Broken Alliance: How Milorad Dodik is Step by Step Leading Republika Srpska Out of Bosnia

“If you build a house with two exits, sooner or later one will be deemed an escape route,” — a Balkan politician might begin an interview that way. But in reality, it sounds more mundane. One exit simply widens in the direction of Belgrade, while the other cracks under Western pressure. The house is Bosnia. And the man wielding the sledgehammer — Milorad Dodik.

On April 24, 2025, Christian Schmidt, the High Representative of the international community in Bosnia and Herzegovina, did something none of his predecessors had dared: he suspended public funding for the ruling Serb parties in Republika Srpska. The reason? “Systematic attempts to undermine the Dayton Agreement and the country’s legal order,” reported AP.

On paper, it was an administrative act. In practice — the most dramatic political intervention since the end of the war in 1995. Schmidt’s order struck at the very heart of Dodik’s power structure, where loyalty is often fed not by ideology but by budgetary flows. And now those flows have been cut off.

“He is here illegally. Nobody elected him. We do not recognize him. If he shows up in Republika Srpska — we will arrest him,” said Milorad Dodik in a televised interview, as cited by The Washington Post.

Politics in Republika Srpska is increasingly resembling a reversed chess game: Dodik’s moves lead clearly toward secession, while Schmidt’s attempt to keep him on the board relies on the mandate and authority of international law.

But to understand why this financial slap resonated so loudly, we need to go back. Back to a time when Milorad Dodik wasn’t “Bosnia’s main opponent,” but presented himself as its modernizer.

It was from there — from the 1990s political scene, in a rhythm of interethnic compromises and strategic pivots — that this long road to today’s conflict began.

Origins of the Conflict — Who Is Milorad Dodik

When Milorad Dodik first appeared on the Balkan political scene, he was called a “pro-Western social democrat.” In 1998, he became the Prime Minister of Republika Srpska with Western backing and was even trusted by the Clinton administration. His appeal was straightforward: a technocrat without extremism, an alternative to nationalists, ready to work in the spirit of the Dayton Agreement.

Dodik’s appointment in 1998 did not result from parliamentary elections, but rather from a decree by Carlos Westendorp, the then international High Representative. This step was supported by the international community, especially the United States, as an effort to weaken radical nationalist influence and stabilize the postwar situation in Bosnia.

(See PIC resolutions and Office of the High Representative (OHR))

However, over the years, his rhetoric changed. After returning to power in 2006 as President of Republika Srpska, and later as a member of Bosnia’s tripartite presidency, he gradually distanced himself from his Western-oriented past.

Timeline of Dodik’s Political Turn

2006–2010: The Rhetoric Begins to Shift

• Abandonment of the idea of a shared civic identity.

• Emergence of a narrative about the “constant discrimination against Serbs” within Bosnia.

2015–2016: The First Major Challenge to Dayton

• September 25, 2016 – Republika Srpska holds a referendum on celebrating January 9 as its “national day,” despite a ban from the Constitutional Court. The vote became a symbolic act of defiance and the first major political clash between RS and Sarajevo. This is mentioned in the Euronews article.

2019: Institutional Separatism Deepens

• Dodik begins pushing for the creation of separate judicial and prosecutorial institutions within RS.

“We do not recognize Bosnia’s jurisdiction over our courts. This is a matter for our citizens,” he declared in the RS Parliament. You can read the report here.

2021: The Military Question

• The RS parliament votes to begin withdrawing from Bosnia’s armed forces, tax authority, police, and judiciary. Radio Liberty reported about it.

This decision alarmed the UN and EU, prompting warnings from Germany and the U.S. against “undermining state institutions.”

2022–2023: Geopolitical Alliance with the Kremlin

• Dodik meets frequently with high-ranking Russian officials, including Foreign Minister Sergey Lavrov.

• In June 2022, during Lavrov’s visit to Banja Luka, Dodik declared:

“We support Russia’s policy because it is the only country that consistently respects us and our rights.” This is reflected on the page of the Russian Foreign Ministry.

2024: Laws Against Central Institutions

• RS passes laws curbing the power of Bosnia’s Constitutional Court, Prosecutor’s Office, and the OHR.

• New legislation requires all foreign media to register as “agents,” sparking condemnation from the EU and OSCE.

By 2025, Milorad Dodik had evolved from a pro-European pragmatist to perhaps the most vocal advocate of Bosnia’s disintegration — from a builder of institutions to their chief saboteur. His actions long ago outgrew the label of “political opposition”; they now represent a deliberate strategy of institutional sabotage, bolstered by foreign alliances.

It is within this context that Christian Schmidt’s decision to cut off funding served not just as a message — but as a final warning.

Christian Schmidt’s Decision and Its Consequences

On April 24, 2025, while most Western capitals were preoccupied with AI, oil, and elections, a piece of news from Sarajevo shook Bosnia’s political foundations: High Representative Christian Schmidt suspended public funding for the ruling Serb parties in Republika Srpska.

“These measures are aimed at protecting the constitutional order as defined by the Dayton Agreement from systematic undermining by RS leaders,” stated the official declaration from the OHR, as reported by AP.

Schmidt clarified that this was not simply a “punishment,” but a necessary step to halt the internal dismantling of the state, orchestrated by Milorad Dodik. In essence, funding parties that actively destroy state architecture is now being seen as complicity.

Core of the Decision:

• State subsidies allocated to political parties under Bosnian law will be frozen.

• The measure targets only those parties whose actions directly violate the constitutional order, especially those pursuing separation from state institutions.

Legal Foundations

The High Representative in Bosnia operates under Annex 10 of the Dayton Agreement, which empowers him to impose binding decisions and remove public officials in the event of threats to the country’s integrity. This mandate has been endorsed by the Peace Implementation Council (PIC) and is supported by the EU, the U.S., and NATO.

“We see the actions of RS leaders not as political dissent, but as subversive conduct. Freezing their funding is not an option — it’s a duty,” a UN diplomatic source told Reuters.

Dodik’s Response: All-Out Defiance

Milorad Dodik responded immediately. He called Schmidt’s move “foreign interference” and reiterated that he did not recognize the High Representative’s authority.

“We don’t take orders from foreign officials. He [Schmidt] is illegitimate. If he enters Republika Srpska — he will be arrested,” Dodik stated, as cited by AP.

International Response

• The United States endorsed Schmidt’s action. The State Department declared that RS was violating its international commitments.

• The EU, via Josep Borrell, expressed “deep concern” over Dodik’s actions and called for immediate dialogue.

• Germany and Austria reiterated their support for the High Representative and reminded that sanctions against Dodik were already in place.

Implications: Legal and Symbolic

Schmidt’s decision marked the first time in modern Bosnian history that a High Representative used financial pressure not against individuals, but against an entire political structure. The move is widely seen as an open declaration of institutional crisis.

Thus, Schmidt’s action was not only a reaction to Dodik’s maneuvers — it became a stress test for the very construction of post-Dayton Bosnia. Whether it holds depends not on rhetoric, but on whether institutions can withstand a siege by political blackmail escalating into open confrontation.

Political and International Context — Who Supports Dodik

If we view Milorad Dodik’s actions as a bold poker game, his confidence doesn’t rest solely on local support. He’s not just challenging Sarajevo — he’s building a parallel architecture of loyalty, reinforced by external partners. And increasingly, that architecture speaks Russian and Serbian.

Serbia: Brotherhood, with Reservations

President Aleksandar Vučić has long tried to balance support for Serb interests in Bosnia with the need to maintain relations with the EU. But by late 2022, Belgrade’s rhetoric leaned more heavily toward defending RS’s “right to autonomy.”

Vučić has repeatedly emphasized the importance of the Dayton Agreement and Bosnia’s territorial integrity, while also affirming support for the Serb people in the region. In June 2024, during a rally in Belgrade, he called for peaceful solutions in line with Dayton and vowed that Serbia would never abandon Bosnian Serbs. AP wrote about it.

However, Vučić has not officially supported Dodik’s actions or the idea of RS withdrawing from Bosnian institutions. This is a convenient position of ambiguity, enabling him to appease the EU while maintaining influence in Banja Luka.

Russia: Political Protectorate in Exchange for Geopositioning

Since 2021, Dodik has frequently traveled to Moscow. He is the only European leader who openly supported Russia’s invasion of Ukraine. In June 2022, he hosted Sergey Lavrov in Banja Luka; in 2023, he met with Vladimir Putin in the Kremlin.

In return, Russia has blocked efforts to extend the OHR mandate in the UN Security Council and consistently refers to Schmidt as “illegitimate.”

China: Economics Over Rhetoric

Unlike Russia, China prefers infrastructure diplomacy. Through the Belt and Road Initiative, large-scale projects in Republika Srpska — highways, hydropower plants — are being developed. This gives Dodik access to alternative financing, bypassing Western institutions.

The West: Red Lines and Sanctions Diplomacy

• The U.S. imposed sanctions on Dodik in 2022, later expanding them in 2024 to include his associates and affiliated companies.

• The EU has so far responded with visa restrictions and financial oversight.

• Germany and Austria declared Dodik persona non grata.

“We’re not dealing with an opposition leader, but with a politician who uses state resources to dismantle the state,” said German Foreign Minister Annalena Baerbock in December 2024, reported Reuters.

The Banja Luka – Belgrade – Moscow Axis

To the international community, this is not merely an internal Bosnian crisis. It is a geopolitical projection of the East-West conflict. Republika Srpska has become a political enclave through which Russia maintains pressure on the Balkans, and the EU faces a test of its resilience and resolve.

Dodik is playing a multi-layered game, where each move is simultaneously a challenge to the EU, a signal to Belgrade, and a handshake to Moscow.

Conclusion — Swimming Against the Current

States, like bridges, don’t collapse from storms — they collapse from material fatigue.

Bosnia and Herzegovina, a country built on the balance of compromises, has become a stage for testing the very idea of federation. Milorad Dodik is no longer merely a challenger — he’s dismantling the structure from within, leaving the building exposed to the draft of separatism.

Christian Schmidt’s decision to cut funding for Serb parties is not just a hit to their budgets — it’s a strike at the very architecture of legitimacy. Schmidt didn’t act as a bureaucrat but as the last line of defense of the Dayton framework. He did what many thought impossible: he shifted the conflict from the realm of declarations to that of consequences.

And while Belgrade remains officially silent, in Banja Luka the air resounds not with rhetoric, but with ultimatums. The arrest of Schmidt, the creation of a parallel army, courts, media — these are no longer hypotheticals. They are entries in a political program that Dodik refuses to abandon.

— And now what? a fictional interlocutor might ask, lazily gazing at the map of the Balkans.

— Now comes the pause, the author would reply. The most dangerous kind of pause — the one between a gesture and its consequences. Just long enough to prime the next explosion.

A phrase often attributed to either Winston Churchill or Otto von Bismarck says:

“The Balkans produce more history than they can consume.”

And perhaps Dodik is not the cause — but the symptom. A symptom that the peace constructed after 1995 is cracking where it was only temporarily glued together, held by the assumption of goodwill.

But goodwill is no longer enough. What is needed now is political engineering. Precision. Principle. And perhaps a bit of luck.

Because in this house with two exits, one is already sealed shut. And the other stands wide open.

And the real question is not who will leave first — but who will choose to close the door behind them.