The EU executive in a report on Kosovo out on Wednesday (14 October) said it "proposes to draft a comprehensive strategy to guide Kosovo´s efforts to meet the EU´s requirements for visa liberalisation."
The process is open-ended for now, with visas to be scrapped only "when the necessary reforms will have been undertaken."
The move is a political response to popular feeling among Kosovar Albanians that Serbia, which is held responsible for the 1999 war and numerous atrocities, is being given privileged treatment by the EU while the victims of the conflict are left behind.
Serbia, Macedonia and Montenegro will enjoy visa-free EU travel from January 2010.
The Kosovo visa-free project is being launched despite the fact that Spain, Romania, Slovakia, Greece and Cyprus do not recognise it as an independent country.
"Notwithstanding EU member states´ differing positions on Kosovo´s status, the approach of diversity on recognition, but unity in engagement provides a constructive basis for progress," Wednesday´s report said.
An EU official pointed out that despite the legal complexities of the situation, Greece currently accepts Kosovo passports as valid travel documents, while Romania is a big contributor to Eulex, the EU police mission to the quasi-state.
The EU report painted a worrying picture of Kosovo one and a half years on from Pristina´s declaration of independence, an initiative orchestrated by the EU and US.
It complained of political interference in high-level appointments in the civil service, inadequate investigations into allegations of judicial corruption, lack of police access to Serb-controlled areas and "porous" borders with neighbouring states.
Kosovo´s economy grew by 5.4 percent last year but this was largely due to massive public spending and Kosovar expats sending home money from abroad. Meanwhile, GDP per capita was just €1,726, a fraction of the level in even the poorest EU state, Bulgaria (on around €8,000). Unemployment stood at 40 percent, rising to over 70 percent among young people.
In a curious snapshot of Kosovo society, the EU paper said 50 percent of people own mobile phones, but just one third of homes are connected to sewage pipes.
"The wide possession of weapons by the civilian population remains a serious concern," the report added.