Bosnia breaks government impasse

Bosnia’s Muslim, Serb and Croat leaders made a breakthrough last night by agreeing to form a government and pass a budget for 2011 to avoid financial collapse, ending a political impasse since an inconclusive October 2010 election.

Leaders of the six largest political parties said they had also agreed on a long-delayed set of laws that pave the way for Bosnia to apply for membership of the European Union. The agreement will enable the release of funds from the EU and the International Monetary Fund.

Bosnia has been effectively paralysed for more than a year since the parliamentary election.

“We have created conditions to nominate as soon as tomorrow a prime minister-designate to the presidency,” said Dragan Covi of the largest ethnic Croat party, the Croatian Democratic Union (HDZ), which will nominate the future prime minister.

Bosnia’s three ethnic groups share power and distribute leading posts fairly, but after last year’s elections Croat and Serb nationalists insisted positions reserved for Serbs and Croats should go only to nationalist parties, not to a multi- ethnic party that won most of the votes.

The deadlock had put Bosnia at the end of the queue of EU hopefuls in the western Balkans, behind Serbia, Albania, Macedonia and Montenegro.

The formation of the central government and the agreement on the general fiscal framework for 2012-14 are key conditions for Bosnia to win back funds from an IMF stand-by loan, which were suspended last year because of lack of progress.

The European Commission has also blocked its €100 million (£84m) budget support loan to Bosnia until it formed the government.