The Bosnia and Herzegovina motorway section will follow a route of roughly 300 kilometres from Bosanski Brod/Bosanski Samac via Doboj, Zenica, Sarajevo, and Mostar, to the Croatian border. After the border it will proceed to Ploce.

The railway route will follow a similar northeast-southwest trajectory, from Strizivojna-Vrpolje in Croatia, and the road-rail network will be connected to the Sava River at Samac, Bosanski/ Slavonski Brod and Brčko.

Corridor Vc will join Bosnia and Herzegovina to one of the main intercontinental trade routes, and

•    make it easier to export goods from this country to other parts of the world;

•    make it possible to develop better links between economic clusters and companies, particularly in terms of tourism, agriculture and industrial regions;

•    facilitate social and cultural interaction; and

•    help to boost local economies along the route.

Initially, through construction work, the project will have a positive impact on job creation. Long-term maintenance and operational requirements will also sustain employment.

However, the project is not a magical elixir that will automatically transform the BiH economy.

It can help to bring about an economic transformation.

But this will only happen if the authorities take the necessary steps to ensure that the project is properly exploited for long-term benefits.

In terms of boosting exports, Corridor Vc will only have the desired effect if related initiatives aimed at increasing the competitiveness of BiH products are put into effect – and this includes establishing efficient certification agencies that will make it possible for BiH producers to take their goods to the European and international market.

It will only boost tourism and agriculture if related initiatives are implemented to standardise legislation across the country and begin coordinated and coherent international marketing.

To achieve the desired impact in local economies a process of consultation must be developed so that communities all along the 300-kilometre route can propose plans that will allow them to exploit the opportunities that Corridor Vc will offer.

One reason that the infrastructure along the existing Corridor Vc route has been able to cope with demand until now is that demand itself has been modest since the war. Corridor Vc will help the BiH economy grow, and, at the same time, it will allow the transport network to cope with this increased growth. It represents, therefore, a virtuous cycle.

Getting this virtuous cycle up and running has been made more difficult since the BiH authorities have not endorsed an overall transport strategy. Because of this, planning and implementation of Vc projects has been inconsistent and patchy.

The BiH Ministry for Communications and Transport coordinates efforts related to Corridor Vc. The Entity ministries responsible for transport and spatial planning approve final designs, and raise and allocate funds. The Entities fund expropriation costs, while permits are issued by the cantons (FBiH) and/or the municipalities.

A total of 500 million Euros has been provided for Corridor Vc through EBRD-EIB loans with an EU contribution of 5.27 million Euros to subsidize the EIB interest rate (NB: 2.5 million Euros of this sum was lost due to delays in the construction of the Sarajevo bypass). Around 180 million Euros of the total 500 million Euros is under implementation.

The European Union is committed to helping the BiH authorities in their efforts to attract funding for Corridor Vc.

Source: http://www.bh-news.com

An official air quality monitoring body warned Friday that Sulfur dioxide pollution in the industrial town of Zenica for the past three days has been three times the European Union limit.

It said the concentration had risen due to unfavorable weather conditions, including the absence of wind that normally disperses the gas.

A representative for the Operational Center for Air Pollution Monitoring, Muhamed Pasic, told The Associated Press that all polluters in the town — including an ArcelorMittal steel mill which is the “greatest polluter” — have been instructed to take measures to reduce SO2 emissions.

SO2 is a pollutant linked to smog and acid rain and is blamed for aggravating asthma and other respiratory difficulties.

About three-quarters of SO2 emissions come from coal-fired power plants, and 20 percent from other industrial facilities.

Source: http://www.cbsnews.com

SARAJEVO (Bosnia and Herzegovina, SeeNews) – Bosnia’s municipal water and wastewater utility Cazin is seeking a 4.0 million euro ($5.2 million) sovereign guaranteed loan from the European Bank for Reconstruction and Development to co-finance a wastewater collection and treatment system project, the international lender said on Tuesday.

“Possible co-financing is being considered by several donors including the Swedish International Development Cooperation Agency and the Dutch government,” the EBRD said in a statement.

In order to determine the feasibility of the project and to confirm its eligibility for grant funding, a consultant is required to carry out a feasibility study, it said.

The project is aimed to assist Cazin in its sustainable development of wastewater infrastructure. It will also contribute to environmental protection, minimise the risks to public health and improve the quality of drinking water through the implementation of sewage and wastewater treatment infrastructure in the municipality.

The consultancy assignment is expected to start in February 2012 and last for three months. The estimated cost for the assignment is 296,970 euro with value added taxed excluded.

The municipality of Cazin is located in the northwestern part of Bosnia and Herzegovina, in the Muslim-Croat Federation. It has an estimated population of 70,000.

($ = 0.7742 euro)

Copyright 2012 SeeNewsAll Rights Reserved

SeeNews

    * ECB held first ever 3-yr liquidity tender in Dec.

    * Longer-term ECB funds to Italy banks more than doubled

MILAN, Jan 9 (Reuters) – Funding from the European Central Bank to Italian lenders rose sharply to nearly 210 billion euros in December as banks in the country took advantage of an unprecedented offer of longer term ECB funds, data from the Bank of Italy showed on Monday.  Reliance on ECB funding for Italian lenders has risen sharply since the end of June, when total borrowing stood at 41.3 billion euros, mirroring growing funding strains caused by the euro zone sovereign debt crisis. The ECB injected 489 billion euros at its first-ever tender of three-year funds on Dec. 21. Italian banks took 116 billion euros, securing nearly 24 percent of the total, three sources told Reuters in December. The Bank of Italy data showed that domestic banks held 160.6 billion euros in longer-term ECB funds at the end of December,more than double the 68.4 billion euros of a month earlier. By contrast, Italian lenders lowered their participation to the ECB’s main refinancing operations in December, with total funding from the seven-day tenders falling just below 50 billion euros from 83.4 billion euros at the end of the previous month.  At the end of November total ECB funding to Italian banks stood at 153.2 billion euros.

Fears that European banks will struggle to raise capital to withstand the spreading debt crisis have intensified since Unicredit priced a rights offer at a deep discount last week. The Italian bank’s shares have since lost 37 percent of their value and trading in rights to buy into the bank’s closely watched cash call have been suspended.             Domestic banks are predicted to be the main buyers of debt Italy is expected sell at an auction later this week, details of which are due to be announced on Tuesday. The Treasury will also give details later on Monday of a planned sale of shorter-dated t-bills. Yields on Italian 10-year bonds have risen above the 7 percent level regarded as unsustainable for public finances, and the country’s debt offers hefty returns for banks borrowing at ultra-low rates from the ECB. Italy’s debt sale and a Spanish auction on Thursday will provide 2012′s first major test of investors’ willingness to plough more money into the euro zone’s troubled sovereigns.  Both countries are struggling to convince investors they can raise enough cash to repay a mountain of debt due in 2012 despite low growth, weak public finances and downgrade threats.

Source: http://www.reuters.com

(Reporting by Valentina Za; Graphic by Scott Barber; Editing by Catherine Evans)

The euro rose as the two leaders met in Berlin to flesh out a rulebook for budgetary discipline negotiated at a Dec. 9 summit that seeks to create a “fiscal compact” for the 17- member euro area. At their first meeting of 2012, they also plan to discuss a financial-transaction tax, progress on Greece’s second bailout and a Jan. 30 European summit that will focus on bolstering growth, the German government said.

The German and French leaders have sponsored a plan to draw up new fiscal guidelines by March to resolve a crisis that began in Greecemore than two years ago. As the contagion moves to the euro-area’s core, policy makers are struggling to persuade investors they can contain the risk and assure the single currency’s survival. Merkel and Sarkozy are due to hold a joint press conference at about 1:30 p.m. Berlin time.

Fixing the crisis requires more “German largesse” through the current bailout programs, Goldman Sachs Group Inc. Chief European Economist Huw Pill told a conference in London today. “Starting today with Mrs Merkel’s meeting with Mr Sarkozy, it’s important we do start to see some progress.”

Euro, Stocks

The euro rose 0.3 percent to trade at $1.2754 at 12:19 p.m. Frankfurt time. The single currency has extended its decline against the U.S. dollar last year, sliding 1.5 percent so far this year. The Euro Stoxx 50 (SX5E) Index declined 0.3 percent after earlier gains.

Bond yields declined after borrowing costs for sovereign debt climbed last week. Spanish 10-year yields declined three basis points after rising by the most in almost 17 years last week on concern that the government will struggle to cut budget deficits amid the economic slowdown. Spain, Italy, the Netherlands, Austria and Germany plan to sell bonds this week, offering a gauge of market confidence.

The meeting will be followed by a round of talks among euro-area leaders before the next summit meeting in Brussels on Jan. 30. Italian Prime Minister Mario Monti also will visit Berlin this week, and Sarkozy and Merkel will both travel to Rome on Jan. 20 for negotiations with the Italian government.

Among the moving parts in planning to resolve the crisis are Greek negotiations with bondholders, in their seventh month, to cut the country’s debt load in half. Olivier Blanchard, the International Monetary Fund’s chief economist, said Jan. 6 that debt reduction for Greece “could have to be larger” and the numbers will have to be worked out.

‘Not Good’

“The numbers are not good” for Greece, Blanchard said on CNBC television. “There’ll have to be substantial haircuts.”

IMF Managing Director Christine Lagarde is due in Berlin for talks with Merkel tomorrow, chief German government spokesman Steffen Seibert told reporters.

The plan to provide a second Greek bailout “must be implemented” and requires “resolute” budget consolidation by Greece’s government, Seibert said. The blueprint backed by European Union leaders in October remains the “clear path forward” for Greece.

Assembling the fiscal compact, which anchors debt limits into national constitutions and accelerates sanctions for violators, will entail creating a framework for euro members and other EU states to draw up rules among themselves. The refusal by the U.K. to participate in a plan to alter EU treaties could complicate efforts by euro-area governments seeking to use EU institutions to police any new debt scheme.

Belgian Test

Europe’s newfound powers over national taxing and spending will get their first test this week when the European Commission prodsBelgium to make deeper savings just a week into the budget year.

Under authority granted last month, the commission on Jan. 11 will decide whether an emergency Belgian spending freeze is enough to put the deficit on track to fall below euro-area limits in 2012. A negative verdict would expose Belgium to potential sanctions in a precedent-setting trial of rules.

Merkel and Sarkozy may also discuss funding for the European bailout fund today. Germany’s opposition to increasing the so-called firewall for struggling states was underscored last week, with German lawmakers expressing their resistance to raising the 500 billion-euro ($636 billion) ceiling for the permanent European Stability Mechanism, scheduled to go into effect this year.

No More

“There won’t be 1 cent more,” Markus Ferber, a European Parliament lawmaker from the Merkel-aligned Christian Social Union, said at a party meeting in the Bavarian town of Wildbad Kreuth on Jan. 5. Hans Michelbach, the ranking CSU member in the German parliament’s finance committee, said in an interview that “you can’t keep throwing more money at the problem, and that’s what increasing the ceiling would mean.”

The German and French leaders will also discuss options for introducing a financial-transaction tax after Sarkozy said that France was ready to go it alone if necessary. Germany favors a Europe-wide tax and will lobby governments to agree on such a levy in the coming “weeks and months,” Seibert said.

Bringing the Italian premier into the fold contrasts with the tendency by Merkel and Sarkozy to hone a Franco-German position on crisis matters. It may mark a vote of confidence in the unelected Monti, who has pushed through budget cuts demanded by the EU after the resignation of Silvio Berlusconi.

ECB Role

Comments by Sarkozy and Italian Economic Development Minister Corrado Passera suggested a joint push for a greater European Central Bank role, a move Merkel has resisted.

Europe must have a “real central bank with the tools to do the job on stability and liquidity in the markets,” Passera said at a conference in Paris last week. Sarkozy said “all EU members and institutions must meet their responsibilities.”

Europe is “slowly but surely” mastering the debt crisis, even if a solution has taken longer than hoped, EU President Herman Van Rompuy told Belgian broadcaster RTBF.

“We’ll put this crisis behind us, but it has taken longer than we hoped for,” Van Rompuy said yesterday. “We often acted a bit late and our decisions were often a bit too weak. But in most cases, we’ve worked in the right direction.”

To contact the reporter on this story: Patrick Donahue in Berlin at atpdonahue1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were mixed ahead of the opening bell Monday. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Aluminum producer Alcoa (AA,Fortune 500) will start off the earnings season after the closing bell, as the first Dow component to report results for the final three months of 2011. Analysts expect a big profit drop and a sales increase of 2% from a year ago, according to estimates from Thomson Reuters.

Overall, earnings for companies in the S&P 500 are expected to be up 7.5% in the final three months of 2011, versus the same period in 2010.

Investors will also be closely watching for any developments out of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy. The two leaders are discussing their strategy for rescuing the euro and preparing for a European summit at the end of the month.

Europe’s debt crisis: ‘No clear end in sight’

U.S. stocks ended mostly lower Friday, as worries about Europe’s debt crisis dampened enthusiasm over a better-than-expected U.S. jobs report.

World markets: European stocks were lower in morning trading. Britain’s FTSE 100 (UKX) and France’s CAC 40 (CAC40) shed 0.3%, while the DAX (DAX) in Germany fell 0.5%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) gained 2.9% and the Hang Seng (HSI) in Hong Kong added 1.5%. Tokyo was closed Monday for a national holiday.

Economy: The Federal Reserve will release data on consumer credit for the month of November Monday afternoon. Analysts surveyed by Briefing.com expect consumer credit to have increased by $7 billion, after increasing by $7.6 billion in October.

Companies: Novartis (NVS) shares slipped 0.4% in premarket trading, after the Swiss pharmaceutical company recalled bottles of over-the-counter drugs, including Excedrin and Bufferin, because of complaints about mislabeled and broken pills.

Currencies and commodities: The dollar fell against the euro, the British pound and the Japanese yen.

Oil for February delivery slipped 51 cents to $101.05 a barrel.

Gold futures for February delivery added $1.10 to $1,617.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.97% from 1.96% late Friday.

Source: http://www.money.cnn.com

Herbert Knosowski/European Pressphoto AgencyGerman Chancellor Angela Merkel delivered a statement on the resignation of Defense Minister Karl-Theodor zu Guttenberg in Berlin Tuesday.
Mr. Zu Guttenberg’s resignation comes as Ms. Merkel’s governing coalition is under pressure from a series of state elections this year, including in the key state of Baden-Württemberg later this month.
A poll conducted by the Forsa surveying institute for the RTL broadcaster and Stern magazine sees the CDU in Baden-Württemberg at 39% and its liberal coalition partner FDP at 6%, or 45% together. The opposition Social Democrats and Greens, jointly, would garner the same percentage, the poll says.
A national poll forecasts the opposition jointly at 43%, or four percentage points ahead of Ms. Merkel’s governing coalition.
“Even as many citizens were opposing the resignation of the defense minister, the scandal still led to irritation and shock among the [CDU's] own supporters,” said Manfred Güllner, the head of the Forsa surveying institute.
Ms. Merkel’s CDU suffered a major defeat in an election in the city-state of Hamburg, which the opposition Social Democrats won. The German Chancellor also needed to reshuffle the cabinet rapidly to be able to concentrate on a major overhaul of the euro zone to be negotiated at a summit of European Union leaders next week, and to be decided upon at an EU summit in late March.

Economists are confident the ECB’s Governing Council won’t raise its main interest rate from a record low of 1% at its policy meeting Thursday, but they say ECB President Jean-Claude Trichet may harden his anti-inflation rhetoric to show a rate rise is getting closer.
After the last policy meeting Feb. 3, Mr. Trichet said ECB interest rates remain appropriate but close monitoring of price developments was warranted. He said inflation would probably be above the ECB’s target of just below 2% this year before eventually moderating.
“With the bank stress tests underway and still a lot of uncertainty regarding the endgame of the debt crisis, the ECB will be wary to pull the trigger now,” Peter Vanden Houte, an economist at ING, said in a note. “We see a first rate hike only in the fourth quarter of the year.”
The Eurostat data showed the monthly jump in producer prices was driven by energy and intermediate goods. Producer prices for energy rose 3.2% in January, the sharpest gain since July 2008, while intermediate goods prices rose 1.5%, matching the record gain seen in January 1995. However, even stripping out construction and energy, industrial producer prices rose 0.8% on the month, the sharpest gain in 16 years.
More up-to-date surveys suggest the rally in producer prices is continuing. A survey of purchasing managers in the euro-zone manufacturing sector by financial information firm Markit released Tuesday showed input costs and output prices both increasing at record rates in February.
Although producer prices for intermediate goods and energy surged in January, factory gate prices for consumer-related goods posted only modest gains, a sign that demand in that sector isn’t as strong. Producer prices for durable consumer goods rose 0.2% on a monthly basis in January, while factory-gate prices for nondurable consumer goods gained 0.4%, both repeating the increases seen in December.
Write to Nicholas Winning at nick.winning@dowjones.com

European stocks pared some of their early losses but remained weak Wednesday, as concerns that rising oil prices could cut into global economic growth weighed on the heavyweight resources and oil and gas sectors.
This, together with the uncertainty in the Middle East and North Africa, is probably costing the equity market 7-8% in crude terms at the moment, said Jim Reid, strategist at Deutsche Bank.
“The threat of contagion within the region still very much alive,” said Simon Denham, head of Capital Spreads in London, noting that stock markets across the Middle East are continuing to sell off aggressively and anything relatively upbeat in terms of economic data or corporate results has been overshadowed.
By 1215 GMT, the benchmark Stoxx Europe 600 index was 0.5% lower at 283.17. London’s FTSE 100 index was 0.4% lower at 5911.04, Frankfurt’s DAX index was 0.4% weaker at 7191.76, and Paris’s CAC-40 index was down 0.6% to 4044.12.
At the same time, April Nymex crude oil futures traded 34 cents higher at $99.97 per barrel, still close to the psychologically-important $100 per barrel level. Traders said that the negative impact of that movement was compounded by comments by Federal Reserve Chairman Ben Bernanke, who said an increase in the price of oil and other commodities could threaten both economic growth and overall price stability.
Commodity stocks slipped as weak metal prices weighed on the resources sector. The Stoxx Europe 600 basic resources index fell 0.8%. Moreover, major oil stocks tumbled as fears the uncertainty in the MENA region could hamper oil supply further weighed on prices. BP fell 0.9%, Royal Dutch Shell lost 1.3%, Total shed 0.9% and Eni slipped 0.6%. The Stoxx Europe 600 oil and gas index fell 0.6%.
The selling of oil producers’ shares in rising oil markets is a sign of increasing fears of systemic risk, said Olivier Jakob, managing director of Petromatrix. “It is impossible for all asset managers to be fully hedged against the doomsday scenario of a breakdown in Saudi Arabia or Iran, and that could lead to an acceleration of risk reduction as stocks are basically back to their 2007-2008 peaks while commodity prices continue to climb to historical highs,” he added.
Elsewhere, insurance shares fell sharply after Swiss Re said it estimates that the insurance industry faces losses of up to $12 billion from the recent earthquake in Christchurch, New Zealand, saying its own share of the loss may amount to $800 million. Swiss Re lost 1.8%, Munich Re fell 2.9% and AXA shed 2.1%. The Stoxx Europe 600 insurance index was down 1.2%.
Earlier, an economic report showed factory gate prices in the euro zone posted their sharpest monthly gain in 29 years in January, the latest sign that inflationary pressures are building faster than expected, ahead of the European Central Bank’s policy meeting Thursday.
Attention now turns to the monthly U.S. ADP employment report for February at 1315 GMT, widely seen as a precursor to Friday’s nonfarm payrolls release. Ahead of this, Wall Street stock futures were mixed. At 1220 GMT, the March Dow Jones Industrial Average futures contract was down 1.5% at 12,057 but the March S&P 500 futures contract up 0.3% at 1305.40.
In Asia overnight, stock markets sold off after weakness in U.S. stocks Tuesday and a rise in oil prices as the turmoil in Libya continued.
Japan’s Nikkei Stock Average closed 2.4% lower, Australia’s S&P/ASX 200 fell 0.5%, and South Korea’s Kospi Composite shed 0.6%. Hong Kong’s Hang Seng Index fell 1.5% and China’s Shanghai Composite lost 0.2%.
In the European foreign exchanges, the euro and sterling were firmer despite the ‘risk off’ trades in other markets.
At 1220 GMT, the euro was trading at $1.3822, up from $1.3778 in late New York trade Tuesday, while sterling traded at $1.6304, up from $1.6260. The dollar was at Y81.99, up from Y81.86.
Spot gold was down $1.00 at $1433.40 after recently touching a fresh record high of $1435.00 per troy ounce as investors flooded back into this safe haven.
Similarly, in the core sovereign debt market, benchmark German bunds for March delivery traded 0.02 higher at 124.08.
-By Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9488; ishaq.siddiqi@dowjones.com

BiH Presidency chairman Nebojsa Radmanovic affirmed that Sarajevo’s top priority remains EU integration and at the same time called for fast government formation at all levels. (Srna, Nezavisne Novine, RTRS, BHRT – 28/02/11)