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The current Bosnia-Herzegovina essentially was created by the Dayton Accords, which ended the war in Bosnia-Herzegovina in 1995. With the Dayton Accords, the West gave the country’s three major ethnic groups — the Bosniaks (Bosnian Muslims), Croats and Serbs — a weak, decentralized state comprising the Republika Srpska (RS) and the Muslim-Croat Federation. The result is a de facto state within a state, RS, ruled by Prime Minister Milorad Dodik, while the Bosniaks and Croats share power in the Federation. The federal government is ruled by a complex power-sharing system involving the three groups and two entities, and has little power other than defense and some foreign policy. STRATFOR has written extensively about the dysfunctional Bosnia-Herzegovina political system. Bosnia-Herzegovina’s elections in October 2010, however, took tensions in the country to a new level. The Croats are angered that their preferred candidate did not get one of the three Federal Presidency slots, alleging that many Bosniaks within the Federation voted for a candidate who is an ethnic Croat — Zeljko Komsic — but who represents a more unitary vision of Bosnia-Herzegovina preferred by moderate and nationalist Bosniaks alike. This has stoked tensions between Bosniaks and Croats, which were already high, prompting many Croats to ask for the creation of an ethnic entity akin to the RS for the Croats. The West would like to see a strong federal government in Bosnia-Herzegovina. In part, this vision is a product of a normative understanding of what Bosnia-Herzegovina should be, forged in the West’s belief that splitting Bosnia-Herzegovina along the ethnic entity model — as Dayton did — would ultimately reward the nationalist violence of the 1990s. The last attempt to resolve the political imbroglio was Swedish-led, at the Butmir talks at the end of 2009. With the Eurozone crisis now in full swing, the question is how high Germany — currently positioned as Europe’s leader — would place normative concerns on its agenda. German Chancellor Angela Merkel is, according to multiple reports from the region, preparing a grand bargain solution to Bosnia-Herzegovina that will include strict penalties for any politician who takes a hard-line nationalist position. Germany wants to handle the Balkan tensions as quickly as possible and wrap up the necessary reforms that put all countries on the path to EU accession so that it can deal with the reforms necessary for the EU itself. As such, a strong federal government in Sarajevo may not be as important to Berlin. On the other hand, Germany will also be far less worried about stepping on the toes of regional powerbrokers. Dodik’s standoff with the Office of the High Representative increased his power and showed the West to be impotent, but he will find Merkel much harder to intimidate.