MEPs this month took the Commission to task for its poor management of the EU's Ecu 1bn aid programme for Bosnia. In 1997 for example, it proved possible to spend only Ecu 27.7 million of the Ecu 205 million allocation, despite the pressing need for new schools, hospitals, housing and public buildings.
Political controversies in Bosnia-Herzegovina have often delayed decisions on rebuilding the economy and establishing stability. The timetable and deadlines for setting up joint institutions will have to be strictly applied if the peace process is to move forward and justify the financial effort and the presence of NATO troops, says Luciana Castellina (I, EUL/NGL). The follow-up to the peace process depends to a large extent on political developments in the Republika Srpska. The new democratically-elected Serbian government must be able to function and enter upon a peaceful transition to democracy. If so, this will be of critical importance for the economy and for effective implementation of the aid programme for the whole of the Bosnian Republic. Implementation of the reconstruction programme is vital to creating the conditions for thousands of refugees to return home.
The Commission had difficulties in finding partners to carry out the work on the ground. There was disagreement amongst Bosnian authorities on how resources should be allocated. Furthermore, the Republika Srpska was not prepared to co-operate until the election of the moderate Prime Minister Dodik.
To guard against the possibility of fraud and abuse in an unstable political situation, the Commission felt it had to be ultra-careful in allocating funds. This involved carrying out the bulk of project preparation and implementation work back to Brussels.