Hungarian Prime Minister Ferenc Gyurcsany Tuesday ordered Finance Minister Janos Veres to transform state-owned power wholesaler Magyar Villamos Muvek Zrt. to prepare it for privatization and eventually lower electricity prices, a government spokesman said.
The government's decision was helped by the National Bank of Hungary's recent guidance on the distortions and the impact MVM's monopolistic status has on prices, government spokesman David Daroczi said at a press briefing.
Monopoly kills competition and the lack of competition results in consumers' vulnerability and unrealistic, high prices, Daroczi said.
Veres, in cooperation with other cabinet members, will immediately launch regulatory, personnel and structural changes at MVM to cease its monopolistic role "in the foreseeable future," Daroczi said.
MVM needs to be restructured so it could become one of the companies the government plans to sell to mostly domestic retail investors in an initial public offering during the next 12 months.
Proposals for transforming MVM are on the prime minister's office's Web site.