EU hopes sanctions threat will stop Bosnia breakup

He was referring to potential EU asset-freezes and visa-bans on Republika Srpska leaders, such as its president Mirolad Dodik.

Borrell did not say whether sanctions were to be triggered after Republika Srpska secedes or if it were to take further steps toward that goal. But he did say they would be a "last resort".

"The EU will definitely react very strongly", Austrian foreign minister Alexander Schallenberg said in Brussels on Monday. "They will feel the consequences," he said, referring to Republika Srpska's leaders.

The EU is already withholding some €600m of road and rail investments from Republika Srpska until a "return to full functioning of state institutions," the European Commission said Monday.

EU officials, who were not authorised to speak on the record, called the situation in the region "probably the most serious crisis since 1995", when an ethnic conflict in Bosnia killed more than 100,000 people.

According to a recent internal EU report, the 600 European peacekeeping soldiers in Bosnia were on high alert to tackle "local outbursts of violence" in the event Dodik went ahead with secession.

Dodik is a close ally of Russia and so a flare-up in the Western Balkans risks playing into Moscow's hands, not least by distracting European policymakers while they also focus on trying to stop Russia from invading Ukraine.

"We have to be very careful that Bosnia-Herzegovina and the Balkans as such don't become a playground for actors outside the EU, outside Europe," Austria's Schallenberg said, alluding to the role played by Moscow in the Bosnia crisis.

But for all that, Hungary, one of the most Russia-friendly EU countries, has threatened to veto any Bosnia blacklists.

"The threat of sanctions by some of our allies and friends against Milorad Dodik is not contributing to stability and peace in Bosnia and Herzegovina, but is exacerbating the situation," Hungary's foreign minister Péter Szijjártó said Monday according to Hungarian news agency MTI.

Szijjártó also used social media to make his views clear in recent days.

"The sanctions policy has failed, it only incites hostility," Szijjártó wrote on Facebook after holding a phone call with Dodik — a close ally of Hungarian prime minister Viktor Orbán — on Friday.

"Instead the European integration of the Western Balkans must be accelerated, which will be the real solution," Szijjártó wrote.

The US administration announced sanctions in January against Dodik, whom it accused of "corrupt activities," which he denies.