Can privatisation be the panacea for the lack of growth in Europe?

From left to right, Wolfgang Schüssel; Fabrizio Saccomanni; Sylvie Goulard; Leonhard Birnbaum; Christian Helmenstein  (United Europe, 13/10/2014)

From left to right, Wolfgang Schüssel; Fabrizio Saccomanni; Sylvie Goulard; Leonhard Birnbaum; Christian Helmenstein (United Europe, 13/10/2014)

An interesting topic was treated last Monday evening in Brussels and the European Sting was present to listen to some ideas on how to boost growth in the European Economy in a pragmatic manner. It would be unfair to say that the idea on the table of the discussion was original or innovative but nevertheless it was worth listening.

“Privatisation Potential in the European Union” was the topic of the event that was co-hosted by United Europe and the Bertelsmann Stiftung earlier this week and lots of people gathered to participate in the debate. The main stimulus was the presentation of the study of Economica Institute in Vienna on how much money would go in the EU’s pockets if the state was ‘convinced’ to withdraw from the public and private sector. Prominent panelists shared with the audience some interesting thoughts, Dr Chrisstian Helmenstein, Board Member of Economica Institute, Dr Wolfgang Schussel, former Chancellor of Austria and President of United Europe, Sylvie Goulard, French MEP, Dr Leonhard Birnbaum, Member of the Board of E.ON and Fabrizio Saccomanni, former Minister of Economy and Finances in Italy.

The evening started with Mr Schussel, President of United Europe and former Prime Minister of Austria, who briefly set the scene of a European Union in economic crisis with its citizens suffering from lack of European identity. Indeed this is roughly the image of Europe currently. Mr Schussel went further on, saying that privatisation is being significantly reduced since 2009. And this is mainly attributed by him to the lack of political will in the Union to endorse systematically privatisation. Moreover, he former Chancellor of Austria linked productivity with privatisation and compared Europe with other parts of the world where productivity is much more impressive than in the Old Continent.

Right after the brief introduction, Mr Helmenstein from Economica Institute, who is the main researcher responsible for this study, came to the podium. While referring to the specifications of the research, the researcher underlined his core finding, that Europe can make up to 500 billion euros if everything became private in one night. Of course, he also presented to us the figures in the case that the state withdraw by 25% or 50% from public and private companies.  Apparently the results of this study are describing an ideal European situation. Truth is, however, that most of EU leaders are familiar with the benefits of privatisation, only that it is easier said than done. Further, privatisation is just one of the means to promote growth. Thus, we anticipated with interest the comments following by the panel.

Mr Saccomanni began his commentary on the results of this study, saying that given the economic state Europe is at the moment, “anything can help” the EU. He praised the macro-economic effect of privatisation and referred to the privatisation of banking sector in Italy as a success story. Further, the former Italian Minister of Economy mentioned how his work with the Letta government had as primordial aim the privatisation of public companies in ‘Belpaese’. He also made the remark that even the Renzi government follows the same path. At least, the “infrastructure of the single market”, he argued, sectors like energy and digital industry, need to be privatised as much as possible for the EU to come back to growth fast.

The turn of Mrs Goulard, French liberal MEP of ALDE, came right after that and she stressed immediately how growth is desperately needed in Europe. Interestingly enough the French MEP discussed about the privatisation potential of France that on its own is not able to eradicate public debt. Mrs Goulard embraced the privatisation idea but at the same time she underlines that Europe lacks a panEuropean strategy and approach on this one. On the country, unilateral approach by member states cannot just do the trick.  The French politician argued that there is a lot of foreign investment to foster growth in the Old Continent, but would not be materialised if Europe is fragmented policy wise.

Last, but not least, Mr Birnbaum from the German energy company, E.ON, argued that the real growth issue should not be privatisation but instead efficiency. He referred to the example of his company that when it takes over a smaller company in the energy industry, then suddenly productivity gets better, as well as safety. He supports that utility industry can bear great advantages from privatisation. As he simply put it, “improvement of industry would not have happened with monopolies”. In a nutshell, for the German business man it is not necessarily privatisation but the mere pressure from the market that can clean an economy and enforce growth. That combined with fair regulation.

All in all, the takeaway from this event was rather positive. Emphasis on the benefits of privatisation is always relevant, especially in these times of economic fragility in Europe. However, it is known that privatisation is not panacea. It is certainly not the synonym of growth but only one means to obtain a growth orbit. Most importantly, most member states have privatisation in their agenda but in general do not see as ambitious results as per the plans preceding. Instead, estimating the impact of privatisation to public debt, as many of the panelists argued about last Monday, is a rather tricky and multifactorial exercise.

Last, if we accept that privatisation can release business in some sectors, create competition and hence growth in the long run, then what are the sectors or type of companies that need to remain public? Are we pro-privatisation for anything? Would we want to pay a price for water we drink or air that we breathe to private companies? And what are the dangers if ownership expands to areas that jeopardise harmony in societies?

All these are questions that we hope the next United Europe conference on privatisation will not neglect to address.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

4 innovative renewable energy projects powering Europe’s green future

China’s Ambassador to the EU Zhang Ming wishes to Brussels a Happy 2019 Year of the Pig

Putting a price on carbon will help New York state achieve a clean energy future

EU-Singapore trade agreement enters into force

Uganda’s Ebola preparedness ‘will go a long way’ says WHO chief

Bioethics: how to recover trust in the doctor-patient relationship

Encryption is under attack. Here’s why that matters

Practicing healthcare: Skills of a good healthcare professional and its effects

Work to make the world a better place: 5 things you need to know about ‘green jobs’

Mali just took a huge step towards universal healthcare

Not much of a help the new EU Directive on pensions

The UK to split if May’s hard or no-deal Brexit is pursued

This company is breeding millions of insects in the heart of London

Member states jeopardising the rule of law will risk losing EU funds

Regional competitiveness and growth: a Gordian knot for Europe

EU Budget: A Reform Support Programme and an Investment Stabilisation Function to strengthen Europe’s Economic and Monetary Union

European Parliament calls on Russia to end occupation of Georgian territories

European Commission Joint Research Centre opens world-class laboratories to researchers

Conditions deteriorating alarmingly in Yemen, warns senior UN official

“Private” sea freight indexes hide Libor like skeletons?

Tuesday’s Daily Brief: UNESCO ready to help after Notre Dame fire, and updates on Libya, Nicaragua, and the Cyclone Idai response

Who are the winners and losers in Africa’s Continental Free Trade area?

Greater transparency, fairer prices for medicines ‘a global human rights issue’, says UN health agency

Statement by the Brexit Steering Group on UK paper on EU citizens in the UK

Pakistan has just planted over a billion trees

Samsung’s profits fall as cheaper smartphones gain market share

UN health agency spotlights stalled effort to close health divide across Europe, in new report

EU Council agrees to reform the system for motor vehicles but with “restricted” power for the Commission

Can we create an empathic alternative to the capitalist system?

Scaling for success: SMEs, tech innovations and the ITU Telecom World Awards 2019, in association with The European Sting

European Court of Justice to Google: It is #righttobeforgotten but not #righttoberemembered

Is Eurozone heading towards a long stagnation?

China is a renewable energy champion. But it’s time for a new approach

UN member states express their will to tackle global migration but specific actions are still missing

Anti-vaccination scaremongering: What should we know about anti-vaccine argument?

UN chief urges India and Pakistan to dial down tensions in wake of Kashmir attack

10 of Albert Einstein’s best quotes

Distributed ownership: what it means and how it could transform India

Step up action to protect the planet during wartime: UN environment chief

Who will secure Lithuania?

Mental health and suicide prevention – What can be done to increase access to mental health services in my region?

In polarized America, a new divide looms

Massive cholera vaccine campaign planned for cyclone-ravaged Mozambique, as UN calls for ‘urgent’ step-up in support

Young migrants: Is Europe creating a lost generation?

UN atomic watchdog chief updates governing body on key North Korean reactor

“BEUC cautions against TTIP that would seek to align EU and US chemicals management frameworks”

Juncker Plan reaches almost €410 billion in triggered investment across the EU

How Japan became the world leader in floating solar power

Council’s position on Visa Directive a step back for young people’s mobility

Commission reports on progress in risk reduction in the Banking Union and calls for faster progress on Capital Markets Union ahead of EU Leaders’ meetings

Quicker freezing and confiscation of criminal assets in the EU

Libya: UN mobilized to support thousands uprooted by Tripoli clashes, renews call for humanitarian truce

ILO discusses world of work response to global refugee crisis

How well you age depends on what you think of old age

“Airbnb and YouTube are two great examples of a crowd based capitalism”, key stakeholders outline the boundaries of the 4th Industrial Revolution in Davos

What is the IMF telling Eurozone about fiscal and banking unification?

In Rwanda, high-speed drones are delivering blood to remote communities

These countries create most of the world’s CO2 emissions

‘Refrain from violence’ UN chief urges, as presidential election result is announced in DR Congo

Yemen talks: Truce agreed over key port city of Hudaydah

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s