ECONOMY

Romania to open energy up

BRUSSELS (Reuters) – Romania made fresh progress on Wednesday in negotiations to join the European Union by agreeing to liberalize its energy sector. Under the agreement, Romania will slash state subsidies and free up electricity and gas prices to bring them into line with EU rules by 2007 when the Balkan country expects to join the bloc. «Our energy sector is to be liberalized by 2007 to the extent it is liberalized in the EU,» Romania’s chief negotiator, Vasile Puscas, told reporters after accession talks in Brussels. With the energy deal, Romania wrapped up negotiations on implementing EU law in 25 out of 30 policy areas that have to be agreed before any country joins the bloc. Romania and neighboring Bulgaria missed the first round of EU expansion into formerly communist eastern Europe in May, when 10 countries joined. Puscas vowed to catch up with Bulgaria, which completed EU talks this month, by the end of this year. Romania’s energy overhaul, which will cost about 2.5 billion euros, involves gradually privatizing the industry, modernizing the communist-era infrastructure and developing nuclear energy. «The liberalization of the energy market… should have a positive effect on consumers… who will be able to choose suppliers according to the conditions offered,» Puscas said. Under the deal, Romania has until 2011 to increase strategic fuel stocks to the EU’s 90-day minimum, during which the economy can function without external supplies. The country had reserves of 33.5 days last year. Romania also promised that by 2010, about 11 percent of power produced in the country would come from renewable energy sources, mainly from hydroelectric plants. It still needs to complete talks about services, competition and state aid, the environment, regional policy, justice and home affairs.