Bosnia and Herzegovina (BiH) faces a severe financial loss as, due to slow reform implementation and political stalemate, it risks losing more than €500 million from the European Union's Growth Plan for the Western Balkans.
A portion of the funds has already been lost, while authorities have failed to meet even basic administrative conditions to withdraw new amounts.
Bosnia and Herzegovina could be left without more than half a billion euros in European funds intended for reforms and economic development, with the primary responsibility for such an outcome lying in the non-fulfillment of obligations undertaken by domestic institutions through the Reform Agenda.
This concerns money made available by the European Union to Western Balkan countries to accelerate EU integration, strengthen institutions, and improve the business environment through reforms.
While some countries in the region have already begun using funds from this mechanism, BiH faces an increasingly narrow window of time to make up for lost ground.
First millions already lost
The first major financial loss occurred following delays in submitting the Reform Agenda, as a result of which BiH lost around €108 million. After the reform document was finally accepted in October 2025, domestic institutions were tasked with implementing a series of concrete measures to clear the path for the remaining funds.
These obligations include reforms in the areas of electronic identity and electronic services, the energy sector, whistleblower protection, the judiciary, labour rights, the protection of journalists, and resolving debts owed to the public broadcaster.
A key part of the reform package focuses on establishing a more efficient system for verifying the assets of judges and prosecutors, as well as strengthening the integrity of the judicial system.
The issue lies in the fact that a large portion of these obligations has not yet been implemented.
Deadlines for certain reforms extend to the end of 2026, but the political dynamics in BiH leave very little room for their execution. The electoral process, campaign period, and expected months of negotiations on forming a new government further reduce the likelihood of reforms being adopted and implemented within the required timeframe.
Failure to fulfill reform obligations could cost BiH an additional €373 million, which is tied to specific reforms outlined in the Growth Plan. Funds are not allocated automatically but depend on achieved results; thus, countries implementing reforms faster have a better chance of drawing down the funds.
Albania, Montenegro, and North Macedonia have already made significant progress in utilizing the available funds, whereas BiH is falling further behind.
Initial tranche of €60 million not drawn down either
BiH has also failed to withdraw the initial €60 million, the disbursement of which did not require a major reform package. One of the key prerequisites was appointing a coordinator for the Growth Plan.
However, the necessary political agreement on this matter was not reached in the Council of Ministers of BiH. Consequently, the state remains blocked at an administrative level as well, despite these funds already being earmarked within the European financial mechanism.
If this issue is not resolved, BiH risks being left without money that could be used for development projects, institutional reform, and the improvement of public services.
How much money has been lost so far?
When combining the €108 million already lost, the potential €373 million from reform tranches, and the additional €60 million initial tranche, the total reaches approximately €541 million.
This amounts to more than one billion Convertible Marks.
For the economy of BiH, this is a significant sum, particularly considering that it is European money intended for reforms and development, rather than loan debt that the country would have to repay.
Therefore, the issue of the Growth Plan cannot be reduced solely to EU integration. It carries direct economic consequences for citizens and the economy.
Every lost million represents fewer resources for infrastructure, digitalisation, the energy transition, public institutions, and other areas that could be funded through the European mechanism.
The political calendar poses a specific challenge.
Upcoming elections and the formation of a new government could further slow down reforms in BiH, precisely at a time when the EU is demanding their acceleration. The inability to utilise available European funds points to serious institutional inefficiency, while other countries in the region are already using this money for development and reforms.
(EUpravo zato)