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The Public Sector of Selected European Capitals: the Situation in Berlin, London, Paris, Vienna and Rome Compared

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The Public Sector of Selected European Capitals: the Situation in Berlin, London, Paris, Vienna and Rome Compared The public sector of selected European capitals: The situation in Berlin, London, Paris, Vienna and Rome compared By Marian Krüger Published by the Rosa Luxemburg Foundation, Berlin [email protected] rls The public sector of selected European capitals: The situation in Berlin, London, Paris, Vienna and Rome compared By Marian Krüger Table of contents Introduction City files Overview concerning the general conditions and the points of emphasis of the study I-) Berlin: Red-red rehabilitation brigade at work 1) Origin and development of the political system of the city of Berlin, social and economic conditions 2) Contract basis: Budgetary calamity – Political relationships of forces and government goals 3) Budgetary policy – to rehabilitate and to shape! 4) Public service and public sector II-) London: No return to Old Labour 1) Origin and development of the political system of the city of London, general social and economic conditions 2) Political relationships of forces and political agenda starting in 2000 3) Key budgetary data 4) Maggie Thatcher’s legacy: Public service and public sector III-) Paris: A policy of social urban development and of extending the public sector 1) Origins and development of the political system of the city of Paris, general social and economic development 2) Political relationships of forces, the agenda of the new left government 3) Budgetary policy 4) Public service and public sector à la française IV-) Vienna: Continuities and changes of a social-democratic model city 1) Origins and development of the political system, general socio-economic framework 2) Political relationships of forces and governmental objectives, Vienna’s strategy plan 3) Budgetary policy 4) Public service and public enterprise sector: the Vienna City Works Holding V-) Rome: Governed for almost 13 years by left majorities 1) Origins and development of the political system, socio-economic framework 2 2) Political relationships of forces and governmental objectives 3) Budgetary policy 4) Public sector Some conclusions and theses 1) Political profile of the urban governments 2) General socio-economic data in comparison 3) Budgetary scopes for manoeuvre in comparison 4) Facing the immanent contradictions of the public sector! 5) Conditions of production of public goods in comparison: Example PPUT Bibliographical Sources 3 The public sector of selected European capitals compared: Taking stock in Vienna, Paris and London, Rome and Berlin I- Introduction Vienna, Paris and London are very different with respect to their population, their economic and political position, their history and their intellectual-cultural profile. Their positions in the national and international city networks also differ strongly. Paris and London are, in the sense of the definition of Saskia Sassens “Global Cities”, meaning decision centres of international economic and financial life.1 Vienna, at least at the national level, occupies a dominant economic position and pursues the ambition of being a centre of economic relations with the East European countries. Rome, from the spiritual-cultural point of view, has been a global city through the ages and the centuries. At the same time, the Italian city system, just like that in Germany, remains poly-centric. And while Rome may be of great weight economically, it is not dominant. Berlin, on the other hand, raises the claim to be a metropolis that meets with international acceptation especially at the cultural level. Its economic and financial power, however, lies chronically under the federal average. A consistent characteristic of the chosen capitals, however, is that they are ruled by representatives of the European left. In London, Paris, and Berlin, in the persons of Ken Livingstone, Bertrand Delanoë, and Klaus Wowereit, three social-democrats came to power as a result of changes in government. Vienna by contrast stands for a decade-long continuity of social-democratic governmental practice. In Rome, Walter Veltroni (DS – Italian Left Democrats) replaced Francesco Rutelli (Margarita – liberal), and this way at the same time protected the Roman mayor’s post against a party alliance of the Italian right. Although the general economic conditions in a globalised economy are subject less and less to the disposition by local actors and the budgetary scopes of manoeuvre depend mainly on the position within the overall state financial constitution, there remains the important question for the original political scopes for action of the city governments. The public sector has special significance in the answer to this question, because the local state (region) in its function as employer and/or entrepreneur is subject to direct political influence. What decisions the Left participating in the local government takes with respect to the public sector and what governmental goals it pursues, shall be investigated and presented here in the following. Pushing back the role of the state as employer and/or entrepreneur, as producer of public goods, was and is the declared goal of neoliberal policy, whose keywords are privatisation, liberalisation, and deregulation. Where can policy intervene at a shifting border between state and private, between the community and the market and to the benefit of the public sector? The examples that are listed of this in the following reach from the re- centralisation of London waste management to the “Vienna Water Charta” which dealt the privatisation of the communal water economy a decisive refusal. If the retreat of the state were the general form of movement into the future, the large communal holdings in Vienna (Vienna City Works) and Rome (Gruppo Comune di Roma) would be only anachronisms. On the contrary, large communal enterprises, 1 Sassen, Saskia, „Ausgrabungen in der Global City“ (Excavations in the Global City), in: “Berlin: Global City or liquidation mass” (Berlin: Global City or liquidation mass), Dietz Publishers, Berlin 2000, p. 17. 4 that may for instance have the legal form of a stock-holding, can be an important instrument of political design. The Vienna or respectively Rome policy linked the foundation of these enterprise groups to the strengthening of the city’s role as owner under the general conditions of the European competition law. In London, the “public- private partnerships” were successfully used to attract billion-heavy investments to communal infrastructures. At the same time, the London city management that is struggling at this very time for the reestablishment of a unified waste management will most certainly not follow the neoliberal de-regulation advice. The Rosa-Luxemburg Foundation has devoted a number of publications to the topics of public property, the public sector and privatisation. For instance, Barbara Dickhaus and Kristina Dietz in the year 2004 have provided a comprehensive analysis of privatisation processes in core areas of public services in the European comparison. Their case studies relate mainly to the service sectors water and energy supply, transport (PPSDT and railway transport) as well as education and culture in a number of selected countries of the EU (Great Britain, Germany, France, a number of Scandinavian countries, Austria and Italy).2 The present study wants to link up to that study. Referring to Dickhaus and Dietz3, the privatisation of wealth, meaning the transfer of property rights from the state to private agents, must be distinguished from organisational privatisation, meaning change in the legal form of the agent charged with a public task, for instance, from city ownership to a limited partnership or a stock-holding. Functional privatisation, finally, means the contracting out of public tasks to private businesses for the purposes of service rendering to the state or respectively the local community. Klaus Lederer, whose investigation of privatisation in the communal water sector has been seminal in many respects, analyses privatisation in the context of a permanent conflict between politics and market: “Privatisation means […] various forms of shifting the relationship between state and the private sector as the carrier of responsibility for public tasks or as the owner of values, while liberalisation […] means the ‘liberation’ of tasks up to now carried out in public license for non-state actors. Linked to that is […] the reduction of influences alien to the market […], in other words, the subjection […] under the conditions of the unregulated market, the rolling back of state interventions into cartel and economic law.”4 Since electricity, transport, water, and waste disposal are objects of EU directives which as a rule prescribe the opening of those markets, regulated up to then as state or public-legal monopolies in the member states, the rules of the game for the municipal economy are less and less subject to the influence of local actors. The EU in the meantime has passed a number of directives for services “of an economic nature”. These are to be subjected to EU competition law. This concerns mainly the energy, transport, and telecommunications sector.5 It prescribes the opening of the national or respectively regional service markets, the opening of the right to manage transport and supply networks to private agents and the separation of infrastructure and business. 2 Dickhaus, Barbara and Kristina Dietz: “Public services under privatisation pressure”, ed.: Rosa Luxemburg Foundation and WEED, 2004. 3 Opus cit., pp. 3 ff. 4 Lederer, Klaus, “Structural change in the case of communal water services“,
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