IMF Cash Delay Threatens Bosnian Budgets

Nermin Niksic, Prime Minister of the Federation of Bosnia and Herzegovina, one of Bosnia's two entities, on May 5 warned that the entity budget faced a crisis due to the cancellation of an expected tranche of IMF money.

The IMF representative to Bosnia, Ruben Ayotan, blamed Bosnia's failure to adopt key laws for the blockage of the cash.

With the stand-by arrangement now stalled, fresh meetings between politicians and the financial institution are expected later this month.

Niksic said the Federation entity government will meantime review the budget and try to make up for the missing money, which had been expected this month.

“This will mean finding suitable sources of planned revenues through the emission of additional bonds, treasury bills and accumulated revenues of public companies,” Niksic said.

He insisted that the entity “will not increase its debts and will guarantee fulfilment of budget obligations”.

The government of Republika Srpska, Bosnia's other entity, earlier announced that it would make up for the missing money with a Russian loan. However, it did not spell out what kind of credit this would be and under what conditions it would be taken.

Zeljka Cvijanovic, Prime Minister of Republika Srpska, said some of the conditions set by the IMF were too strict but it would still be good to have the arrangement.

She said that the entity would adopt a new Labour Law, which was one of the conditions set by the IMF, following consultations with the trade unions.

Bosnia and Herzegovina agreed the two-year stand-by arrangement, worth some 400 million euro, in 2012.

The money was to divided in several tranches, which were to be given out following a number of agreed...