IMF suspends Kosovo aid

The International Monetary Fund has suspended its 2011 Stand-by Agreement with Kosovo, after Pristina breached the deal by implementing pay raises.

The 18-month-deal would have provided Kosovo with 87 million euros in soft loans from the IMF plus another 100 million euros from the European Commission, pledged at a 2008 donors’ conference.

The IMF, which gave the agreement the green light last July, said on Wednesday that Kosovo’s government had deviated from the deal with its implementation of large public sector pay hikes, despite warnings from the lender earlier this year.

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