The Dayton peace agreement, reached in November 1995 with U.S. leadership, ended a brutal three and one-half year ethnic and territorial conflict in Bosnia-Herzegovina that erupted after the dissolution of the state of Yugoslavia. The Dayton agreement outlined a common state of Bosnia and Herzegovina comprised of two entities, the Bosniak (Muslim)-Croat Federation and the Republika Srpska (RS), under the authority of an international representative and a NATO-led peacekeeping presence. Central Bosnian governmental institutions include a three-member presidency, Prime Minister and Council of Ministers, and bicameral state Parliament. Under the Dayton constitution, central governing powers were kept weak, with many governing functions remaining at the Federation and RS entity level, which have their own governments and parliaments. Below the entity level are cantons and municipalities in the Federation and municipalities only in the RS. At the international level, Dayton mandated an Office of the High Representative (OHR) to oversee international activities in Bosnia and bear authority to impose decisions and remove officials. As the security situation improved, NATO gradually reduced its presence in Bosnia and turned over peacekeeping duties to the European Union (EU) in December 2004. Most observers agree that Dayton was a great achievement in that it ended the war and laid the foundation for consolidating peace. However, many also believe that the Dayton agreement, as a document derived from compromises and reflecting wartime circumstances, cannot by itself insure Bosnia's future as a functioning democratic state. In particular, Bosnia's multi-layered and ethnically-defined governing structures have presented significant challenges to its efforts to integrate into the European Union and NATO. Political differences among Bosnia's leaders and vested interests in the status quo continue to hinder efforts to strengthen Bosnia's central governing institutions and administrative capacity. The pull of Euro-Atlantic integration has fostered a degree of cooperation on this front, but political consensus across ethnic lines on key governing arrangements is still elusive. Over the years, the Bush Administration has assisted Bosnia's development as a functioning democratic state, supported its Euro-Atlantic aspirations, and encouraged Bosnia's leaders to consolidate state structures. U.S. and international officials have underscored the regional importance of progress in Bosnia, and have decried the divisive nationalist rhetoric that has dominated Bosnian politics over the past year or so. They reject initiatives by opposing Bosnian politicians that seek to undermine Bosnia's territorial integrity, such as calls for the RS to secede or for the entity structure to be eliminated. Some Members of the 110 th Congress retain an interest in Bosnia's progress since Dayton, its path toward NATO membership and EU integration, as well as its record of cooperation on war crimes issues. For FY2009, the Administration has requested over $37 million in bilateral foreign assistance to Bosnia, an increase from FY2008 levels (estimated $33.3 million) that reflects U.S. concern about Bosnia's recent uneven progress in reforms. In recent years, the Bush Administration and the EU have sought to promote further constitutional reform to improve the governing effectiveness of Bosnia's political institutions and overcome some of the dysfunctional aspects of the post-Dayton legacy. In March 2005, the Council of Europe's Venice Commission concluded that Bosnia's current constitutional arrangements were neither efficient nor rational, and that state-level institutions needed to become far more effective for Bosnia to move closer to EU integration. Several political and economic reforms have been reached over the years, often with extensive input from and pressure by the international community. For example, the Bosnian parties agreed in early 2005 to comprehensive defense and security reforms on merging the formerly rival forces into an integrated army controlled by the central government. Additional landmark agreements on intelligence and information services, state prosecution offices and justice ministry, and border and customs services, among others, further expanded central state competencies and institutions. Bosnia's economy has also achieved significant growth in recent years, although unemployment still exceeded 40% in 2007. At a Washington meeting in November 2005 to commemorate the 10 th anniversary of the Dayton accords, Bosnia's leaders signed a "Commitment to Pursue Constitutional Reform," pledging them to embark on a process of constitutional reform to create stronger and more efficient democratic institutions. Some envisioned reforms included creating a single presidency instead of the current tri-partite presidency, strengthening the Prime Minister's office, and strengthening the Bosnian parliament. Negotiations on a reform package continued through early 2006, with the intention to complete them in time for scheduled general elections in October. In March 2006, seven Bosnian parties agreed to a package of constitutional reforms, and the tri-partite Bosnian presidency likewise adopted it. Despite this broad consensus, the measure failed in Bosnia's lower house of parliament on April 24, missing the required two-thirds majority by two votes. Some Bosnian Croat and opposition Muslim deputies opposed the bill. Its failure was widely viewed as a major setback to the state consolidation process. After the vote, several parties reiterated their commitment to continue negotiations toward reaching a consensus on constitutional reforms, which many recognize to be essential for eventual integration with the European Union. Subsequent political realities, however, have severely diminished prospects for constitutional reform in the near term. On October 1, Bosnia held elections for the three-member Bosnian presidency, the Bosnian parliamentary assembly, the parliaments of the two entities, the RS presidency, and the Federation's cantonal assembly. Overall turnout was 55% and the conduct and administration of the electoral process were generally praised. While the hold on power of the wartime nationalist parties was weakened, the relatively hardline positions of the victorious parties pointed to significant new challenges to building national consensus across ethnic lines on key issues. For example, the Party for BiH (headed by former Prime Minister Haris Silajdzic), has promoted the dismantling of the entity structure in favor of greater state centralization. Conversely, Milorad Dodik, the leader of Alliance of Independent Social Democrats in the RS, has promoted greater federalism, and has on occasion threatened to call for a referendum on independence for the RS. Ethnic Croat parties are generally supportive of greater rights for the country's ethnic Croat community. After several months of negotiations, a new seven-party coalition government was formed in February 2007, headed by Bosnia's first ethnic Serb Prime Minister, Nikola Spiric. Bosnia's new leading politicians retained much of their hardline and uncompromising positions throughout 2007, contributing to a deteriorating political environment and provoking intermittent political crises. Some speculated that the international High Representative would use his authority to remove Silajdzic and Dodik from power. Bosnia Prime Minister Spiric actually did resign late in the year in protest of the High Representative's decision to streamline central Bosnian decision-making processes, but was later reinstated. Above all, the issue of police reform and restructuring took over as a proxy for the earlier (and still ongoing) debate over constitutional reforms, and became tied up with Bosnia's efforts to secure an association agreement with the EU (see below). Police reforms have been a particularly thorny area of security sector reform because they relate to the power relationship between the entities and the central government. The governing parties reached a major milestone in this area in October-November 2007 by agreeing on a set of principles and action plan on police reforms that appeared to meet EU conditions on police consolidation; further progress, however, would still take several additional months. Despite this sign of compromise, Bosnia's leaders have been challenged in 2008 to implement their commitments on the police as well as search for areas of consensus in revived efforts to achieve constitutional reforms. International officials have decried the increased nationalist rhetoric and "destructive tendencies" of leading politicians in Bosnia. Inter-ethnic tensions threatened to spike after Kosovo declared independence from Serbia in February 2008. U.S. recognition of Kosovo prompted several protest rallies in Banja Luka in the RS. RS President Milorad Dodik appears to have stepped back from earlier hints about calling for the RS to secede from Bosnia, but has rigorously defended the continued existence and prerogatives of the RS entity. Leaders from all three major Bosnian communities may cater to nationalist sentiments in the run-up to local elections scheduled for October 2008. Along with the other western Balkan states, Bosnia and Herzegovina seeks eventual full membership in the European Union and NATO. Both institutions have committed to the region's full integration, once various conditions have been met. For a variety of reasons, Bosnia has encountered a greater degree of difficulty in meeting some of the conditions compared to other western Balkan countries. At its June 2003 Thessaloniki summit, the EU committed to integrate all of the countries of the western Balkans and created new instruments to foster closer ties to the EU, including the Stabilization and Association Agreement (SAA), the first step toward eventual EU accession. Numerous hurdles slowed Bosnia's progress in negotiating and concluding a SAA. Progress in defense and security sector reforms, including the latest breakthrough commitments on police reforms, paved the way for the EU to "initial" a SAA with Bosnia in December 2007. Bosnia's governing institutions finally approved a compromise agreement in April 2008 on new police laws to establish greater coordinating mechanisms for, rather than the unification of, the country's police forces. Brussels viewed this more limited achievement as sufficient to meet SAA conditions. Bosnia signed the SAA agreement in Brussels on June 16, the last country in the western Balkans to do so. On several occasions, the EU has recommitted to the vision of full EU membership for all of the western Balkan states; many observers, however, have been concerned about growing "enlargement fatigue" among EU member states. Beyond the defense and police reform issue, the EU has also prioritized the need for further reforms in Bosnia's public administration and public broadcasting.