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B&H Watch: Green light with conditions - reforms before next step on EU path

Just after ten months of gained candidacy status for EU membership, B&H got next green light for further advancement on its EU integration path (Negotiator status) but conditional on higher level of reforms within the 14 EU Commission priorities.

A generational chance at the table – EU support for overall improvement

On November 8, the EU Commission adopted its 2023 Enlargement Package (B&H factsheet), presenting individual reports for all candidate countries. In the case of Bosnia and Herzegovina, the EU Commission said that it recommends opening the EU accession negotiations once the Commission assesses that Bosnia and Herzegovina has achieved the necessary degree of compliance with the membership criteria and in particular has met the key priorities. This means that Bosnia made some improvement on reforms, but it is not enough for negotiation status and EU side gives time for more reforms till March 2024.

Where B&H made advancement? Important steps and commitments were made towards the fulfillment of the 14 key priorities (despite negative legislative developments and media freedom seen on RS entity level). The formation of a State-level coalition government at record speed is an important proof of a new political dynamism and will. B&H completely fulfilled 2 of 14 priorities, while visible steps were made within other priorities with adoption of five laws from EU agenda: the Law on the Ombudsman, the Law on Access to Information, the Law on the High Judicial and Prosecutorial Council, the Law on Foreigners and before the Law on Public Procurements.

What is in front of B&H in context of necessary reforms? B&H needs to fulfill remaining 12 priorities or “necessary degree” of that which will be estimation of the EU Commission. The priorities that B&H has to complete refer to elections, functioning at all levels of the coordination mechanism on EU matters, improve the institutional framework, steps to reconciliation, functioning of the judiciary, prevention and fight against corruption and organized crime, border management, protection of the rights of all citizens, enabling environment for civil society, freedom of expression and of the media, protection and inclusion of vulnerable groups, and public administration reform. In general, a lot of work for a short time.

What can B&H get with reforms? Economic convergence is an essential element in getting the Western Balkan counties closer to the EU. It should enable partners to step up reforms and investments to significantly accelerate the speed of the enlargement process and the growth of their economies. To this effect, the EU Commission is proposing a new growth plan for the Western Balkan based on four pillars, aimed at enhancing economic integration with the EU single market, boosting economic integration within the Western Balkans, accelerating reforms and increasing financial assistance to support the reforms through a new instrument worth EUR 6 bn in non-repayable support (EUR 2 bn) and loan support (EUR 4 bn), with payment conditioned on the partners fulfilling defined reforms.

Having in mind local political weaknesses and vulnerability, global uncertainty marked with Russian aggression on Ukraine and war in the Middle East, we believe that political representatives in B&H, led by State Coalition, have awareness that country has the generational chance to get closer to EU and that they will fulfill necessary reforms till March 2024 so that the country is granted with Negotiator status. In the meantime, the EC recommendations need now to be approved by the European Council at the December meeting.

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location iconBosnia Herzegovina   

Ivona Zametica has established B&H Research Team within Raiffeisen BANK d.d. Bosnia and Herzegovina back in March 2010. She graduated at Economic Faculty of Zagreb in Macroeconomics and Finance and further deepened her knowledge through the Master degree program in Advanced Financial Management and Markets. She has been among top 3 forecasters for economic indicators of B&H in Focus Economics pool in the past four years and granted the award as the best overall forecaster for 2021. She has been further deepening her knowledge about the Financial Markets and Investment Banking in several projects and transactions of the Bank and being part of the Working Group supporting establishing the local DCM market in B&H. She has been also author of several research papers and studies related to currency board in B&H, government debt management and access to finance of SME’s in B&H. Apart from current coverage of B&H market and interest in SEE and CEE region, she has been particularly interested in monetary policy and recent technological impacts on future of monetary policy and currencies. Ivona is passionate yoga practitioner while in the free time she enjoys the most with her family and friends in travelling, hiking while dancing, theater and music are her passions from the childhood which she shares now with her daughter.

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location iconBosnia Herzegovina   

Mirza is macroeconomic analyst in Raiffeisen Bank BH dd Sarajevo. He has joined to the Research Team in spring 2022 after 16 years work activities as a Credit analyst in Raiffeisen Risk Department where he was in charge for Corporate, FI and LRG clients. With desire to make step forward and improve his analytical skills in macroeconomics, he decided to join the Raiffeisen Research Team. Mirza holds master’s degree of Economic Sciences at Sarajevo University and he has experience in management of public institutions/companies as a member of the Supervisory Board / Assembly / Audit Committee in public institutions/companies. In private, most of time he spends with his family but he is trying to find some moments for tennis, football and running as a passionate sport fan.