European diplomats said in recent weeks that Serbia’s aspirations to win an offer of candidate status as part of the EU executive’s annual report on EU hopefuls, due out on Wednesday, could be harmed by heightened tensions with Kosovo.

Several member states, including EU powerbroker Germany, had pushed for a clear improvement in relations between Belgrade and its former breakaway province before awarding Serbia with a step forward on its EU path.

But the Commission wants to acknowledge democratic reforms introduced in Serbia and reward it for bringing the remaining war crime fugitives to justice this year, diplomats said.

“There are indications this is what will happen,” a senior diplomat said, speaking on condition of anonymity.

The Commission is scheduled to make a final decision on its recommendation on Wednesday before issuing the report, which will also discuss relations with Turkey and other states in the western Balkans. EU governments will have to approve it later this year.

If they grant Serbia the status of EU candidate, Belgrade will likely have to meet specific criteria on cooperation with Kosovo, before the EU decides whether and when to launch actual negotiations on its accession.

These conditions will likely include further progress in dialogue between Serbia and Kosovo which aims to address practical cooperation between the two.

Serbia, along with five EU members, refuses to recognize Kosovo as an independent state and considers it its historic heartland. It lost control over Kosovo in 1999, when a NATO bombing campaign halted a Serb counter-insurgency war against ethnic Albanian rebels. With Western backing, Pristina declared independence in 2008.

Tensions between the two has worsened in recent weeks over border and trade disputes that led to clashes in which one policeman died and dozens of NATO soldiers and Serb protesters were injured. A round of EU-mediated talks was also canceled.