Interview by Commissioner Štefan Füle for Magazine InfoKom: Foreign Trade Chamber of Bosnia and Herzegovina

  • How satisfied are you with the current implementation of activities by the authorities of Bosnia and Herzegovina in view of BiH’s accession to the EU? 

Bosnia and Herzegovina has recently achieved a number of important steps towards its integration into the EU. A new State level government has been established and two key pieces of legislation have been adopted: the State aid law and census law. I welcome these positive developments. Now, the political representatives of Bosnia and Herzegovina need to build on the current positive momentum and address the other outstanding reforms.

  • What should local politicians urgently do to change the current situation, what are the steps that would  lead to the acceleration of the country’s EU integration?

The conclusion of the Stabilisation and Association Agreement with the EU is within reach. What is crucial now is to meet the remaining requirement for its entry into force: a credible effort in bringing the Constitution into compliance with the European Convention on Human Rights, in line with the Sejdić-Finci ruling.

Moreover, the 2012 State budget law needs to be adopted without further delay to ensure financing of key institutions that play an important role for the EU integration process. A coordination mechanism for EU matters needs to be established as a matter of urgency. This will ensure that EU rules and standards are implemented evenly across the country and that  EU’s financial assistance will support agreed priorities. Furthermore, it is essential that all authorities throughout Bosnia and Herzegovina provide the necessary follow-up to the recommendations agreed under the EU-Bosnia and Herzegovina Structured Dialogue on Justice. In the same way all authorities need to effectively implement all the reforms undertaken under the visa liberalisation dialogue.

  • Why is it the entry into force of the Stabilization and Association Agreement with the EU so important for BiH ? What benefits can we expect from the SAA?

The entry into force of the Stabilisation and Association Agreement is the next step for Bosnia and Herzegovina towards European integration. The Agreement is important because we need more focus on the EU agenda in Bosnia and Herzegovina, and because the Agreement would open up new structures of dialogue and interaction between the EU and Bosnia and Herzegovina.

  • To end the open-ended questions, should BiH  reach a compromise solution for a number of activities remained unfinished from the European Partnership  as the establishment of a unified economic space, the adoption of strategies in the energy sector, the establishment of economic – social councils at the state level?

It is difficult to conceive how Bosnia and Herzegovina could join one single European market without having established a single economic space within the country. It would not be acceptable for EU Members States and EU businesses, it would not be in line with EU legislation. Above all, it is not in the interest of the people of Bosnia and Herzegovina to have fragmented or conflicting rules in a small local market. With effective and efficient co-ordination and political will, this can be overcome.          

On energy, a country-wide sector strategy is needed. The strategic policy concepts developed by the two entities do not hamper the set-up of a common energy policy in the country as a whole. The only condition the Commission puts is effective and efficient coordination between the two entities and with the state level in order to avoid overlaps and inconsistent planning. Moreover, a convincing long-term energy strategy would give investors and market players a positive signal. With further effective integration of Bosnia and Herzegovina in the regional energy market, you will be able to trade electricity far beyond the current borders.           

As regards the Economic and Social Council, the EU expects it to become operational. It also expects to see more synergy among social partners in Bosnia and Herzegovina in improving social dialogue with the government for the benefit of all citizens. There is still a lot of work to be done, which requires active involvement and determination by all stakeholders to move forward on this issue.

  • In Bosnia, on several occasions it was indicated June 2012 as a possible new date for application for EU membership, as the questionnaire contains thousands of questions is it realistic to expect that BiH gets candidate  status early the following year, 2013?

As clearly stated in the conclusions of the Council of EU Foreign Ministers of March and December 2011, a satisfactory track record in implementing the SAA/IA will be key in order for the EU Member States to consider Bosnia and Herzegovina’s membership application as credible. This requires amending the constitution as explained earlier. The sooner this requirement is met, the sooner Bosnia and Herzegovina can envisage applying for  EU membership.

The next step – in case the EU Member States request the Commission to prepare an opinion – would be a sequence of questions and answers and technical analysis which would cover all areas under the Copenhagen criteria for EU membership. It is only once this technical process is completed that the Commission may recommend in its Opinion to the Council the granting of a candidate status to Bosnia and Herzegovina.

  • Why is it good for BiH to gain candidacy status, and therefore it is extremely important segment on the path towards full EU membership?

First of all what is important is for the country to be prepared to start the accession negotiations. The candidate status comes with it as an acknowledgement of the country’s  readiness to start the negotiation for EU membership.

As all past enlargements have shown, the journey to the EU is long but it is no doubt worth travelling. EU membership will open up new education and training opportunities for your children, open new European markets to your businesses, offer your farmers place to sell your goods and receive support for rural development, open up labour mobility for people, bring more financial assistance for your infrastructure and environment, and, finally, integrate your country into the European education, energy and other networks.

  • 8. How does he candidate status brings an advantage and the possibility of three additional components of the Instrument for Pre-Accession Assistance (IPA funds) – Regional Development and Human Resources and Rural Development how important it is that the state of Bosnia and Herzegovina becomes a user of these funds? How can IPA funds be accessed?

The Regional Development component finances investments and associated technical assistance in areas such as transport, environment and economic cohesion. The Human Resources Development component aims to strengthen human capital through education and training and to help combat social exclusion. The Rural Development component contributes to sustainable rural development. It provides assistance for the restructuring of agriculture and its adaptation to EU standards in the areas of environmental protection, public health, animal and plant health, animal welfare and occupational safety.           

These three IPA components are designed to mirror closely the structural, cohesion and rural development funds (from which EU Member States benefit). This helps candidate countries to make the most of EU cohesion funding once they join. Countries can only benefit from all five components of IPA once they achieve candidate status and their implementation system has been accredited by the Commission. Since the three components prepare for the implementation of the funds that the EU Member States receive, the beneficiary country is required to manage the funds of these three components in a decentralised manner. Bosnia and Herzegovina has made little progress towards establishing the necessary structures for this purpose, due to political disagreements.     

  • What steps need to be done to give priority to the economic segment? Where do you see the perspective of Bosnia?

Sound management of the economy is very important for the country – not only to be able to compete in a global market, to produce and trade high value-added goods and services, but also to assist those members of society who need social help. Boosting the country’s economy and helping to create the conditions for jobs and growth is central from the EU’s viewpoint. Indeed our fortunes are tied – our high bilateral trade is a symbol of this. The political actors should bring their contribution to this goal and put their political differences aside when it is about better education or better and more jobs.          

The first step that needs to be made is to agree on the common economic policy. Establishing a functioning market economy and achieving the capacity to deal with competitive pressure within the Union are the core economic criteria that every aspirant EU Member State has to fulfill. We believe that this boils down to proper economic policy-making and a well-functioning, unified domestic market. In the recent years, the country lacked both medium-term economic policy and the fiscal framework that should be associated with it. The authorities in BiH need to restore proper policy-making processes, and reach consensus on economic policies, associated expenditures and sources of financing for the country as a whole.

  • What would you advise the authorities of Bosnia and Herzegovina to do in order to ensure that there will be no  negative effects of Croatian accession to the EU for  BiH, particularly for the economy and companies involved in exporting?

We expect the effects of the accession of Croatia to be positive. They would only be negative if Bosnia and Herzegovina allowed them to be negative. This brings us back to the issues of the unified domestic market and EU standards. Namely, every country or a company that wants to operate on the EU market needs to fulfill precise conditions and meet standards. With or without Croatia’s accession, the basic problem with BiH’s export performance is that the country and its producers did not yet meet the standards required for placing products on the EU market. This resulted in missing opportunities offered by the preferential trade treatment under the Interim Agreement. For example, among agricultural and food products only very few fish establishments are on the list of accredited companies which are allowed to export to the EU.

Croatia is one of the BiH’s main export destinations. As of 1 July 2013 exports to Croatia that were possible in the past – including milk and dairy products, poultry and related products will be only be possible if BiH producers are on the list of the eligible third-country establishments allowed to export to the EU. A recent mission of the EU Food and Veterinary Office confirmed that there is a lot more to be done before producers will be allowed to export to the EU. Moreover, proper infrastructure needs to be placed on border crossings and this will not happen overnight.           

Correcting all deficiencies in the food control systems will require a lot of time and effort. Steps required include legislative amendments, capacity building and infrastructure development to bring the government institutions concerned as well as the food producing establishments up to the level required by the EU market. Let me underline that all adjustments to be done are of a very technical nature. Achieving these adjustments before July 2013 is possible, but the process needs to be initiated now, and cannot suffer from any further delays.