EU Accession Conditionality and Compliance with the Energy Community Treaty: A Missing Link

Abstract

EU accession conditionality is expected to be an incentive for third countries to apply EU energy rules. However, looking at the latest Energy Community (EnC) Implementation Report (2021), Ukraine, then a non-candidate country, performed better than the candidate country of Serbia in liberalizing its energy sector. Adopting the EU external governance approach, this article investigates whether this result depends on the EU’s bargaining power or, rather, on the domestic cost-benefit calculation of implementing the EnC acquis. While applying this legislation proves to be quite costly for both Serbia and Ukraine, the EU’s bargaining power turns out to have opposite effects in the two cases. This has increased in Ukraine as a result of the deterioration of relations between Moscow and Kiev, thus leading to an increasingly implementation of the EnC acquis. Conversely, the EU’s bargaining power has decreased in Serbia due to Russia’s significant presence in the country’s energy sector, which is a major obstacle to the implementation of the EnC legislation. A significant level of EU bargaining power has therefore the potential to reverse the impact of domestic factors, leading to a reconsideration of the role that international energy dynamics play in accession conditionality. Finally, conclusions are drawn on how the EnC can benefit from this finding and improve its effectiveness. Energy Community, EU external governance, Energy governance, Accession conditionality, Ukraine, Serbia