The European Union’s recent decision to freeze any further enlargement into the Balkans made me think of a moment from a quarter of a century ago, when I saw the EU flag for the first time. I was a 16-year-old Bosnian refugee, standing in dirt, holding a humanitarian aid package in my arms. The box I had received contained rice, flour and other relief items that were supposed to last me two weeks. I took out a can of corned beef and on the side saw a dazzling circle of gold stars on a blue background. The text beneath the EU flag read: Donated by the European Community.

This was not how we had imagined our future relationship with the European Union. Its flag was supposed to represent our aspiration for a higher state of existence, close to our heritage as Europe’s most diverse country. It was not the corned beef, but the dream of joining a community of tolerance and open borders that kept many of us going through rough times. It gave us hope because, deep inside, we knew that we belonged. This belief in what the EU represented was practically coded in our national DNA.

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But now the doors seem to have shut in our faces following the decision by EU leaders to block the start of accession talks with North Macedonia and Albania.

To describe this decision as harmful for the western Balkans is an understatement. It is a blow for progressive political forces throughout our region, who have been working hard to build our EU future. Now we know that investing immense political capital to end longstanding disputes, take on difficult reforms, and make painful compromises – even to the point of changing your country’s name, as Macedonia did recently to appease Greece – will not gain us admission to Fortress Europe. The EU has sent us the message we feared the most: the EU no longer cares. It certainly does not care enough.

Worse than just keeping us outside the club, freezing the EU integration process risks fostering populism, contributing to instability and placing the region in a geopolitical limbo. The consequences will have to be mitigated through some smart EU policies and increased engagement in the region. For Bosnia in particular, this may be the only way out of its dire current predicament.

It might not seem apparent to current EU leaders, but the European Union and Bosnia were built on similar values and born at the same time. The EU (replacing the European Communities) was legally established by the Maastricht Treaty, signed on 7 February 1992. Only three weeks later, Bosnia voted in a referendum to become an independent state. In Bosnia, we saw this as the intertwining of our joint destinies. Just like the founders of Europe, we saw strength in our diversity, and were inspired by the optimism spreading across the continent. Our young nation was built on the narrative that we would eventually join the EU. This was our origin story, and we never imagined an alternative future.

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Instead, decades of stagnation, ethnic tensions and failed attempts at reform followed our devastating war. In the past four years alone, 5% of our citizens have left the country. The national parliament has not held a single meeting this year, while the government has still not formed, more than a year after the last elections. The rhetoric of secession and war are pervasive. Bosnia has drifted further away than ever from the EU, and is now in full-blown political and existential crisis, at risk of disintegration. It is, according to President Macron, “a time-bomb” ticking on the borders of the EU.

Our leaders carry part of the blame. They have certainly lacked the vision, capacity and integrity to take our country forward. Many Bosnians remain entrenched in ethnic divisions and keep electing the same nationalist parties. However, ineffective politicians and a largely myopic electorate are a consequence, rather than the root cause, of the problem. The fault lies squarely with the system within which they operate, and which by default produces such outcomes.

The governance system created by annex 4 of the Dayton peace agreement – our constitution – is notorious for its complexity, ineffectiveness and discriminatory impact. A population of 3 million is governed by three presidents, 14 prime ministers, about 180 appointed ministers and more than 700 lawmakers, sitting in 14 different parliaments. Ethnic-based elections and appointments perpetuate tensions by continuously pitting the three main groups against each other. Blocking decisions has become the main political tool, and impasse long ago became the norm. Around 15% of the population, including all Jews and Roma, are effectively second-class citizens, unable to run for high political offices.

After more than two decades of sticking-plaster solutions, it is high time we recognised that the Dayton agreement was a valuable tool to end a war, but it created an unjust and unsustainable system. The crisis is real, but Macron’s assessment of the situation is decidedly unhelpful. The EU must help Bosnia to lay a new constitutional foundation and rebuild its political structure from the bottom up.

This will be met with resistance from Bosnia’s governing elite, the only group that stands to lose in the process. Thousands of families are supported by the corrupt and inefficient system, and the political class will be understandably reluctant to let go. This loss has to be acknowledged and carefully managed, through a mix of incentives, pressures and safety nets that should accompany the constitutional makeover.

The process also entails serious risks; reopening a landmark peace agreement and rebalancing historic compromises at a time when Bosnia finds itself in an increasingly precarious geopolitical situation.

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But the risk of doing nothing is greater still. Business as usual will lead to Bosnia’s leadership pivoting to the Gulf states, China and Russia, which will further jeopardise the country’s cohesiveness and its EU future, especially now, when the only national consensus that existed – the hope of EU integration – appears to be indefinitely postponed. It will become ever harder for Bosnia to avoid becoming a testing ground in a new cold war.

The European council and the new commission should be braver and more ambitious. Our common values and stability are at stake. Otherwise, all we may be left with is a failed state on the EU’s doorstep and EU flags on humanitarian relief items – sad reminders of a never-realised dream.

• Boriša Falatar is a Bosnian economist who lectures at Sciences Po, Paris. He stood in Bosnia’s 2018 presidential election for Naša Stranka, a member party of the Alliance of Liberals and Democrats for Europe