The 3rd Subcommittee meeting on Economic and Financial Issues and Statistics between EU and Bosnia and Herzegovina took place on 15-16 November in Mostar. Representatives from the European Commission (Commission) and of Bosnia and Herzegovina (BiH) discussed most recent developments and future policy challenges in these areas. The meeting was co-chaired for BiH by Mrs. Vera Letica, Assistant Minister at the BiH Ministry of Finance and Treasury and by Mr. Uwe Stamm from the Directorate General Economic and Financial Affairs of the European Commission.
The Commission noted that the economy in BiH has continued to show signs of solid growth, while still facing important challenges such as high unemployment, low investments, a poor business environment, a low quality of fiscal governance and weak innovation. The Commission stressed that fragmented markets, a poorly functioning labour market, a weak rule of law and the insufficient alignment of education with the needs of the labour market are impediments for long-term growth and convergence. Reform implementation has generally been slow in the last two years and needs to be accelerated.
In this context the Commission stressed the need to improve the quality of public finance by strengthening its growth friendliness and by improving the targeting of social spending. BiH should address key reasons for low investment by improving the business environment and creating a single economic space. The Commission called upon BiH to continue its efforts to reduce the tax wedge and to address the informal economy. The Commission reiterated its call to strengthen the bank resolution framework and adopt amendments to the law on deposit insurance.
As regards Public Internal Financial Control (PIFC), the Commissions encouraged BiH to develop a comprehensive PIFC policy covering all levels of government, in line with the principle of managerial accountability. On Statistics, the Commissions reiterated that BiH should improve the provision of timely and exhaustive statistics in compliance with EU standards.
The Commission underlined the relevance of the EU Economic and Financial Dialogue with BiH and other enlargement countries for shaping future reforms in line with the criteria for EU accession.