The situation in Bosnia and Herzegovina has deteriorated in recent months and that will have not only political but also economic repercussions, the Austrian ambassador to that country said in an interview with a local daily.

Ambassador Martin Pammer said the plan by the Serb entity authorities to conduct a referendum on September 25 challenging the jurisdiction of the Constitutional Court of Bosnia and Herzegovina had seriously strained relations in the country and increased political tensions.

Some people think that the rule of law can be negated, but it cannot. That leads to instability, the ambassador said in the interview with Dnevni Avaz of Monday.

The position of Austria as well as other Western countries on the referendum in Republika Srpska is clear and boils down to the fact that questioning rulings by the Constitutional Court, including one that declared as unconstitutional the marking of January 9 as the day of Republika Srpska because it only reflects the interests of the Serb people and neglects the positions of Croats and Bosniaks in that entity, cannot be tolerated, said Pammer.

In the referendum planned by the Serb entity authorities voters would decide if January 9 would continue to be marked as that entity's day.

"The Constitutional Court of Bosnia and Herzegovina, as the highest (judicial) institution in the country, has taken a clear position on that day and that decision must be respected," said Pammer.

He also warned that by agreeing with referendum plans, the Constitutional Court of Republika Srpska had demonstrated that it was directly influenced by politicians.

The ambassador, however, stopped short of announcing any direct response by the international community to the referendum.

He said this depended on the position of the Peace Implementation Council (PIC), a body in charge of overseeing the implementation of the Dayton peace agreement in the country, consisting of representatives of the most influential Western states, Russia and Turkey.

Those countries' differing policies may now pose a problem, said Pammer.

During a visit to the eastern town of Srebrenica, which is part of the Serb entity, on Sunday, Republika Srpska President Milorad Dodik said the referendum planned for September 25 would be held regardless of the position of the international community.

He also said that a referendum on Srebrenica opting out of the Serb entity, proposed last week by Bosniak (Muslim) officials in the entity and state authorities, would be prevented.

Srebrenica Mayor Camil Durakovic said after that that Bosniaks would not accept to live in an entity whose authorities challenged the authority of Bosnia and Herzegovina as a state.

"Just as Dodik is negating the state of Bosnia and Herzegovina, so can we too challenge the entity which under a ruling by an international court is responsible for genocide (in Srebrenica). The law is on our side while he has on his side the majority in the parliament of the Serb entity which is a result of ethnic cleansing on the territory of the smaller Bosnia and Herzegovina entity. We do not want to be a part of the system that is dismantling Bosnia and Herzegovina," said Durakovic.

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