July 7 (SeeNews) - The International Monetary Fund (IMF) said on Thursday it has delayed its arrangement under the Extended Fund Facility with Bosnia until further notice.
"Due to a delay in the signing of the Letter of Intent (LOI), the IMF Executive Board meeting to consider the authorities' request for an arrangement under the Extended Fund Facility had to be delayed until further notice," Francisco Parodi, the IMF Resident Representative in Bosnia and Herzegovina, told SeeNews via email.
The fund added that the elements of the programme and the content of the LOI had been agreed by the IMF mission and Bosnia's authorities in May, however, to date, the IMF has not received a duly signed LOI.
The prime minister of Bosnia's Serb Republic, Zeljka Cvijanovic, also said on Thursday that the LOI was signed by the Serb Republic's authorities, while the prime minister of the country's other entity the Muslim-Croat Federation, Fadil Novalic, and the chairman of Bosnia's council of ministers, Denis Zvizdic, refused to put pen to paper.
"It remains unclear why they participated in the negotiations with the IMF and the harmonisation of the LOI if they did not intend to sign it," Cvijanovic said in a statement.
She noted that the Serb Republic will raise the funding from other sources, adding that the entity was already prepared for the fallout based on prior experiences with the Federation's and state authorities.
In a separate statement, Novalic confirmed he did not sign the letter and explained that by signing it he would have committed himself to implementing reforms aimed at bringing Bosnia closer to the EU - reforms which include the Stabilisation and Association Agreement (SAA) that the Serb Republic has refused to accept.
"The IMF funds are intended for structural adjustment processes, to implement necessary social and economic reforms to which all levels of government have committed. Assessing that these initiated positive processes were halted, the prime minister could not sign the letter of intent," a statement issued by his cabinet reads.
The country signed the SAA in 2008 and ratified it in 2010, but the agreement only entered into force on June 1, 2015, marking a milestone on Bosnia and Herzegovina’s EU path.
In May, the IMF said it has agreed to lend Bosnia 550 million euro ($609.1 million) under a three-year programme that will require the country to cut public debt, improve the business climate, and secure financial sector stability.
In January last year, the IMF decided to postpone the disbursement of a new loan installment under the stand-by arrangement with Bosnia because the country had failed to implement needed reforms.
($=0.903 euro)