The European Commission's deputy director general for enlargement, Joost Korte, told a Sarajevo news conference on Tuesday that Bosnia's politicians had failed to make the proper adaptations to the constitution.

"Don't underestimate the political consequences of this," Korte said. "These are clear signals to the leadership of this country that there is a consequence for failure to act."

EU member states voted to cut the aid to Bosnia over that country's failure to change its constitution to give ethnic minorities more rights. The decision means Bosnia faces a drop in funding this year of 45 million euros ($62 million). A financial aid package to run from next year until 2020 has also been placed in jeopardy.

Under the painstakingly-constructed peace deal that ended Bosnia's 1992-1995 war, Muslims, Croats and Serbs are considered granted special status when it comes to running for political office.

The country is composed of two "mini-states," one belonging to Serbs and the other shared by Bosnian Muslims and Croats. The two semi-autonomous regions are united under a parliament and three-member presidency.

Minorities not deemed "constituent peoples" are barred from running for either the presidency or parliament. In 2009, the European Court of Human Rights issued a ruling that this discriminated against other ethnic groups - in particular, Jewish and Roma Bosnians.

Negotiations to change the constitution are said to have stalled because of political bargaining, with Bosnian Croats keen to win greater protections of their rights before any deal is done.

Bosnia is behind other former Yugoslav republics on the path to any future entry into the bloc. Croatia and Slovenia are already members, while Montenegro has already begun accession talks. Serbia is due to begin its own accession negotiations by January.

rc/ph (AFP, Reuters)