Municipalisation of private utilities

The economic crisis is being used as an excuse to privatise utilities across Europe. This is most evident in Greece and Portugal – although there are strong  anti-privatisation campaigns in both these nations.

Recent research from the Public Services International Research Unit (PSIRU) at the University of Greenwich shows that the trend in Europe has been towards bringing private utilities back into public ownership. In France, water has been taken back from privateers in no less than 16 cities including Bordeaux and Paris, home of utility giants Veolia Environnement and GDF Suez.  There are similar moves in Berlin and Budapest too. In Italy plans to privatise water were knocked back in a referendum in 2011.

In Germany electricity has been undergoing a process of renationalisation as 2,000 private concessions expired. The Swedish parliament rejection the privatisation of the power company Vattenfall. In Hungary, the state is taking back control of the energy sector, part of which is controlled German multinational E.on. Latvia has declared it illegal to privatise the electricity company Latvenergo.

There is a similar story in transport, waste management and facilities management.

The PSIRU research found that:

  • cost savings, largely due to higher borrowing or transaction costs, and promised price cuts didn’t happen;
  • problems with the quality of services and investment;
  • private firms were unaccountable and unresponsive to local needs;
  • and privatisation and outsourcing of public services had led to worse working conditions and job security for employees.

Opinion polls in the UK and across Europe reflect a negative experience with privatisation, and confirm a deeper mistrust of making profits from public services.

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