EU warns Bosnia of further funding cuts without Reform Program

In a statement to FENA, the EU Delegation explained that, until the end of 2027, financing under the Instrument for Pre-Accession Assistance (IPA) will remain available solely for environmental projects. New EU support for investments in other sectors will only be accessible through the Growth Plan, specifically via the Reform and Growth Instrument, which secures investments in exchange for implementing reforms aligned with the Reform Program.

“Without the Reform Program, the European Commission cannot assess any new investment project under the Western Balkans Investment Framework for the whole of BiH, except for projects in the field of environmental protection,” the Delegation stressed.

They emphasised that the Growth Plan could have a transformative impact on BiH’s economy, ensuring many of the benefits of EU membership even before formal accession, while also enabling stronger integration into the EU’s single market, the country’s largest trading partner. “Citizens will directly feel these benefits,” the statement underlined.

The EU Delegation reiterated that BiH is expected to implement a set of reforms defined in the Reform Program, which the country’s authorities must agree upon and present to fully seize these opportunities. “For the reforms carried out, beneficiary governments receive financial support, creating a positive cycle of reforms, investments, and growth,” the statement added.

The EU recalled that BiH is already facing consequences from failing to adopt the Reform Agenda. Since the European Commission has not received a finalised and agreed Reform Program from BiH, a decision was made to reduce the amount originally allocated to the country under the Western Balkans Growth Plan.

“In July, the European Commission decided to cut BiH’s funds by 10%, from €1.085 billion to €976.6 million, a reduction of €108.5 million. On July 17, the BiH authorities were notified that a further 10% cut would follow if the finalised Reform Program is not delivered by September 30,” the EU Delegation warned.

They also pointed out that financing under the Growth Plan expires at the end of 2027, meaning all related reforms must be implemented within this timeframe, which is tied to the EU’s current multiannual financial framework and cannot be extended.

By contrast, several neighbouring countries have already accessed funds from the Reform and Growth Instrument and taken concrete steps, such as joining the Single Euro Payments Area (SEPA), significantly reducing business costs.

“Non-action has its price,” the EU Delegation concluded, urging BiH’s authorities not to miss out on nearly €1 billion in investments, as well as reforms that would improve the business climate and advance alignment with EU legislation and standards.