Contents -- I. Introduction -- II. Overview of Subsidy Reform in the New Member States -- A. Concept and Definition -- B. From Transition to EU Accession -- C. Size and Composition of Subsidies -- III. Analytical Framework Explaining Differences in Subsidy Reform Experiences -- A. External Conditionality -- B. Domestic Constraints -- C. Subsidy Reform in the New Member States: Underlying Factors -- IV. State Aid Subsidy Reform -- A. Situation Prior to Accession -- B. The Process of Reform -- C. The Sustainability of Reforms -- V. Agricultural Subsidy Reform -- A. Situation Prior to Accession -- B. The Process of Reform -- C. The Sustainability of Reforms -- VI. Energy Subsidy Reform -- A. Situation Prior to Accession -- B. The Process of Reform -- C. The Sustainability of Reforms -- VII. Transport Subsidy Reform -- A. Situation Prior to Accession -- B. The Process of Reform -- C. The Sustainability of Reforms -- VIII. Conclusions and Policy Lessons -- Tables -- 1. Size of Subsidies -- 2. Reductions in Subsidies by Type -- 3. Key Cases of Subsidy Reform -- 4. State Aid in the New Member States -- 5. Instruments to Finance State Aid for Manufacturing and Services -- 6. The Effects of State Aid Reform -- 7. Agricultural Subsidies in the New Member States -- 8. Share of Different Farm Types in Total Agricultural Land -- 9. Energy Subsidies in the New Member States -- 10. New Instruments for Promoting Renewable Energies in the New Member States -- 11. Power Sector Regulatory Bodies in the New Member States -- 12. Transport Subsidies in the New Member States -- 13. State Aid for Horizontal Objectives and Particular Sectors -- Figures -- 1. External Conditionality and Variation of Reform Across Types of Subsidy -- 2. State Aid Being Phased Out During Accession -- 3. Distribution of new EU's Agricultural Subsidies during Accession.

4. Agricultural Income in the Old and New Member States -- 5. The Impact of Subsidy Reform on Household Expenditures -- 6. Indicative Allocation of ISPA Funds -- Appendixes -- I. EU Rules -- II. Country Examples -- References.