Banja Luka is a place full of upbeat confidence. Set in the Vrbas valley, and surrounded by low wooded hills, the town that was for years no more than a Habsburg backwater now has all the trappings of a capital city.

For many in the Republika Srpska, what happens in Banja Luka counts far more than the deliberations of the government of Bosnia and Herzegovina in Sarajevo. Listen to the output of local television and radio in Banja Luka and you could be forgiven for thinking that the Republika Srpska really is an entirely separate country.

It is not, of course. The Republika Srpska is one of the two principal entities that make up modern Bosnia and Herzegovina. A Serbian Orthodox cathedral stands centre stage on the main drag in Banja Luka and the Cyrillic alphabet dominates in the public arena. Banks, libraries and art galleries all proclaim their identity as institutions of the Republika Srpska.

At one level, this entity is party to the uneasy peace imposed on Bosnia by the Dayton Peace Accord. But the Republika Serpska’s diligence in attending to the affairs of the wider country of which it finds itself part is open to question.

Back in 2004, the then High Representative for Bosnia, Paddy Ashdown, sacked sixty high ranking Republika Srpska officials for failing to apprehend or hand over a single indicted war criminal. Things have moved on, but not a lot, and in the Viennese-style cake shops that are a mainstay of life in Banja Luka, the talk among older residents of the town is all about how the Republika Srpska must stand up for its rights.

The younger crowd who frequent the town’s famously noisy Mexican restaurant every evening concur. Many question why the Republika Srpska really must cooperate in the game of Bosnian peace. “Could we not just go our own way?” asks one young woman between bites of a tortilla.

The Kosovo question is only just below the surface in Banja Luka. Kosovo’s independence is no longer a question of ‘if’ but ‘when’. Next week? Next month? Who knows. But all eyes in Banja Luka are on Pristina. If the USA and some western countries precipitately recognise an independent Kosovo, it is going to become even harder to persuade folk in Banja Luka that they really must put their hearts and souls into cooperating with the Muslim-Croat Federation to create a unified state in modern Bosnia and Herzegovina.

A diplomatic cheer from the west for Kosovo’s secessionist aspirations might carry all sorts of implications for other would-be independent entities across the Balkan and Black Sea region. It is a point that is not lost on the citizens of Banja Luka.

This is the seventh in a series of guest postings by Nicky Gardner and Susanne Kries of hidden europe magazine (http://www.hiddeneurope.co.uk).