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					                 Tithe an Oireachtais
     An Comhchoiste um Ghnóthaí Eorpacha

                      Tuarascáil



                          2009




             Houses of the Oireachtas

           Joint Committee on European Affairs


                        Report
Study Visit to the Western Balkans: Croatia & Bosnia-
Herzegovina - EU Accession and a European Perspective

                      March 2009




                                                        1
Introduction


The Western Balkans has be the source of instability on the European continent on
many occasions. Most recently, Europe witnessed the violent break-up of the former
Yugoslavia which inflicted much pain and suffering on the people of the region and
tested the European Union‟s ability to react to and manage crisis. There has been
much progress in the region since the tragic wars of the early 1990s but a lot more
work is required by the International Community, the EU and the politicians of the
respective countries of the region to ensure that peace and stability is maintained and
consolidated.


The EU has a major role to play in securing long-term stability and prosperity in the
Western Balkans. This role has been given practical effect by the EU‟s Stabilisation
and Association Process for South-East Europe. This process was established by the
General Affairs Council in June 1999 with the aim of strengthening political and
economic stability in the region. The Stabilisation and Association Process is a key
strategic and political element in the EU‟s long-term engagement with the Western
Balkans, and is explicitly linked to the prospect of EU accession for the countries
concerned. The Process is adjusted to the level of development of each of the
countries in the region, enabling them to move at their own pace, while strongly
encouraging regional cooperation.


Given the importance of the Western Balkans to Europe in terms of stability and
security, the Joint Committee on European Affairs decided to visit the region to assess
the current situation. In doing so, it decided to visit two countries in the region which
represent different levels of development and progress towards EU membership.
While Croatia is very close to EU membership with accession negotiations
progressing well towards a finalisation date of December 2009, Bosnia-Herzegovina
is still very much in need of substantial political and economic reform before
accession negotiations with the EU could begin. The main purpose of the study visit,
therefore, was to assess the political and economic situation in both countries and to
examine the role of the EU in bringing the countries towards political and economic
stability. There is no doubt the prospect of eventual EU membership, once all



                                                                                       2
conditions are met, has and continues to be a major factor in ensuring stability in the
region and a driving force behind political and economic reform.


A delegation of the Joint Committee, led by the Chairman, visited Croatia and
Bosnia-Herzegovina from 2-5 March 2009. In that time, it held thirteen meetings (the
programme appears in Annex I). In Croatia, the delegation met with the Prime
Minister, the Foreign Minister, the Speaker of the Croatian Parliament, members of
the Croatian Parliament‟s European Integration Committee and Foreign Affairs
Committee and the Chairperson of the National Committee for monitoring
negotiations on the accession of Croatia to the EU. In Bosnia-Herzegovina, the
delegation met with the Ministry for Foreign Affairs, the Bosnia-Herzegovina
Parliament‟s Joint Committee on European Integration and the Principal Deputy High
Representative, Mr. Raffi Gregorian (US). The delegation also visited the base of the
EU‟s military stabilisation mission to Bosnia-Herzegovina (EUFOR), Camp Butmir,
and received a briefing on the role of EUFOR from Lt Col William Harrington,
Senior Irish Officer and Lt Col Brian Monahan, Contingent Commander. There are
currently 43 personal from the Irish Defence Forces serving with EUFOR as well as
four Garda Síochána serving with the EU‟s police mission in Bosnia-Herzegovina.


On the basis of these meetings, the Joint Committee has prepared the following report
which assesses the political and economic situations in both countries, Croatia‟s
accession to the EU and Bosnia-Herzegovina‟s reform agenda in the context of its
European perspective. The visit comes at a critical time in both countries‟
development, with Croatia nearing the conclusion of its accession negotiations with
the EU and Bosnia-Herzegovina facing a crucial meeting of the Peace Implementation
Council (PIC) which will assess its progress on reform. It also comes at a time when
the EU is considering key decisions in respect of the Western Balkans, and
specifically on Croatia‟s accession, and the EU‟s engagement in Bosnia-Herzegovina,
most notably the future role of EUFOR. This report aims to inform the Irish
Government‟s participation in this decision making which is a test for the EU and its
enlargement policy and could define the success of its stabilisation and association
process and the Common Foreign and Security Policy more generally. But probably
more crucially, getting these decisions right is vital for the continued political and
economic development of the Western Balkans.

                                                                                     3
Croatia


Political Situation


Croatia was a constituent Republic of the former Yugoslavia until 1991, when it
declared independence. On declaring independence, violence erupted between
Croatian forces and Croatian Serbs of the southern Krajina region. The fighting was
ended by an UN-mediated ceasefire in 1992. In 1995, Croatian forces launched an
offensive which took control of the Serb dominated Krajina region. Since this
conflict, Croatia has developed into a stable parliamentary democracy with a directly-
elected President as head of State. The last general election in November 2007
represented something of a consolidation of a two-party system in Croatia with the
governing Croatian Democratic Union (HDZ) party and the main opposition Social
Democratic Party (SDP) taking control of over three-quarters of seats in parliament.


Croatia‟s applications to join NATO and the EU, and the subsequent EU accession
negotiations, are a top priority for Croatia and have therefore dominated the country‟s
political scene in recent years. The accession negotiations and the related reforms
have also contributed to the development of Croatia‟s governance, including in the
judicial area, and has led to economic and social development in the country.


Economic Situation


Croatia has a small, relatively open economy, with significant exports of services.
Since 2000, Croatia‟s economy has been steadily growing with GDP growth rates of
4-6 per cent. This growth was led by a rebound in tourism and credit-driven consumer
spending. In 2005, with the opening of EU accession negotiations, a programme of
reform in business and economic policy was introduced. Many obstacles remain in
areas such as restructuring of the shipbuilding and steel industries and reforming
agriculture and fishing (see below). The accession negotiations has also led to a
significant investment in infrastructure which is part funded by the EU.


The ongoing global financial crisis is being felt in Croatia. However, it appears that it
is not being as hard hit as many other small and relatively open economies. Positive

                                                                                       4
growth is still expected in 2009, though at a much lower rate than in previous years. A
leading concern is the high ownership of Croat banks by foreign banks. Over 90 per
cent of Croatia‟s banks are owned or part owned by foreign banks, most notably from
Austria, Italy and France. There is a concern that these banks will re-evaluate their
investment in Croatia in the current economic situation but as of yet there is no sign
that they are thinking about withdrawing from the market.


Linked to the issue of bank ownership, is concern over Croatia‟s high level of foreign
debt, two-thirds of which is personal and corporate. This is putting pressure on the
value of the Croatian currency (Kuna) which is begining to slide slightly. However,
the Croatian Central Bank is using it reserves to support the currency. The Central
Bank is also in dialogue with the Banks in order to encourage more lending to
business. A growing concern is the lack of credit available to Small and Medium
sized enterprises, which has led some businesses to close. This is contributing to
rising unemployment. Croatia‟s unemployment rate currently stands at 13.7 per cent.
Unemployment is proportionally higher among young people, with a significant
number of graduates deciding to emigrate. This presents a major challenge for
Croatia.


The prevailing opinion within Croatia is that the full effects of the global economic
crisis on Croatia will not be fully known until the summer. It is hoped at this stage
that the revenue from tourist season will help to mitigate to effects of any recession.
However, there is evidence that the tourist industry is very vulnerable to the decrease
in consumer demand. Visitors to Croatia decreased slightly in 2008 and the industry is
reporting higher than usual increases in unemployment in the off-season.


EU Accession Negotiations


Croatia applied for membership of the EU in February 2003. The June 2004 European
Council, chaired by the then Taoiseach, agreed to launch the accession process and
that negotiations would open in 2005. During the meetings held by the Joint
Committee, there were many expressions of gratitude for Ireland‟s role as the then
Presidency in securing agreement among the Member States to open accession
negotiations with Croatia. Ireland‟s ongoing support and assistance during the

                                                                                     5
ongoing negotiations is also appreciated. Since 2005, Croatia has been a beneficiary
of the EU Accession Training programme offered by the Department of Foreign
Affairs to candidate countries. The programme, which for the most part is delivered
by the Institute of Public Administration (IPA), aims to assist these countries to
develop their public administration capacity in preparation for EU membership and to
develop bilateral relations with them. Some 120 Croatian officials have benefited
under Ireland‟s programme of assistance to new Member States and Candidates. This
programme, together with our role in securing agreement on opening the accession
negotiations, has generated a lot of good will towards Ireland from Croatia. This good
will is important in terms of building alliances with countries like Croatia now and
when they become members of the EU.


Croatia‟s objective is to finalise the accession negotiations by the end of 2009 and to
join the EU by 2011. Negotiations are continuing on the 33 chapters that constitute
the acquis communautarie. So far Croatia has opened negotiations on 22 chapters and
has provisionally closed negotiations on seven. However, there are a number of issues
to be resolved, concerns to be addressed and obstacles to be overcome before
negotiations can be concluded.


First, there is the issue of Croatia‟s full cooperation with the International Criminal
Tribunal for the former Yugoslavia (ICTY). This issue in fact delayed the opening of
accession negotiations in 2005, specifically in relation to the delayed arrest of General
Ante Gotovina, although this was eventually resolved by his transfer to The Hague in
December 2005. The issue of Croatia‟s cooperation with the ICTY is again
threatening progress in the accession negotiations. In his report to the UN Security
Council in December 2008, the Chief Prosecutor of the ICTY, Serge Brammertz,
reported that although certain archival material was made available, a number of
requests for key documents in connection with ongoing trials are still pending. He
reiterated his request to Croatia that these be made available immediately. Croatia has
since supplied some, but not all, of the missing documents. The Croatian Foreign
Minister, Mr Gordan Jandrokovic, assured the Joint Committee that this issue would
be resolved. Prosecutions are being brought against those who actively withheld the
documents and the authorities have undertaken a thorough search of the archives.
Croatia will fulfil its commitments to the ICTY.

                                                                                       6
Second, more progress is required on the implementation of reforms in the judicial
system. This relates to Chapter 23 of the acquis communautaire on Judiciary and
fundamental rights. This has proven to be a sensitive chapter and Croatia‟s National
Committee for monitoring the accession negotiations has received 32 position papers
on this issue to date. However, since the appointment of a new Interior Minister a lot
of progress has been achieved in giving practical effect to the reforms. The problems
with the judicial system are a legacy of the past when there was a proliferation of
Courts and judges. There has been a rationalisation of the court system with the
number of municipal courts reduced from 108 to 67. Different Courts are being
merged and special units within courts being established to replace separate court
systems. The main aim is to improve efficiency and transparency. It was clearly stated
that there is a real willingness to resolve the issues around this chapter. Establishing a
functioning and efficient court system in line with EU standards is one of the best
arguments in convincing the general public of the value of EU membership.


Third, the authorities need to do more in the pursuit of the fight against corruption and
organised crime. This problem is linked to the reform of the judicial system which
will reduce the number of judges and improve their training, thus leading to a more
ethical judiciary.   The problem of corruption is also linked the process after
independence of privatising industry after decades of state control. Many of the
people who benefited from the transition and who are now very wealthy are less likely
to engage in unethical practices as stringent laws are now in place.


Fourth, the need to restructure the shipbuilding industry in order to be in line with the
EU‟s State Aid rules is also proving to be domestically controversial. Many of the
Unions are against the privatisation of the ship yards as it is likely that a number will
close as they are currently being propped up by State funding. The Foreign Minister
admitted that it is not a good time to push the process of privatisation forward given
the current financial crisis but the government is committed to the measure as part of
the accession negotiations. To this end, tenders for the sale of the ship yards were due
to the issue within a few days of the Joint Committee‟s visit.




                                                                                        7
Fifth, and probably the issue of most concern to Croatia, is the affect of the bilateral
border dispute with Slovenia on the progress of the accession negotiations. At the
Inter-Governmental Conference on Accession held on 19 December 2008, Slovenia
blocked the opening and closing of a number of chapters over a long-standing border
dispute, claiming that documents presented by Croatia in connection with its
negotiating positions on these chapters prejudge the (disputed) sea and land borders
between the two countries.


The origins of the maritime border dispute between Slovenia and Croatia lie in the
dissolution of the former Yugoslavia, which had one unitary sea. Since dissolution,
each state has the right, under international law (and in particular under the UN
Convention on the Law of the Sea), to establish a territorial sea not exceeding 12
nautical miles in breadth from their shoreline. Unusually, because of the location of
Slovenia on the Bay of Piran, the territorial sea of Slovenia is surrounded by the
territorial seas of Italy and Croatia. Slovenia claims to have „a corridor of territorial
seas‟ that reaches the high seas. It asserts the claim to direct territorial exit to the high
seas because it had, it claims, jurisdiction over the Bay of Piran before dissolution,
and asserts that it has preserved this jurisdiction. However, this is disputed by Croatia
which denies that Slovenia has territorial exit to the high seas and contends that the
maritime border runs along the median line in the Bay. Croatia, which appears to
have stronger arguments under international law, has proposed to submit the dispute
to arbitration by the International Court of Justice (ICJ) and has refused the use of the
ex aequo et bono (fairness) principle in such proceedings. However, Slovenia has for
some years stalled on the question of referring the issue for judicial determination,
preferring to seek a political settlement of the matter through mediation rather than
arbitration. Public opinion in both countries provides the Governments with mandates
for opposite positions.


The Croatian Prime Minister, Mr Ivo Sanadar, the Foreign Minister, and the Croatian
Parliament‟s European Integration Committee put Croatia‟s side to dispute very
forcefully to the Joint Committee. They made it clear that a bilateral dispute should
have nothing to do with accession. There is already examples where countries were
allowed to join the EU even through territorial disputes existed with another Member
State. This dispute did not prevent that country joining the EU. Croatia expects the

                                                                                           8
same standards to be applied to its application and as long as they meet the criteria set
by the EU under its enlargement policy, the bilateral dispute with Slovenia should not
be an obstacle to Croatia‟s membership. Croatia accused Slovenia of unfairly using its
position as a member of the EU as leverage in a bilateral dispute.


Croatia‟s proposed solution is to refer the dispute to an International Court, a solution
so far rejected by Slovenia. Croatia is willing to accept any ruling of an International
Court. Croatia strongly believes in the international rule of law and given that the rule
of law is the basis of the EU, it should also support this proposed solution rather then
a political agreement which is favoured by Slovenia. The Foreign Minister was clear
in his assertion that the bilateral problem is not part of the acquis communautaire and
therefore does not need to be solved as a condition for membership. If the bilateral
issue is allowed to delay or even block Croatian membership, the Prime Minister
believes that a lot of damage will be done to the EU‟s credibility.


Prime Minister Sanadar also indicated that his government were currently considering
the initiative of Enlargement Commissioner Rehn to establish a mediation group
headed by former Finnish President Martti Ahtisaari. He said that his government
would not reject this initiative but it must be made clear that it is not part of the
ongoing accession negotiations. That said, he is still convinced that referral to an
International Court is the fairest solution for both Croatia and Slovenia. First and
foremost, however, Prime Minister Sanadar and Foreign Minister Jandrokovic sought
the support of the Joint Committee in ensuring that the bilateral border dispute with
Slovenia be kept separate from Croatia‟s EU accession negotiations.


Other issues are also a cause for concern for Croatia in the context of their accession
negotiations and their bid to become EU members by 2011. Both Prime Minister
Sanadar and Foreign Minister Jandrokovic expressed a hope that the Lisbon Treaty
will be ratified soon and that the Irish people will vote in favour of the Treaty. While
in technical terms, enlargement can proceed under the current Treaties, a number of
Member States, including Germany and France, have indicated that they would prefer
the Lisbon Treaty to be in place before any further enlargement. They believe that the
institutional reforms under the Treaty are required in order to allow an enlarged to EU



                                                                                       9
to work efficiently. Croatia is concerned, therefore, that the non-ratification of the
Lisbon Treaty could delay their EU membership.


A number of the Joint Committee‟s interlocutors were concerned about the
phenomenon of „enlargement fatigue‟, which seems to be creeping into some of the
EU Member States‟ thinking. This could also be linked to the current economic crisis,
which some feel should be the main focus of the EU for now and not further
enlargement (e.g. statement by German Chancellor Merkel on 16 March that the EU
needed a “consolidation phase” before adding new members). However, they warned
that the Croatian public are also beginning to feel “transition fatigue” and therefore it
is important to maintain the momentum towards a conclusion of negotiations by the
end of 2009.


Bosnia-Herzegovina


Political Situation


Bosnia-Herzegovina (BiH) has a very complex constitutional and governance
structure which is the result of the Dayton Peace Agreement of 1995 (also known as
the General Framework Agreement) which brought hostilities to an end after three
years of fighting. BiH declared independence from the former Yugoslavia in late
1991. In a referendum in February 1992, Bosnians voted in favour of independence
but almost all Bosnian Serbs either voted against or boycotted the referendum. The
root of BiH‟s problems was a complex ethic mix of Muslims (Bosniaks, 44 per cent),
Serbs (31 per cent) and Croats (17 per cent). War began in 1992 when the Bosnian
Serbs – supported by neighbouring Serbia – moved to partition the new State along
ethic lines and join Serb-held areas to form a „greater Serbia‟. In March 1994,
Bosniaks and Croats signed an agreement creating a joint Bosniak/Croat Federation
on the territory they controlled.


Under the Dayton Peace Agreement, BiH‟s territorial integrity is maintained and a
joint multi-ethnic and democratic government was created. The national government
is charged with conducting foreign, economic and fiscal policy. The Agreement also
recognises a second tier of government comprising two entities roughly equal in size:

                                                                                      10
the Bosniak/Croat Federation and the Bosnian Serb-led Republika Srpska (RS). Both
entities each of their own government and their own parliaments charged with
overseeing internal functions.


The Dayton Peace Agreement also established the position of High Representative, a
senior international figure charged with monitoring implementation of the Agreement
and coordinating the activities of international organisations operating in BiH. The
High Representative is advised by the Steering Board of the Peace Implementation
Council (PIC). The PIC comprises 55 countries, including Ireland and all other EU
Member States, and international organisations that sponsor and direct the peace
implementation. The Steering Board members are Canada, France, Germany, Italy,
Japan, Russia, United Kingdom, United States, the Presidency of the European Union,
the European Commission, and the Organisation of the Islamic Conference (OIC),
which is represented by Turkey. The High Representative also acts as EU Special
Representative. In December 1997, at a Conference in Bonn, the PIC strengthened the
role of the High Representative to allow him to impose decisions in cases of
disagreement and to punish officials who obstruct the implementation of the Dayton
Agreement. These “Bonn powers” have been exercised on a number of occasions by
the High Representative.


The governance of BiH is complex, costly and inefficient, with 14 governments at
three levels – state, entity and canton – and with unclear delineation of responsibility,
resulting in some competition for legislative authority. Under the BiH constitution,
supreme legislative authority is vested in the bicameral national parliament,
comprising the House of Representatives (42 members) and the House of Peoples (15
members). Two thirds of the members of each house are elected by the Bosniak
(Bosnian Muslim) – Bosnian Croat Federation, and the remainder by the Republika
Srpska (RS). All legislation requires the approval of both chambers. Because of the
ethnic composition of the national parliament and the use of a “vital national interest”
(meaning, in effect, vital ethnic interest) clause, this requirement causes frequent
delays and difficulties in legislative decision-taking. All three ethnic groups are
represented in the executive branch of the entity governments. The Head of State is a
three-member joint presidency, elected directly, which consists of representatives of
the three ethnic groups. The chairmanship of the presidency rotates every 8 months.

                                                                                      11
Nebojša Radmanović (Bosnian Serb), is the current Chairman (until July 2009).


The Bosniak-Bosnian Croat Federation has it own constitution, presidency, bicameral
parliament and government. The Federation is divided into ten cantons organised
along ethnic lines, which also have their own governments and parliaments. The RS
has a unicameral National Assembly, a government and a directly elected president.
Brčko District (an administrative unit under the direction of the central state) also has
its own parliament.


Developments in the current political situation, which are complex and of serious
concern, are very much linked to the issues of peace implementation and
constitutional reform in the context of BiH‟s European perspective and are therefore
dealt with in detail in the section below on BiH’s European Perspective and role of
the EU.


Economic Situation


The economic base of BiH suffered profoundly due to the 1992-95 war and its
aftermath. The significant current account deficit and high unemployment rate remain
serious economic problems. The official unemployment rate is 25 per cent but many
of the Joint Committee‟s interlocutors estimated that the true figure is more in the
region of 40 per cent. BiH is not immune to the global economic crisis, though it is
unlikely to be hit as hard as other European economies as it is developing from a very
low base. Despite significant demand for reconstruction work after the war, the
construction sector has remained a relatively modest contributor to the overall
economy and accounts for about 5 per cent of GDP. The main impetus for post-war
growth was a strong expansion in investment, underpinned by huge financial inflows
from the internationally sponsored reconstruction programme. Real GDP growth has
decelerated to an annual average of 5% since 2000. This reflects a steady decline in
international assistance, tight monetary and fiscal policies, slow restructuring of the
country‟s industrial base, and shortcomings in the business environment.


Industrial decline in BiH has been accompanied by growth in services, which account
for about 65 per cent of GDP. A significant portion of services output is generated by
the public administration and defence forces, reflecting the country‟s complex

                                                                                      12
governance structure. But the cost of public administration and governance,
comprising of 40 ministers and 10 parliaments is also a substantial obstacle to
investment and economic restructuring. However, efforts are being made such as the
simplification   of   the   procedure   for   the      registration   of   enterprises.   The
parliamentarians and authorities also wished to make clear to the Joint Committee that
BiH is an open market for Foreign Direct Investment. To this end, there was a
proposal to facilitate a Business Forum between Ireland and BiH. The need to
modernise BiH‟s education system was also highlighted in order to produce well
educated graduates. In this respect, BiH would also appreciate Ireland‟s assistance in
establishing links between third level institutions.


The receipt of pre-accession funding from the EU was also highlighted as crucially
important to the development of BiH‟s infrastructure and therefore economic
development. The achievement of candidate status for BiH would mean an increase in
funding from the EU but a lot of problems remain to be resolved before candidate
status could even be considered by the EU. Notwithstanding this, the BiH
Parliament‟s European Integration Committee sought Ireland‟s support for EU
candidate status for BiH.


BiH’s European Perspective and the EU’s role


A European perspective for BiH has been and will continue to be one of the driving
forces behind stability and progress in the country. This European perspective
includes NATO membership and eventual membership of the EU. But membership of
these organisations, and in particular the EU, is very much dependent on the
establishment of good governance and economic stability in the country. Therefore,
prove of cooperation between the entities and progress on BiH‟s reform agenda is
required. The abolishment of the post of the High Representative (HR) and the
transition to just the position of EU Special Representative (EUSR) is one of the
benchmarks that would signify the satisfactory progress of BiH towards its European
perspective. It has been envisaged that the HR post would be abolished by July 2007
but the poor political atmosphere in BiH, the lack of progress in agreeing necessary
reforms, and concerns about regional stability related to Kosovo‟s future status,
prompted the PIC to delay the planned closure of the Office of the HR.

                                                                                           13
In February 2008 the PIC agreed on five objectives and two conditions (the “five plus
two”) to be met before the transition from HR to EUSR. The five objectives relate to
(a) agreement on the division of state property between the State and other levels of
government, (b) resolution of issues related to Defence Property, (c) completion of the
Brčko District Final Award, (d) resolution of issues related to fiscal sustainability, and
(e) entrenchment of the Rule of Law. The two conditions relate to signing of a
Stabilisation and Association Agreement (SAA) with the EU, and achievement of a
stable political situation.


The leaders of three of the four main political parties seem to have recognised the
need to make progress on the “five plus two” and came to an agreement in the village
of Prud in November 2008 which was followed by further meetings. This became
known as the Prud process. Sulejman Tihić SDA (one of the two main Bosniak
parties), Milorad Dodik (SNDS and Prime Minister of Republika Srpska), and Dragan
Čović (Croatian Democratic Union of BiH) signed brief documents on constitutional
reform, refugee return, state property, the holding of a national census, and Brčko
District.

However, all politics in BiH tends to revolve around the issue of a more centralised
state versus the very decentralised and entity-based state created by the Dayton
Agreement, with Bosniaks, the majority ethnic group, seeking a more centralised state
involving the gradual disappearance of the entities, and Bosnian Serbs, and some
Bosnian Croats, favouring a decentralised state where real power is vested in the
entities. The attitudes and positions of three key players in BiH politics have at
present a determining influence on prospects for any major reforms in BiH: Dr. Haris
Silajdžić, leader of the (Bosniak) Party for BiH and Bosniak Member of the tripartite
Presidency, Mr. Milorad Dodik, leader of the (Serb) Alliance of Independent Social
Democrats and Prime Minister of Republika Srpska, and Mr. Sulejman Tihić, leader
of the (Bosniak) Party for Democratic Action.


At their last meeting, on 26 January, the three leaders involved in the Prud process
called for a decentralized state with three levels of government in which the middle
level of government would consist of “four territorial units” each with its own


                                                                                       14
legislative, executive and judicial authority. It should be noted that the Prud process is
so far taking place outside the institutions of the State and it should also be noted that
Dr. Haris Silajdžić is not a party to the Prud process and has strongly criticised some
of the (apparently very preliminary) agreements arrived at by the three leaders. Dr.
Silajdžić tends to insist on big steps towards the dismantlement of the Dayton
arrangements, which he sees as having almost partitioned BiH. Mr. Dodik is intent on
maintaining intact the essence of the Dayton arrangements in regard to Republika
Srpska, and on increasing the semi-statehood of that entity by chipping away at the
powers of the State. Mr. Tihić, who led what was the largest Bosniak political party
before Dr. Silajdžić‟s party won that role in the October 2006 general election, has
recently been seeking to recover that role for his party. He was very encouraged by
the results of the October 2008 local elections, in which his party fared very well
against Silajdžić‟s Party for BiH.


Therefore, the prospects of serious constitutional reform appear uncertain but the Joint
Committee noted some progress in relation to the implementation of “five plus two”.
First, the Stabilisation and Association Agreement with the EU has been signed (the
Agreement was ratified by the Dáil on 11 March). Second, there has been progress in
relation to defence reform with the establishment of a single defence force and with
BiH being admitted to the Partnership for Peace (PfP). Third, at the time of the Joint
Committee‟s visit it was report (by the Deputy HR) that agreement had been reached
in principle on the Brcko District Final Award. Fourth, there has been some
movement on the issue of State property but a fundamental disagreement remains
over whether the property should registered at State level and then administered at the
entity level or whether it should be only registered at the entity level. Interlocutors
also pointed to the initiation of negotiations on WTO membership, which BiH hopes
to join by the end of 2009, as another positive development.


However, on judicial reform and the resolution of fiscal stability there appears to be
little progress. But more worryingly, BiH seems far off from meeting the condition of
achieving a stable political situation. This was underlined by the Deputy HR, Raffi
Gregorian as well as the NGO, Democratisation Policy Council, who both presented a
very bleak picture of the political situation. They said that the political leaders are
deliberately stoking the public‟s fears along ethnic lines for their own political and

                                                                                       15
material gain. There seemed little interest or political will to work together in bringing
forward reforms. The position of the Miloran Dodik, prime minister of Republika
Srpska, was particularly highlighted. He recently stated that the people of BiH could
not get along despite the fact there is no evidence to support this assertion. He also
made a call (but later downplayed) for a referendum on the succession of Republika
Srpska from BiH. Deputy HR Gregorian believes that if there is any chance of
progress on reform being made in BiH it needs to happen this year as the general
elections in 2010 will not be conducive for political dialogue. Therefore, 2009 is a
crucial year for BiH.


The role of the EU


All those who the Joint Committee spoke to in BiH called on the EU to play a greater
role in pushing forward real reform in BiH. The EU signed a Stabilisation and
Association (SAA) agreement with BiH on 16 June 2008, which is being steadily
implemented. The June 2004 European Council adopted a comprehensive policy
towards BiH, within the framework of the European Security Strategy agreed by the
European Council in December 2003. The comprehensive policy sets out practical
arrangements to enhance the coherence and effectiveness of the EU‟s engagement in
support of BiH‟s European perspective. Particular attention is paid to the role of the
EU Special Representative in ensuring coherence between the Commission-led
Stabilisation and Association process, the EU Police Mission, and the EU follow-on
force EUFOR.


On the ground, the EU‟s role is most evident through the ESDP stabilisation force or
EUFOR. In December 2004, the EU launched a military operation in BiH (EUFOR
OPERATION ALTHEA). This followed the decision by NATO to conclude the
SFOR mission. The Joint Committee visited Camp Butmir where EUFOR is based
and received a briefing on the EU mission from the Senior Office of the Irish
contingent which compromises of 43 personnel (see Annex II for presentation).


The purpose of the EUFOR mission is to provide a military presence in order to
contribute to the safe and secure environment, deny conditions for a resumption of
violence, manage any residual aspect of the Dayton Peace Agreement and thereby

                                                                                       16
allow all EU and International Actors to carry out their responsibilities. The overall
strength of EUFOR is 2098 drawn from 21 EU Member States and 5 non EU
countries. The Council has declared the EUFOR mission a success and believe that it
has made significant progress towards completing its mandate. This is why the EU is
currently examining the possible evolution towards a downscaled training mission
consisting of a force of about 250. This is known as Option 3. This means there would
no longer be situational awareness, no military intervention and no force protection.
The focus will be on training and the capacity building of BiH defence forces.


The EU also has a police mission in BiH in which four members of the Garda
Síochána are participating (the Joint Committee also met the Irish senior officer in
this mission during its visit to camp Butmir). The police mission is largely involved in
training and capacity building. It is assisting the BiH police in combating organised
crime and the trafficking of drugs and people. BiH has become a major transit point
for drug and people trafficking.


Ireland is committed to continue in EUFOR until June 2009 when the situation will be
assessed following the decision of the EU. Two EU Member States have already
announced that they will be withdrawing from EUFOR, namely France and Finland.
The Joint Committee noted that the reasons for this withdrawal are probably
economic, and in the case of France, increased commitment to other operations, most
notably Afghanistan.


EUFOR assessment of the security situation in BiH is generally positive with only
some potential for isolated incidents in certain regions. However, EUFOR has become
a source of comfort and security within the country, especially among the Bosniac
population and therefore the downscaling of the mission is probably not seen as a
positive development among this part of the community. In addition, Deputy HR
Gregorian could not rule out the prospect of violence if Republika Srpska were to
hold a referendum on secession. If Dodik were to call a referendum he would
probably do so before the general elections in 2010, in which his party is expected to
lose some seats. In these circumstances, Deputy HR Gregorian asserted that the
downscaling of the EUFOR mission by the EU would be a wrong decision at this
time.

                                                                                     17
While all those who the Joint Committee spoke to acknowledged that the EU must
play a major rule in facilitating reform in BiH and building a stable and prosperous
country, some were very critical of the EU‟s commitment. It appeared to some,
including Deputy HR Gregorian, that while the rhetoric of the EU supporting reform
in BiH increased, its commitment in terms of resources and political will appeared to
decrease. The possible downscaling of EUFOR was cited as a prime example as well
as the lack of support given by the GAERC and HR/SG Solana to the previous
HR/EUSR, Miroslav Lajcak to face down the BiH politicians and force through the
required reforms. The message coming from Brussels seemed to be to keep things
quiet in BiH in order not to impact on the solution to Kosovo‟s future status. This
meant that a lot of time and momentum was lost.


Deputy HR Gregorian put forward his opinion of what the EU needs to do:


      maintain EUFOR at the current levels at least until the end of 2010 when the
       general election will be held;
      reinforce the position of EUSR and give the new EUSR more autonomy to
       wield his powers, in particular the power to impose sanctions in order to
       encourage a faster pace to the reform process;
      make it absolutely clear to Prime Minister Dodik that the succession of
       Republika Srpska from BiH will never be accepted; this clear message must
       come from HR/SG Solana‟s office also as many people in BiH make
       connections between the role of the EUSR and Solana‟s role in Montenegrin
       independence, even though the cases of Montenegro and the Republika Srpska
       are completely different;
      send a very clear political message to BiH about the need to expedite the
       reform process if it is to achieve its European perspective;
      do all it can to assist BiH in combating corruption and do what it can to ensure
       an effective and transparent judicial process in the case against Prime Minister
       Dodik on corruption charges.


Deputy HR Gregorian also informed the Joint Committee that while the US goal



                                                                                    18
remains the transition from the OHR to the EUSR, there is a lot of dissatisfaction
about the approach and commitment of the EU. The US does not believe that enough
progress has been made on the “five plus two” and therefore it will be voting against
the closure of the OHR at the PIC on 25 March.


The NGO, Democratisation Policy Council, also argued that the EU must re-double
its efforts in BiH. It called for the appointment of internationally renowned political
figure as EUSR and not a diplomat as the EU required a personality who would be
take seriously by the politicians in BiH and have the ability to become involved in
politics in order to drive the reform process forward. The new EUSR must be given a
clear mandate from the Council and the powers to carry out this mandate. It also
argued that the EU‟s so-called “soft powers”, which are consistently support by
HR/SG Solana as the EU‟s best tool, is not enough. The EU must use of a range a
powers including sanctions as well as the maintenance of EUFOR at current levels.
Finally, it attached greater importance to the need for visa liberalisation as this would
demonstrate to the public of BiH the benefits of a European perspective. The Foreign
Ministry also called on Ireland to support such a liberalisation and stated that BiH is
close to achieving the 20 conditions laid down by the EU in order to conclude a Visa
facilitation agreement (as Ireland is not a member of Schengen and given the
existence of the Common Travel Area, it would not be a party to such an agreement
but would be open to discussing a bilateral agreement with BiH).


Conclusions


Croatia


   a.      The Joint Committee supports Croatia‟s accession to the EU. It is
           important that Croatia be allowed to join the EU if it meets all the
           necessary criteria as it would clearly demonstrate the success of the EU‟s
           Stabilisation and Association process and would act at a motivation to
           other countries in the region to press ahead with political and economic
           reforms.


   b.       The Joint Committee welcomes the significant progress that has been

                                                                                      19
     made to date by Croatia on fulfilling the criteria for EU membership and
     meetings its commitments under the acquis communautaire. It encourages
     the Croatian government to continue its efforts, particularly in respect of
     reform of the judicial system and restructuring of the shipbuilding
     industry, and calls on Croatia to fully and verifiably cooperate with the
     ICTY. It hopes to welcome Croatia as a member of the EU by 2011.


c.   The Joint Committee calls on the EU to remain committed to its
     enlargement policy so long as countries wishing to join the EU meet the
     necessary criteria. The current economic crisis should not used as a
     distraction from the fundamentally important policy of enlargement and
     the Stabilisation and Association process in the Western Balkans. It is
     important that the momentum in maintained in respect of the Croatia‟s
     accession negotiations. The Joint Committee also acknowledges the
     importance of ratifying the Lisbon Treaty in order to facilitate the better
     functioning of an enlarged EU.


d.   The Joint Committee is concerned that the bilateral maritime border
     dispute between Croatia and Slovenia should not act as an impediment to
     progress in Croatia‟s EU accession negotiations. The Joint Committee
     strongly believes that this bilateral issue should be kept separate from
     Croatia‟s EU accession negotiations. It welcomes the initiative of
     Commission Rehn to establish a mediation group led by Former Finnish
     President, Martti Asthesari. It hopes that this initiative will persuade
     Slovenia to lift its blockage on different chapters of Croatia‟s accession
     negotiations before the next meeting of the Intergovernmental Accession
     Negotiations conference on 27 March.


e.   The Joint Committee believes that border disputes such at the one between
     Slovenia and Croatia should be resolved on the basis of international law.


f.   The Joint Committee encourages the Irish Government to continue
     building good relations with Croatia which it sees as a good partner for
     Ireland both now and when it joins the EU. It asks the Government to keep

                                                                              20
          under review the establishment of an Embassy in Zagreb and consider this
          carefully as Croatia moves towards the completion of its accession
          process.


Bosnia-Herzegovina


   a. The Joint Committee acknowledges that the current political situation in BiH
      is very complex and also a source of great concern. It calls on all the political
      parties and the perspective entities to work together with the help of the
      International Community in bringing political and economic stability to the
      country. BiH future is within the EU and this is very much desired by the
      people of BiH but the political parties must demonstrate more willingness to
      fulfil the required conditions.


   b. The Joint Committee notes that some progress has been made in meeting the
      “five plus two” but is disappointed that more progress has not been made. It
      calls on the entities and the political parties to put their differences aside and
      redouble their efforts to meet these conditions as soon as possible.


   c. The Joint Committee commends the role of the EU, through the Stabilisation
      and Association Process and the EUFOR mission, in bringing stability and
      progress to BiH. But it is clear that a lot more effort and commitment is
      required in order to prevent BiH slipping back on the progress achieved.


   d. The Joint Committee urges the EU to be more robust in signalling to BiH that
      a lot more progress is required on achieving political stability, reforming the
      judiciary, combating corruption and constitutional reform before the EU could
      seriously consider opening accession negotiations with BiH.


   e. The Joint Committee calls on the EU to make it explicitly clear to the Prime
      Minister of the Republika Sprska that succession from BiH is not an option
      and will never by accepted by the EU.




                                                                                     21
f. Given the political uncertainty in BiH, the Joint Committee‟s asks the EU to
   consider carefully any decision to downscale its military operation EUFOR
   and examine again the possibility of maintaining the current mission at the
   current force level at least until after the general election in BiH in 2010.


g. The Joint Committee calls on the EU to give the new HR/EUSR the necessary
   powers, autonomy and resources to fulfil his mandate in BiH and to push
   forward the necessary reforms.


h. While the Joint Committee supports the goal of abolishing the Office of the
   HR, it is clear that the necessary “five plus two” conditions have not been met
   to allow this happen. It therefore calls on the EU to vote against the transition
   to the EUSR at the next PIC meeting on 25 March. This decision will also
   send a clear message to different parties in BiH that the EU is serious about
   achieving meaningful and lasting change in BiH.


i. The Joint Committee commends the work of the members of Irish Defence
   Forces and the Garda Síochána participating in EUFOR and the EU‟s police
   mission in BiH. They are a playing a vital role in ensuring peace and stability
   in BiH. If the EU does decide to maintain EUFOR at current levels, the Joint
   Committee would encourage the Government to continue Ireland‟s
   participation in the mission.




                                                                                   22
Acknowledgements


The Joint Committee wishes to thank its host in Croatia and Bosnia-Herzegovina
for their very generous hospitality during the study visit and for assisting the Joint
Committee in gaining a better understanding of the situation in their respective
countries.


The warm welcome and assistance extended to the Joint Committee by the
members of the Irish Defence Forces and the Garda Síochána who are serving
with the EU in BiH was also greatly appreciated. The Joint Committee would also
like to thank the Embassy of Ireland in Slovenia for assisting it in preparing the
programme and for providing written and on the spot briefing to the delegation.
The Ambassador‟s and his staff‟s contribution was invaluable to the success of the
Joint Committee‟s study visit.




                                                                                   23
                                       ANNEX I
    Visit of Joint Committee on European Affairs to Croatia and Bosnia and
                                    Herzegovina


                                  2 to 5 March 2009


Delegation from Ireland
Mr. Bernard Durkan, T.D. – Chairman (Fine Gael)
Mr. Pat Breen, T.D. (Fine Gael)
Senator Jim Walsh (Fianna Fáil)
Mr. Ronan Gargan, Policy Adviser to the Joint Committee (+353 87 131 2973)



Monday, 2 March 2009


13:20         Arrival at Zagreb Airport (flight LH 3482 Frankfurt - Zagreb)


              Welcomed by
              H.E. Patrick McCABE, Ambassador of Ireland
              Mrs Vesna LONĈARIĆ, Secretary of the European Integration
              Committee


19:00         Dinner hosted by Mrs Marija PEJĈINOVIĆ-BURIĆ, member of the
              European Integration Committee (former State Secretary responsible
              for European Integration at the Ministry of Foreign Affairs and
              European Integration)
              Venue: Restaurant Gašpar, Nova Ves 4


Tuesday, 3 March 2009


10:00–10:30 Meeting          with       Mr        Gordan         JANDROKOVIĆ,
             Minister of Foreign Affairs and European Integration
             Venue: Ministry of Foreign Affairs and European Integration


11:00–11:30 Meeting with Mr Luka BEBIĆ, Speaker of the Croatian Parliament
              Venue: Croatian Parliament, Trg Sv. Marka 6




                                                                                   24
11:45–12:15 Meeting with      Mr    Ivo   SANADER,       Prime   Minister of the
             Republic of Croatia
             Venue: Croatian Government, Trg Sv. Marka 2


12:30 – 14:00 Lunch hosted by Mrs Marijana PETIR, head of the Croatian-Irish
             Friendship Group in the Croatian Parliament
             Venue: Croatian Parliament, Trg Sv. Marka 6


14:05 – 14:55 Meeting with members of the European Integration Committee
             Venue: Croatian Parliament, Trg Sv. Marka 6


15:00 – 15:40 Meeting with Mrs Vesna PUSIĆ, chairperson of the National
             Committee for monitoring negotiations         on the accession of the
             Republic of Croatia to the European Union
             Venue: Croatian Parliament, Trg Sv. Marka 6


15:45 – 16:15 Meeting with Mr Mario ZUBOVIĆ, chairman of the Foreign Policy
             Committee
             Venue: Croatian Parliament, Trg Sv. Marka 6


19:30        Departure to the Zagreb Airport
             (flight OU 342 Depart Zagreb 21:15 – Arrive Sarajevo 22:00)



                                   SARAJEVO


Tuesday, 3 March 2009



22:00        Arrival at Sarajevo airport (flight OU 342 Zagreb – Sarajevo)


             Welcomed by


             Mr. Halid GENJAC, Chairman of the Joint Committee on European
             Integration of the Parliamentary Assembly (TBC)
             Ms. Vlatka DANGUBIĆ, Secretary of the Committee




                                                                               25
              Mr. Patrick O’REILLY, Deputy Head of Mission, Embassy of
              Ireland, Ljubljana
              Miss. Lara BOROVINA, Senior Expert Assistant for Protocol and
              Bilateral Relations of the PA of BiH


Wednesday, 4 March 2009


08:45 – 10.40 Meeting with the members of the Joint Committee on European
              Integration of the Parliamentary Assembly of BiH
              Building of the Parliamentary Assembly


12:15         Briefing on role of EUFOR by Lt Col William HARRINGTON,
              Senior Irish Officer, and Lt Col Brian MONAHAN, Contingent
              Commander, Camp Butmir


12.45-13:45   Reception with Irish contingents from EUFOR, EUPM, and OSCE
              Camp Butmir


13:45         Departure to the Tunnel Dobrinja-Butmir and guided tour
              Tunnel Dobrinja-Butmir


14:30         Departure to the Ministry of Foreign Affairs


15:00-15:45   Meeting with Mr. Sven ALKALAJ, Minister of Foreign Affairs of
              Bosnia and Herzegovina, Musala street 2


19:30–22:00 Dinner hosted by the Interparliamentary Friendship Group
              “Libertas” Restaurant, Logavina Street 9


Thursday, 5 March 2009


09:00 – 10:00 Breakfast meeting with Mr. Kurt Bassuener (+ 387 61 489 653) and
              Mr. Garret Tankosić-Kelly (+ 387 63 582 820), Democratisation
              Policy Council, hotel


12:00 – 13:00 Meeting with Dr. Raffi GREGORIAN, Acting High Representative in
              BiH, Emerika Bluma 1


                                                                           26
ANNEX II

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