The Energy Sector Reform and Macroeconomic Adjustment in a Transition Economy: The Case of Romania

Stéphane Cossé

No 2003/002, IMF Policy Discussion Papers from International Monetary Fund

Abstract: This paper assesses the main issues faced by the energy sector in a transition economy such as Romania and their macroeconomic dimension. It examines how the size of quasi-fiscal subsidies, owing mainly to inappropriate prices and the lack of financial discipline, has led to an increased focus on the energy sector under the IMF-supported programs. The paper analyzes the macroeconomic impact of recent reform measures and discusses the next steps to improve price policy and collection in energy utilities. Shifting to targeted budgetary subsidies appears also to be a crucial reform step.

Keywords: PDP; firm; government; price; subsidy; firm collection policy; Romania; energy sector; quasi-fiscal activities; macroeconomic stabilization; transition; energy sector company; state-owned company; enterprises' profitability; regulatory authority; district heating company; low income; Natural gas sector; Tariffs; Electricity; Government subsidies; Europe; Central and Eastern Europe; Western Europe (search for similar items in EconPapers)
Pages: 26
Date: 2003-04-01
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