May 17 (SeeNews) – Kosovo needs to act towards the transition to renewable sources and take steps to reduce the grey economy in order to boost its competitiveness and growth, the Council of the European Union said.
Kosovo should adopt a long-term energy and climate strategy for lowering carbon emissions, including plans for a phase-out of coal and fossil fuels subsidies, the Council said in a report on the economic and financial dialogue with the Western Balkans published on Tuesday.
“In line with the commitments of the Green Agenda for the Western Balkans: [Kosovo should] increase energy efficiency incentives for the private sector and households and improve the support schemes for renewable energy projects with the introduction of competitive bidding/auctions; adopt an action plan for the gradual adjustment of energy tariffs reflecting actual costs and providing mitigation measures for vulnerable consumers, and implement the plan to liberalise the retail energy market,” it noted.
Furthermore, the country should take steps to streamline and digitise licensing procedures and tackle tax evasion, improve oversight of state-owned enterprises and the execution of capital spending.
“If needed, [Kosovo should] use the available fiscal space in the 2022 budget to cushion the potential impact of adverse shocks through targeted support to vulnerable households and firms; provided the economic recovery is well entrenched, and as envisaged by the ERP [economic reform programmes], target in the 2023 budget and medium-term expenditure framework a return to the 2% deficit ceiling of the fiscal rule. Ensure proper costing of new pension and social policy initiatives and compliance with the legal ceiling applicable to the public wage bill and spending on war veteran pensions,” the Council recommended.
