Mr. President we would like to extend a warm welcome to the High Representative and thank him for his report.

We have in the situation before us today, as is often the case in this area of the world, a mixture of positive developments and ongoing challenges.

At the State level and in the Federation we have a coalition of moderate non-nationalist parties, which has expressed its commitment to the international community's priorities in Bosnia and Herzegovina.

And yet at the same time its majority is extremely fragile. It will not be easy to achieve the important steps that are needed for making progress on refugee returns, the consolidation of state institutions, and economic reform. This is a big job and it will take time.

Likewise, while there is a non-ideological government of experts in the Republika Srpska no one doubts the continuing influence of the SDS and other nationalist parties in the Republic.

And sadly, the nationalist HDZ party continues to pursue an obstructionist path that, we are confident, is merely the last gasp of an obsolete and defeated faction. We applaud the resolute action the High Representative has taken to deal with those leaders who attempt to reverse progress by clinging to such nationalism.

Mr. President, I review some of these details because my delegation believes the High Representative must monitor the situation closely and take strong and concerted action when necessary.

We do not disagree with the High Representative's concept of ownership but my government has made very clear its continuing belief that the international community has an important role to play in pushing for progress when it grinds to a halt. And it is Ambassador Petritsch who leads the international community's effort in this regard.

Another important point; we are encouraged by the positive news on refugee returns but there is still important legislative action that must be taken to push this process further.

Mr. President, we would like to close by noting our deep concern about the Special Agreement between the FRY and the Republika Srpska. As the statement you will read at the end of this meeting makes clear, it is important that the High Representative monitor the final details of this agreement to ensure that it does not undermine the sovereignty of Bosnia and Herzegovina or violate the Dayton Peace Accords in any way.

Mr. President, finally, my delegation would have liked a specific call in the President's statement for the adoption and implementation of a permanent election law as soon as possible.

This is the most useful and appropriate response to the irresponsible actions of the HDZ and we urge all of Bosnia's duly elected representatives to make it a priority in the coming six months. Thank you.

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