Due to the failure of the authorities in Bosnia and Herzegovina to agree on required implementation actions, the European Union has suspended 4.5 million Euros allocated for projects to support the tourism industry and the introduction of Quality Management Systems (QMS) for small and medium enterprises (SMEs) in Bosnia and Herzegovina (BiH).
The two capacity building projects aimed to support economic growth in the country through SMEs and tourism, the most competitive BiH industries.
Clear political agreement on the scope of activities, including the approval of relevant project reports, and an agreed way forward in project implementation are needed for further support to these sectors.
The lack of agreement does not only mean the potential loss of 4.5 million EUR of EU funds. It may also have implications on the allocation of millions of Euros of EU funds for economic development under IPA 2, the main EU programme of financial assistance to BiH for 2014-2020.
Commenting on the suspension, Deputy Head of the European Union Delegation to Bosnia and Herzegovina, Dr Renzo Daviddi, stated:
“We are disappointed because Bosnia and Herzegovina is not able to take the money made available to it. In June, we already were forced to suspend five million Euros committed for projects in agriculture and rural development. Only a month later, we have to suspend additional millions of Euros in two equally important sectors – SMEs and tourism.
“The EU has repeatedly underlined that Bosnia and Herzegovina risks falling behind other countries in the region. This is as much an economic as a political issue – other Western Balkans countries are working hard on introducing EU quality standards and preparing for investments to increase their economic growth.
“While the EU is fully committed to assist Bosnia and Herzegovina to move down its EU path, we must also ensure that the funds provided by the EU Member States’ taxpayers are effectively used. Only if there is clear and verifiable agreement on the project activities, can these funds be mobilised again.”
Bosnia and Herzegovina still has a window of opportunity to agree on this. The EU-BiH IPA Monitoring Committee will meet on 10 September 2013 to consider whether the projects should be terminated or, if relevant preconditions are put in place, can go forward.
