Monday, 13 December 2021 14:51

The Brief, powered by Goldman Sachs — Bosnia crisis and the failure of stabilocracy

The National Assembly of Republika Srpska (the Serb half of post-war Bosnia-Herzegovina) voted last Friday to pull their autonomous entity out of Bosnia’s armed forces, judiciary and tax systems. The assembly said the RS government should propose laws to regulate these matters at the entity level within six months.

The move plunged the country into probably the most severe crisis since the Dayton peace agreement ended the war among Bosniaks (Bosnia Muslims), Croats and Serbs in 1995.

The proposal, which has no direct legal effect, is the first move towards secession and was passed by 49 votes in favour out of 83 MPs. The biggest opposition parties did not attend the voting, but many were likely to vote against it anyway.

There is no doubt that Milorad Dodik – the Serb strongman in BiH’s tripartite presidency and the most vocal champion of RS’s secession – will not build a Serb army capable of starting a war, simply because of the lack of money. Moreover, a war would damage his business interests. His patrons in Belgrade and Moscow need no war either.

The real threat is the attempt by RS to mess up BiH’s financing. The International Monetary Fund was particularly concerned about the potential withdrawal of the RS entity from the Indirect Taxation Authority (ITA) of BiH.

According to the IMF, ITA represents one of Bosnia’s most successful institutions and indirect taxes collected by the agency are the single most important source of revenue for BiH’s multiple governments.

As previously said, opposition forces in RS share Dodik’s vision. Mirko Šarović, leader of the Serb Democratic Party, founded by war criminal Radovan Karadžić, said it was legitimate to demand more powers, but it was not reasonable to risk a conflict with NATO.

The political infighting in Republika Srpska is clearly about power and not about principles, and Dodik is the one managing the dynamics.

Serbian President Aleksandar Vučić, one of Dodik’s patrons, can for the time being stay away, using his own problem with mass protests in Serbia against lithium mining as an excuse.

Russia, as the other patron of RS, is undoubtedly behind Dodik. When negotiations about Ukraine are entering the crucial stage, Vladimir Putin could use BiH as a bargaining chip and show the West he can destabilise the Western Balkans whenever he wants, not necessarily by using gas.

Putin’s strategy is to keep non-EU members in the region outside the bloc, and he has different instruments in most of the cases.

Serbia is constrained by energy, Montenegro by the Orthodox church. In BiH, it’s Dodik, or whoever succeeds him, who is discouraging the EU from any ambition. North Macedonia is a special case; it constrains itself because the country shows little interest in solving its bilateral problem with neighbouring EU member Bulgaria.

In Albania, the Russians have little influence but the US, believed by many to rule the roost there, is pushing for EU accession on a daily basis, often glossing over glaring issues with the rule of law and democracy.

The latest developments in Bosnia point to the failure of the strategies of the West, which has prioritised the perceived stability that leaders such as Vučić in Serbia or Djukanović in Montenegro provide.

However, this ‘stabilocracy’ has had too many downsides, one of them being economic and social stagnation, which leads to instability and opening the door to other geopolitical players.

The other downside of stabilocracy is that it creates puppets like Dodik, which sometimes escape control.

For more than 20 years, stabilocracy was the dominant feature of US and EU politics in the region, but it was wrong and failed. It mainly created autocracies and opened the door to external influences.

After so many young and educated people left the region, is there still room for democratisation, Europeanisation of the Western Balkans? The authors of this Brief are sceptical.

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The Roundup

Germany’s new government passed a supplementary budget on Monday to supercharge its climate and transformation fund with a debt-financed injection of €60 billion to allow more investments in the shift towards a green economy, officials said. The budget compromise enables Germany’s new finance minister and FDP leader Christian Lindner to eye a return to the debt brake rule from 2023 and still allow more public investments needed to reduce carbon emissions in Europe’s largest economy.

Meanwhile, Germany’s new transport minister Volker Wissing has raised question marks over the country’s lagging transition to clean mobility. Given widely differing approaches to cutting emissions in the sector, the three parties set to form the new government presented a coalition agreement that was widely criticised for lacking a coherent strategy for the transport sector.

‘Brain drain’ has become a sad refrain in the Western Balkans, where many youngsters harbour dreams of living and working abroad. In the region, the expression reflects the way thousands of usually young people move to EU countries to pursue further education or work. But Janos Ammann, an economics editor at, is not convinced it is necessarily a bad thing.

The European Commission and the member states need to reduce the administrative burden on small and medium enterprises (SMEs) in the food sector, according to conservative EU parliamentarian Marlene Mortler.

Look out for…

  • The Slovenian presidency and the incoming French presidency present the roadmap for the European Semester 2022
  • Ministers will approve the Joint Declaration on the EU legislative priorities for 2022 at the General Affairs Council
  • Delegations from the EESC and its Chinese counterpart take part in the 18th meeting of the EU–China Round Table
  • Commissioner Margaritis Schinas presents the Revision of the Schengen Borders Code

Views are the author’s.