Greece Forced To Sell Public Water Utilities Under EU-Imposed Privatization Plan

Greece’s economic woes continue to pile up, with key public utilities such as water now on the chopping block of privatization. But activists like Maria Kanellopoulou are working to spread awareness of this issue and prevent Greek water from being put into private hands.
By @dialogosmedia |
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    GREECE — 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.



    Maria Kanellopoulou of the Greek activist organization “Save Greek Water,” in an interview originally recorded in October 2016 and broadcast on Dialogos Radio, spoke to MintPress News about the impending privatization of Greek water systems and the potential consequences it will bring, as well as the efforts being made to prevent the privatization from being completed.

     

    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.


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    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.


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    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 Noa short film produced by Wordgrapher.com in collaboration with Save Greek Water:

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    • No More Neos

      “More destructive than bombs, money has become the weapon of choice for the global elite, for the hidden hand of finance can plunder and conquer entire nations, assimilate whole cultures, exploit resources and rape the earth while forcing billions into poverty, all with the surprising stealth of pen-strokes and business contracts.

      Neoliberalism is the economic and political philosophic driving force in the world today. It suggests that human progress is the result of competition, best expressed by an extremist version of unfettered capitalism, where privatization of profits and socialization of losses are acceptable ethics, regardless of human and environmental costs incurred along the way.”

      Neoliberalism is the killer plague of the 21st century. Neoliberalism is economic fascism. It is a criminal doctrine. Globalized neoliberalism privatizes public goods for private profit. Neoliberalism led by Washington with the shameful complicity of Europe has in the last fifteen years killed between 12 and 15 million people by wars, famine, deprived health services… forced refugees. Today a small world elite of corporate and Wall Street CEOs and selected politicians call the shots. ~Peter Koenig

      https://popularresistance.org/former-world-bank-staffer-explains-how-neoliberalism-is-destroying-the-world/

    • No More Neos

      This is why the EU must be dismantled. Nations need to maintain the authority to issue their own currency for social programs. The US is a sovereign nation with this capacity, but it chooses to funnel newly created currency into multi-trillion dollar private bank bailouts, corporate subsidies and defense spending.

      MMT (modern monetary theory) is an excellent source to find TRUTH in how the economy is actually designed to work, but isn’t. We’ve been fed LIES about taxes, which do not fund federal spending!

      Our government is run just like a bank, not a household, in that it can “create money out of thin air” as private banks do. Since our currency is no longer pegged to an external commodity like gold ever since 1971, our new fiat system grants us the freedom to break out of the finite pie chart of discretionary fiscal spending.

      Why don’t we worry if private banks balance THEIR budgets all the time? Because they’re not supposed to! Same thing applies to government.

      “The Government is not like a household. A government is like a bank. And a government running a balanced budget is like a bank that simply lends back as much as it gets in repayments, therefore the money supply never grows and without that, you don’t have a growing economy,” Steve Keen said.”

      Michael Hudson’s new book, J is for Junk Economics, is an excellent source of truth that cuts through the Orwellian doublespeak used by media, mainstream economists and politicians. Stephanie Kelton, Steve Keen, Randall Wray, Bill Mitchell and Warren Mosler are all worth researching for answers to the failed neoclassical economics that is still being taught in most universities today.

      • No More Neos

        For those struggling with MMT (modern monetary theory), google “money created from thin air”. You’ll get lots of hits, including Bernanke admitting that’s where the multi-trillion dollar bank bailout came from, and German banks admitting that’s where credit came from.

        There is nothing new about this, it’s been the reality since we all abandoned the gold standard in 1971. Trouble is, the ramifications of abandoning the gold standard and using fiat currency were never explained to the people. And no way were governments captured by Neoliberalism ever going to use fiat currency properly. That is, to serve the majority of society.

        Governments and mainstream neoclassical economics professors continue to explain money as a limited commodity with an external value (like it had with a gold standard) and government budgets as being like household budgets (which they’re not: households can’t create currency out of thin air, but governments can) because it suited laissez-faire, Neoliberal capitalism to keep a huge supply of labor unemployed, underemployed or working poor people, for some perverse, peculiar reason.

        I often suspect governments and politicians don’t understand the ramifications of abandoning the gold standard and using fiat currency themselves. Either that, or they are VERY good actors. ~ Kathy Heyne

        • tapatio

          I don’t think you’re right about politicians failure to understand the meaning of fiat money. But, they are backed into corners, as was George III in the mid 18th Century, or they commit some other whoopsie and wind up selling their nation’s soul to Satan (Rothschild et al.).

          Or, to achieve some personal lust, they will make a pact with that same Prince of Darkness, condemning future generations to slavery.

          And, unlike other commodities, the price of slaves/workers/humans must be kept at rock bottom – thus your unemployment and the oligarchy’s willingness to wipe out millions of humans for some small economic or political gain.

    • Steve Neubeck

      Grexit would have made more sense than Brexit.The other PIIGS nations should leave the E.U.

      • TecumsehUnfaced

        I agree. I think that Victoria Nuland threatened Tsipras with something very serious like invasion or color change revolution.

        • orwell11

          Tsipras didn’t need any threats in order to do whatever the Europeans and IMF wanted. It was obvious to anyone paying attention from day one of his government and even before.

          • TecumsehUnfaced

            You don’t remember how he became very submissive after she visited him?

            • orwell11

              I remember more than that. I remember how watered down his “radical” rhetoric already was prior to the January 2015 elections. I remember his victory speech, with countless mentions of Europe but not one mention of Greece. I remember how he and his government elected an arch-conservative corrupt career politician as president of Greece when there was no constitutional crisis and Syriza had enough votes to get anyone they wanted into the position (this same individual said today that Greece’s place in the EU is “permanent and irrevocable”). I remember all the other pro-austerity laws and policies of his government long before the “betrayal”.

              • TecumsehUnfaced

                I also remember how he got nothing in place in case the EU wouldn’t bargain.

                • orwell11

                  Absolutely nothing. Even the “radical” Varoufakis who everyone loves admitted he had no Plan B and a Grexit was not on the table—he said this during the negotiations! With negotiations like that, who needs negotiators? Just sign whatever’s handed to you and save some time at least.

    • FrontLine

      Why the European Financial Dictatorship will continue to torture Greece at least until 2019
      http://bit.ly/2qNAYdN

    • James Wherry

      If the government of Greece can take care of water and waste treatment facilities “faster, better and cheaper” and come up with the money for infrastructure investment, then they should do so.

      The truth is that Greece’s aging water and waste treatment facilities are in need of upgrading and Greece does not have the money to do so. Private investment will do what’s necessary to keep the facilities running – but not for free.

      • jo6pac

        Yep, just like Flint, Mich.
        Private investors are about taking not giving, it short term gains they’re looking for. It happened in Calif. and it won’t be any different in Greece

        • James Wherry

          Remind me, again: when did Flint Michigan privatize its water and waste treatment facilities? Seems like its still a publically-held company, to me: https://www.cityofflint.com/.

          Oh, don’t get me STARTED on the THIEVING LIBERALS of California! They took their electric company and divided it into three companies and jacked up the prices! Environmentalists let the scum do so because raising energy costs would “promote energy conservation!”

          When you live in an apartment, you cannot put solar panels on your roof, folks. And when your electric bill is insanely high, you can’t afford to buy LED lights!

      • orwell11

        Greece’s water and waste treatment facilities are in far better shape than those of the United States, and many were built in the past decade or two. They’re not aging, decaying, or problematic in any way. They are also profitable. Do you like to sit around and troll articles about Greece to spread your BS rhetoric?

        • James Wherry

          Fine: then there’s no need to privatize.

          I would be just as happy, if the Greeks would default and opt out of the IMF and the EU: but quit bit*hin’ and make up their minds.

          As a conservative I say, “Fine: balance your budget and live within your means.” America, too.

          But quit bellyaching about what the world owes the rest of you.

          Now don’t feel stupid for the name-calling?

          • orwell11

            Greeks aren’t “bitching.” They’re under occupation by a government and indeed a political system that seems hell-bent on destroying the country, with the blessings of the EU. By the way, Greece’s budget is not just balanced but it is running a surplus, something which is causing even more unnecessary pain to its people at this time.