Bosnia faces its worst crisis since the war. State institutions are under attack by all sides; violence is probably not imminent but is a near prospect if this continues. Seven months after elections, there is no state government and little prospect for one soon. The authorities of the larger of the entities, the Federation, were formed controversially – a main state institution said illegally – in March and are disputed by Croats, who have created a parallel Croat National Assembly. The other entity, Republika Srpska, has called a referendum that could provide support for a Serb walkout of Bosnian institutions. With such trends, it is all too easy to imagine Bosniak parties overseeing a failed state whose institutions Serbs and Croats have abandoned. Compromises are needed so every Bosnian side can claim enough victory to justify retreat from the brink. The international community needs to step back from over-involvement in local politics to calibrate goals to a realistic appraisal of diminished powers and best guarantee stability. Then work needs to begin to create a context for renewing Dayton and achieving EU membership.

All involved share blame for the crisis. Two rival Croat Democratic Union parties (HDZ, HDZ 1990) that represent most of the Croat population, violated the Federation constitution by blocking formation of governments and refusing to send delegates to the entity’s House of Peoples from the four cantons they control. The two HDZs and the biggest winners of the October 2010 elections, the Social Democratic Party (SDP), all rejected reasonable internationally-brokered coalition proposals. The SDP then formed a Federation government in violation of the entity constitution and against the advice of the state-level Central Election Commission (CEC). The HDZs also chose a dangerous moment to create a Croat Assembly. The RS, in particular President Dodik, provocatively called a referendum on laws imposed by the High Representative, Bosnia’s international governor, especially regarding the state court and prosecutor, issues outside RS jurisdiction. Dodik’s divisive, nationalistic speech at the RS National Assembly called into question his commitment to reconciliation and a multi-ethnic Bosnia.

On 27 March, the High Representative suspended the CEC ruling annulling formation of the Federation authorities. That suspension, which had the consequence of disrupting the normal appeal process, has undermined state bodies – most directly the CEC – and the rule of law. It would be further detrimental if the harm were compounded by an attempt to annul RS’s referendum decision or to impose sanctions on Serb officials, not least because the attempts would likely be defied and make a referendum even more destabilising.

The EU has lost credibility due to its inability for the past nine months to strengthen its delegation in Bosnia and give a new head – who is yet to be appointed – adequate authority and powers to vigorously direct international policy. Virtually all international institutions in Bosnia have lost authority; many, including the Office of the High Representative (OHR), are seen as favouring one side or party. Local leaders demand support from OHR and state institutions alike and ignore rulings that go against them. There is no broadly respected authority in the country, only regional or partisan champions.

Since Yugoslavia broke up, Bosniaks, Croats and Serbs have had three conflicting views on what kind of a state they can share. According to former Slovenian president Milan Kučan, a close observer, “these three concepts never really met, let alone reconciled … then these three concepts were turned into war aims, but the war itself never really ended; it was only interrupted by the Dayton peace agreement”. Dayton created a loose union in which the two entities retained most governing competencies, and important state decisions required consensus of the three major ethnic groups; many posts were assigned by ethnic quotas. This system soon encountered obstruction from nationalists; as an emergency measure, the international community endowed the High Representative with broad powers to keep the state running. Since then, it has supported further centralisation and less consensual decisions, hoping to make the state more functional. This in effect promoted the Bosniak vision at the expense of the Serbs and Croats. It also made Bosnia reliant on regular interventions by High Representatives.

The Federation government crisis and the RS referendum expose two sides of a general, Bosnian problem. In the Federation, community rights and majority rule collide. In RS, the contest is over the international community’s role in governing Bosnia and the balance between state and entity prerogatives. Both represent assaults on the vision of Bosnia’s future offered by OHR and accepted by most Bosniak parties. That vision would guarantee that the state could not be sabotaged or paralysed by ethnic conflict. Yet, most Croats and Serbs reject it.

To resolve half of the immediate crisis and form non-contested Federation authorities:

• the High Representative should lift his suspension and allow the CEC decision to take effect; and
   
• the Federation House of Peoples should meet in full composition, elect the president and, with the House of Representatives, name a government that complies with the entity constitution; the president and government should only transact urgent business until they have been officially inaugurated;

To resolve the other half of the immediate crisis:

• the RS National Assembly should retract its decision to hold a referendum; if the referendum goes ahead, President Dodik should publicly rule out any unilateral acts challenging the Bosnian state court (the Court of Bosnia and Herzegovina), such as withdrawing Serb representatives or rejecting its jurisdiction.

​​​​Even though the situation is deeply troubling, the international community should avoid hasty decisions that could deepen the crisis and push the parties to maximalist positions. This is not the time to try to micro-manage the crisis with technical measures or sanctions. Instead, the 9 May UN Security Council discussion on Bosnia and the 13 May European Foreign Affairs Council should be used to launch a strategic rethink of international policy. This should culminate before the planned mid-June RS referendum. Specifically:

• the international community should convene a high-level conference to set its goals in Bosnia, reconfirm its commitment to the Dayton Peace Agreement, remove the High Representative from local politics, develop plans to relocate his office outside Bosnia and give the EU the capacities to become a leading actor

Sarajevo/Istanbul/Brussels, 6 May 2011