Bosnia and Herzegovina has made little progress over the reporting period. The domestic political climate has deteriorated and challenges to the functioning of the institutions and inflammatory rhetoric have continued. Reform implementation has been slow, mainly due to a lack of consensus and political will, but also to the complex institutional organisation of the country. A very limited number of European integration-related laws have been adopted.
Political criteria Few positive developments can be outlined as regards political criteria. The constitution of Bosnia and Herzegovina was amended for the first time to regulate the status of the Brčko District. The public administration reform strategy is being implemented and the public administration reform fund is operational. Cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) has remained satisfactory. As regards prosecution of war crimes, at State level trials have been generally held within reasonable time and in compliance with internationally recognised standards.
However, the domestic political climate has deteriorated over recent months, and lack of consensus on the main features of state building and inflammatory rhetoric have adversely affected the functioning of institutions and slowed down reform. The authorities have not yet demonstrated sufficient capacity to take the necessary political ownership and responsibility. The role played by ethnic identity in politics has continued to hamper the functioning of the executive, the legislative and the judiciary as well as the country’s overall governance. A process for the reform of the constitutional framework has not been initiated. The requirements for the closure of the Office of the High Representative have not been fully met. Corruption remains prevalent in many areas and is a serious problem.
Economic criteria Bosnia and Herzegovina has made little further progress towards a functioning market economy. Further considerable reform efforts must be pursued with determination to enable the country to cope over the long term with competitive pressure and market forces within the Union.
Bosnia and Herzegovina has been severely affected by the economic crisis. Nonetheless, financial and monetary stability has been preserved thanks to the timely reaction from the central bank when the financial crisis erupted in autumn 2008. The currency board arrangement has continued to enjoy a very high degree of credibility and the banking sector has so far weathered well the impact of the crisis.
However, the quality and sustainability of public finances have further deteriorated Restructuring and liquidation of state-owned enterprises has advanced slowly and the privatisation process has not proceeded further. The weak productive capacity and structural rigidities hamper job creation. Unemployment continues to be very high and the large informal sector remains an important challenge. The business environment is still affected by administrative inefficiencies. Progress towards the creation of a real single economic space within the country has been very limited.
European Standards As far as European standards are concerned, some progress has been made in the fields of [customs, taxation, education and transport]. Progress has also been made in number of justice, freedom and security-related areas, which has brought Bosnia and Herzegovina closer to the fulfilment of the visa roadmap requirements.
The country still needs to intensify its efforts in many areas, such as [free movement of goods, persons and services, employment and social policies, state aids, energy and environment. Sustained efforts in sensitive areas such as police and the fight against organised crime are also necessary.
2009 Progress Report for BiH and Enlargement Strategy available at: http://ec.europa.eu/enlargement/press_corner/key-documents/reports_oct_2009_en.htm
