Council of Europe: Privatisation often bad for public services

28 June 2014

Council of Europe: Privatisation often bad for public services

High quality public services are an essential requirement for a strong democracy, and any future fundamental state reforms must therefore take better account of the public interest as well as of common European values. This was the advice given by the Parliamentary Assembly of the Council of Europe (PACE) to the parliaments and governments of the forty-seven countries belonging to Europe’s oldest and largest treaty-based organisation. The assembly voted in Strasbourg by a sizable majority to back a proposal to this effect brought by SP Senator Tiny Kox.

The proposal affirms that the extensive reforms carried out by the government over recent decades in most European member states, notably radical privatisation programmes and liberalisation of activities previously carried out by the state, have had a major influence on public service provision. PACE, in which parliaments across Europe are represented, shared Kox’s concern that, while some reforms may have been successful, they have been guided to too great an extent and too frequently by budgetary criteria, with negative consequences for the quality of public services.

The assembly therefore called on the governments and parliaments of the Council of Europe’s forty-seven member states to critically evaluate earlier reforms of state and public services and ascertain whether they truly fit with the concept of social cohesion, a concept which, according to the Council of Europe, should be at society’s core.

Senator Kox’s proposal was based on two years of research into the available data on the issue and extensive meetings with international organisations, trade unions, social scientists and parliamentarians. According to Kox it has been in part inspired by the parliamentary enquiry, carried out by the Dutch Senate, into the consequences of privatisation and liberalisation of state and public services. That enquiry, the first of its kind performed by the Senate, took place as a result of a joint initiative of the SP, the Labour Party and the Christian Union. The proposal from Kox which won the support of PACE calls for a Europe-wide follow-up to this investigation.

Whereas central and eastern Europe at the beginning of the 1990s witnessed the sudden fall of communism and the arrival of a pluralistic democracy and the imperative to establish a market economy, member states in western Europe decided around the same time to effect radical reductions in state and public services. 'More market and less government’ became the guiding principle, especially in the member states of the European Union, with fundamental consequences for the public sector. The financial and economic crisis which broke out in 2008 led throughout Europe to renewed interference with the public sector, aimed at cutting spending. In eastern Europe poorly thought-out and overhasty privatisation frequently led to massive corruption, unstable government and social inequality. In the whole of Europe, in part through the withdrawal of the state and the stripping down of the public sector, citizens’ confidence in government and in the political process fell dramatically.

Kox’s enquiry has shown that the aims of many reforms of the state and public sector were in the end not fulfilled, or imperfectly fulfilled. Political decision-makers’ understanding of the consequences of their own decisions and their surveillance of these consequences often came up short. PACE is attempting, via a long list of lessons learnt and recommendations based on these, to achieve improvements in policy and in supervision in the forty-seven Council of Europe member states.

The enquiry was one of a series into the relationship between reforms, austerity and the social consequences of these in Europe carried out by PACE on a proposal by the United European Left, the political group of which Senator Kox has been president since 2007. Kox sees it as remarkable that while the findings of these enquiries have provoked major political debate throughout Europe, his report could nonetheless count on such broad support, but also finds this easy to understand. ‘My report doesn’t present my ideas as to how the state and public sector should be organised, but concerns rather what successive governments across Europe have done and what the often unforeseen and undesirable results of this have been for the people and for society.’

The complete report can be found on the website of the Parliamentary Assembly of the Council of Europe.

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