After many long months of negotiations, and with just days to spare before European Union leaders met to reconsider Serbia’s application for candidacy, it was finally announced that a breakthrough had been reached on Kosovo’s designation at regional meetings. Kosovo-UNMIK will be ditched. Henceforth it will be listed as Kosovo*. The asterisk refers to the following footnote: ‘This designation is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ Opinion on the Kosovo Declaration of Independence.’

It is a major breakthrough for all concerned.

For the European Union, it marks a further significant victory in its efforts to promote dialogue between Belgrade and Pristina. Already, these have achieved major results, including an agreement on managing their joint boundary/border. This latest agreement underlines the way in which the EU, when willing to take the lead in its neighbourhood, can in fact find inventive solutions to seeming intractable problems.

Kosovo also stands to gain. It was vitally important to find a way to allow it to participate in regional gatherings. More importantly, and in light of the fact that five members of the European Union still refuse to recognise Kosovo’s unilateral declaration of independence from Serbia, it is significant that this designation will also be used in future by the EU in its dealings with Pristina. This opens the way for Kosovo to establish formal relations with the European Union. Indeed, the first real benefits have already been seen as the five members that have not recognised Kosovo have agreed to permit the preparation of a feasibility study for a Stabilisation and Association agreement. This is a tremendous step forwards.

The agreement also opened the way for Serbia to be declared a candidate for membership of the EU. This is crucial. While many people in Serbia, and indeed across the EU, may be sceptical about the value of EU membership, the truth is that EU candidacy sends out an important message about the country’s political stability. Gaining candidacy, which was long conditioned by co-operation with the International Criminal Tribunal for the Former Yugoslavia (ICTY), is proof that Serbia is finally moving beyond the legacy of the Milosevic era.

Nevertheless, the compromise over Kosovo’s designation also represents an uncomfortable compromise for Belgrade and Pristina.

For Kosovo, it is certainly a bitter blow to the ego to have to accept this designation. In the weeks and months leading up to the agreement, Pristina had been insisting that it would accept nothing less that the ‘Republic of Kosovo’ on nameplates. Under the EU-brokered arrangement, the asterisk and footnote are yet further evidence that its statehood is still far from universally accepted. It may be independent administratively from Serbia, but its actual status on the world stage is still unresolved. Kosovo* will be a constant reminder of this. However, looking beyond the symbolism, it is still a major step forward. Again, this decision paves the way for Kosovo to now begin the journey towards eventual EU membership. The importance of this cannot be overemphasised.

For Serbia, the designation Kosovo* marks the clearest indication yet that it has come to terms with the full and effective administrative independence of Kosovo. In many key regional bodies, Kosovo will now be representing itself and making decisions that affect its future, regardless of Belgrade’s positions. (Although, contrary to what some observers have suggested, there is no reason to believe that it will open the way for Kosovo to join the main international organisations, such as the United Nations.) Crucially, though, Belgrade has managed to keep the status question open. As long as the asterisk is there, the status issue is not fully settled and Serbia has some leverage. However, this leverage should not be read to be more than it really is. Belgrade cannot hope to reverse the recognitions of Kosovo by the leading EU states or the US. Rather, this leverage will need to be used to achieve realistic goals, such as an agreement over the predominantly Serb north of Kosovo, the Serbian enclaves in south of Kosovo and the important Serbian Orthodox religious sites. This is Serbia’s task in the period ahead.

Of course, all things considered, one could argue that the question over Kosovo’s status need not be a major problem for anyone at this stage. The most important goals for all parties concerned should be regional stability, democratisation and economic development. With the right approach, and a continued spirit of pragmatic compromise, the agreement over designation means that the status question could in fact be set entirely to one side until almost the end of Serbia’s EU accession process.

However, this will not happen. The key states of the EU are keen to draw a line under the Kosovo issue once and for all. The recent agreement is an improvement on the previous situation. It is not enough, though. It seems likely that further pressure will be brought to bear on Belgrade to move beyond Kosovo* and accept Kosovo as a fully sovereign state. Here the EU has leverage of its own. While Serbia’s candidacy is certainly important, it is the start of actual accession negotiations that really counts. It seems very likely that Serbia will be expected to come up with firm proposals for how to address the outstanding issues as soon as forthcoming parliamentary elections, which are likely to be held in May, are out of the way.

While the agreement over Kosovo’s designation is certainly a major improvement on the previous situation, it is certainly not the end of the story. Four years after Kosovo unilaterally declared independence from Serbia, a comprehensive settlement that ties up all the loose ends between Belgrade and Pristina is still needed.

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James Ker-Lindsay is Eurobank EFG Senior Research Fellow on the Politics of South East Europe at the European Institute, London School of Economics and Political Science. He is the author of Kosovo: The Path to Contested Statehood in the Balkans, and co-editor (with Dejan Djokic) of New Perspectives on Yugoslavia: Key Issues and Controversies. His next book, to be published by Oxford University Press, explores the ways in which states try to prevent the recognition of secessionist territories.

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