Citizen Reaction to the Privatization of Water

Control over Water

Selling public companies to the private sector is part of a major economic debate regarding State participation in the economy. Those in favour claim that the involvement of the private sector often leads to an improvement of services and quality of the product.

Those against argue that private companies—led by profit maximization—raise the price of goods that are considered public, making them beyond reach for some parts of the population. Such goods or services include energy, infrastructure, public transportation, higher education, natural resources and even health coverage. Nevertheless, the case of water is different.

Except being a public good, access to water is a fundamental human right recognized by the United Nations. Water providers aren’t privatized as easily as other public companies that offer the above-mentioned services. Moreover, when this has happened, it hasn’t always been linked with success concerning the price and quality of water. Most examples can be found in Latin America during the 90’s, in England and Wales towards the end of the Thatcher administration, and recently in some European cities.

What is Initiative 136?

In Thessaloniki –the second largest Greek city- the State-owned water company EYATH provides its services to the municipality and the city suburbs. Along with many other public companies, part of EYATH was designed to be sold to the private sector as part of Greece’s obligations towards the conclusion of a second bailout agreement with its creditors. The process of this sale has now started and is expected to be concluded until October 2013. 

Initiative 136 was created by the citizens of Thessaloniki to protest against the privatization of EYATH and to propose the management of the company by a Union of non-profit water cooperatives named Citizens’ Union for Water. The amount of money that is required to become a majority stakeholder of EYATH divided by the water meters in the areas covered by the company is equal to 136. Thus, 136 Euros is what each household should contribute to gain control of EYATH. 

When the decision to sell EYATH was taken, its workers demanded a referendum by the city council. This was denied so they started protesting together with the participants of the indignados movement in one of the central squares of Thessaloniki. Numerous citizens got the chance to know about the initiative and started taking part actively. 

The movement became widely known in Thessaloniki as the time passed. Right now there are 17 cooperatives: 6 within the city of Thessaloniki; 10 in its suburbs; and a cooperative of solidarity that was created for non-residents who wish to support the initiative. 

Recent developments

Due to bureaucratic obstacles that prevented the cooperatives from becoming legal entities on time, as well as a fast track procedure that was chosen by the Greek government, it hasn’t been possible to collect enough members and funds before the application deadline expired. Initiative 136 came with an alternative solution. 

The funds for the acquisition of EYATH will be provided by a group of 22 Socially Responsible Investors (SRIs) from around the globe. Between them are social cooperative banks able to provide microcredit, trade union’s mutual funds, non-profit institutions and other organizations. The cooperatives will gradually repay the loan provided by these institutions once the bureaucratic obstacles eclipse.

In May 2013, the Citizens’ Union for Water has submitted a ten-point plan to the relevant public institution as an expression of interest for the purchase of 51% of EYATH’s stocks. Among the plan’s ten points the most relevant are: the management’s non-profit character; the one member one vote system regardless of the amount of money that each member offered to their corresponding cooperative; the Union’s commitment to respect the environment; the promise to keep intact the size of the actual workforce. 

In June 2013 the public body that is responsible for the sell chose two potential buyers. The Citizens’ Union for Water wasn’t among them. We asked Kostas Marioglou, vice-president of EYATH’s labour union and pioneer of Initiative 136, what was the justification for this decision. He said that no particular reason was given to them, only a negative answer. According to Mr. Marioglou their application fulfilled the requirements in order to be among the potential buyers. He said that they already presented their case to a court that ought to judge whether the decision is right or wrong.

Future action

Mr. Marioglou claimed that regardless of the outcome of the court, Initiative 136 will continue to excist. He argued that all elected city councils of the districts where EYATH offers its services support the solution of a referendum on the matter. It is not very probable that a referendum will take place due to the Greek State’s denial. Therefore, there will be a conflict between the will of the local authorities -which represent the citizens that are directly interested and affected by the privatization- against the central authority. Given that in Greece local authorities have little power compared to the central State, it is most probable that the latter will prevail.

We asked Mr. Marioglou how Initiative 136 would react if a freshly elected government withdrew the privatization plan? He answered that they wouldn’t rely on such a solution because it wouldn’t be a permanent one. Years later another government might try to revive the plan of privatization, he said. Instead, a social management of EYATH would remove that possibility and keep the price of water low. According to Mr. Marioglou, until now citizens never got involved in the decision-making regarding EYATH’s future, but is time to change that. 

Whether EYATH will be privatized or not is yet unknown. The court’s verdict might favour Initiative 136 and include the Union among the possible buyers. A referendum might take place and stop the privatization process. Anyhow, the mobility of the citizens is remarkable and not very common in such cases. One possible explanation is the product’s importance. Water is far more vital for the citizens of Thessaloniki than a highway or other natural resources and this is reflected in the popularity of Initiative 136

Editorial Comment

If you wish to know more about Initiative 136, get updates about the process or support the solidarity cooperative, please visit its website. 

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