The leadership of Republika Srpska (RS), the smaller of the two entities that make up the Balkan country of Bosnia and Herzegovina (BiH), pushed relations with the state government in Sarajevo to the brink this spring with a proposed referendum that many saw as a first step toward declaring independence from Bosnia.

International onlookers breathed a sigh of relief when the EU brokered an eleventh-hour compromise, leading RS leaders to shelve the referendum proposal. Yet Republika Srpska's ongoing tendency toward political and institutional separatism threatens Bosnia's stability.

It is clear that neither the US nor the EU would accept an independent Republika Srpska--and it is likely that any concrete move towards secession would provoke a violent reaction from Sarajevo. Yet Crisis Group has reported that RS citizens in general favor independence. Serbs feel alienated from the state that, they say, has asked them to shoulder the bulk of responsibility for the Balkan Wars of the 1990s.

The popular RS President Milorad Dodic has attempted to bridge this gap between expectations and reality with small measures that chip away at the central state's institutions, in turn making it more difficult for these institutions to function. And unlike President Tadic of Serbia, Dodic has yet to issue any formal apology for past war crimes, forestalling the kind of national reconciliation that could help build a successfully federated state.

Post-war economic growth and reconstruction in Republika Srpska and the rest of BiH mask a reality of lingering wartime trauma, which runs deep in the social psyches of both populations. Divisive moves from Republika Srpska like last spring's referendum proposal only intensify existing resentments.

In place of separatist brinksmanship, RS should rely on the EU mediation process--which has proven successful in the past--to help resolve ongoing disputes about the role of BiH institutions in the political, legal and economic life of Republika Srpska.

Sabine Freizer, Crisis Group's Europe Program Director, spoke with me about what has changed since Dayton ended the Bosnian war--and how old tensions have persisted in disrupting the governance of Bosnia. Listen to our conversation below.