“The Role Of The European Union’s Acquis In The Czech Republic’s And Slovakia’s Energy Market Reforms”

“The role of the European Union’s Acquis in the Czech
Republic’s and Slovakia’s Energy Market Reforms”
Washington DC, August, 2006
Pedro Sanchez
Elliot School of International Affaires
George Washington University

The role of the European Union’s Acquis in Czech Republic’s
and Slovakia’s Energy Market Reforms

The role of the European Union’s Acquis in Czech Republic’s and
Slovakia’sEnergy Market Reforms
Introduction
While many developing countries in the early nineties had to start economic reforms due
to previously non performing policies, Czechoslovakia not only had to overcome those
challenges, but also to initiate a deeper transforming process: constructing a country after
the fall of the Communist regime’s influence, following a bloodless transformation
processknown as the velvet revolution. Moreover, as soon a new democratic regime
was organized, the country split into two countries, which is known as the velvet divorce.

Three years after Czechoslovakia started the challenging process of transforming the
legacy of its earlier socialist economy1, the two new states, under different leadership and
approaches, started their return to Europe. Joiningthe EU became a national priority for
both the Czech Republic and Slovakia because the EU could provide the acceding
countries a number of benefits for economic and social growth and stability; these
benefits became a strong incentive to pursue and achieve reforms in every sector of an
acceding country’s economy, including the energy sector.

This paper will review and analyze the process ofpreparing the accession process for
both countries from a political and economic perspective, and will focus specifically on
the power sector reforms that were undertaken within this process.
1

Five Laws of Socialist Economies: “(1) Though nobody does any work, the plan is always fulfilled, (2)
Though the plan is always fulfilled, there is nothing in the stores, (3) Though there is nothingin the stores,
everyone has everything, (4) though everyone has everything, everyone steals, and (5) though everyone
steals, nothing is ever missing.

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The role of the European Union’s Acquis in Czech Republic’s
and Slovakia’s Energy Market Reforms

Historical Background
Czechoslovakia was ruled by the Communist Party from February 25, 1948 to December
29, 1989. Duringthis period, there were no official opposition parties operating in the
country. In 1977, a dissident movement named Charter 772

published home-made

periodicals, but they faced persecution from the secret police, and the general public was
afraid to support them. A person could be dismissed from his job or school, or have his
books or movies banned for having a "negative attitude tosocialist regime”, which
included: being a child of a former entrepreneur or non-Communist politician, having
family members in exile, supporting Alexander Dubček, opposing Soviet military
occupation, promoting religion, boycotting rigged parliamentary elections, signing
Charter 77 or associating with those who did.

This persecution changed gradually after the introduction of Mikhail Gorbachev'sPerestroika in 1985. In theory, the Czechoslovak Communist leaders supported
Perestroika, but they did little to put in place real changes. Mention of the Prague Spring
of 1968 was still a taboo. Between 1988 and 1989 the first anti-government
demonstrations started, but they were repressed by the police. The real impulse for
revolution came from the developments in neighboring countries — byNovember 16, all
the neighboring countries of Czechoslovakia, except the Soviet Union, had gotten rid of
Communist rule, the Berlin Wall fell on November 9, and the citizens of Czechoslovakia
could see all these events every day on TV. The Soviet Union also supported a change in

2

“Charter 77 is not an organization: it has no rules, permanent bodies or formal membership. It embraces...