EU warns Bosnia it risks losing millions in funds

(SARAJEVO) - The European Union warned Bosnia on Thursday it could lose almost 100 million euros (135 million dollars) of the bloc's funds for 2011 due to internal political disputes and gave it a few days to agree over the issue.

EU Enlargement Commissioner Stefan Fuele "regrets that Bosnia-Hercegovina is the only country in the region that has not been able to finalise an IPA national programme" destined for candidate or potential candidate countries, a statement issued by the EU delegation here said.

If the European Commission is not notified of an agreement on the programme "in the coming days" the annual funds in the amount of 96 million euros will be reallocated for a regional Western Balkans programme, Fuele said in a letter to Bosnian Prime Minister Nikola Spiric.

The funds were aimed to be used notably to implement reforms in judiciary and public administration, and to help development of small and medium enterprises and construction of highways.

Ever since a deal on the funds was signed between Brussels and Sarajevo in February, Bosnian leaders have failed to agree a list on projects to be financed due to inter-ethnic wrangling.

Since its 1990s war Bosnia consists of two semi-autonomous entities -- the Serbs' Republika Srpska and the Muslim-Croat Federation.

The country is facing the most serious crisis since the 1992-1995 war as due to inter-ethnic disputes its political leaders have failed to agree on a central government almost a year after general elections.