Greece Forced To Sell Public Water Utilities Under EU-Imposed Privatization Plan
Above Photo: A protester takes part in a rally against the privatization of the state-run water utility, in Thessaloniki, Greece.(AP/Nikolas Giakoumidis)
REECE — In May 2016, the SYRIZA-led Greek government passed a new comprehensive set of economic austerity policies in exchange for receiving new loans that are intended to keep the country’s fragile economy afloat. This represents the fourth such “memorandum” between Greece and its creditors since the onset of the country’s economic crisis in 2009. It follows the third memorandum agreement passed by the SYRIZA-led government in the summer of 2015, just weeks after 62 percent of Greek voters rejected more EU-demanded austerity measures in the historic Greek referendum of July 5.
What both of these memorandum agreements have in common, along with the first two agreements voted upon by previous Greek governments, is the wholesale imposition of economic austerity measures, including pension and wage cuts, in addition to a wide-ranging program of privatizations of key public assets.
Just in the past year, 14 major regional Greek airports were privatized, as was the port of Piraeus, Greece’s largest port and one of the largest in Europe. More recently, the port of Thessaloniki, Greece’s second-largest city, was also privatized to a consortium of investors. In addition, special privatization funds have been created where the ownership of public assets such as water utilities has been transferred, leading up to their future sale.
MintPress News (MPN): What did current Greek Prime Minister Alexis Tsipras once promise regarding the privatization of Greek water systems, and what is he saying today?
Maria Kanellopoulou (MK): Well actually, Alexis Tsipras has outdone the previous governments all these memorandum years. Unfortunately, he has said a lot about opposing water privatization but has done the exact opposite thing. The important thing is that water privatization shouldn’t be an issue and shouldn’t be part of the programs and the things that the creditors of the country are asking for, and unfortunately, it is.
We have seen these recurrent demands about the water services being privatized since 2010, and all the governments since then, the Papandreou government, the Samaras government, and now the government of Alexis Tsipras, proved incapable of stopping these demands.
MPN: What are the Greek government’s current plans with regards to Greek water utilities and their transfer of ownership to a European privatization fund, and what does the Greek constitution have to say about this issue?
MK: Very recently, we saw that despite the Supreme Court decision that we had back in 2014 that prohibits the privatization of water services in Greece – ruling that it is unconstitutional – we have this recent development in which both EYDAP (the Athens water utility) and EYATH (the Thessaloniki water utility) were transferred entirely – and this is important to stress – to this new “Superfund,” which is the new European privatization fund agreed to between the Greek government and its creditors in the Third Memorandum.
Of course, this is something that constitutes a privatization, because this privatization fund does not belong to the public sector as a legal entity. For us, it is very strange that this happened and we’re expressing our criticism, but we’re [also] going to pursue this issue in court and wherever we have the right to do so.
It is important to say that this privatization fund has four different subsidiaries. One of these is the public participation’s holding company, where the water services have been transferred. The very critical thing to also remember is that this fund has a different scope, a different object. It was created to make money to go to the public debt, to help raise funds to reduce the debt, and part of it is also supposed to be for the development of the country.
Water services, on the other hand, regarding the Supreme Court decision, have a completely different object. They have the object not to be profitable or directed towards profit but directed towards providing good sanitation and water services to the citizens of Athens and Thessaloniki.
For us, it is very important that with this transfer, even if just one stock is not sold, we have a complete change of the character of the water services, which are now instrumentalized with a completely different objective.
MPN: Has the European Union or the European Commission adopted a position regarding the privatization of Greek water?
MK: This is also something that we really need to discuss very seriously. On one hand, the European Commission is supposed to be neutral when it comes to the management of water services, whether they are private or public. It is an obligation by the EU treaties to have this standing. On the other hand, we see that the Commission is part of the institutions that direct the situation right now in Greece. It is part of the institutions that make such demands about the privatization of water companies.
The very problematic issue here is that there is no transparency whatsoever in these negotiations, and we cannot really know what the position of the Commission is and who, in the end, is responsible for having to implement these policies which are against the will of the people. This is very obvious because we have, on the one hand, the referendum in Thessaloniki in 2014, where 90 percent of the people there voted against privatization.
But on the other hand, we also have the very successful “right to water” campaign, which is a campaign of the only direct democracy procedure at the EU level, which was also successful in Greece. We know very well that the people are against these policies, and that this continues to be demanded is very, very problematic for the EU as well.
MPN: Is it true that in many European countries, water utilities remain in public hands?
MK: Yes, and not only that but in the few cases where the water has been privatized in recent years, in the past 15 years, there are 235 high-profile cases of re-municipalization. It seems that this model has failed. It didn’t really withstand the pressure. We had a lot of problems with private management, and therefore many cities around the world, or in Europe in very high-profile cases such as Paris or Berlin, the management went back to public hands.
This is not a very big surprise for us. In rationally and patiently studying the available data, because it is in the nature of this monopoly, which is a public service, to not be able to go in the direct of the market, in the market-based economy as we know it.
MPN: Specifically with regard to the examples of Paris and Berlin, how were the water utilities in these cities returned to public hands after they were initially privatized?
MK: In Paris, it was a political decision. After the mayorship changed hands and became part of a coalition of the left parties and greens, they decided to stop, not to renew the contract that they had with one of the big French multinational private water operators. So it came smoothly, politically and economically speaking, which was not the case in Berlin.
Berlin was a completely different case. Actually, Berlin is one of the very few cities in Germany, where the majority of the cities still have publicly-owned and managed water utilities, that tried this privatization effort. A lot of scandals erupted because there was a secret deal between city hall and the private operators. Citizens had to invoke a referendum to learn the content of these secret deals, and in the end, they had to pay a lot of money to break the contract and regain control of their services, after a lot of problems and a lot of economic hardship for the citizens of Berlin.
MPN: Are there any examples that you could share with us regarding the adverse consequences of water privatization in other countries?
MK: In most cases, we see a lot of problems with the raising of prices…there is an unjustifiable [increase] in the tariffs for water. There is a lot of neglect when it comes to investment in infrastructure. Occasionally, we also have problems with pollution and quality control. Of course, in many cases, there are also stories of secret deals, of profit guarantees between the private operator and the party or authority which gives the concession contract.
In the end, a lot of the citizens, as I said before, are obliged by outrage to take back control of the water companies. We really don’t need to see that happening in Greece. We know exactly what the consequences are, and it is shameful that cities in Europe that have long [experienced] these kinds of policies now try to impose them in a European country with economic hardship such as Greece. There is no need to make things even more difficult than they already are.
MPN: Who are the major multinational players in the international water utility industry? Have they shown interest in purchasing Greek water systems?
MK: Back in 2014, when we had the tender for the sale of EYATH, which is the Thessaloniki water company, two very big players participated in the tender, together with some Greek companies that were in some kind of consulting [role] with them. One was Suez. Suez is a French multinational, a very big player in this sector. The other one is Mekorot, which is a very big public state-owned company of Israel. These two companies expressed their interest and participated in the tender for EYATH, and of course, this tender stopped because of the Supreme Court decision in May 2014. They have many times said publicly that they are still interested in acquiring or participating somehow in the Greek water sector.
MPN: What would the European Union’s free trade agreements, such as CETA [the EU-Canada Comprehensive Economic Trade Agreement] mean for the future of public ownership of water utilities?
MK: A lot of organizations, and especially the ones [producing] the research around these treaties, have expressed their concern that the future of water services is in danger. A lot of issues are raised with these treaties, but for me, the most important thing here is the lack of transparency and the fact that they’re considered to be just treaties of commerce, which is not the case. They influence so many aspects of our lives – it is unacceptable, the way they are discussed behind closed doors.
We’ll see how it goes. There is a lot of concern among citizens in Europe right now about these deals, and we could say more, but most of these deals are secret, so we don’t know the exact consequences that they will have in several aspects. One of the most unnerving, of course, is this kind of international tribunal, which is supposed to rule all the cases between the states and respective investors, which are the multinationals in our case. A mechanism which is beyond the international court system that we have right now, and in the cases where it has already been applied, there are a lot of problems for states to be bound to the rules and regulations of the markets, or environmental aspects of their law.
MPN: Since the privatization of publicly-owned assets is often justified based on economic grounds, could you tell us what the economic status of Greece’s water utility systems is like today?
MK: What is interesting to note, in the case of Greece: we have both EYDAP and EYATH, which are very profitable and stable companies. Only [in 2015], EYDAP made 138 million euros in gross profits. Now they have already agreed to sell a minority share of 11 percent to a bidder. The market value of the companies inside the stock market is entirely different from the value of their infrastructure, which was paid for by generations and generations of taxpayers in Greece.
We have companies that are profitable, which offer cheap water, as well as some of the cheapest tariffs in Europe right now, and let’s just say that in Greece we still drink water from our taps. Tap water is drinkable, and we know that in many cases when water is privatized, in very few years, we have a problem with [the consumption] of tap water. This would be devastating if such a thing occurred [here]. Most of the people in Greece right now have great difficulties in paying their electricity bills or their everyday grocery bills. Adding water to their shopping cart will be a very big problem.
MPN: How does your group, Save Greek Water, plan to respond to the impending privatization of Greece’s water supplies?
MK: Our “Bible” is the Supreme Court decision. We consider this a historic decision which protects water services from privatization. Based on this decision, we’re going to make all the legal moves which are available [to us] and to do whatever we can together with allies in Greece and abroad in order to stop this from happening, and also to expose.
There is a very big democratic deficit here, when we have a policy which has failed when we have a policy that’s against the people’s will, and still, it is being implemented here. For us, this has to go…we need to show to all the world that this policy here in Greece is against the will of the people and should definitely be revoked.
MPN: In your view, what can ordinary citizens do to respond to the privatization of water and other public assets?
MK: In Greece, they can help organizations which are already active by volunteering their time. We do not take donations of money, but we take time donations from experts or even people who can translate and do graphic design or whatever a campaign can be based on. And also, even people who don’t think they have a specific skill, they can disseminate information. This is very, very important in our times, especially with social media. They can help in spreading this information, help us disseminate what we’re going to do, the legal stuff for the protection of water. And of course, if they live in a city where they have similar problems, why not self-organize?
MPN: Where can the public find out more details about Save Greek Water and your organization’s activities?
MK: Our website is updated and active. It is www.savegreekwater.org. It is fully bilingual. People who don’t speak Greek too well or at all, they can still learn about not only Greece, but also things that have happened in Europe in general, and maybe sometimes in the world, internationally. We try to keep up with the news and discuss this issue mainly regarding the Greek situation, but also internationally. There, in English and in Greek, people can get more information.
Watch No Means No, a short film produced by Wordgrapher.com in collaboration with Save Greek Water: