Economic Reform of the Electricity Industries of Central and Eastern Europe

The purpose of this paper is the following: firstly, to chart how much economic reform of CEE electricity industries has taken place to date; secondly, to discuss why progress has been so limited; and, thirdly, to consider the prospects over the next few years. In charting the economic progress to date, we will consider and discuss progress in electricity price unbundling and rebalancing; in utility commercialisation; in industry and market restructuring and liberalisation; and in privatisation, as well as the development of economic regulation. For the reasons outlined above, we will explore the pricing issues in some detail as they are essential for understanding the difficulties in making progress in the other aspects of economic reform. The analysis concentrates on the 10 countries with which the EU has an Association Agreement and who are stated candidates for EU membership (the EU 10).