Mr. Kurt Bassuener:

I thank the Chairman and the esteemed members of the committee for inviting me back. It is always a pleasure and an honour to return to Dublin and appear before the joint committee.

This committee and the Irish Houses of Parliament have given greater attention to Bosnia-Herzegovina than has been the case in many other member states of the EU. I applaud them for that because it has delivered important dividends. It is my firm conviction that the principled scrutiny given to Serbia's candidacy for the EU, in the context of the war crimes accountability issue, was one of the reasons Ratko Mladić was discovered and handed over to the International Criminal Court in The Hague for trial. It was not just Ireland that was involved in this regard. The Dutch Parliament took a strong position and the prosecutor compiled a strong report, which affected the political calculus in Belgrade.

This example illustrates the role Ireland can play in the EU during its Presidency. In our discussions with various people, we are aware that the role of the Presidency has been diminished since the implementation of the Lisbon treaty. Leaving aside the Presidency, Ireland, as a member of the 27 member states, can exercise quite an amount of leverage which could be useful in the context of Bosnia-Herzegovina. When I previously addressed the committee, Deputy Creighton, who is now Minister of State with responsibility for European affairs, was a member. She recently stated that she recognises the fact that "We cannot force change and reform ... but that we can incentivise it." I would like to concentrate my remarks on that.

Since I last came before the committee, things in Bosnia-Herzegovina have become worse rather than better. It is on the same trajectory and for the same reasons. The pull of Brussels has not been sufficient to compensate for the retreat of the international community from maintaining the Dayton guardrails that were established in order to maintain peace and security in Bosnia-Herzegovina. In essence, the sense one gets from the European Union delegation on the ground, from Brussels and from most member states is that they are trying to prove the EU's transformative power to themselves rather than trying to get traction on the ground in respect of any particular goals of having Bosnia-Herzegovina propel itself into membership of the EU and NATO.

The Dayton accords were built around the interests of the signatories. No surprises there. What they effectively cemented into power was a political-business-organised-crime nexus. It is the same people who run the show across the board, not just in politics but also in the media, academia, business, you name it. There is very little upward mobility in any of those sectors. The democratic machinery does not work. Effectively, it is an oligarchy that we pretend is a democracy. Ms Hennessey just highlighted the point when she referred to the Sestorka, the six party leaders. The European Union and others effectively recognise that fact by meeting with the political deal-makers rather than the constitutionally empowered actors who answer to the six party leaders. That is part of the problem. We are not fooling anybody but ourselves in this masquerade. The citizens get it and the politicians get it. Everybody is a rational actor in that system. We in the international community are the ones with the learning disability in respect of this matter. This is because we do not want to understand why things are the way they are.

This is an unprecedented challenge for the European Union because in almost every other instance of enlargement that to which I refer has been enough. Even in the case of Romania and Bulgaria, at least the political elites were obliged to fake meeting EU standards in order to get through the door. They knew that once they were on the other side of that door they would become animals of a different kind and would be less susceptible to pressure. The EU and its member states must ask why politicians in Bosnia-Herzegovina are not impelled by the same incentives. The answer, as far as I am concerned, is that they have already obtained a better deal than any the EU can offer. They can retain what they stole, continue to steal and remain unaccountable both politically and legally. Nothing can trump that.

We do not need new tools to deal with this matter. Instead, the incentive structure within the system must be changed. The biggest difference between when I first arrived in 2005 and now is the sense that the bottom could drop out. While all the unfulfilled agendas from the war were still dominant in 2005 - or were at least still there politically - there was a sense that they could not be met within the lifetime of anyone who was acting politically at that point. Now there is a sense that, because we have retreated and ceased to enforce the rules we are obligated to enforce under the Dayton accords, there could perhaps be an independent Republika Srpska and that we could get away with it. There is also a sense that perhaps there could be a third entity or a Bosniak national state. There are more than these three unfulfilled agendas but those involved are acting without restraint because we are not restraining them. The idea that the European carrot is going to be enough to change this dynamic has proven false for more than six years.

The most recent instalment in this process is a political deal between the ruling party in Republika Srpska and the ruling party in the federation, which is nominally social democratic in ethos. Directly at issue in the context of this deal are the independence of the judiciary, the fiscal sustainability of the state and electoral engineering to stack the deck prior to the next elections. All of this is happening in plain sight and the international community has been very remiss in confronting it. This is because a political deal was done and it was stated that the two parties involved were talking to each other and that at least there might be progress. We want to believe the latter rather than actually believing our eyes. That is the fundamental problem.

How can we turn matters around? Quite simply, by closing the exits and making clear that it is a constitutional problem. The constitutional order is the fundamental basis of all the issues involved. As Ms Hennessey stated - I am sure Ms Memišević will also comment on this - the incentives in the system are such that politicians are not democratically accountable even though they go through electoral cycles. There is no transmission mechanism by which citizens can make their views known. The EU should close the exits and ensure that unless standards are met for real, then those to whom I refer will not get EU taxpayers' money. They have been in receipt of the latter and using it as a way to buy stability up to now. The EU should extricate itself from the partnership dynamic which contemplates an assumption that the political leaders in Bosnia-Herzegovina are its partners.

The potential constituency for European values - and the actual constituency thus far in respect of them - is at the civic rather than the political level. The EU should put the squeeze on politicians by dealing with citizens and accepting their leadership in respect of a number of the issues involved - one of which is the census - on which politicians are not delivering. Doing so will place the latter in a bad position in the context of Croatia's proposed membership and what this will mean for farmers in Bosnia-Herzegovina. I will comment in more detail on this matter during our discussion with members.

When he appeared before the committee in March, the EU's special representative, Ambassador Peter Sorensen, made a comment with which I could not agree more. Ambassador Sorensen stated that the executive mandate of the international high representative and the Chapter 7 mandate of EUFOR should be maintained until a system which can function without them is put in place. The ambassador got some stick for saying this from within the EU but he was right. The so-called restrictive measures - these include freezing assets, introducing visa bans and halting EU funding - were agreed upon by the European Council. At present, all the EU's special representative can do is to recommend to the Council that these measures be applied. All that is needed is for one Greek-Cypriot communist to object and nothing will happen. If the Council states that it is going to take the advice of the special representative and says "Don't talk to us - talk to him", that would be a real stick to use. At present, however, it is completely useless as a tool.

Irish politicians across the political spectrum have already demonstrated both an interest in and a principled engagement on these issues. I encourage them to keep it up. Ireland has already spoken up at COREPER in respect of the attacks on the judicial system, which has proved helpful. I encourage Ireland to continue what it is doing and to use its vote - even beyond its Presidency - to drive the EU towards a principled, intellectually honest and creative approach whereby it can use its leverage in a way that will actually impel forward movement. I think Ireland has the power to do this. I thank members and look forward to the discussion.