Bosnia and Herzegovina must speed up the reform process by the end of the year or risk being left without an additional 373.9 million euros from the European Union’s Growth Plan. Brussels warns of a delay in fulfilling the obligations, while part of the funds have already been lost due to earlier delays.
Among the key tasks are the adoption of laws in the field of justice, the appointment of the chief negotiator with the European Union and the implementation of other reforms.
Warning from the European Union
In the joint statement of Kaja Kalas and Marta Kos, it was stated that in order to avoid further loss of funds, it is necessary to complete the legal and institutional framework without delay and start implementing the undertaken reforms.
“In order to avoid further loss of funds, it is necessary for the country to complete the legal and institutional framework without delay and start implementing the reforms it has committed to, which contribute to improving the quality of life of all citizens of Bosnia and Herzegovina, in accordance with their aspirations for EU membership,” the statement said.
Although it is partly about loans, economists emphasize that it is about favorable loans.
EU funds on hold, time running out
Economist Svetlana Cenić points out that about 28 percent of the funds are non-refundable, while the rest are credit funds with a long repayment period.
“Somewhere around 28 percent are grants, the rest are credit funds, but credit funds whose repayment begins in 2034, and for 40 years. Now tell me who could have borrowed from the entity under those conditions, and they all reached for the international capital market, i.e. international stock exchanges, and both of them killed their capital market in the process,” said Cenić.
The interlocutors warn that there is not much reason for optimism when it comes to the rapid formation of the government, especially bearing in mind that European funds imply clearly defined conditions and control of their dedicated spending.
Will the government be formed soon?
Journalist and political analyst Amir Sužanj believes that the warnings from Brussels will not necessarily affect the formation of the government and the fulfillment of the conditions for the use of European funds.
“These are funds that they cannot influence in the way they want. So it is very difficult to expect that the warnings from Brussels will affect the formation of the government in Bosnia and Herzegovina and the fulfillment of all other conditions, and I do not expect that anyone in the ruling circles in Bosnia and Herzegovina, in the winning parties, will be excited because of these warnings,” said Sužanj.
Even analyst Mladen Bubonjić is not an optimist when it comes to a quick agreement.
“I’m not an optimist on that issue. And in all of this, let’s say, that carrot presented through EU money, that is, those funds, I don’t think they will play that much of a role, taking into account what’s on the table here, which is the distribution of interests, the distribution of roles, the distribution of positions,” said Bubonjić.
The loss of European funds would mean less money available for reform projects, improving public services and strengthening the economy, but also a missed opportunity for BiH to speed up economic development through European support. According to the estimates of some economists, taking into account the indirect effects of investments, the total lost economic benefit could be measured in billions of marks. Experiences from previous years, when negotiations on the formation of the government often lasted for months, further raise the question of whether a new political agreement will be reached quickly enough to use the remaining time.
