Despite the fact that international exprerience shows that water privatization is harmful to the interests of citizens, the Greek government is pushing ahead with privatizing water supply and sewerage companies. In this report for UNFOLLOW magazine, Christos Avramidis and Antonis Galanopoulos present several sides of the issue, including a much debated attempt to claim the Thessaloniki water supply company for the people of the city.

“The idea that water is a human right comes from ‘extremist’ NGOs. Water is a food like any other, and must have a market value,” said the president of Nestlé in 2005. This is perhaps the only man who found it in him to label the UN, which registered water as a human right in 2010 by 122 votes in favor and 41 abstentions, “extremist” – though it has to be said that, interestingly, one of the countries that abstained was Greece.

Greece’s abstention, however, might be less surprising if one considers the ongoing attempt in recent decades to privatize water supply and sewerage companies. Currently, the sale process of 51% of EYATh (Thessaloniki Water Supply and Sewerage SA) is under way, while EYDAP (Athens Water Supply and Sewerage Company) is also scheduled to be offered up.  Abroad, Portugal’s national water supply company has also embarked on the course of privatization. David Hall, director of the Public Services International Research Unit, believes that the new push for water privatization “is manipulated by the austerity policies in public spending and the cutbacks on public services imposed more strictly in the countries subject to IMF and EU bailouts.”

A profitable business in spite of the crisis

EYATh was founded in 1998, following the merger of the Thessaloniki Water Supply Organization and Thessaloniki Sewerage Organization. In 2001 the company entered the stock market and was divided into the sector of EYATh of assets that manages infrastructures, and EYATh SA. Furthermore, a 25% is ceded from the State to individuals. The company serves the greater Thessaloniki region, that is over a million and a half of people. It is worth noting that EYATh supplies the cheapest water in Europe.

Greek public water supply companies are significantly profitable in spite of the crisis.

Taking advantage of a natural monopoly such as water, the company ensures large profits. In particular, during the period 2007-2011 it achieved a profit of 75,2 million euros, and in 2012 a profit 17,8 million euros. The company also has a reserve of 35 million euros. Indeed, according to the president of the workers’ union Mr. Archontopoulos, “municipalities and other big debtors owe over 50 million euros, which shows that the investor will make payments in a very short time.” Certainly, the company’s profits are associated with the wage cuts and personnel downsizing that has occurred in recent years, as no employees have been hired since 2003, when the last call for hiring was published. Thus, while in 1998 EYATh numbered 650 employees for a smaller population and area, it currently numbers 250, with only 11 plumbers for the whole city.

In any case, Greek public water supply companies are significantly profitable in spite of the crisis. Moreover, the State and municipalities owe to water supply companies a total sum of 356 million euros, a fact which sheds a different light on the paradox of privatization: the state will lose revenue from attributed dividends, while it will have to pay its debts to the new owners of the companies with the money earned from the sale. “The winners will be the new private owners and the citizens will be the losers,” MEP Kriton Arsenis told us.

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The controversy over gold mining in Chalkidiki, a province of rare natural beauty in northern Greece, is dominated by the specter of far-reaching, long-term environmental destruction. However, dubious political machinations between Greek Government officials and private companies, scandalous agreements against the interests of the Greek State, and a violent police crackdown on locals who protest against the mines, also hang over this deeply divisive issue. Now, we learn that Eldorado Gold, the main investor, has a cunning plan to solidify its investment: It will use Article 107 of the Greek Constitution, on the protection of foreign capital. And the Greek Government is ready to dance to the company’s music. Yet, the question remains: Will the investment be overall beneficial to Greece? The evidence at hand suggests it will not.

A few days ago, after an attack by masked intruders, who destroyed machinery at the gold mining site, the Prime Minister of Greece Antonis Samaras said in a statement to the Wall Street Journal: “This kind of act cannot be tolerated. Greece is a modern European country, and we will at all costs protect foreign investment in the country”.

The evidence at hand and the history of gold mining in Chalkidiki contradict the view of the investment’s supporters: They rather show that Eldorado Gold’s investment won’t be all that beneficial to Greece

So, it appears that Canadian multinational Eldorado Gold, one of the biggest mining companies in the world, is winning the battle so far, having found a staunch ally in the Greek Government. This is hardly news. Greek Governments have supported the interest of mining companies for decades. The company has made assurances it will make “every effort possible” to protect Chalkidiki’s unique nature. In any case, according to the investment’s supporters in the Government, in the Council of State (the Supreme Administrative Court of Greece), and in most Greek Media, environmental concerns should not be made into such a huge issue: even if the environment suffers to a point, they say, that’s a fair price to pay for such an investment, which will bring much needed development to crisis-laden Greece.

But is this the case? Both the evidence at hand and the history of gold mining in Chalkidiki contradict the view of the investment’s supporters. They rather show that Eldorado Gold’s investment won’t be all that beneficial to Greece – at least within the terms the Greek Government appears so eager to offer. It will certainly be beneficial to the company though, which is poised to take advantage of a reserve estimated to be worth 13bn euros.

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