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Bosnia passes delayed law to unlock $1.1bn of IMF, EU funds

(L to R) Macedonia's Prime Minister Zoran Zaev, Serbia's Prime Minister Ana Brnabic, Montenegro's President Filip Vujanovic, Chief Executive Officer of the World Bank Kristalina Georgieva, Bulgarian Prime Minister Boyko Borisov, Bosnia and Herzegovina's Minister of Foreign Trade and Economic Relations Marko Sarovic, Albania's Prime Minister Edi Rama and Kosovo President Hasim Taci pose for a photo during a summit to support regional integration in the Western Balkans region in Sofia, in this December 7, 2017 photo. (AFP)
SARAJEVO: Bosnia’s national Parliament passed a long-delayed law on Friday that should unlock about €1 billion ($1.18 billion) of funding from the International Monetary Fund, the EU and other international lenders. The law raising road-toll fees and excise taxes on bio-fuel was passed by 22 votes to 20 by the 42-seat Parliament.
Opposition parties voted against, saying it would raise other costs for citizens. They had blocked a previous draft law last year that would have increased excise taxes on fuel to pay for road-building, demanding more transparency in the allocation of monies raised so that the government could not channel them into general budget spending.
Addressing the opposition concerns, the government made changes to the legislation lifting road-toll fees and excise taxes just on bio-fuel and bio-liquid, and clarifying that proceeds will be used exclusively for road construction.
EU Enlargement Commissioner Johannes Hahn praised the adoption of the law in a tweet as a “critical step to secure infrastructure investment and international aid.”
“I applaud those who voted in favor. They have shown courage and commitment to move their country forward on the EU path,” he wrote.
The failure to pass the law, which was among key conditions set for Bosnia by the IMF under a €553 million aid deal approved last year, had prompted the Washington-based lender to freeze further loan disbursements. The IMF sees the law as a pre-condition for the launch of large-scale infrastructure projects that would boost growth and create new jobs in the impoverished Balkan country.
Its program is part of a wider reform package devised by the EU to guide Bosnia toward faster integration with the bloc.
The passage of the law will unblock €220 million approved by the European Bank for Reconstruction and Development (EBRD) for infrastructure projects in Bosnia plus another €250 million of loans from the same lender.
The EBRD considers proceeds from increased road tolls as a safeguard for repayment of the debts. The European Commission has also made its €250 million of loans for infrastructure in Bosnia conditional on the passage of the law.
— REUTERS

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