Bosnia & Herzegovina reportedly has lost its chances to receive a new tranche from the International Monetary Fund (IMF) as it has failed to adopt required key legislation changes and will now have to start negotiating new conditions in order to save the deal with the institution, daily Nezavisne Novine reported on June 21, quoting unnamed sources.

In May, Bosnia’s parliament missed its best chance to adopt key legislative changes proposed by the government that would have unlocked the second tranche under the agreement with the IMF, signed in 2016. To receive the second tranche, Bosnia needed to implement a set of measures, which included cutting public spending, improving control of employment and increasing excise duties on oil – none of which have been completed.

“We must start talks from scratch. The programme has been halted, so completely new negotiations and a new mission from Washington are needed,” Nezavisne Novine quoted a source as saying, who added that such talks should be initiated by Bosnian authorities.

Meanwhile, Republika Srpska’s Prime Minister Zelja Cvijanovic said that the deal with the IMF has not been ended, but is seriously endangered.

At the end of May, the head of Bosnia’s state-level indirect tax authority UIO sent new draft amendments to the excise duties law to the institution’s managing board for approval, in a new attempt to save the deal with the fund after all other legal options were ended by the parliament.

In January, the IMF put the arrangement on hold for the same reasons and extended the deadline to mid-April. The funding tranche was agreed in principle in September 2016, when Bosnia and the IMF agreed on a new 36-month deal, supported by a SDR443.04mn (about €550mn) Extended Fund Facility (EFF).

The country had been trying for almost a year to secure a new IMF deal after the previous arrangement expired in June 2015. The new deal was expected to help the governments of Bosnia’s two entities – the Muslim-Croat Federation and Republika Srpska – patch their budget gaps and give them some stability over the next three years.