German high representative for Bosnia and Herzegovina Christian Schmidt announced on Monday that the German government would suspend a $125 million aid package to Bosnia’s Serb Republic region, following comments by its leader, President Milorad Dodik, in favor of secession from Bosnia—a development that European observers have warned could prompt a renewal of ethnic conflict within the country.

Schmidt made the announcement during an interview with the N1 television network, which broadcasts across the Balkan countries that formerly comprised the nation of Yugoslavia until its violent dissolution during the early 1990s. The German official warned that a continued buildup of ethnic tensions in Bosnia could endanger its stability.

“Nobody should feel safe in this regard,” he said, adding that Germany could approve a deployment of its military to Bosnia as part of the European Union Force, or EUFOR, to maintain order. The international organization’s deployment to Bosnia is scheduled to be renewed by the UN Security Council by the end of the year. However, observers have warned that Russia, which enjoys close ties with Serbia and has supported Dodik, could attempt to veto the renewal.

Dodik, who leads the Serb Republic within Bosnia and occupies the country’s rotating presidency once every three years, briefly initiated a political crisis within Bosnia after vowing not to recognize the authority of the central government in Sarajevo over the Serb Republic. However, Dodik temporarily abandoned this plan following the imposition of sanctions against him by the United States and the United Kingdom, as well as Russia’s invasion of Ukraine in February.

Bosnia—divided between ethnic Serbs, Croats, and Bosniaks—became the epicenter of ethnic conflict within the former Yugoslavia during the early 1990s. The three-year siege of predominantly-Bosniak Sarajevo by Serbian forces came to define the conflict in Western eyes, and Serb leaders Radovan Karadzic and Ratko Mladic were ultimately convicted of war crimes at the International Criminal Court in the Hague for their actions, although other sides of the conflict were also implicated in ethnic violence and war crimes.

The Dayton Accords, which brought an end to the war in 1995, reformed Bosnia as a single state partitioned into Serbian and Croat-Bosnian halves. However, tensions have lingered between the two halves, and Schmidt has warned on previous occasions that regionalist tendencies among Serb leaders could lead to secession and increased instability.

Trevor Filseth is a current and foreign affairs writer for the National Interest.

Image: Reuters.