Federation PM blocks RS debt payment from BiH Central Bank profits

Niksic reaffirmed his previous stance, rejecting any financial support for Republika Srpska's debts.

"We will not give FBiH’s money to separatists in RS to cover their debt—period. When it's time to pay their dues, suddenly Bosnia and Herzegovina is acceptable, and the budget can be used. In 2017, the RS government unconditionally committed to settling all financial penalties, with then-Prime Minister Zeljka Cvijanovic signing the agreement. They must fulfill their obligation—Federation BiH will not and it is not obligated to do so. It is clear that the Federation of Bosnia and Herzegovina is the more developed, stable, and financially superior entity in this country," Niksic previously stated.

Transport and Communications Minister Edin Forto had already anticipated the Federation's rejection of this proposal.

"If the Fiscal Council does not approve this—which is expected because redistributing Central Bank funds would be detrimental to the FBiH — we can expect FBiH to reject this solution. In that case, the Council of Ministers will explore alternative options for unblocking BHANSA at Tuesday’s meeting to prevent disruption of airspace control in BiH," Forto said.

Council of Ministers Chair Borjana Kristo shares the view that the debt must be paid but believes it should come from adjustments to the BiH budget.

However, Deputy Minister of Finance and Treasury Muhamed Hasanovic pointed out that no adjustments can be made, as Bosnia and Herzegovina is operating under temporary financing. He cited financial regulations allowing for emergency funding when BiH institutions are threatened.

"BHANSA is currently at risk, and funds can be allocated for this issue without altering the budget, which is already undergoing approval. Redirecting resources from the Central Bank's profits is the most viable solution," Hasanovic told N1.

Meanwhile, the debt continues to rise, accumulating an additional 18,000 Bosnian marks (approximately €9,000) in interest daily. The total amount now exceeds €70 million.

Background of the Viadukt arbitration case

In 2004, Republika Srpska granted a concession to Viadukt’s subsidiary HES Vrbas for hydroelectric projects on the Vrbas River. The same year, RS issued another concession for HE Bocac 2, obstructing Viadukt’s original project.

Viadukt launched arbitration in 2014, claiming damages from the contract breach. In 2022, an arbitration panel in Washington ruled in Viadukt’s favor, ordering BiH to pay €40 million. The Slovenian firm has since threatened to seize BiH Central Bank properties in Banja Luka, Mostar, and Brcko, while Eurocontrol may cut funding to BHANSA, posing a serious risk to Bosnia’s air navigation services.

BHANSA employees, particularly air traffic controllers, have already voiced their concerns, urging authorities to resolve the matter before the financial crisis severely impacts Bosnia’s aviation sector.