Lawmakers in Bosnia's autonomous Bosniak-Croat Federation backed approved new labor legislation sought by the European Union and International Monetary Fund on Thursday, facing down thousands of protesters outside the regional assembly.
The new law introduces more flexible labor practices and underpins a raft of legislative changes to secure much-needed funds from the IMF and the EU, which has launched a new bid to encourage economic and political reform in Bosnia in exchange for closer integration with the bloc.
Riot police ringed the parliament of the Federation, one of two autonomous regions that make up Bosnia under the peace deal that ended the 1992-95 war in the former Yugoslav republic.
Several thousand trade unionists threatened to storm the building, arguing that the law would make it easier for companies to fire workers in a country already plagued by high unemployment.
It was passed by the upper chamber of parliament and is expected to easily clear the lower house next week, when trade unions said they will gather again.
The autonomous Serb Republic has also said it will adopt similar changes by the end of the year.
Bosnia's state leadership last week endorsed a timetable of reforms agreed with the EU under a fresh drive to shake the country out of years of economic and political stagnation and set it on a path to eventual membership of the bloc.
The EU urged authorities to implement the so-called "Reform Agenda" without delay, and said the labor law would be an "important first step."
Federation Prime Minister Fadil Novalic dismissed the concerns voiced by workers outside the parliament, saying failure to adopt the law would close the door on new recruitment, foreign investment and international funds.
"We need this law, not because of the EU, but because of us," he told the assembly.