Mr Olli Rehn
Member of the European Commission, responsible for Enlargement

"From peace-building to state-building"

Conference "Ten Years of Dayton and Beyond"
Geneva, 20 October 2005

Your Excellencies, Ladies and Gentlemen, Dear Friends,

I am glad to participate in this important conference, among eminencies and friends of Bosnia and Herzegovina, at a time when the debate over `Dayton' and the constitutional future of the country is intensifying.

In November 1995 the Dayton Peace Accords brought the end to a war which left 250.000 dead and over two million people homeless. The Dayton Agreement ended three years of fighting in Bosnia, thus stopping the worst war in Europe since the II World War.

Today, the prospect of hostilities is remote. Over a million of refugees and displaced persons have returned to their homes. The physical infrastructure has largely been reconstructed. The elections are now run entirely by Bosnia and Herzegovina and they have been conducted fairly and peacefully. Since last year, a number of war criminals have been sent to The Hague. These are all important achievements.

Bosnia and Herzegovina has made major advances also in other areas:

The number of foreign troops in Bosnia and Herzegovina has dropped form 60.000 under IFOR to 6.000 under EUFOR - a clear sign that the tensions have diminished.

Bosnia and Herzegovina is now on its way to have a single army with one Minister and a single command.

A unified judicial and prosecutorial service and a State Court have been created, capable of trying organised crime and war criminals.

The country has a unified and well-functioning customs system. The introduction of VAT is scheduled for next year.

I also expect that Bosnia and Herzegovina will have a unified, effective and efficient police force in the near future on the basis of the recent agreement on police restructuring.

Ten years on, Bosnia and Herzegovina is now very close to start Stabilisation and Association Agreement negotiations with the European Union. It is also close to enter the NATO Partnership for Peace.

The Stabilisation and Association Agreement will be a major stepping stone towards EU membership. The recent progress on the police reform and the public broadcasting law should enable us to open the negotiations on a SAA still during this year.

However, the reforms must continue, to further improve the citizen rights and economic opportunities of the people of Bosnia-Herzegovina. They also help to meet the conditions of approaching the EU. Clear conditionality is the basis of the EU's soft power of transformation that turns potential candidates to ripe member states over the years.

Overall, it's springtime for the Western Balkans this fall as far as the region's European aspirations are concerned. All countries of the region are making steady progress in their relations with the EU. They show an increasing readiness to reform their societies and institutions.

Croatia started its accession negotiations earlier this month. Last week, the EU started negotiations on an SAA with Serbia and Montenegro. In November, the Commission will give its opinion on application for membership of the former Yugoslav Republic of Macedonia. In the coming months, we hope to conclude the SAA negotiations with Albania.

Next it can be Bosnia and Herzegovina's turn - and this opportunity should not be missed. Bosnia and Herzegovina should now make further progress on the road to Brussels. This calls for member-state building.

Ten years after we acknowledge the achievements of the Dayton Agreement, it is also time to recognize its limitations. It is time to reflect whether it provides Bosnia and Herzegovina with such an adequate constitutional and administrative framework that is needed to take the country forward in the process of European integration.

With only a small dose of sarcasm, one may ask: How anyone can call a country ungovernable if it has as many as 13 governments for just over four million people? Which other country of the size of Bosnia and Herzegovina has over 700 members of several parliaments, over 180 Ministers, 13 Prime Ministers and three Presidents?

Bosnia and Herzegovina and its people must now make the choice whether to maintain the current constitution with its functional limitations - or to opt for constitutional changes necessary to make herself a stable and functional country, ready to progress towards the EU.

This calls for a focus on two issues:

Firstly, the constitutional structure is too complex and fiscally unsustainable. The authorities of Bosnia and Herzegovina must make efforts to streamline this expensive and multilayered bureaucracy. It is also clear that this structure poses problems as to the ability of Bosnia and Herzegovina to negotiate and then to implement Stabilisation and Association Agreement with the EU, not to speak of accession.

Secondly, the role still played by the High Representative, including his Bonn Powers, is problematic. These limit Bosnia and Herzegovina's ownership for decision-making and reform. The role of the High Representative has been extremely helpful in making the country moving towards normality - and I would like to take the opportunity to pay a tribute to Paddy Ashdown for the dynamism and the leadership he has shown - but time has now come for Bosnia and Herzegovina to assume more responsibility for its own future.

Recently, a number of reports have been tabled that question the adequacy or even the legality of the Dayton arrangements. The International Commission on Balkans, under the leadership of former Prime Minister Amato, concluded that the current constitutional setup in Bosnia and Herzegovina is dysfunctional. It advocated clarifying responsibilities across all levels of government and ensuring that these responsibilities are matched by necessary resources.

The Venice Commission in March suggested a transfer of responsibilities to the state level and opposed any additional layers of bureaucracy.

It stated that the election of members to state-level Presidency and House of Peoples are incompatible with the European Convention on Human Rights, as they do not guarantee the equality of all citizens in the country - and it recommended amending these provisions.

The European Parliament in April 2005 adopted a resolution which questioned Bosnia's constitutional framework and stated that the Dayton arrangements undermine the viability of the state. The Parliament held a public hearing on the Dayton Agreement earlier this month, with representatives from Bosnia and Herzegovina. The prevailing view was that a revision of the Dayton Agreement is necessary.

I am encouraged to see a certain degree of consensus emerging in the country itself over the necessity to review the Dayton arrangements. It is high time to have a real discussion among the politicians in the country about how to make Bosnia and Herzegovina more viable and functional.

Let me underline the following points:

For a country which aims at closer ties and ultimately EU membership, it is necessary to develop constitutional arrangements that are compatible with progress towards European integration.

What I envisage is a constitutional evolution rather than an overall constitutional review. I hope that Bosnian political leaders can manage to reach an agreement in time before the next elections.

The debate is not about abolishing entities or rights of the peoples, but about making the country more viable and functional, so that every citizen can enjoy real freedom and real rights.

We have many constitutional models in Europe. Federal and regional models are possibly the most appropriate for a multi-ethnic state such as Bosnia and Herzegovina. We must emphasize functionality in the case of this relatively small and certainly not very wealthy state.

The Dayton Agreement has allowed certain flexibility, thereby permitting solutions in an evolving political and economic context. There is a mechanism in the Constitution that allows its change, which has already been used successfully from time to time.

Talking about the High Representative, I assume we all agree that the High Representative has been instrumental in advancing stability and reform in the country. Now, we have to reflect on how the country can take more responsibility for its own future. With responsible and democratically accountable authorities in place, a phasing out of the Office of the High Representative is foreseeable.

The High Representative has himself expressed this opinion and has already de facto started preparing for the phasing out of his Office. The Bonn powers have been used with decreasing frequency. This is promising in the context of preparing the country for negotiating a Stabilisation and Association Agreement. And rightly so, as the Commission cannot imagine negotiating an SAA with a High Representative who would still have the Bonn Powers.

But as a number of challenges still remain, the transition from the High Representative to full local ownership must depend on real progress on the ground, not on artificial deadlines or political promises.

Let me be clear again on one point: It is not up to the International Community or the European Union to impose any constitutional models on Bosnia and Herzegovina - but we are certainly ready to assist and facilitate the constitutional evolution.

We have reached a stage in political development of Bosnia and Herzegovina where only the people and the institutions of the country can agree on what kind of a country and what kind of institutions they want. This must be a process led by Bosnia and Herzegovina, with its citizens at the centre of this process.

Ladies and Gentlemen,

Ten years after Dayton, Bosnia and Herzegovina needs to move from peace building to state building. The time has come for BiH to seriously discuss how to move on. The country and its citizens must demonstrate their readiness to evolve - and the Constitution should evolve with them.

This can be done. The country can do it, and I hope she will not lose time before getting the constitutional evolution truly off the ground.

I am looking forward to seeing the country being modernised and moving ever closer to the European Union. The Commission and I my self shall certainly do whatever we got to do to facilitate this important journey.