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As Bosnia and Herzegovina applied on Monday to join the European Union a new film premiered at the Berlin Film Festival showing how the mafia has gained the upper hand in the small Balkan state seething with tensions from the past.

In Bosnian director Danis Tanovic's film Death in Sarajevo, the city's best hotel Hotel Europa is full as the nation prepares to mark the centenary of the assassination of Austria's former archduke Franz Ferdinand, which historians see as the spark that ignited the First World War.

At a TV studio set up in the hotel's roof to discuss the centenary a violent argument erupts between the moderator and a relative of the assassin about whether the killing was terrorism or the action of a national hero.

Meanwhile, the hotel manager is down in the building's basement where the mafia has set up a sleazy nightclub and a gambling den, plotting with them about heading off a potentially damaging strike by the hotel's staff.

The film is about "the cycles of hell that Bosnia is going through," Vedrana Seksan, who played the TV moderator in the film, told a press conference in Berlin. "The basement pulls everything down (towards it)," she said.

Three years ago Tanovic won the Berlinale's Jury Grand Prix – the festival's second major prize - for his film An Episode in the Life of an Iron Picker, which touched on another troubling side of Bosnian life, the treatment of its Roma minority. Nazif Mujic, who played himself in the film, won the festival best actor award.

But given the film's story about the role played by Ferdinand's assassination in Sarajevo in 1914 in the events leading up to the First World War there is a strong European dimension to Tanovic's movie that goes beyond Bosnia and Herzegovina.

Indeed, the film and the nation's bid to join the EU comes at a critical time in European history with the mass influx of refugees largely from wars in the Middle East and Africa triggering new tensions across the EU and a debate about the 28-member bloc's future.

Ironically, Bosnia was at the heart of Europe's last refugee drama in the early 1990s when hundreds of thousands fled their nation at the height of the war in the former Yugoslavia.

As Europe's latest refugee crisis has unfolded in recent months, nations such as Germany have taken steps to tighten up their asylum laws.

These steps, which have in part been aimed at Bosnians, have been drawn up to help deport those who fail to qualify for asylum and force them to abandon plans to leave their countries to head to northern Europe.

"I'm an optimist," Tanovic told the press conference. But he concedes that Europe is facing tough questions, which could ultimately decide its future.

"If people in Bosnia cannot live together then no-one can," Tanovic said. "We speak the same language and we read the same books.

"I'm very afraid of the future as a result of what is happening in the world," he said.

The European Commission told the Bosnians last year that they had taken meaningful measures towards implementing reforms, which form a necessary part of Sarajevo's bid for EU membership.

But Tanovic's film raises questions about Bosnia's chances of making further progress in introducing those reforms.

Adapted from French writer Bernhard-Henri Levy's play Hotel Europe, the hotel at the centre of Tanovic's film appears as a microcosm of contemporary Bosnian life.

The hotel is behind with its bills. The staff has not been paid for two months with the aspirations of even the most dedicated staff crushed by the machinations of the management and its mafia links.

"There are a lot of things that point to a darker future," said Izudin Bajrovic, who plays the hotel manager.

However, he insisted at Monday's press conference that he remains hopeful about his nation's prospects. But he said: "The mafia represents the new generation who were not around in the past."

"I'm not really a pessimist," said Seksan. "But I'm afraid for the void (in the country). People are leaving my country in droves every day because they don't see a future for themselves."

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