Bosnia and Herzegovina could lose its new Arrangement with the IMF


Bosnia and Herzegovina could lose its new arrangement with the International Monetary Fund (IMF), because the arrangement with the IMF requires the consent of all levels of government in BiH. According to Vijesti.ba news portal, the Letter of Intent has already been signed by members of the Fiscal Council of Bosnia and Herzegovina by Chairman of the Council of Ministers of BiH Zoran Tegeltija, entity Prime Ministers Fadil Novalic and Radovan Viskovic, Central Bank of Bosnia and Herzegovina Governor Senad Softic and RS Minister of Finance Zora Vidovic.

Representatives of the HDZ party, Bosnian Finance Minister Vjekoslav Bevanda and Federal Finance Minister Jelka Milicevic have not yet signed their letters of intent. The HDZ is demanding that the cantons be included in the allocation of IMF money, which would be an unprecedented precedent.

Federal Prime Minister Fadil Novalic yesterday clarified that the rules regarding the allocation of IMF funds have been in existence for 22 years and have never been changed.

“I see no reason why they should be changed now. This is one aspect we observe between the RS and the Federation of BiH. But after 22 years, we would now introduce cantons for the first time. So instead of seven signatures on the Letter of Intent, there would be 17. And that would be a very complex principle of harmonization, and we do not want to introduce it,” said Novalic.

Andrew Jewell, a resident representative of the International Monetary Fund (IMF) in Bosnia and Herzegovina, said the IMF is ready to provide BiH with 330 million Euros to mitigate the coronavirus crisis under the Rapid Financing Instrument (RFI).

Following the Executive Board’s decision to increase the amount of emergent assistance available to member countries, the IMF is now ready to provide Bosnia and Herzegovina with 330 million Euros to fight the coronavirus crisis, under the Rapid Financing Instrument (RFI).

He recalled that before the RFI could be approved, the authorities must first agree on how the funds would be split between the two entities.

“Failure to reach an agreement will result in delayed assistance. The Executive Board currently has more than 90 emergent requests, and it may be difficult to find another date in the near future when the Committee may consider BiH’s request. We encourage the authorities to work together to reach an agreement as soon as possible,” Jewell said.

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