Brussels – The green light of the European Council for the start of accession negotiations is not enough. Bosnia and Herzegovina remains in institutional chaos, which now puts at risk – as has long been feared – the EU funds allocated by the new Western Balkans Plan that links economic growth with domestic reforms. “Bosnia and Herzegovina has not yet submitted a final reform agenda to the European Commission. It is therefore very likely that it will not receive, already after the summer, the first unconditional installment of pre-financing worth 7 percent,” the EU delegation in Sarajevo disclosed in a post on X: “This is a missed opportunity for substantial early funding.”
This danger has been clear since last fall, when the President of the European Commission, Ursula von der Leyen, on her Bosnian leg of the customary annual trip to the Western Balkans, made it clear that failure to implement crucial reforms would mean that “resources will be redistributed to other countries that are capable of doing so.” With the Growth Plan approved in record time by the EU co-legislators earlier this year, the EU executive confirmed two months ago that without meeting reform standards, the EU may decide to cut funds. “The first installment of the Growth Plan can only be disbursed after the Reform Agenda has been submitted and formally approved by the European Commission and Bosnia and Herzegovina,” the EU delegation in Sarajevo made clear yesterday (July 25), encouraging work “without further delay, so as not to miss this opportunity altogether.” Bosnia and Herzegovina’s share of funding from the Growth Plan is estimated at one billion euros: for now, the country misses out on the first installment of unconditional pre-financing worth about 70 million euros.
What caused the stalemate was the institutional chaos that emerged in the face of the draft submitted by the Ad Hoc Working Group, despite the EU Commission’s deadline extension to reach a last-minute agreement. In what is considered one of the world’s most complicated institutional arrangements – that emerged from the 1995 Dayton Accords ending three-and-a-half-years of civil and ethnic war in the country – first, the president of Republika Srpska, Milorad Dodik, refused to accept two items (out of 112 on the Agenda) on the appointment of judges to the Central Constitutional Court and the recognition of the Court’s decisions Then the representatives of four cantons of the Federation of Bosnia and Herzegovina (Central Bosnia, Tuzla, Zenica-Doboj, and Una-Sana) did not agree to the document, accusing it of prioritizing the institutions of the two entities over state institutions and prioritizing projects in Republika Srpska and Bosnian-Croat majority cantons over Bosnian majority ones.
“Despite all the efforts and support of the European institutions, not everyone has shown a minimum level of political responsibility to direct our activities toward a common European path,” attacked Bosnia and Herzegovina’s President of the Council of Ministers, Borjana Krišto, in announcing on Wednesday (July 24) the failure of negotiations on the Reform Agenda. In addition to the EU delegation reiterating its readiness to continue to support the Bosnian authorities “if necessary,” the US Embassy in Sarajevo also intervened harshly in defense of the Western Balkans Growth Plan, defining it, in a post published yesterday, “an unprecedented offer by the EU to the citizens of Bosnia and Herzegovina.” Washington’s direct attack is not only on Bosnian Serb President Dodik – “a man who consistently puts his interests ahead of those he claims to represent” and who represents “the greatest threat to the European future” of the Balkan country – but also on the main Bosnian-Muslim party, the Democratic Action Party (SDA): “The decision to use the occasion for political grandstanding, instead of working with the other parties to secure approval on the final two outstanding points was unhelpful and irresponsible.”
What is the Western Balkans Growth Plan
The Growth Plan for the Western Balkans was submitted by President von der Leyen on November 8, 2023 in parallel with the publication of the EU Enlargement Package 2023. “It is something exceptional. We know that the miracle of prosperity comes with access to the Single Market, and we are already starting this process. We are not waiting for the final decision on political accession,” the EU Commission leader claimed, outlining the 4 pillars of a Plan to “close the economic and social gap” between the EU and the Balkan region and allow “integration on the ground even before they formally enter as member countries.”
The first pillar is economic integration in the Single Market in seven key areas, subject to alignment with EU rules and the opening of relevant sectors to neighboring countries: free movement of goods, free movement of services and workers, access to the Single Euro Payments Area (SEPA), facilitation of road transport, integration and de-carbonization of energy markets, digital single market, and integration in industrial supply chains. The second pillar is internal economic integration through the Common Regional Market (based on EU rules and standards). Brussels estimates that this factor alone could potentially add 10 percent to the economies of the Balkan Six. The third pillar concerns socio-economic and fundamental reforms to pass between 2024 and 2027, which in the Brussels Plan will, on the one hand, support the Western Balkans’ path to EU membership and, on the other, support foreign investment and the strengthening of regional stability.
Investment is where the fourth pillar of EU financial assistance for reforms for all six partners comes in. Specifically, it is a new €6 billion Reform and Growth Facility for the Western Balkans for 2024-2027, the disbursement of which depends on the implementation of reforms agreed upon in the respective Agendas (just like Next Generation EU for the 27 member states). With the interim review of the EU Multiannual Financial Framework 2021-2027, the go-ahead was given for the instrument consisting of 2 billion euros in grants(ending up in the EU budget without changes to the Commission’s proposal) and 4 billion in soft loans, with the allocations for each country determined based on GDP and population. Half of the support for the Growth Plan- carried out twice a year and conditioned on meeting the qualitative and quantitative stages of the Agendas – will be provided by the Western Balkans Investment Framework (WBIF), and half by loans disbursed directly to the partners’ national budgets.
The Republika Srpska problem for Bosnia
Dodik has been one of the biggest obstacles to Bosnia and Herzegovina’s path to rapprochement with the European Union – and today of access to EU Growth Plan funds – since he has been championing a secessionist project since October 2021. The goal is to wriggle out of central state control in crucial areas such as the army, the tax system, and the judiciary, more than 20 years after the end of the ethnic war in Bosnia and Herzegovina. The European Parliament has called for economic sanctions. After the condemnation of secessionist attempts by the Serb majority in Bosnia (with a bill to establish an autonomous High Judicial Council), Bosnian leaders gathered in Brussels in mid-June 2022 to sign a charter for stability and peace, focused primarily on electoral and constitutional reforms in the Balkan country.
However, concerns became increasingly real in late March 2023 when the government of the Bosnian Serb entity presented a draft law to establish a registry of foreign-funded associations and foundations. The called law on ‘foreign agents’ is similar to the one adopted by Moscow in December 2022 and was approved in late September by the Banja Luka National Assembly amid harsh criticism from Brussels. At the same time, the process of adopting amendments to the Criminal Code reintroducing criminal penalties for defamation also advanced, which after being proposed in late March, came into force on August 18, with fines of 5,000 to 20,000 Bosnian marks (2,550 to 10,200 euros) if the defamation occurs “through the press, radio, television, or other public media, during a public meeting, or otherwise.” The European External Action Service (EEAS) and the EU delegation in Sarajevo attacked Banja Luka, highlighting that the two laws “have had a frightening effect on freedom of speech in Republika Srpska.”
The secessionist provocations were accompanied by the issue of the relationship with Russia after it invaded Ukraine. As early as September 20, 2022, Dodik traveled to Moscow for a bilateral meeting with Putin after provoking Western partners about the illegal annexation of Russian-occupied regions in Ukraine. These provocations continued in January 2023 with the award to the Russian autocrat the Order of Republika Srpska (the highest honor of the Serb-majority entity in the Balkan country) – in recognition of “patriotic concern and love” toward Banja Luka’s demands – during National Day of Republika Srpska, an unconstitutional holiday under Bosnian law. As if that were enough, Dodik went on a second trip to Mosco on May 23, while in Brussels, misgivings emerged about the Union’s failure to respond with sanctions. EU sources revealed to Eunews that a framework of restrictive measures has existed for some time ready to be implemented, but Viktor Orbán’s Hungary does not allow the green light. Any such foreign policy action requires unanimity in the Council.
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English version by the Translation Service of Withub
