BRUSSELS (AP) — The European Union is ready to limit financial assistance and possibly impose sanctions in Bosnia to help prevent the possible breakup up of the ethnically divided Balkan country as the peace agreement brokered over 25 years ago unravels, the EU’s top diplomat vowed Monday.

“There is no place in Europe for a divided Bosnia and Herzegovina. And those who work in this direction are strongly wrong,” EU foreign policy chief Josep Borrell said after chairing a meeting of the bloc’s foreign ministers.

The United States last month announced new sanctions against Bosnian Serb leader Milorad Dodik, who has for years been advocating that the Serb-run part of Bosnia should leave the rest of the country and unite with neighboring Serbia.

The U.S. accused him of “corrupt activities” that threaten to destabilize the region and undermine the U.S.-brokered Dayton Peace Accord. Dodik says he and Bosnian Serbs are being unfairly targeted and wrongly accused of corruption.

“We are ready to use all the instruments available if the situation will require (it),” Borrell told reporters in Brussels. He said those measures could involve cutting “financial assistance, and restrictive measures, but this would be used as a last resort.”

The peace agreement in 1995 ended the war in Bosnia, which killed more than 100,000 people and left millions homeless. The accord established two separate governing entities in Bosnia — Republika Srpska run by Bosnia’s Serbs, and another other dominated by Bosniaks, an ethnic group that is primarily Muslim, and Croats. The two are linked by shared, state-wide institutions, and all actions at a national level require consensus from all three ethnic groups.

Most EU countries also want to hit Dodik with sanctions, but Hungary, Croatia and Slovenia are notably opposed.

Dodik rejected any EU threat of pressure. He said Monday that he and his ruling party “will not accept” any EU sanctions, adding that the Bosnian Serb entity will block all “development projects” on the federal level within Bosnia if they are accepted.

“If they want to stop the whole of Bosnia and Herzegovina, we are at their service,” Dodik sad.

Austrian Foreign Minister Alexander Schallenberg had said earlier that “the announcements of Dodik and Republika Srpska are extremely dangerous and playing with the integrity of the state, and this is for us a no-go.”

He warned that Bosnia and the Balkans must not become “a playground for actors outside Europe.” Russia has notably pledged support for Dodik and his associates.

The EU is also demanding that electoral reform be passed ahead of polls in Bosnia later this year.

What the EU wants to see, Irish Foreign Minister Simon Coveney said, is “a full reform package agreed and implemented in advance of the elections so that we can have elections that then successfully result in the formation of a government that can function.”

“We want to see peace and stability in Bosnia and Herzegovina, and I think that reform package would certainly help that to take place,” Coveney told reporters.


Dusan Stojanovic in Belgrade contributed to this report.