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DER ÖFFENTLICHE SEKTOR THE PUBLIC SECTOR PRIVATIZATION AND THE EUROPEAN SOCIAL MODEL The Coordinated Action PRESOM 3-4/2006 Herausgeber: A.o. Univ.-Prof. Dipl.-Ing. Dr. Wolfgang Blaas, c/o Fachbereich für Finanzwissenschaft und Infrastruktur- politik, Department für Raumentwicklung, Infrastruktur- und Umweltplanung der Technischen Universität Wien, Karlsgasse 13, A-1040 Wien, Tel. +43/1/58801-26701 Email: [email protected], Web: http://www.ifip.tuwien.ac.at Für den Inhalt verantwortlich: Ass.-Prof. Dipl.-Ing. Dr. Johann Bröthaler, c/o Fachbereich für Finanzwissenschaft und Infrastrukturpolitik, Department für Raumentwicklung, Infrastruktur- und Umweltplanung der Technischen Universität Wien, Resselgasse 5/2/2, A-1040 Wien, Tel. +43/1/58801-26701 Email: [email protected], Web: http://www.ifip.tuwien.ac.at Abonnements: Michaela Eckhardt, c/o Fachbereich für Finanzwissenschaft und Infrastrukturpolitik, Department für Raum- entwicklung, Infrastruktur- und Umweltplanung der Technischen Universität Wien, Resselgasse 5/2/2, A-1040 Wien, Tel. +43/1/58801-26721 Email: [email protected], Web: http://www.ifip.tuwien.ac.at ISSN 1563-4604 Der Öffentliche Sektor - The Public Sector Content Editor: Wolfgang Blaas Layout and Wordprocessing: Wolfgang Blaas Introduction: Who or What is PRESOM? Jörg Huffschmid 1 Privatization Experiences in the EU - a Review Wolfgang Blaas, Marica Frangakis, Gabriel Sakellaridis 3 Theoretical approaches to the explanation of liberalisation and privatisation Malcolm Sawyer 31 Concepts of the European Social Model Christoph Hermann 47 Privatisation Research Institutions in Europe - First Results from a Survey Andrej Holm 57 The Authors 65 Gedruckt mit Förderung des Bundesministeriums für Bildung, Wissenschaft und Kultur 32. Jahrgang Heft 3-4/2006, März 2007 Preis: Inland Ausland Einzelnummer € 5,10 € 5,80 Doppelnummer € 9,50 € 10,90 Jahres-Abo € 16,00 € 18,20 PSK-Konto-Nr. 2.415.150 (Österreichische Postsparkasse) Heft 3-4/2006 Heft 3-4/2006 Der Öffentliche Sektor - The Public Sector Introduction Who or What is PRESOM?1) Jörg Huffschmid PRESOM is the short version of: Privatisation and ding official policies and responses from social the European Social Model movements and civil society. PRESOM is a network of social scientists who are Structure of PRESOM's work critical of the current wave of liberalisation and pri- vatisation of public services in the EU. We regard this as a threat to the European Social Model (ESM). The work of PRESOM is divided into three phases: At the same time we notice with astonishment the In the first phase a general stocktaking has taken frequency with which European institutions are place of : invoking the ESM to underpin and justify their poli- cies. This raises questions about the meaning of this a. the background and history of privatisation in the term. Obviously unions and social movements who EU. oppose privatisation as an attack on the European b. theoretical approaches to the explanation of priva- Social Model have something different in mind than tisation. politicians who justify privatisation with reference to the same term. c. the concept of the European Social model. This phase has been terminated by now, reports have been written and are available on the homepage of PRESOM takes up these contradictions with the aim PRESOM (www.presom.eu). to clarify the issues, disseminate our findings and thus to contribute to the public discussion. Our basic position is that one of the essential pillars of the In the current second phase more in-depth studies European Social Model is social solidarity and that are undertaken for four areas: this requires a strong and democratically organised public sector which provides public goods to every- a. privatisation and finance body living in the EU regardless of his or her origin b. privatisation in social services (health and pensi- and economic and social status. ons) c. privatisation in education PRESOM has 14 participants from 10 countries of d. privatisation in the new member countries the EU, amongst them three new member states (see box). It is a so-called "Co-ordination Action" finan- This phase should be terminated by the end of 2007. ced under the sixth framework programme for Research and Technology of the EU. The project started in January 2006 and will be financed until In the third phase conclusions will be drawn and December 2008. It will organise a number of work- policy proposals will be formulated with regard to shops and international conferences and participate the political approach to further liberalisation and in workshops and conferences organised by others. privatisation and to the role of a democratic sector in a progressive European Social Model. This phase is envisaged for 2008. From 2007 onwards PRESOM will publish bi- monthly Newsletters in which we present our work and inform about current issues in our domain, inclu- Communication and an exchange with the scientific Heft 3-4/2006 1 Introduction community and with stakeholders like policy makers, social movements and civil society are essential in all phases of the project. This will be organised in small meetings, workshops and larger open conferences. 1) The text of this introduction is a part of the first PRESOM newsletter, see www.presom.eu. PRESOM partners Institution Country Person 1 University of Dortmund DE Jörg Huffschmid 2 “Nicos Poulantzas” Institute GR Marica Frangakis 3 Forschungs- und Beratungs- AT Christoph Hermann stelle Arbeitswelt, FORBA 4 Institute for Strategic HU Karoly Lorant Research of Economy and Society ECOSTAT 5 Université de Paris Nord FR Jacques Mazier 6 CEPREMAP Paris FR Christine André 7 Vienna University of Technology AT Wolfgang Blaas 8 Technical University Delft NL John Groenewegen 9 University of Greenwich UK David Hall 10 Corvinus University of HU János Ladányi Budapest 11 Fachhochschule für DE Birgit Mahnkopf Wirtschaft in Berlin 12 University of Leeds UK Malcolm Sawyer 13 Poznan University of PL Janusz Tomidajewicz Economics 14 Ekonomski Institut Pravne SL Joze Mencinger Fakultete 2 Heft 3-4/2006 Der Öffentliche Sektor - The Public Sector Privatization Experiences in the EU A Review Wolfgang Blaas, Marica Frangakis, Gabriel Sakellaridis 1. Introduction Before turning to these dimensions in more detail, the paper presents a short general background of the This paper has been compiled from a number of wor- privatization and liberalization development in the 1) king papers which have been written as contributi- post World War II period in the EU. ons to the workshops and discussions of the Coordi- nated Action PRESOM during it's first year of ope- ration. While it gives a brief overview over some crucial aspects of privatization in the EU member 2. Background and history of countries, it claims to be no more than a basis for liberalization and further discussion. privatization in the EU The countries included in this overview are grouped in the following way: Following the Great Depression and World War II, * Western Europe: UK, Germany, France, Italy, the the consensus among elites in economics and poli- Netherlands, Austria tics was that capitalism could only function with * Scandinavian countries: Sweden, Finland, Den- regular and robust government management. So mark much so, that in 1971 Richard Nixon announced a plan to impose wage and price caps in order to curb * Southern Europe: Spain, Portugal, Greece inflation, declaring "We are all Keynesians now"2). * CEE countries: Czech Republic, Hungary, Slove- However, with the collapse of the Bretton Woods nia, Poland, Romania Agreement only a few years later and the two oil shocks that marked the 1970s, the consensus on the * Baltic states: Estonia, Latvia, Lithuania. role of the government in the economy gradually Privatization is a multidimensional economic and declined, and eventually it changed direction. social phenomenon. It will be dealt with across the With the onset of the 1980s and the Reagan and above mentioned countries along the following Thatcher era in the US and in the UK respectively, dimensions: the dogma of privatization and deregulation took * Time dimension - Phases, periods and turning hold of both politics and economics, spreading to the points in the history of privatization across diffe- rest of the world at a remarkably fast pace. In fact, it rent European countries (the "when" question). is estimated that over the past twenty-five years, pri- vatization has reduced the share of state-owned * Sectoral dimension - The sectors involved. Sec- enterprises (SOE) in "global GDP" from more than tors of interest include industry, services and uti- 10 percent in 1979 to less than 6 percent in 20053). lities (the "what" question). The member states of the European Union readily * Institutional/legal aspects - Types of privatization adopted the policy of privatization, in the pursuit of (the "how" question). a multiplicity of objectives. These included (i) pro- * Actors involved in the process of privatization moting efficiency, on the often axiomatic assumpti- (the "who" question). on that "private companies tend to be more efficient * The rationale for privatization relevant at the time that public ones", or, more elegantly, that "public of privatization (the "why" question). ownership is … considered to reduce incentives for efficient resource allocation, both in terms of impro- vements in internal efficiency (cost-minimization) Heft 3-4/2006 3 Privatization Experiences and allocative efficiency (pricing according to mar- gical goal of privatization, that of spreading share ginal cost)"4); (ii) increasing competition in particu- ownership. Although PSO did boost both the market lar sectors and in the economy at large; (iii) develo- capitalization and the trading volume of European ping a national capital market; (iv) reducing the stock markets, they failed to spread share ownership, public debt, as well as the public deficit, especially as many buyers disposed of their newly acquired in view of the adoption of the single currency; and shares soon after. For example, it has been found that (v) last but not least, promoting a culture of equity the total number of shareholders in the largest priva- ownership amongst the population in general.