February 5, 2015 / 2:18 PM / in 3 years

Kosovo considering pre-2009 debt write-off to tackle unrest

PRISTINA (Reuters) - Kosovo may write off a range of debts racked up by citizens before 2009, the government said on Thursday in a move to tackle widespread dissatisfaction fuelling unrest and a new wave of emigration to western Europe.

Just two months in office, the government has been rocked by some of the worst civil unrest since Kosovo declared independence in 2008. It is also grappling with a dramatic surge in the number of Kosovars smuggling themselves illegally into the European Union.

Finance Minister Avdullah Hoti said the government was considering cancelling the debts of Kosovars to the state from before the end of 2008 - meaning unpaid taxes, customs duties and utility bills.

“We agreed to create a commission that will review the possibility of forgiving all debts of businesses and citizens to the Kosovo institutions and public companies until December 31, 2008,” Hoti told a news conference. “We feel it is necessary to have a fresh start with the new government,” he said.

The government said it had picked 2008 because that was the year, in February, when Kosovo seceded from Serbia with the backing of the West.

The majority ethnic Albanian territory, a former province of Serbia, became a ward of the United Nations in 1999 after NATO bombed to drive out Serbian forces accused of massacring and expelling civilians in a two-year counter-insurgency war.

The government did not specify what the debt write-off would cost, but the move may stir concern among Kosovo’s Western backers and the International Monetary Fund.

Non-payment of utility bills is widespread in Kosovo, which is still plagued by electricity shortages.

Poverty, unemployment and corruption are the main drivers of a sudden spike in the number of Kosovars trying to reach western Europe, slipping over the border between Serbia and EU member Hungary under cover of night.

Since September last year, more than 30,000 have been caught by Hungarian authorities and applied for asylum, most of them then slipping the net of immigration authorities to push westwards to Germany, Switzerland and other more affluent countries in the hope of finding work.

Editing by Matt Robinson/Mark Heinrich

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