The European Union has suspended EUR 4.5 million allocated for tourism projects and for the introduction of quality management systems for small and medium enterprises in Bosnia and Herzegovina after the country's authorities have failed to agree on necessary steps to implement these projects, the EU Delegation to Sarajevo announced in a statement on Friday.
The funds were not approved even though they would have strongly contributed to economic growth through SMEs and the tourism industry as the most competitive branches of the Bosnian economy.
"Clear political agreement on the scope of activities, including the approval of relevant project reports, and an agreed way forward in project implementation are needed for further support to these sectors," the statement said.
This may have negative consequences for the allocations of millions of euros in EU funds under the IPA 2 pre-accession aid programme, the main programme of financial assistance to Bosnia and Herzegovina for the 2014-2020 period.
"We are disappointed because Bosnia and Herzegovina is not able to take the money made available to it. In June, we already were forced to suspend five million Euros committed for projects in agriculture and rural development," said the deputy head of the EU Delegation, Renzo Daviddi.
Daviddi said that Bosnia and Herzegovina risked falling behind other countries in the region. "This is as much an economic as a political issue - other Western Balkans countries are working hard on introducing EU quality standards and preparing for investments to increase their economic growth," he said.
"Bosnia and Herzegovina still has a window of opportunity to agree on this. The EU-BiH IPA Monitoring Committee will meet on 10 September 2013 to consider whether the projects should be terminated or, if relevant preconditions are put in place, can go forward," the statement said.
