The Progress Report on Bosnia and Herzegovina is part of the 2013 Enlargement Package adopted by the European Commission on 16 October. The Commission concluded that Bosnia and Herzegovina has made very limited progress in addressing the political criteria.
A shared vision by the political representatives on the overall direction and future of the country, or on how it should function, remains absent. Despite intensive facilitation efforts by the EU, the country's political representatives could not agree on a solution to implement the European Court of Human Rights judgement in the Sejdić-Finci case regarding discrimination against citizens on grounds of ethnicity. Addressing this judgement remains key for the entry into force of the Stabilisation and Association Agreement and for a credible application for EU membership. No progress has been achieved either on establishing an effective coordination mechanism on EU-related matters between various levels of government. Such a coordination mechanism is essential to enable the representatives of Bosnia and Herzegovina to speak on behalf of their country and to commit when interacting with the EU.
Bosnia and Herzegovina has made very limited progress in addressing the political criteria for membership in the EU. The EU has engaged in intensive facilitation efforts to help the country's political representatives to find common ground for implementing the Sejdić-Finci judgement. This issue has also been the focus of discussions of the EU-BiH High Level Dialogue on the Accession Process. This judgement needs to be implemented as a matter of urgency in order to have the amendments of the constitution and election law in place by April 2014 at the latest, in time for the next general elections. An EU coordination mechanism between the State, the Entities and the Brčko District for the transposition, implementation and enforcement of EU laws remains to be established as a matter of urgency to enable the country to speak to the EU with one voice and to make effective use of EU funds under the Instrument for Pre-Accession Assistance.
The Parliamentary Assembly of Bosnia and Herzegovina has made only very limited progress in adopting EU-related legislation. The failed attempt to reshuffle the government in the Federation has negatively affected its functionality and contributed to fragmentation of policy-making at all levels. The process of public administration reform lacks the necessary political support. The issue of the financial sustainability of public administration at all levels needs to be addressed. The human and financial resources of the Ombudsman of Bosnia and Herzegovina remain insufficient. Regarding the country's obligations on state aid under the Interim Agreement, the State Aid Council has been established, but is not functioning properly. A state aid inventory has been submitted. Bosnia and Herzegovina has delayed the process of the technical adaptation of the Interim Agreement/Stabilisation and Association Agreement in view of Croatia’s accession to the EU.
A significant number of recommendations issued in the framework of the Structured Dialogue on Justice have begun to be implemented and some already resulted in concrete outcomes. Good progress has been achieved as regards processing war crimes and reforming the state-level judiciary. The conclusion of the Protocols on cooperation in prosecution of perpetrators of war crimes, crimes against humanity and genocide with Serbia and Croatia has been an important development at regional level. However, Bosnia and Herzegovina has made only limited progress in the fight against corruption and organised crime. Corruption remains widespread, with an insufficient track record of investigation and prosecution in high-profile cases, which has a negative impact on society and the economy.
Progress has been made with regard to the Sarajevo Declaration Process on refugees and internally displaced persons. There has been some progress in implementing the Roma Strategy as regards housing but the Roma minority continue to face very difficult living conditions and discrimination. Despite some improvements, discrimination against lesbian, gay, bisexual, transgender and intersex (LGBTI) persons remains widespread. Political and financial pressure on the media has increased. The independence of the Communication Regulatory Agency remains to be secured. No progress has been made to make schools more inclusive.
Following a slight contraction of the economy of 1.1% in 2012, the economy started to recover slightly in early 2013. Nevertheless, unemployment is still very high. Consensus on economic and fiscal policy essentials remains weak, impeding reforms at the country level. The complex political and administrative structure of the country is unlikely to be fiscally sustainable. The legal system is equally complex, with the implementation of laws hampered by a weak enforcement capacity, which, together with an inefficient judicial system, is a clear deterrent for investment and a source of corruption.
Bosnia and Herzegovina has made little further progress towards a functioning market economy. Considerable further reform efforts need to be pursued to enable the country to cope with competitive pressure and market forces within the Union over the long-term. The authorities need to improve the quality of public finances as well as fiscal reporting. The authorities furthermore need to develop a pension reform in the Federation and implement it with a clear timetable. Reinvigorated privatisation would have the potential to improve the fiscal situation and bring about more competition in the economy. The private sector needs to be supported by a sound business environment, most notably by improving contract enforcement and establishing a single economic space in the country. The informal sector remains an important challenge.
There is very limited progress as regards approximation to EU law and standards. This concerns in particular the fields of veterinary and food safety, competition, public procurement, energy, environment, climate change and transport. In other areas such as rural development or regional policy there is little progress due to the lack of agreement on the relevant country-wide strategies. In some cases appointments for important bodies are not made, which is hampering legislative progress. Other institutions, such as the State Aid Council, have been suffering from a lack of financial resources and couldn't function properly. One of the few positive exceptions is the area of intellectual, industrial and commercial property rights where preparations to align with EU standards are advanced.
In order for Bosnia and Herzegovina to be able to export products of animal origin to the EU it is necessary to advance rapidly with the transposition of the EU's veterinary and food safety legislation.
Bosnia and Herzegovina is the only country in the region which has not aligned its legislation to the 2004 EU directives on public procurement. It is now expected to do so as a matter of urgency.