Bosnian Serb leaders in the Republika Srpska region of Bosnia have canceled plans to hold a referendum that many feared would have drastically deepened the ethnic divide in the country to its worst state since the end of the war in 1995.

Under pressure from the European Union, the Republika Srpska announced on Friday that it would not hold a referendum challenging the legitimacy of country’s juridical system and the powers of the highest authority in the country, the International High Representative for Bosnia and Herzegovina, currently held by Austrian Valentin Inzko.

The announcement came after Catherine Ashton, EU high representative for Foreign Affairs, made a surprise visit to Republika Srpska President Milorad Dodik to try to avert the crisis.

Ashton told Dodik that the EU would assist in reviewing the shortcomings of the judicial entities, which Dodik asserts are biased against Serbs.

That dialogue will present a “comprehensive overview of the whole judiciary” and “re-establish this country on the EU path,” Ashton said in a statement.

Two semi-autonomous entities, the Serb-led Republika Srpska and the Bosnian-Croat Federation of Bosnia-Herzegovina, were created under the Dayton Agreement, which ended the 1993–1995 war and has governed the country until now.

Since the enactment of the Dayton treaty, the Serbs have been seeking to maintain as much autonomy as possible. The Bosnians have been pushing for a more centralized government to fulfill conditions to join the EU, a position backed by the U.N. and the EU.

Pressure has been steadily mounting in the country since last October’s state elections. Since then, the mandated tri-member presidency—comprised a member from each of the three ethnic groups, Muslim Bosniaks, Serbs, and Croats—has not able to form a government, hamstringing all federal legislative processes.

Inzko raised alarm bells that the situation was deteriorating at the U.N. Security Council on May 9.

The proposed referendum was announced last month and is based on claims that the national legal institutions were biased in that they prosecute more Serbs for war crimes than Croats or Bosniaks who perpetrated crimes against Serbs.

International officials fully supported Inzko’s concerns, fearing that if Bosnian Serbs are allowed to challenge the state judiciary, the country could become a haven for war criminals. Inzko points out that Republika Srpska’s authorities deny that there was genocide in the town of Srebrenica in 1995, despite being proven by the U.N.

More than 8,000 Muslim men and boys, who had sought U.N. protection in Srebrenica, were executed by Bosnian Serb forces, and nearly 25,000 women, children, and elderly were forcibly deported.

The Other Political Crisis

Not only is the Republika Srpska pushing the country towards crisis, but the Bosniak-Croat Federation itself has been split by conflicts since the October elections.

The Social Democrat Party (SDP) fared best in the parliamentary but the two main Croat parties refused to send their delegates to the House of the Peoples and instead created their own Croat Assembly. Croat representatives are also demanding the revision of the Dayton accord to create a third Croat-led entity.

The SDP tried to form the government without its Croat partners, but the Central Electoral Commission deemed the government illegal and annulled it. High Representative Inzko then suspended the decision, thus disrupting the country’s legal system.

“The issues are fundamentally political, not legal, their roots in the deterioration of Bosnian-Croat relations over the past decade,” reads an International Crisis Group report. Croats have had a deepening sense of grievance over not feeling represented by the SDP candidates who most Croats did not vote for.

So while the referendum has been avoided for the time being, the fractured, dysfunctional country has moved no closer to reconciliation.

Bosnian Crisis Averted for Time Being

Russia Kowtows to Beijing in Advance of APEC

Euro 2012 Ukraine’s Lost Chance

Observers Deem Russian Elections ‘Unfair’

Tymoshenko’s Ally Sentenced to 4 Years