On the cut to Bosnia and Herzegovina’s allocation under the Growth Plan

The European Commission has informed the authorities in BiH of a 10% reduction in the indicative allocation envisaged for Bosnia and Herzegovina under the Growth Plan for the Western Balkans. The country is now eligible to receive up to €976.6 million instead of €1.085 billion. 

A central element of the Growth Plan, discussed since 2023, is the Reform and Growth Facility. This is a performance-based instrument that provides funds in exchange for the delivery of crucial reforms in a number of areas, notably green and digital, private sector development and the rule of law. The first step to receive these funds is for authorities to submit to the European Commission, for agreement, a list of reforms in the form of a Reform Agenda.

Regrettably, despite the political agreement achieved in the BiH Council of Ministers on 27 June, Bosnia and Herzegovina remains the only country in the region whose authorities have been unable to send an agreed on and finalised draft of the Reform Agenda to the European Commission. Following multiple technical discussions with the European Commission, a Reform Agenda is almost ready, but the BiH authorities have not finalised it. By contrast, Albania, Kosovo, Montenegro, North Macedonia and Serbia submitted their Reform Agendas by summer 2024, and the Commission approved them in October 2024.

It has always been clear that the Reform and Growth Facility is based on performance and results: those partners that deliver on reforms could benefit from all available funds, while those that do not could see their allocations decrease. The Reform and Growth Facility expires at the end of 2027, at the same time as the EU’s own seven-year budget. This deadline cannot be altered. The EU repeatedly warned Bosnia and Herzegovina’s authorities that time was running out, and that the country could face cuts to its allocation if no action was urgently taken.

Bosnia and Herzegovina is still able to benefit from €976.6 million under the Reform and Growth Facility. This is a considerable amount of money which will have tangible impacts in improving transport, energy and digitalisation, for the benefit of all citizens. The funds cut from the indicative allocations will remain available for all Western Balkans six, including Bosnia and Herzegovina, and will be reallocated based on satisfactory progress and the overall reform performance.

The Growth Plan for the Western Balkans is an important opportunity for the countries of the region to deepen their economic integration with their largest trading partner – the European Union – and undertake comprehensive reforms that will transform their business climate and attract investment.

We therefore urge the BiH authorities to finalise the Reform Agenda as soon as possible, for the benefit of citizens. Bosnia and Herzegovina’s authorities have been informed that if a consolidated, final version of Bosnia and Herzegovina’s Reform Agenda is not submitted to the European Commission by 30 September 2025, a further reduction of Bosnia and Herzegovina’s initial allocation by another 10% will be applied.

The European Union will remain a loyal and reliable partner of Bosnia and Herzegovina, supporting the country’s integration with the EU. We will continue to provide investment in projects that support the EU path.

Nonetheless, there is also a cost to inaction. It is time for political actors in Bosnia and Herzegovina to act to use opportunities that are available for the benefit of citizens.