EU to urge quick cash injection for Kosovo

By Mark John

BRUSSELS (Reuters) - The European Union will call on members on Friday to contribute to a fast injection of up to $2 billion (1 billion pounds) for Kosovo's fragile economy over three years once it achieves independence, an internal paper says.

The United States is seen providing a quarter of the total, but the EU must expect to lead reconstruction in the Serb province once its independence has been given a green light by the United Nations Security Council, the document said.

The paper, drawn up by EU foreign policy chief Javier Solana and EU Enlargement Commissioner Olli Rehn, also warned against expectations of quick improvements after independence.

"Expectations of the local population about better living conditions after status settlement are unrealistically high," said a copy of the document seen by Reuters.

Solana and Rehn put Kosovo's external financing needs at 1.3-1.5 billion euros (883 million pounds to 1 billion pounds) which they expect to be partially covered by common EU funds, the U.S. contribution, financial institutions and other donors.

But they added: "EU member state contributions will also be mecessary." The paper is due to be presented to EU foreign ministers at a meeting in the German city of Bremen.

If Kosovo's leaders come up with realistic spending plans, a donor conference could be organised "within weeks" of a U.N. Security Council resolution endorsing a plan for the province to win supervised independence, Solana and Rehn forecast.

The West hopes Kosovo's future will be wrapped up by June, bringing an end to the eight-year uncertainty over its fate since a 1999 NATO bombing campaign drove Serb forces out of the 90 percent ethnic Albanian territory.