Debt-driven water privatization: The case of Greece

Abstract

The privatization of water services is a basic conditionality in the structural adjustment programs imposed by international financial institutions, such as the IMF and the World Bank, on indebted countries. In the same sense, the financial assistance that has been offered to Greece from Troika, since the beginning of the financial crisis, in the late 2009, was accompanied by the commitment, to privatize, among others, the two largest public water companies. The consequences of water privatization policies include increases in prices, poor quality of services, little or no investment, rise of income inequality, high levels of corruption, loss of jobs and deterioration of working conditions. Despite the fact that privatization of water supply companies has been proven to be ineffective in many parts of the world and the tendency towards the remunicipalization of water services that has lately been detected, international financial organizations continue to set water privatization as conditionality. The unconstitutionality of the policy and the strong opposition of citizens and unions to water privatization seem to be inefficient to prevent the Greek government to proceed to the establishment of a public-private partnership in the water supply sector.