SARAJEVO (Bosnia and Herzegovina), March 3 (SeeNews) – The Croatian unit of Austria's Raiffeisenbank said on Friday it believes the current three-year funding arrangement between the International Monetary Fund (IMF) and Bosnia will not be terminated despite current delays.
"We still bank on the continuation of the IMF arrangement through the Extended Fund Facility (EFF) and EU accession process, which are the major pillar and drivers of reform processes in the country", Raiffeisenbank Austria d.d. (RBA) said in its weekly CEE report.
Francisco Parodi, the IMF resident representative in Bosnia told SeeNews last month the Fund has delayed the release of the second loan tranche under its funding arrangement with Bosnia because the country's authorities have failed to meet the agreed reform targets.
“We cannot expect the formal completion of the first review in February because there are delays in the completion of prior actions", Parodi said. "We are waiting for them to be completed for the IMF staff to recommend (Executive) Board approval of the first review,” Parodi noted.
Following the announcement, politicians from Bosnia's entity the Serb Republic speculated that the arrangement was under threat and might be cancelled if the country failed to deliver on reform pledges by March.
In September last year, the IMF approved a three-year 553.3 million euro ($583.3 million) loan to Bosnia and Herzegovina to support the country’s economic reform agenda. The disbursement of funds under the loan deal hinges on the implementation of a set of reforms.
The reforms are closely tied to Bosnia's EU accession process, which officially began in February last year when the country submitted an application to join the bloc. By December Bosnia received the European Commission's questionnaire based on which the Commission will evaluate the country's fitness to join the EU.
RBA commented on Friday that Bosnia should aim to submit its answers by mid-2017 in order to be granted a candidate country status by the end of the year.
"However, we believe that the speed the questionnaire is filled in could slow down due to heightened political tensions, nationalistic rhetoric and a lower willingness to cooperate at the state level", the lender opined.
Bosnia's is made up of two autonomous entities, the Serb Republic and the Federation.
($=0.948611 euro)