Bosnian Serbs Battle Over Russian Windfall

Bosnian Serb parties are feuding over 35 million euros that Russia has offered to Republika Srpska, to clear its share of the foreign debt that Bosnia owed the old USSR.

The total debt Bosnia owes the Soviet Union is about 125.2 million US dollars [around 110 million euros].

Moscow has offered to cover the sum itself, giving 33 per cent of the cash to Republika Srpska and 67 per cent to Bosnia's other entity, the Federation of Bosnia and Herzegovina, the RS Minister of Finance told BIRN on Thursday.

"Russia has written to the Bosnian Ministry of Finance stating that it is ready to repay completely the [money]  ... as this is the only former Yugoslav country which has not settled this issue with Moscow," the RS Ministry of Finance said.

In the same letter, the Russian Ministry of Finance proposed to the Bosnian Ministry of Finance the signing of an agreement to ensure that the money goes under the agreed percentages to the two entities.

The Republika Srpska government accepted the plan proposed by Moscow on April 6 while the Federation still has to take a decision, the RS news agency SRNA reported.

Russia's proposal, however, has provoked a row between representatives of the Alliance of the Independent Social Democrats, SNSD, which governs Republika Srpska, and the Alliance for Change, a coalition which is in opposition at entity level but in government at state level.

While entity officials want the money used to pump some fluidity into the entity's cash-strapped budget, Serbian officials in Bosnia's state government want it used to stimulate the private sector.

"The state government should not allow [authorities in Banja Luka] to be in charge of allocating this money," said Mirko Sarovic, Bosnia's Minister of...