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Privatizing Europe - massive European fire sale using crisis to entrench neo-liberalism

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[ The inevitable dismal result of private central bank debt-money, countries losing their own currencies, and economic hit-men corrupting governments. The bankers print their own money, charge the people interest, and then buy public assets already paid for on the cheap - what a scam and a scandal!...]

“And it’s kind of ironic given it’s privately owned banks that have created–have triggered this whole crisis.”

Privatizing Europe – massive European fire sale using crisis to entrench neo-liberalism

Nick Buxton: A massive European fire sale is one way finance is using the crisis to entrench neo-liberalism


PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

As Europe settles in for an even deeper recession, many countries of Europe, in Greece, now of course Cyprus, in Spain, in Portugal–and we’ll see it soon, probably, in other countries, even France–a big sale is on. Some people have called it a fire sale. And what are they selling? Public assets, in order to pay off their debts.

Now joining us to talk about all of this is Nick Buxton. He’s a communication manager for Transnational Institute, which provides analysis for movements working for social and environmental change.

Thanks for joining us, Nick.


JAY: So how big or widescale is this fire sale, as you’re calling it? And why is it happening?

BUXTON: It’s very widespread. We’ve been looking at some of the memorandums of agreement signed by the European Commission and the European Central bank with each of the countries as it’s come forward for issues with their debt to get loans from the European Central Bank. And each of them have had to sign these memorandums of agreement with the European Commission.

When we’ve looked at the details of those agreements, it’s not just about making cuts that we most famously hear about; almost in every agreement there is a demand for privatization of key national assets and key public services. And this is not just happening in countries that we all know are at the epicenter of the crisis, such as Greece and Portugal, but many other countries across Europe are now using this as a way of pushing for it, most notably the U.K., which was a pioneer of privatization. It’s really pushing through another wave of privatization, particularly now, in fact, in the national health service.

So the economist Paul Krugman perhaps has put this best, that the crisis–austerity is not about solving the crisis; it’s about using the crisis. And that’s what our report tried to look at, how the crisis has been used to push for privatization.

JAY: Now, a group of unions and other organizations sent a letter to Commissioner Rehn, European commissioner, and asking him for their position on this issue of privatization. Here’s what Rehn wrote back to them:

As you know, the privatization of public companies contributes to the reduction of public debt, as well as to the reduction of subsidies, other transfers of state guarantees to state-owned enterprises. It also has the potential to increasing the efficiency of companies, and by extension the competitiveness of the economy as a whole, while attracting foreign direct investment.

So the commissioner seems to be saying this isn’t just about dealing with bank debts or state debts or the financial crisis. This is kind of more overarching objective of theirs. And maybe this lends some credibility to taking advantage of the crisis. In other words, crisis or no crisis, they want more privatization.

BUXTON: Yeah. And actually by itself that’s rather shocking, because if you look at the European treaty, it says that the European Commission remains neutral on whether companies and enterprises are in public or private hands, whereas if you read that letter, it’s very clear that they’re not at all neutral and they’re not even pretending to be neutral on this key issue. So there’s quite clearly an agenda, a very clearly marked out and publicly spoken agenda to privatize and deregulate.

JAY: And it’s kind of ironic given it’s privately owned banks that have created–have triggered this whole crisis.

BUXTON: Exactly. And it still comes back to that argument that continues, the myth that this was a crisis created by public debt, whereas if you look at all the figures and the stats, the debts’ levels were very low, and they actually still remain well below U.S. levels even now across Europe, until you have the banking crisis. And it was only as the bailout of the banks–I mean, it was EUR 4.5 trillion went to bail out the banks from E.U. money. That’s aside from all the U.S. federal money that went into bail out European banks. All that money was what created the debt crisis. And yet we’re still getting the argument very much that this is a problem of public debt and public spending.

JAY: So give us some examples of the kind–the scale and types of privatizations that are taking place or plan to take place.

BUXTON: Well, perhaps the largest is Italy, where they’re expecting, projecting up to EUR 570 billion of money coming from sales, largely of huge amounts of heritage and state national assets being sold off, but also energy, transport, most of the sectors you’re talking about. Water is almost universally tackled, despite the huge controversy that there’s been for many decades now about water privatization. But also energy, transport, water, electricity, health, and a whole group of other services, and any kind of national companies, like telecommunication companies, airlines, bus companies, and so on. So it’s right across the whole sector. I think Greece is obviously where you’re seeing some of the most extensive privatization being pushed through.

JAY: Yeah, I think they’re planning to sell the two biggest ports in Greece.

BUXTON: The two biggest ports in Greece. It’s their main energy companies. The most controversial ones at the moment have been fought around water in Thessaloniki and Athens, where they’re pushing those things through.

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