Switzerland said Wednesday it may cut back reconstruction aid for Bosnia-Herzegovina unless SFr1.5 million ($1 million) of reconstruction funds blocked in a Bosnian bank are not released and the banking crisis solved soon.

Switzerland said Wednesday it may cut back reconstruction aid for Bosnia-Herzegovina unless SFr1.5 million ($1 million) of reconstruction funds blocked in a Bosnian bank are not released and the banking crisis solved soon.

The spokesman for the Swiss Agency for Development and Cooperation (SDC) said it was considering legal proceedings against the Bosnia and Herzegovina Bank, which has collapsed and is under special administration by the Bosnian authorities.

“If the SFr 1.5 million do not turn up, we will have to reassess the overall aid funds that we make available for Bosnia-Herzegovina,” SDC spokesman Reinhard Voegele said Wednesday.

Voegele said that aid for refugees returning to Bosnia would not be affected. But other aid programmes, he added, might be cut back.

He said that all interventions with the Bosnian authorities had failed to bring about a solution to the crisis.

The Organisation for Security and Cooperation in Europe also has its money in the bank and the United States agency USAID said it was unable to recover about $500,000 in loans to the bank.

The financial institution’s liquidity problems became apparent in November. In February, the bank stopped all payments and money transfers.

The Swiss funds that should have been paid out regularly were aimed at supporting returnees to Bosnia, Voegele said.

The crisis comes amid allegations that Muslim, Croat and Serb authorities in Bosnia may have stolen more then $1 billion in public funds and international aid.

The allegations, based on findings of the anti-fraud unit of the Office of the High Representative in Bosnia, appeared in the New York Times on Tuesday.

A spokeswoman for the office, which oversees the implementation of the 1995 Balkans peace accord, said the report was largely correct.

From staff and wire reports.

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