Republic of Kosovo

Kosovo, the youngest independent state in Europe, has an area of about 10,000 km2 and a population of about 1.6 million. More than 90% of this population is Albanian, and the Serbian minority represents 5.3%. Other minority populations include Bosnians, Gorani, Roma, Ashkali, Egyptians, and Turks. In addition, an estimated 1,000,000 Kosovars live outside Kosovo (mainly in the European Union).

The country has shown significant progress in transitioning to a market economy and maintaining macroeconomic stability. Kosovo has experienced steady economic progress since independence, with a nearly 50% increase in per-capita income and a 35% reduction in poverty. In 2024, according to the International Monetary Fund (IMF), “Kosovo’s economy continues to perform well, supported by robust private consumption and higher public investment, offsetting the impact of a widening trade deficit and softening remittances. The growth is projected to reach 4.2% this year and 4% next year”. However, despite the continued reduction of poverty due to slightly higher growth, 17-21% of the population is facing poverty, while 5-7% of the population lives in extreme poverty.

High unemployment encourages emigration and stimulates a large informal economy. The youth employment challenge in Kosovo is even more critical given the high proportion of young people. Kosovo's population is the youngest in Europe, with an average age of about 34.

Kosovo is part of the Stabilization and Association Process (SAP) and the European Union pre-accession strategy. The SAP has three objectives: stabilisation and a rapid transition to a market economy, the promotion of regional cooperation, and the prospect of European Union membership.

Since 2000, Luxembourg Cooperation has been helping to mitigate the effects of the lasting crisis in the Balkans, particularly in Kosovo.

On 24 April 2013, the Government of Kosovo signed the first bilateral agreement and a memorandum of understanding (MoU) with the Grand Duchy of Luxembourg, defining the sectors and areas of collaboration between the two countries.

On 21 July 2022, a third bilateral agreement and a MoU have been signed. This MoU, of a global amount of EUR 35 million for the period 2023-2025, targets five main areas of intervention and cooperation: vocational education and training, health, sustainable and inclusive growth, energy transition and climate mitigation, and strengthening the Kosovo civil society. The MoU marks a diversification of Luxembourg Cooperation with Kosovo, enhancing collaboration with the Kosovar and Luxembourg private and research sectors. This strategic focus aims to address the evolving needs of Kosovo while promoting sustainable development.

In addition to the interventions in these sectors, the agreements between the two states provide technical assistance in support of the European Union integration process and support to civil society.