Integrating Bosnia and Herzegovina into the European Union represents the strategic aim of
this country. Although many are aware of the fact that full membership of BiH into the
European Union requires fulfilling many conditions and criteria, it has not been sufficiently
deliberated upon especially regarding the economic aspect of integration. From this
standpoint, the analysis of economic criteria for EU membership using BiH as an example
certainly represents a actual/ongoing and significant topic for this country, especially since
we are aware that, in the long run the duration of the integration process will to a great extent
depend on the fulfillment of economic conditions.
The Economy of Bosnia and Herzegovina, contrary to the economies in most of the transition
countries, is specific for many reasons. It falls under the transition economies where initial
transitional reforms were stopped because of the war. The enormous devastation caused by
the war almost totally ruined the economic capacities of the country, so at the end of the 20th
century, this country was faced simultaneously with the process of reconstruction and the
continuation of the implementation of transitional reform. In these complex social and
political surroundings, these processes have been on going during a whole decade with
success in all areas. Facts/categories which marked the BiH economy in general are the
following: achieved macroeconomic stability (i.e. stability of prices and public deficits), high
unemployment rates of the workforce, and huge imbalances in the external sector. In the area
of transitional reforms, BiH achieved some positive results; according to transition indexes,
in the area of price and foreign trade liberalization, small-scale privatization, whereas it
achieved fewer results in the area of large-scale privatization, enterprise reforms, competition
policy, and reforms of non-banking financial institutions. Obviously, the transitional reform
process in BiH has not been completed yet, and it is necessary to put some more effort into it
so that the envisaged reforms can then achieve some positive results in the country. The BiH
decision to follow the direction of European integration, at the same time to follow the
direction of fulfilling economic criteria for membership, represents a positive direction and
instrument for accelerating the transitional reforms in the country.