ECONOMY

Bosnia Serb bond-issuance broke the law

SARAJEVO (Reuters) – Bosnia’s Serb region violated state legislation and a constitutional court ruling by issuing bonds to creditors who lost hard currency deposits in the wars of the 1990s, officials said yesterday. Bosnia’s Finance and Treasury Ministry was due to begin issuing by end-March the first long-term securities compensating frozen currency depositors throughout the Balkan country, but the Serb Republic did it on its own on Thursday. «Yesterday’s issuance of bonds by the the Serb Republic… likely breaches a decision by the Constitutional Court,» the office of Bosnia’s peace overseer Miroslav Lajcak said in a statement. «It is a clear violation of state-level legislation.» Under the Dayton peace agreement that ended the 1992-95 war, Bosnia is made up of the Serb Republic and the Muslim-Croat federation, two autonomous regions linked by a weak central government. While Muslims and Croats want a stronger state able to lead the country toward the European Union, the Bosnian Serbs want to keep their high autonomy and handle political and economic matters independently from the central state. The Constitutional Court ruled in 2005 that settlement of debts related to old foreign currency savings was a matter for the central state, and the central parliament decided last year that the Finance Ministry would be the one to issue bonds.