Introduction
The European Commission (EC) adopted the Growth Plan for the Western Balkans (WB) on November 8, 2023, with the objective of fostering socioeconomic convergence between WB states and the European Union (EU). The plan consists of four pillars: enhancing economic integration with the EU, boosting regional economic integration, accelerating fundamental reforms, and supporting financial convergence. The facility allocates €6 billion for 2024-2027, with €1.085 billion designated for Bosnia and Herzegovina (BiH). This financial support depends on BiH implementing necessary reforms to improve governance, rule of law, and economic conditions.
To access these funds, BiH was required to submit a Reform Agenda to the European Commission. The government formed a Working Team in January 2024, including key political figures and officials from different government levels. However, representatives from BiH’s parliaments were excluded, and no public consultations were held, leading to concerns about transparency. The Working Team faced delays and political disputes, particularly due to a lack of quorum when representatives from Republika Srpska (RS) failed to attend meetings. Despite tight deadlines imposed by the EC, the lack of consensus hindered progress. In April 2024, BiH submitted a reform agenda with 97% of the proposed measures aligned with EU recommendations. However, the European Commission returned the document for further coordination, citing unresolved issues. By July 2024, growing public pressure demanded greater involvement in the reform agenda. Cantonal ministers entered negotiations, complicating the approval process. The Chairwoman of the Council of Ministers, Borjana Krišto, submitted a revised document in September 2024, excluding two controversial measures. However, the EC deemed the submission incomplete, stating that BiH had failed to deliver a final reform agenda.
Key Challenges Facing BiH
The core disagreements centered on the Constitutional Court of BiH and the Council for State Aid. RS officials opposed the establishment of a centralized Constitutional Court and the removal of entity veto powers. Meanwhile, the Federation of BiH viewed the reform agenda as a necessary step toward securing financial support from the EU. Four cantonal prime ministers opposed the document, arguing that it undermined BiH’s state institutions. They claimed the process was non-transparent and lacked proper methodological rigor. This political standoff prevented the reform agenda’s finalization and submission to Brussels. As a result, BiH lost the opportunity to receive a €70 million pre-financing tranche. Political leaders blamed each other for the failure, with RS representatives insisting on maintaining entity voting rights and federalist principles, while opponents accused them of obstructing EU integration. The EC reiterated that all 113 agreed measures must be included for approval. The failure to implement the reform agenda has broader economic and social consequences for BiH.
Without the allocated financial assistance, BiH faces a slowdown in infrastructure projects, public sector improvements, and investment in key industries. The uncertainty surrounding EU integration also affects investor confidence, reducing foreign direct investment and job creation. Socially, the delay exacerbates existing economic disparities, particularly in employment and wage growth. Younger populations, already facing high unemployment rates, may seek better opportunities abroad, further contributing to brain drain. Additionally, public dissatisfaction with political inefficiencies continues to grow, potentially leading to increased political instability and public protests. If the reform agenda is not finalized by 2025, BiH risks long-term economic stagnation. Policymakers must find a middle ground to ensure that essential reforms are implemented while preserving the country’s political balance. This requires a commitment to transparent governance, inclusive decision-making, and constructive dialogue between political actors.
What next: Recommendations
To ensure the successful implementation of the Growth Plan, BiH must undertake several key steps. Firstly, greater transparency and inclusivity in the Reform Agenda process are necessary. Engaging all relevant stakeholders, including parliament representatives, civil society organizations, and business communities, would foster broader acceptance and collaboration. Secondly, political actors need to demonstrate a stronger commitment to EU integration. This means prioritizing long-term national economic benefits over short-term political gains. Establishing a cross-party agreement on key reforms, particularly regarding judicial independence and governance, could facilitate the adoption of the necessary measures. Furthermore, BiH should strengthen its administrative capacities to efficiently absorb EU funds. Many past international aid programs have faced implementation delays due to inefficient bureaucratic structures. Investing in institutional capacity-building and streamlining procedures would improve fund utilization and project execution.
Another critical step is increasing public awareness about the benefits of EU integration. Many citizens remain skeptical about the impact of reforms, partly due to misinformation and political manipulation. Public campaigns, educational initiatives, and open forums could help address concerns and increase support for necessary changes. Lastly, regional cooperation within the Western Balkans must be enhanced. The success of the Growth Plan depends on stronger economic ties among WB countries, ensuring that BiH does not lag behind its neighbors in development and integration. Collaborative efforts on infrastructure, trade, and digital transformation could position BiH as a more attractive investment destination.
Conclusion
Despite year-long efforts, BiH failed to finalize the Reform Agenda due to persistent political disagreements. The unresolved issues over the Constitutional Court and entity veto rights led to the forfeiture of the first tranche of EU financial assistance. While a new opportunity for submission exists in March 2025, the lack of political consensus suggests that further attempts may also prove unsuccessful. The Growth Plan remains a missed opportunity for BiH to enhance economic stability and integration with the EU. The economic and social consequences of this failure could be severe. Without EU financial support, BiH faces a decline in development opportunities, worsening socioeconomic conditions, and increased public frustration. Moving forward, political actors must prioritize national interests over partisan conflicts to secure BiH’s path toward EU membership and economic growth. If BiH can overcome these political and administrative hurdles, the Growth Plan offers significant opportunities for long-term prosperity. By fostering a more cooperative and transparent approach, BiH can accelerate its journey toward EU integration and secure a more stable economic future for its citizens.
References
European Commission. (2023). Growth Plan for the Western Balkans. Retrieved from [EU official website]
Government of Bosnia and Herzegovina. (2024). Reform Agenda Development Report. Retrieved from [BiH government website]
Kopman, G. J. (2024). Statement on Bosnia and Herzegovina’s Reform Agenda. European Commission Directorate for Enlargement.
Council of Ministers of Bosnia and Herzegovina. (2024). Official Statements on Reform Negotiations. Retrieved from [Official government records]
Political Analysis Journal. (2024). “Challenges in EU Integration for Bosnia and Herzegovina.” Vol. 12, Issue 3.
Balkan Policy Research Group. (2024). “The Future of EU Enlargement in the Western Balkans: Opportunities and Challenges.” Retrieved from [Balkan Policy website].
World Bank. (2024). “Economic Outlook for Bosnia and Herzegovina: The Impact of EU Accession Delays.” Retrieved from [World Bank website].
