EUROPEAN COMMISSION

MEMO
Brussels, 10 October 2012

Key findings of the 2012 Progress Report on Bosnia and Herzegovina

The Progress Report on Bosnia and Herzegovina is part of the 2012 Enlargement Package adopted by the European Commission on 10 October. The Commission concluded that Bosnia and Herzegovina has made limited progress towards meeting the political criteria and achieving more functional, coordinated and sustainable institutional structures. A shared vision by the political representatives on the overall direction and future of the country and its institutional set up remains absent. The need for an effective coordination mechanism between various levels of government on EU matters remains to be addressed as a matter of priority, as does meeting the conditions for entry into force of the Stabilisation and Association Agreement and for a credible membership application. In this respect, it is disappointing that the results so far remain below expectations. The combined EUSR/EU Delegation in Bosnia and Herzegovina has taken the lead in a number of areas to implement the objectives of the EU agenda. In this regard, the EU will continue to strengthen its support for the country's institutions.

Political criteria
Bosnia and Herzegovina has made limited progress in addressing the political criteria for membership in the EU. A High Level Dialogue on the Accession Process (HLDAP) was launched in Brussels in June to address EU accession requirements. The need for an effective coordination mechanism on EU matters remains to be addressed as a matter of priority to enable the country to speak with one voice on EU matters and make an effective use of the EU's pre-accession assistance. The first timeline [31 August] agreed by all participants at the 27 June HLDAP was not met. The European Court of Human Rights decision in the Sejdic-Finci case about compliance of the Constitution with the European Convention on Human Rights needs to be implemented without further delays. After the general elections of October 2010, a State-level government was established in February 2012. The governments at State level and in the Federation started being reshuffled but political disputes and legal challenges make the outcome uncertain. The Parliamentary Assembly has made some progress initially by adopting EU-related legislation, in particular by adopting the State Aid Law and the Law on Household and Population Census. But their implementation is outstanding. The establishment of the State Aid Council, compliance with EU principles on public undertakings and a comprehensive State Aid Inventory remain to be achieved to comply with obligations under the agreements with the EU. Strengthening the functioning and coordination of institutions at all levels remains an issue to be addressed as a matter of priority.

MEMO/12/764

The implementation of the Public Administration Reform Strategy continued, but coordination between the various administrations at all levels remains weak and public administration reform lacks the necessary political support. The reduction of funding for the activities of the Office of the Ombudsman impacted negatively on its effectiveness. The need for a comprehensive reform was recognised within the framework of the Structured Dialogue on Justice, launched in June 2011. Progress has been achieved in the area of judicial system reform, including in the implementation of the justice sector reform strategy and of the national war crimes strategy. However, political attacks continued to affect the independence of the judiciary. Bosnia and Herzegovina has made limited progress in tackling corruption, which remains a serious problem and is prevalent in many areas throughout the public and private sector. Significant progress was made with regard to the Sarajevo Declaration Process on refugees and displaced persons. On the other hand, despite some progress in implementing the Roma Strategy, the Roma minority continues to face very difficult living conditions and discrimination. Political pressure on media and the polarisation of media along political and ethnic lines continues. Attempts to undermine the independence of the Communication Regulatory Agency and of the public service broadcasters have increased. Little progress was done to make schools more inclusive. In view of Croatia's EU accession in July 2013, border, trade and transit related issues remain to be addressed as a matter of urgency.

Economic criteria
Bosnia and Herzegovina has made little further progress towards a functioning market economy. Considerable further reform efforts need to be pursued to enable the country to cope over the long-term with the competitive pressures and market forces within the Union. The economic recovery of Bosnia and Herzegovina stalled in 2012 due to the worsened external environment. Unemployment remained at very high levels. The consensus on economic and fiscal policy essentials has weakened and hampered progress in reforms at country level. A new Stand-by programme of the International Monetary Fund was agreed in September. However, the commitment to structural reforms and sound public finances remained weak and the quality of public finances remained low. The business environment continues to be affected by administrative inefficiencies, unreliable contract enforcement and a weak rule of law. Planned privatisation, restructuring of public enterprises and the liberalisation of network industries did not move forward for the fourth consecutive year. Substantial efforts remain necessary in order to achieve a single economic space.

EU Legislation
Some progress has been made in aligning the country's legislation, policies and capacity with European standards in areas such as free movement of goods, competition/State aid, intellectual property, research, as well as a number of justice, freedom and securityrelated matters Progress remains insufficient in other areas, such as free movement of persons and services, customs and taxation, public procurement, employment and social policies, education, culture, industry and SMEs, agriculture and fisheries, food safety, veterinary and phytosanitary sectors, environment, transport, energy, information society, financial control and statistics.

EU - BOSNIA AND HERZEGOVINA: KEY DATES

1999: The EU proposes the new Stabilisation and Association Process for five countries of South-Eastern Europe June 2000: The European Council states that all the Stabilisation and Association countries are potential candidates for EU membership. June 2003: Thessaloniki Summit; the EU perspective for the Western Balkans is confirmed June 2008: Signature of the SAA and Interim Agreement on trade and trade-related issues December 2010: Visa-free travel to Schengen area for citizens of Bosnia and Herzegovina June 2011: Launch of Structured Dialogue on Justice with the aim of further consolidating the judicial system in Bosnia and Herzegovina September 2011: Reinforcement of EU's role in Bosnia and Herzegovina following the decoupling of EU Special Representative's mandate from the Office of the High Representative June 2012: Launch of High Level Dialogue on the Accession Process to address EU accession requirements

More information at:

http://ec.europa.eu/enlargement/countries/strategy-and-progress-report/index_en.htm