Europe Seeks Moratorium to Protect Public Water from Privatization Push

Despite pressure for public control of water, the European Commission seems intent on privatization.
The first-ever pan-European civil society coalition against water privatisation was launched last week during the European Social Forum in the Swedish city Malmö. Including citizens groups from Italy, Germany, France, Spain, Turkey and a dozen other countries across Europe, the European Network for Public Water will insist on major changes in EU policies towards water management, away from the current pro-privatisation approach.

The pressure towards liberalising water services, which in most European countries are still primarily or exclusively in public hands, to a large extent stems from the European Commission. While officially required to take a neutral stance on public versus private management, the Commission seems determined to find ways to transform the water sector in Europe by exposing it to "competition" via public tendering.

An ambitious attempt by the European Commission to get water delivery included under Single Market rules was rejected by the European Parliament in 2004, but this has by no means ended the Commission's pressure for liberalizing the sector. The most recent example is the infringement procedure launched by the Commission in spring 2008 against Italian municipalities that have jointly organised their public water services in a multi-municipal consortium.

The Commission claims this cannot be considered 'in-house' public management and thus violates EU procurement law. The water services of these Italian cities, the Commission argues, must be offered for competitive bidding, which means allowing private water corporations to bid for the contract.

In fact, the multi-municipal consortium used by the Italian cities is an entirely legitimate and increasingly popular model of organizing public water services, due to its potential to benefit from scale-advantages. This model is widely used, for instance in The Netherlands, France, Germany and Sweden. The Commission's infringement procedure is therefore a serious threat to public water delivery in Europe.

The Commission's approach is essentially ideology-driven, based on flawed assumptions about the superiority of the private sector in service delivery as well as a misguided belief in the universal applicability of "competition." Reality shows that public utilities often perform far better than private water operators when it comes to water quality, low leakage and tariff levels and overall sustainability.

Even in France, the heartland of water privatization, there is a growing understanding of the advantages of public water supply. Earlier this year the Mayor of Paris made a historical decision to end the city's decades-long contracts with two private operators and instead develop an integrated public water and sanitation system.

It is high time for EU policy-makers to abandon short-sighted privatisation policies and instead pay close attention to the lessons that can be learned from Europe's many world class public utilities. Cities such as Amsterdam, Seville, Vienna and Grenoble have developed highly effective, environmentally sustainable and socially responsible public water management.

The first step towards a new approach that builds on the strength of Europe's public water sector is to introduce a moratorium on new EU liberalisation initiatives in the water sector and clear guarantees that public water supply is exempted from EU competition and procurement rules.

Olivier Hoedeman (Corporate Europe Observatory) is a member of the steering group of the European Network for Public Water.
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