Nicholas Watson in Prague -

As Bosnia and Herzegovina (BiH) prepares to commemorate one of the darkest episodes of the Balkan wars in the 1990s, its squabbling politicians have managed, yet again, to kill off a rare bout of momentum that had promised to take this fractured country a step further from its tragic past.

On July 11, thousands of dignitaries, including possibly even the Serbian prime minister, will gather in the Bosnian town of Srebrenica to commemorate the victims of the worst European atrocity since World War II, when Bosnian Serb forces overran the UN-protected town and massacred over 8,000 Muslim Bosnian men and boys in an orgy of violence that lasted several days. The International Court of Justice in 2007 ruled that the massacre was an act of genocide and found Serbia guilty of failure to prevent it.

Yet in the run-up to the remembrance ceremonies, there appear precious little signs of unity amongst the country’s various ethnic factions and politicians, whose bickering since the Bosnian war ended with the Dayton Agreement in 1997 have left this divided country struggling to find its place in 21^st century Europe.

“There’s rather an unhealthy environment in Bosnia on many fronts,” sighs one source, who has worked for many years in various development institutions in Bosnia but who wished to remain anonymous.

The recent momentum was in Bosnia’s hapless bid to join the EU. A new strategy launched last December to reinvigorate the integration process culminated with the country signing a Stabilisation and Association Agreement (SAA), the first step to joining the bloc, which came into force on June 1. Johannes Hahn, commissioner for European neighbourhood policy and enlargement negotiations, hailed the SAA “as a defining moment in the relations between the EU and Bosnia and Herzegovina as well as an agreement which firmly sets BiH on an EU-accession path”.

However, mindful of how Bosnian politicians have so often managed to snatch defeat from the jaws of victory, he added: “The SAA also brings new responsibilities stemming from its implementation and for BiH authorities to deliver upon. The Commission will spare no effort assisting the country's authorities in the implementation of the necessary reform agenda.”

That reform agenda, which includes changes to labour law and pushes privatisation among other things, was supposed to have been agreed by politicians in both halves of the country, Bosnia’s Muslim-Croat Federation and the Serb-run Republika Srpska, and signed in the presence of Hahn during his planned visit to Sarajevo on June 11. But Hahn cancelled his visit the day before after it became clear that Milorad Dodik, scourge of many EU initiatives in Bosnia, was rejecting the plan. “The agenda does not exist for us. I am the president of Republika Srpska and I represent it, and I give no consent for this, whatever some people may think,” Dodik said.

Actually, Dodik probably did politicians from all sides a favour, because few actually want the reforms that the International Monetary Fund has made a prerequisite before it starts lending again to the cash-strapped country. As yet another election cycle cranks into gear with crucial local elections set for 2016 (in Bosnia, more than anywhere, all politics is local), politicians are desperate to avoid upsetting the powerful vested interests in the country such as the unions.

While observers believe that Dodik could eventually be turned around (his rhetoric is virulently anti-EU and he has periodically threatened to hold an independence referendum, but usually toes the line in the end), hopes of getting the reform agenda agreed were dealt another blow when the three-month-old Federation coalition lost its majority in parliament on June 4 when one of its parties, the Democratic Front (DF), withdrew its support from the government following Prime Minister Fadil Novalic’s decision to propose a change in the procedure for appointing managers of state-controlled companies. On June 12, all four ministers belonging to DF resigned, followed by the inevitable calls for Novalic to step down, which so far he has refused. Many now expect the government to collapse.

Follow the money

The seeds of this latest crisis perfectly encapsulate the problem that plagues Bosnian politics, which is that what drives all decisions is how the money flows are divided up between the competing ethnic groups in the country. Until the country can move beyond its narrow ethnic-based decision making -  where an advantage conferred on one group must also mean a disadvantage is visited on the others, in a hopeless zero-sum game - experts worry that BiH will slowly decay as countries around it progress.

“I don’t fear any return to the mass violence or wars, but the place is sleepwalking towards an uncertain future: its best young people continue to leave, those with the capacity to reform the country will jump ship, and over time the population will shrink until there’s just old people squabbling over diminishing resources,” says the expert.

Such a situation is particularly dangerous in the current climate of Muslim radicalisation; the Sarajevo-based NGO Atlantic Initiative calculates that a total of 192 Bosnians travelled to the conflict zones of Syria and Iraq from spring 2012 to the end of 2014. And there are growing signs, such as the emergence of videos, that Islamic State is directly targeting its message at Bosnia's Muslims, calling on them to wage war in the Balkans. Last year BiH introduced prison terms of up to 10 years for those who organise, recruit or finance the departure of citizens to fight in foreign countries, and 12 people were indicted in May for fighting for Islamic State in Syria.

The Atlantic Initiative report warns that Bosnian fighters returning from Syria and Iraq are forming regional militant networks that pose a direct threat to security in the Balkans and beyond. This means BiH's problems will continue to be Europe’s as well for the foreseeable future.

For some observers, BiH’s problems won’t be solved until the international community accepts the reality: that the constituent parts need to go their separate ways and make their own bids to join the EU. “Bosnia? Oh, ‘the country of the future’,” one seasoned observer who has worked in BiH notes wryly. “It’s as if the EU were to say to all the former parts of Yugoslavia that they must recombine before they can join the EU – it’s crazy, it isn’t going to happen. Serbia and Croatia separated and now one is in the EU, the other getting closer to joining, and trade between the two is booming – that’s the model we should be following.”