video – SAVEGREEKWATER

“Putting Water Back Into Public Hands” when it is privatized in Greece?

savegreekwater — Tue, 12 Mar 2013 12:12:19 +0000

With the occasion of the production of a short video animation related to putting back water management into public hands, a video that was based on the published research of Corporate Europe Observatory, the Municipal Services Project and Transnational Institute we republish and translate a recent relative article by Martin Pigeon. Before the article please watch the short video that was subtitled in Greek by SAVEGREEKWATER team. You can read more info on the research and its results here. Once more, as it seems, the “solutions” forced in our country, are already obsolete for the societies not only of Europe but also of the emerging world.

By Martin Pigeon

“A business of real public importance can only be carried on advantageously upon so large a scale as to render the liberty of competition almost illusory […] It is much better to treat it at once as a public function.” – J.S. Mill, 1872

Almost a year has now passed since Remunicipalisation: Putting Water Back Into Public Hands was first released. This book examined the ongoing trend of water “remunicipalisation” – how cities are taking back control of their water systems. It is exciting to give it a second life today, in the form of a Spanish book, as well as through a short animation film.

Researching and writing this book was intense: five urban water systems were studied, one per continent, with radical geographical, political and cultural differences among them.

As I looked at water struggles all over the world, more and more it felt as if I were observing the circulation of life’s blood. The cities had a lot in common: their water systems were technology-intensive, comparably standardized, costly, vital… And for at least these two last reasons they had been privatized. Many investors love monopolies, and urban water networks are natural monopolies on a lifeline resource. However, after a period of significant expansion in private water management globally (1980-2000), the trend was reversing.

Lessons from remunicipalisation

As campaigners against water privatization, we encourage public water management: we welcome this new trend, but to what extent is it good news? Our research found that:

remunicipalisation can save money for public budgets, and sometimes a lot such as in Paris where the city saved enough to reduce water tariffs by 8% without endangering investments and financial stability
it always allows for more transparency
it can increase the system’s efficiency (performing to best technical capacity as opposed to just complying with legal standards)
it often puts extension of coverage and equal access back on the agenda[1]

In short, remunicipalisation works!

But other findings are equally interesting. The most striking one perhaps is that the decision to remunicipalize is usually taken mainly on financial and technical grounds. Pro-public water political campaigning does help, but the mere fact that private management fails to run systems in a technically sound and politically acceptable way can be enough to lead to remunicipalisation. In short, privatization is its own worst enemy.

Ongoing struggles

The remunicipalisation wave continues. Veolia just lost one of its oldest contracts in France in the city of Rennes. A city spokesperson explained: “There’s a contradiction between the council’s aim to reduce water consumption and that of the operator whose interest is to see it increase.”

The water companies’ business model for municipal contracts is outdated, at least in the EU. Consumption slowly but steadily decreased over the past 20 years, limiting revenue while costs skyrocketed, and the resulting hike in water tariffs has generated political discontent and high scrutiny. Cities that don’t remunicipalize renegotiate their contracts fiercely: it is common for water multinationals to give 30% rebates these days to keep their contracts, hoping they can still recoup their costs later.

They are now trying to restructure their businesses, with two major options:

Veolia seems to focus more on traditional engineering works and services for public and private clients, as well as new ones such as the mining and oil industry (fracking requires enormous amounts of water and involves high clean-up costs).
Suez seems to try to capture the very management of the resource and the politics of water through “integrated water governance” contracts, trying to sell cities “water health contracts” and co-opting the language of the progressive water world.

One remark: the European Commission seems to completely ignore all of the above. It has never promoted water privatization as enthusiastically as today, imposing this failed model on Greece, Portugal and everywhere it’s given the chance. It has for the first time included water in Internal Market legislation on concession contracts, causing an uproar – and intense corporate lobbying – in Brussels these days. Indeed, “the Commission believes that the privatisation of public utilities, including water supply firms, can deliver benefits to the society when carefully made.”(EC, DG ECFIN 2012)

Making ‘public’ work

Public ownership is a pre-requisite but never a guarantee for better performance. “Public” must go hand in hand with democratization of the service. Only that way can challenges of the water sector be tackled in a sustainable way:

How can we finance costly infrastructure without giving control to corporations or banks?

How can water management be integrated in urban and land planning, in forestry and agriculture policies to improve resilience, resource quality and adapt to climate change?

How to fight other forms of privatization such as the end-of-pipe technological approach to pollution, or useless and dangerous ideas such as water rights markets?

How to translate these technical issues into political issues that all can understand and contribute to?

Remunicipalisation advances these debates by raising water issues on the political agenda and is a golden opportunity to try and solve them.

Martin Pigeon is a researcher and campaigner with Corporate Europe Observatory (CEO). CEO is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making.

[1] The World Health Organisation estimates than every dollar invested in water supply and sanitation saves between 4 and 12 dollars in avoided health costs.

Part of Catastroika dedicated to water privatization

savegreekwater — Tue, 18 Sep 2012 10:05:17 +0000

In this excellent documentary by Ari Hadjistefanou and Katerina Kitidi describing the history of privatization in Europe since Treuhand and the hostile takeover of East Germany from West Germany until the conquest plan of the Russian economy, the catastroika, special mention is made to the history of privatization of water companies. From the 50 ‘minute and on it is described what happened in Paris when Chirac gave Suez and Veolia the management of the water supply. The tariffs increased by 260% in total with no economic or technical justification. When the city mayorship changed hands, in 2010, the municipality took back control of water management. Unlike private companies they reduced tariffs by 8% and profits were invested in improving the water infrastructure networks. The documentary then mentions the case of Italy, where a referendum was held, with 97% of people saying no to the privatization of water. Still, the European authorities have asked the Monti government to include the water company in the latter package of privatizations. The next case described is the greek one. Watch it…

A few words by the creators

It was at the beginning of 1989 when the French academic Jacques Rupnik sat at his desk, in order to prepare a report on the state of the economic reforms in Mikhail Gorbatsov’s Soviet Union. The term that he used in describing the death rattle of the empire was “Catastroika”. In Yeltsin’s time, when Russia instituted maybe the biggest and least successful privatization experiment in the history of humanity, a group of Guardian reports assigned a different meaning to Rupnik’s term. “Catastroika” became synonym of the country’s complete destruction by market forces; the sell off of public property; and the steep deterioration of citizens’ living standards. Now, Catastroika’s unit of measurement was unemployment, social impoverishment, declining life expectancy, as well as the creation of a new cast of oligarchs, who took over the country’s reins. A few years later, a similar effort to massively privatize public property in unified Germany (which is presented as a model for Greece) created millions of unemployed and some of the biggest scandals in European history.

It is this “Catastroika” that is coming soon to Greece; to “Europe’s last Soviet Republic” as the MPs and the ministers of its former “socialist” government liked to call it. Catastroika is the logical aftermath and continuation of “Debtocracy”. Therefore, the logical sequence of our

first documentary, which examined the causes of the debt crisis in Greece and the European periphery as a whole.

Nevertheless, Catastroika is a virus that attacks not only the countries that radically change their economic system (like Russia) or countries under financial occupation. In fact, maybe the most unsuccessful privatization examples occur in financial superpowers that theoretically have the financial strength to control their negative consequences.

Catastroika can be spotted in post-Thatcherite Britain, where citizens were killed in accidents at the privatized rail network. It can be detected in the Dutch privatized and liberalized postal sector, where thousands of jobs have been cut and mail arrives at one’s door two to

three times per day. It can be detected even in California, which left her citizens in the dark when it deregulated the energy market.

However, its consequences are the gravest and most frightening at countries which fell in the trap of foreign lenders and are obliged to proceed to mass privatization. The public property sell-off which takes place in Greece has been tried several times in similar circumstances. The same people, who undertook the selling of public utilities in Latin American countries, now have moved their office in countries of the European periphery –and the most competent among them have been travelling to Athens during the last months.

The procedure always follows exactly the same steps: In the beginning, the government, in collaboration with mass media, starts a forceful attack against public servants, who are presented as responsible for all the country’s financial woes. The myth of the overextended public sector is often based on manipulated data from organizations supported and supporting the government of the time. Concurrently, specific public organizations are deliberately left unsupported, exasperating citizens due to their inefficiency. The process is completed by the sell-off of even the most profitable public organizations at a fraction of their real value.

Catastroika’s team is already travelling in many countries, collecting images, information and material on deregulation and privatization programs that have been implemented at the so-called “developed” world. The final result of the research is never black or white. The divide between the “social character” of the public sector vis-à-vis the inhumane face of the free market is equally simplistic as the theories of Milton Freedman that professed the need to privatize even the air that we breathe. The Greek case however supersedes the simple theoretical discussion on the role of the country in the economy.

TEAM

Directors/Writers: Aris Chatzistefanou, Katerina Kitidi

Scientific advisor: Leonidas Vatikiotis

Production Manager: Thanos Tsantas

Edit: Aris Triantafyllou

Soundtrack: Active Member, Ermis Georgiadis

Other crew: Julia Kileri, Margarita Tsomou, Vaya Pantou, Christos Tsiknias,Graneta Karatza, Costas Efimeros

Production: Infowar Productions