Commission promotes competition in Balkan energy markets

The EU has signed an agreement with eight South East European countries to integrate their electricity markets and pave the way for closer co-operation.

On 8 December, the European Commission signed an agreement with eight South Eastern European countries which aims at integrating their electricity markets into the wider internal electricity market of the EU and to reconstruct infrastructure (damaged during the war) in the Western Balkans.

Commissioner for Energy and Transport Loyola de Palacio emphasised the importance of creating a regional energy market in South East Europe as a step towards a closer co-operation to ensure peace and stability in the region. The aim is to bring state energy policies more into line with each other and to foster competition through the establishment of common rules for generation, transmission and distribution of electricity, grid access and transparency.

Since the inception of the 'Regional Electricity Market in South East Europe' initiative in March 2002, considerable progress has been make in creating a regional market. The agreement is seen as a step towards a legally binding treaty to be concluded between the EU and the South East European states.

The initiative is backed by financial institutions such as the World Bank, the European Investment Bank, the European Bank for Reconstruction and Development and bilateral donors including Italy, Greece and Switzerland. The European Council on 12-13 December is expected to endorse the agreement.

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