Privatisation


One result of this process of putting what were state services onto the market is that the citizen is being turned into a consumer and small shareholder. The political implications of this need seriously to be discussed; it underlies many of the contradictions facing left-wing parties today. There is only one explanation for the propensity of erstwhile parties of the left to support privatisation: in rejecting their past these ex-socialist and ex-communist parties decided they wished to strike a deal with the new holders of financial power. 



Democracy and public services 



There are two recurring strategic questions.The first is how to define in judicial terms 'services for the general interest' and 'services for the general economic interest'; the second is the question of participatory democracy. 

In relation to the first, the literature is vast but at the EU level there is no agreement. Italian research, undertaken by the CIGL union federation, the Network of Municipalities, Attac Italia and Arci found that EU legislation involves 'no awareness of the notion of public service' but only acknowledges 'services for the general economic interest'. One of the most urgent political tasks for opponents of privatisation in Europe, therefore, is to secure a clear and definitive directive on services for the general interest. 

Democracy is another fundamental problem that needs to be addressed. Privatisation has gone hand in hand with 'individualistic' and authoritarian political ideologies. The EU is witnessing a disastrous lack of civic participation in its policy-making.This has been highlighted in research by Greenwich University's Public Services International Research Unit, on behalf of the European Federation of Public Service Unions, that is highly critical of the official report of the European Commission on services and liberalisation. 

The researchers point out that the commission report - which, after all, deals with issues crucial to all European citizens - was published only in English and was edited by a very small circle of people, who failed not only to involve civil society associations but also institutional representatives from other EU committees. In the paper,'Evaluating Network Services in Europe: a critique of the EC evaluation of the performance of network industries' (available online atwww.psiru.org/reports/2006-03-EU-EPNIcrit.doc), the author, David Hall, highlights 'the need for an independent, participative, and democratic process: the European Commission should not provide the defence, jury and judge for its own policies'. 

Bolkestein and the future 

A major problem facing Europe at present is the Bolkestein directive on the liberalisation of services. It was the latest of a series of directives that flowed from the European single market. The earlier directives were aimed at specific sectors - telecoms, energy, rail transport, waste and postal services - and required all EU members states to commit to a deregulation timetable to open up public networks to private operators. 

Bolkestein aimed at complete liberalisation of service industries, creating a common European market. The way the law was formulated meant an attack on workers rights because it enabled a company from any EU member state to recruit workers in other EU countries on the basis of less favourable employment laws in its own 'country of origin'. 

Europe-wide protests led to a compromise by which the countries-of-origin clause was dropped and certain services would be protected from the opening up of the market. How long will this compromise last? Who can rule out that, sometime in the future, a foreign company might lobby successfully to take over services in areas that are now protected? In the internal European market, what sectors will be excluded from the liberalisation process? All services, linked to all sorts of general interests, might eventually be liberalised, leaving the state solely with the responsibility of assisting the most vulnerable. 

One of the next battle lines on liberalisation and privatisation is likely to concern the health service. In this context, it may be worth noting that the present EU health commissioner is the Cyprus-born Marhos Kyprianou. It is well known that Cyprus does not have a public health service. 

Translation by Ilaria Perlini 

The end of state monopoly has not translated into a competitive market. Instead it has produced private oligarchies and massive profits 

There are two classifications of public services in Europe. The services directive (2006/123/EC) applies to 'services of general interest', which includes education, social protection, security, criminal justice and local government services such as refuse collection. Certain services were excluded from the directive, including healthcare services, social services, social housing and financial services. The directive is intended to liberalise the cross border supply of services, thus helping to create a common internal market. 'Services of general economic interest' are commercial services with public service obligations, such as energy, transport and communications. 

The European Public Services Union (EPSU) and the Socialist Group in the European Parliament (PSE) are campaigning for a new EU legal framework on public services. The aim is to establish common public service principles; legal certainty and exemption for social services, health, water and education from competition regimes; and the right for local and regional authorities to provide in-house services. It will also establish an Observatory to promote cooperation, improve standards and monitor the impact of liberalisation.

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