Leaders of the main Bosniak and Croat parties in the Federation of Bosnia and Herzegovina, the Party of Democratic Action, SDA, and the Croatian Democratic Union, HDZ, have started talks with parties on forming a new ruling coalition.
Some Western diplomats have expressed concerns that the new coalition, possibly including a larger number of smaller parties, could be even more difficult to manage than the last government.
“Bosnian politicians have no more time for negotiations and political games. The time has come to roll up sleeves and start working on the agreed reform agenda,” one European diplomat told BIRN on Thursday.
On Wednesday, the HDZ leader, Dragan Covic, in agreement with SDA chief Bakir Izetbegovic, met the head of the Party for BiH, Amer Jerlagic, and offered him a place in the new coalition.
Later on Wednesday, Jerlagic met representatives from HDZ 1990, another Croat party, which has also been mentioned as a possible candidate for the new ruling coalition.
The last coalition government in the entity, established after almost five months of negotiations following the October 2014 general elections, collapsed after less than three months.
It fell apart after the Democratic Front left the coalition, led by the SDA and the HDZ, in a dispute over control of public companies.
Last week, the four Democratic Front ministers in the Federation entity government resigned, although the Federation President, Marinko Cavara, from the HDZ, has accepted only the resignation of the energy, mining and industry minister, Reuf Bajrovic.
Cavara said he would only accept the other resignations and appoint new ministers once a new ruling coalition was formed.
The SDA and HDZ, which hold 41 of the 98 seats in the Federation House of Representatives, even with three MPs from Party for BiH and four from HDZ 1990 need at least three more seats to secure a bare majority.
However, the future of any new ruling coalition may be put in question by the Democratic Front, which still holds several key positions, such as the vice presidency of the Federation and the post of deputy speaker of the House of Representatives.
After meeting Jerlagic on Wednesday, HDZ leader Dragan Covic said the current government could remain in its present form for another couple of months - indicating that this is how long talks on a new ruling coalition could last.
This delay could jeopardize Bosnia’s possibility of securing a new arrangement with the IMF in September. The IMF condition is that both entities in Bosnia adopt a new labour law before the summer break.
With budgets at all administrative levels already emptied, and without new IMF funding by the end of September, Bosnia faces a liquidity crisis in the last quarter of the year, local and international experts told BIRN.
Adoption of the labour law is also troubled by the likely collapse of the ruling coalition in Bosnia's Serbian-dominated entity, Republika Srpska.