The influence of federalist ideas, practical experience and elements of federalism have been present in South-Eastern Europe since the second half of the XIX century, initially in a truncated form of the dual Austro-Hungarian monarchy. Federalism twice appeared briefly at the foundation and shortly prior to the demise of the "Kingdom of Yugoslavia." A confederation of regional resistance movements during the Second World War developed later into a "socialist federation," initially imitating the Soviet Union on a reduced scale (DFY, FPRY, SFRY). The collapse of this structure in 1991-1992 was accompanied by bloody armed conflicts and wars. The idea of a still wider Balkan Federation was floated in 1947 but never got off the ground. In addition, a small part of SE Europe (Moldova) had been for decades a republic in the quasi-federal Soviet Union which broke down in 1991. To the string of unsuccessful federalist experiments one should also add the "Federal Republic of Yugoslavia" (1992-2003), which lost its province Kosova/Kosovo in 1999 and was transformed in 2003 into "The State Community of Serbia and Montenegro." This loose confederation might in turn disintegrate in summer 2006. At present peculiar federalist arrangements are present within "Bosnia and Herzegovina" (with two "entities" - the "Federation B & H," the "Serbian Republic" and the separate Brčko District). Moreover there have been proposals to resolve the "frozen conflicts" in Moldova and on Cyprus by creating confederal structures. This paper looks into the present malfunctioning post-Dayton arrangements in Bosnia and Herzegovina and the dilemmas related to badly needed institutional reforms in that country. Finally it examines the reasons for numerous failures and federalist prospects for the future, including the slow expansion into the region of the European Union.