EU to Weigh Bosnia Sanctions If the Political Crisis Worsens

(Bloomberg) -- The European Union is debating whether it should impose sanctions on the Serb regime in Bosnia-Herzegovina if its leaders follow through on threats to secede from the rest of the Balkan country.  

The EU’s foreign affairs service has set out a series of options, including restrictive measures, for the bloc’s foreign ministers to discuss at a meeting in Brussels later this month, according to people familiar with the matter and documents seen by Bloomberg.

The discussion comes as the Bosnian Serb regime has taken incremental steps toward seceding from the rest of the ethnically fragmented country, ignoring the U.S. decision last month to impose sanctions against its longtime leader Milorad Dodik.

In one paper, the EU suggested that restrictive measures, including asset freezes and travel bans, should be considered if Republika Srpska, led by Dodik, unilaterally takes over competences from the shared state or otherwise takes actions that threaten the federation.

Sanctions should, however, be seen as a last resort if other possibilities to end the crisis fail, as the measures could risk derailing Bosnia’s EU path, according to the document.

At a meeting of EU ambassadors on Friday, where the paper was discussed, several countries, including Germany, asked that measures against Dodik be part of the mix, according to people familiar with the discussion. Others such as Hungary argued that sanctions would be counterproductive.

Dodik, 62, an ally of Russian President Vladimir Putin, earlier this week pushed for a draft law to create a judicial system separate from the rest of the country. The move follows a series of measures adopted by the Bosnian Serb assembly in December aimed at cutting security, administrative, and military ties with the rest of Bosnia-Herzegovina. The vote stipulated that the acts will come into force within a six-month period, giving the authorities time to prepare.

Bosnia was at the center of a series of brutal conflicts that tore apart Yugoslavia in the 1990s, marked by the worst atrocities on European soil since World War II. While the U.S.-brokered Dayton peace accord in 1995 stopped the hostilities, it left the country with a weak centralized rule and lingering animosities. The country is divided into two entities along mainly ethnic lines, between Serbs on one side and Muslims and Croats on the other.

Bosnian Serb efforts toward more independence have increased tensions between the two groups in the other half of the country, known as the Muslim-Croat federation. Croats have sought a reform of the electoral law, complaining that their representatives have continuously been outvoted by Muslim votes in the country’s tripartite presidency.

The EU warned that security incidents are possible should Bosnian Serbs continue with a “worst case scenario” of efforts to secede.

Withholding Funds

In response to the current crisis, the ambassadors were informed that the EU has already started to withhold some funds for infrastructure projects in the Republika Srpska.

The options paper described the EU’s financial assistance as leverage, noting that Bosnia currently receives 395 million euros ($448 million) in funds as a well as a portfolio of more than 1 billion euros of investments, including 242 million euros in grants. 

The bloc’s foreign ministers will be asked to provide guidance on the targeted use of EU financial assistance in Bosnia, as well as the potential use of restrictive measures as a measure of last resort should the situation further escalate, according to the document.

In the paper, the EU assessed that there is no immediate danger. But it adds that the possibility of local outbursts of violence cannot be underestimated.

The assessment also states that outside involvement of others, such as Serbia and Turkey, is increasing and there is also a risk of interference from others that could exploit divisions to destabilize the country further. It also notes that Russia and China have threatened in the past to veto a European-led stabilization force at the United Nations Security Council.

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