Officials from Bosnia and Herzegovina and the European Union met virtually on 14-15 November 2022 for the 6th meeting of the sub-committee on economic and financial issues and statistics under the Stabilisation and Association Agreement between the European Union and Bosnia and Herzegovina.
The meeting was co-chaired for Bosnia and Herzegovina by Mrs Vera Letica, Assistant Minister at the Ministry of Finance and Treasury, and for the European Commission by Mr Uwe Stamm, Head of Unit in the Directorate-General for Economic and Financial Affairs and by Ms Mary Teresa Moran, Deputy Head of Unit in the Directorate-General for Neighbourhood and Enlargement Negotiations.
This was the first meeting of this sub-committee since policy dialogue with the EU under the Stabilisation and Association Agreement resumed earlier this year. The last meeting of the sub-committee was held two years ago, in November 2020.
This sub-committee meeting also follows the adoption in October of the 2022 Commission report on Bosnia and Herzegovina which noted that the country remains at an early stage regarding the economic criteria for accession and that there was no progress in some areas of the economic criteria and backsliding in other areas, in particular in terms of economic governance.
The meeting also follows the Commission’s recommendation that candidate status be granted to Bosnia and Herzegovina on the understanding that a number of steps are taken, including ensuring a track record in the functioning at all levels of the coordination mechanism on EU matters including by developing and adopting a national programme for the adoption of the EU acquis.
The sub-committee took stock of the most important recent economic developments affecting the country, including the impact of Russia’s war of aggression against Ukraine and the economic outlook in the European Union, Bosnia and Herzegovina’s largest trade partner, as presented in the Commission’s Autumn 2022 Economic Forecast. Participants discussed the outlook for economic growth as well as the high level of inflation driven by energy and food prices as well as developments in the labour market and the balance of payments.
The participants from Bosnia and Herzegovina also provided updates on recent developments in fiscal policy and the budget cycle as well as in the financial sector.
The Commission welcomed progress in the area of public internal financial control and called for further improvements in particular in the areas of managerial accountability in public entities, the monitoring of publicly owned companies and communication strategies in entity-level supreme audit institutions.
In statistics, the participants discussed progress made over the previous year, in particular the implementation of a survey on income and living conditions and progress on preparations for an agricultural census. The Commission urged the authorities to agree a master plan for the production of national accounts, continued progress on preparations for the agricultural census and the next population and housing census and the continuation of the surveys on income and living standards.
Bosnia and Herzegovina needs to undertake socio-economic reforms to tackle the consequences of the pandemic and of Russia’s war of aggression against Ukraine, and to establish a functioning market economy, addressing the fragmentation of the country’s internal market.
To that end, the Commission encouraged Bosnia and Herzegovina to fully implement the policy guidance set out in the Joint Conclusions of the Economic and Financial Dialogue and to ensure consistent political support, high visibility, countrywide ownership and coherence of Bosnia and Herzegovina’s Economic Reform Programme which the country is due to send to the European Commission in January 2023.