic.

TAX REVENUE: The main source of tax revenue of municipalities is the property tax, which represented half of subnational government tax revenue in 2020. It is applied on residential and commercial properties, industrial and agricultural properties. Taxation of property is based on the property’s market value. After years of low collection rates, significant efforts were made by the Kosovo Cadaster Agency to improve registration and billing, which increased the minimum property tax rates enforced by municipalities. Tax rates are set up annually by municipal assemblies, within the limits set by the central agency (between 0.15% and 1%). Overall, the property tax’s yield is decreasing over time, attaining 0.2% of GDP in 2020 (vs. 0.4% of GDP in 2016 and 0.3% of GDP in 2019), which was deepened by the drop of economic activity in all municipalities during the COVID-19 pandemic.

In October 2018, a new Law on Immovable Property Tax came into force, introducing a new tax on land, in addition to the tax on property, effective in 2019. In 2020, the land tax represented 9% of tax revenue.

According to the LGF Law, other local taxes include Business License Fees, Motor Vehicle Fees, Municipal Administrative Fees, among others. In 2020, the Motor Vehicle Fees represented 9% of municipal tax revenue while the remaining municipal taxes attained 32% of total local tax revenue.

GRANTS AND SUBSIDIES: In Kosovo, the intergovernmental transfer system includes a fiscal equalisation mechanism in the form of an unconditional grant, the General Grant, as well as specific grants.

The General Grant is defined by law as corresponding to 10% of the general government’s total revenues. Municipalities first receive an annual lump sum payment of EUR 140 000, minus EUR 1 per capita for all local governments with more than 40 000 inhabitants. Therefore, municipalities with populations above 140 000 do not receive a payment. The rest of the grant pool is then allocated to municipalities based on a formula depending on the population size (89%), land area of the municipality (6%), the number of ethnic minorities (3%), and 2% for municipalities in which the majority of the population comes from a national minority. Since 2009, the size of this unconditional grant has increased in line with national budget revenues, as well as own revenues, and the central government introduced investment grants in the scheme. This general grant represented 36% of subnational grants in 2020.

The two main spending areas of subnational governments, education and health, are funded through block grants, determined by a National Grant Commission in accordance with a Medium-term Expenditure Framework (MTEF). The Education Grant is allocated to local governments on the basis of a formula that considers the wages of teachers, administrators and support staff, goods and services, building maintenance, and specific education policies. Municipalities with a higher percentage of minority students are given a higher weight in the formula. This Education Grant represented 38% of subnational government revenue in 2020 and, according to NALAS, over 90% of it goes to wages, 5% to the purchase of goods and services and 2% to capital investments. The Health Grant is also allocated through a formula based on the population. Municipalities are in charge of drafting a plan for developing primary healthcare in accordance with the main Kosovo plan on healthcare. The Health Grant represented 14% of total subnational government revenue in 2020 and again, according to NALAS, over 70% of it goes to staff wages.

Overall, block grants represented 58% of total subnational grants in 2020. The remaining 6% of subnational grants were derived from a special fund established to help the four Serbian–majority municipalities in the north of Kosovo, financed from customs duties collected on the border with Serbia.

OTHER REVENUE: Municipalities also receive revenue from construction permits (infrastructure development charges, in the form of Land Development Fees), which have generated increasing revenue since 2014. They are also allowed to collect municipal charges including regulatory charges, education and health co-payments, as well as rental income. Fines-penalties including traffic fines and fines for municipal offences are collected at the central level by the Ministry of Internal Affairs before being allocated to municipalities.

ⓘ No detailed data available for this country

FISCAL RULES: According to the Law on Public Finance Management and Accountability, municipalities must publish an annual financial report. However, in reality they do not do so on a regular basis. Since 2009, municipalities have an annual ceiling on current expenditure growth of 0.5%. Reports by an internal auditor in recent years revealed that in most municipalities in Kosovo, internal controls on local finances are lacking. This led to a new law on the Internal Control of Public Finances in 2015.

On the other hand, at the national level, the Law on Public Financial Management establishes several budget cuts and transfers that can be made by the central government in the case of unforeseen expenses. In a situation of a macroeconomic shock or natural disaster, the Minister of Finance may reallocate budgeted funds to finance fiscal measures, by excluding funds from own source revenues. However, some restrictions exist: the central government can only transfer 15% to 25% of budget allocations from one category to another, excluding transfers to the category of wages and salaries. There is also an additional restriction in the category of capital investments: In case of reallocation of amounts within different capital projects, such reallocation can only be done within the same sub-program. Any budget transfer that exceeds this percentage or any budget transfer between budget organizations, requires the approval of the Assembly of Kosovo.

DEBT: Municipalities can access loans and debt markets (national capital markets only) to finance capital investments only (“Golden Rule”) with the authorisation of the municipal assembly and of the Ministry of Economy and Finance. However, access is subject to strict conditions: total annual debt service should not exceed 15% of municipalities’ own-revenues from the past fiscal year and the total amount of outstanding municipal debt should not exceed 50% of their own-revenues from the past fiscal year. Grace periods are not allowed. Only a few municipalities had resorted to borrowing in 2019, and none borrowed from financial markets in 2020. At the national level, in 2020, public debt increased strongly up to 24.5% of GDP, from 17.6% in 2019.

TERRITORIAL MANAGEMENT OF THE CRISIS: To deal with the crisis, the central government established a special commission to prevent the spread of COVID-19. The Prime Minister was the head of this commission, followed by other members of the government, including the ministers of Finance, Internal Affairs, and Health, as well as representatives of the security sector (Police, Army, Customs, etc.). As of March 15^th, the government declared a public health state of emergency which required actions from all institutions in accordance with the National Response Plan.

In order to implement the government’s decisions and sustain public health in the country, all municipalities were asked to establish Emergency Headquarters, where all responsible institutions were involved and helped manage the situation at the local level. Emergency headquarters were made up of mayors, heads of the Health Directorates, directors of the Main Family Medicine Centres and police commanders, while operational teams were composed of members of the Directorate of Inspection and Municipal Order, the Sanitary Section, the Public Services Section, and the Social Welfare Section. The Ministry of Local Government was supervising the coordination and alignment of activities between the central level and the municipalities. During the crisis, a number of requests and notifications were addressed to the municipalities, mayors, chairs of municipal assemblies and to the Emergency Headquarters. The Ministry of Local Government conducted visits to municipalities and provided administrative, health and financial support, so that they could more easily manage the pandemic.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: The first Emergency Fiscal Package adopted by the central government consisted of short-term measures aimed at helping the local economy, specifically citizens and businesses, to cope with the two to three-month period of strong restrictions and degraded economic activity from the beginning of the pandemic (e.g. increase pensions, cover wages for private sector workers, rental subsidies, etc.) In addition, extra financial support of up to EUR 10 million for municipalities was given by the central government in the context of the emergency fiscal package implemented in early 2020.

Some municipalities implemented ad-hoc services to deal with local social and economic problems arising from the health situation. In particular, the municipality of Ferizaj provided support to the most vulnerable community members with food and medical supplies, including clothing and hygienic material. Efforts were coordinated with local businesses, volunteers and village leaders to identify families in need. According to NALAS, in total, Ferizaj provided support to approximately 20% of its population during a 100 days period. The same municipality also provided mental healthcare services through an online platform which established communication with citizens in need of psychological therapy, and ensured remote learning for children from disadvantaged households by providing tablets.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: The pandemic significantly affected the municipalities' own resources and forced them to increase their spending. Consequently, the gap between collected revenue and required expenditure to address the pandemic increased, leaving local governments with insufficient means to tackle the crisis. Indeed, municipalities’ own resources fell by 22% in 2020 ; tax revenue in particular dropped by 29% compared to 2019, driven by the decrease in revenue from the property tax (-30%) and the land tax (-41%), which recorded the greater drops, following the decision by the Ministry of Finance to suspend property tax payments during the course of the pandemic. The decreased activity in the construction sector, along with the decreased proceeds from business licenses and construction permits, resulted in a sharp decline of revenue from tariffs and fees, by 15% in 2020. Despite the above, total municipal revenue fell by only 1% in 2020, sustained by a massive increase in block grants: +9% increase for the Education Grant and +13% for the Heath Grant. As a result, overall direct transfers to municipalities increased by 5% in 2020.

On the expenditure side, municipalities had no choice but to strongly increase their spending, of the order of +5% overall. All spending components increased, in particular staff expenditure (+5%) and capital expenditures (+6%). As part of the emergency fiscal package, expenditures for COVID-19 were initially financed by municipalities from their planned capital projects for 2020 and transferred revenues, and were subsequently reimbursed by the Ministry of Finance.

ECONOMIC AND SOCIAL STIMULUS PLANS: The central government first approved an Emergency Fiscal Package worth EUR 179.6 million to help citizens and business throughout the crisis. To face the crisis in the longer term, in the governing program 2020-2023, the central government foresaw a second package for Economic Recovery of about EUR 1.2 billion for the 2020-2021 period. Due to legal restrictions, the Emergency Fiscal Package and the Recovery Package were not able to be fully managed without the involvement of the Assembly of Kosovo. In addition to the need for approval by the Assembly of Kosovo for any transfer exceeding 25% of a budget allocation of the relevant institution, the involvement of the Assembly is required for the approval of new loan agreements.