Nothing New from the European Commission: BiH Lags Behind on the EU Path

In the set of annual reports adopted today, the European Commission assesses the progress made over the past year by the Western Balkan countries seeking to join the EU, as well as Turkey, and the challenges they face, reports the Bosnian news agency Patria.

Presenting the annual enlargement package, Commissioner Štefan Füle said that five years ago, the strengthening of the credibility and transformative power of the enlargement policy began.

- We placed special emphasis on three pillars: the rule of law in 2012, economic governance in 2013, and this year, we are launching new ideas to support public administration reform. Today, this approach is bearing fruit. This process is credible and delivers concrete results through reforms that gradually transform the countries in question and improve stability in our immediate neighbourhood - said Füle.

According to the country overview for Bosnia and Herzegovina, it is stated that it continues to lag behind on the path to EU integration.

- After the October general elections, it will be of essential importance for the country to speak with one voice, implement urgent socio-economic reforms, and make progress on its path towards European integration - the report from Brussels states.

Additional information notes that BiH is a potential candidate and has a European perspective like other Western Balkan countries.

- The country remains stalled on its path towards European integration, and the Stabilisation and Association Agreement has still not entered into force. It is necessary that the leaders of Bosnia and Herzegovina, after the October general elections, decisively engage in a plan of comprehensive reforms. They need to address the socio-economic problems of citizens and improve the efficiency and functioning of institutions at all levels of government, as well as mutual coordination, which is necessary for progress on the EU integration path - stated in the European Commission report.

The Commission concluded, among other things, that very limited progress has been made regarding political criteria. Bosnia and Herzegovina has not overcome the stalemate in the European integration process, while other countries in the region are decisively moving forward.

This disappointing situation has occurred mainly due to a lack of collective political will on the part of the country's leadership. It is necessary to improve the efficiency and functionality of political institutions at all levels of government and urgently establish a functional mechanism for coordination on EU integration issues.

As evidenced by the social protests from the beginning of 2014, addressing the socio-economic needs of citizens must be a priority at all levels of government, with an emphasis on addressing the very high youth unemployment rate as well as providing assistance to the population in need following the severe floods in May.

In response to the protests, the Commission launched three initiatives to redirect attention to reforms and issues of direct relevance to citizens. It expanded the Structured Dialogue on Justice between the EU and BiH to additional rule of law issues. It established a joint EU-BiH working group to accelerate the implementation of EU-funded projects, which will focus on strengthening economic governance. The 'Growth and Employment Agreement', as the first result of this new approach, was presented on 24 July and should become the basis for urgent economic reforms and for the National Economic Reform Programme, the drafting of which the Commission expects from the country at the beginning of 2015. The Commission also expects Bosnia and Herzegovina to act urgently in accepting the adaptation of the trade part of the Interim Agreement and the Stabilisation and Association Agreement in light of Croatia's accession to the EU, based on traditional trade between the two countries.

Political Criteria

Various criteria in which BiH is lagging behind were considered. Thus, in the political criteria, it is stated that the Parliamentary Assembly of Bosnia and Herzegovina has made very limited progress in adopting legislation related to EU integration. Political and inter-ethnic disagreements have had a highly negative impact on the work of assemblies at the state level and in the Federation.

Secondly, BiH has still not implemented the judgment of the European Court of Human Rights in the Sejdić-Finci case. This led Commissioner Füle to end his engagement on this matter in February. Until the issue from the Sejdić-Finci judgment is resolved, BiH continues to violate its own international obligation.

The lack of a coordination mechanism for EU integration issues is also noted, which also affects the level of financial assistance. Sectoral strategies in areas such as transport, energy, and environment that would apply to the entire country have not been harmonised.

The efficiency and functionality of public administration at and between various levels of government continue to cause serious concern. Similarly, very little progress has been made in the judicial system. The Structured Dialogue on Justice remains an important platform for consolidating consensus on judicial reform and has been expanded to other rule of law issues. Little progress has been made in reforms to reduce corruption, which continues to affect the entire public sector and remains most acute in areas of service delivery and access to employment.

Economic Criteria

During 2013, the economy somewhat recovered and growth reached 1.5%. However, this modest upturn faltered in the first half of 2014 when growth slowed again, and short-term growth was further hampered by the floods in May. The unemployment rate remained persistently high. The quality of public finances remained low, although public financial management was somewhat strengthened. Despite some minor improvements, consensus on central economic and fiscal policy issues remains weak and thus continues to hinder reforms at the country-wide level. The large and inefficient public sector with multiple overlapping competencies continues to pose risks to fiscal sustainability. The inefficient legal and judicial system undermines enforcement capacity and remains a clear deterrent to investment as well as a source of corruption.

The low level of efficiency in public spending in Bosnia and Herzegovina continues to be a cause for concern. The continuation of structural rigidities such as excessive taxation of labour, poorly targeted social transfers, and the inefficiency of the education system require measures that will free up demand for labour. The share of public enterprises in the economy remains persistently high. The authorities should restart privatisation to improve the fiscal situation and introduce more competition.

EU Legislation

The lack of genuine political support for the EU integration plan, the absence of a functional coordination mechanism for EU integration issues, and internal disputes over competencies have led to limited progress in aligning with EU legislation and standards in a multitude of different sectors. In a number of areas, further progress is hampered by the lack of strategies that would apply to the entire country.

Unfortunately, the lack of compliance with EU requirements in the areas of agriculture and rural development, food safety, veterinary and phytosanitary policy, and fisheries continues to prevent the export of products of animal origin to the EU. In the area of natural gas, there is a serious and persistent violation of the state's obligations under the Energy Community Treaty, which needs to be urgently addressed. Progress has been made in the area of the internal market through the adoption of the law on public procurement, which has enabled BiH to align with relevant EU laws.