Bosnian parliament again fails to adopt reforms to save deal with IMF

Bosnian parliament again fails to adopt reforms to save deal with IMF
By bne IntelliNews April 20, 2017

The lower chamber of Bosnia & Herzegovina’s parliament, the House of Representatives, again failed to adopt key legislative changes needed for the country to get a second funding tranche from the International Monetary Fund (IMF) under an agreement signed in 2016.

Earlier in April, the parliament’s upper chamber adopted the changes, but they need approval from both chambers for them to become law. The IMF said that completion of the first review of its agreement with Bosnia would be delayed significantly after the lower chamber failed to adopt the legislative amendments at another session in March.

Although MPs declined to adopt the amendments at the April 20 session, they agreed to discuss and vote for them under a shortened procedure, Klix.ba reported.

In January, the IMF put the arrangement on hold for the same reasons and extended the deadline to mid April. It is unclear now when the lower parliament will debate the set of reforms or whether the IMF offer will still be available.

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.

Before that, the country lost the last two tranches from its previous deal with the fund, again because it failed to carry out the necessary reforms in time.

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