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Liberalization in the Energy Sector: Transition and Growth


Despite the gradual progress in the transition countries of Central and Eastern Europe (CEE), a number of obstacles must still be overcome before transition economies can embark fully on the path towards sustainable long-run growth. One of these hurdles is the liberalization of the energy sector. The liberalization of the energy sector will help create a more competitive environment in this industry and facilitate the development of more efficient technologies. Liberalization of the energy sector requires, in addition to the reform of the current obsolete and inefficient legislature, a break-up of state monopoly giants into smaller, less dependent, and more efficient units, even when the state is a major stakeholder, as was the case in many Western European countries. This paper reviews the liberalization experience of Western Europe and elaborates on this topic in selected CEE countries, with a particular focus on the Czech Republic.