Gayblack Canadian Man

Foreign Policy Analysis
Catastroika – Privatization goes public

Catastroika – Privatization goes public

2012 After 2 years of “rescuing”,
the austerity-loving governments… …raise sovereign debt
from 115% of GDP to 160%. One out of two young
workers is unemployed. Thousands of others emigrate or have
to live on 500 Euros per month. Suicide rates increases by 20%, while the number of homeless
people in Athens exceeds 20,000. The constitution is circumvented. Bankers and former supporters
of the military junta… …occupy key positions
in the state machinery. Everything is now ready
for the last act of the tragedy. Greece’s complete sell off. INFOWAR PRODUCTIONS presents A documentary by Katerina Kitidi and
Aris Chatzistefanou Scientific Editor
Leonidas Vatikiotis Editor
Aris Triantafyllou Music
Active Member Ermis Georgiadis Production Manager
Thanos Tsantas 1991 The short 20th century
comes to an end. The West envisions
the end of history. And tries to implement it
in Russia. Én the Soviet Union there was
a sort of a pincer… …between the IMF
and the World Bank… …and at that point I think Summers
was the head of the world bank, and he says “the laws of economics
are like the laws of engineering”. “The same rules work everywhere”. So that was the arrogance
of that moment. The State Department funded
through Harvard University… …a fairly small group
of economists and lawyers, to manage this transition
for the Russians. The transition includes
the biggest experiment… …in privatization
in the history of mankind. An experiment that will lead
a nation to utter disaster. For one, two million dollars
you could buy an enterprise… …where only steel constructions
were so costly, that could be hundreds of million
of dollars or billion of dollars. Like huge factories in the Urals,
in Siberia, in central Russia, former military
industrial enterprises, chemical enterprises,
steel enterprises and so on. In the centre of Moscow,
there is the hotel “Central”, a 19th century beautiful building. They were going to sell it… …for the equivalent in rubles
of 1.000 dollars. So we came there, in the foyer,
in the lobby, there was a huge chandelier
of the 19th century… and we asked a specialist… how much would he pay for it,
if it was offered. And he looked at it and said: “Well, 1,200 dollars”.
Just now, I can pay it now. It was utterly catastrophic in
Russia, it was utterly harsh. Millions of people were thrown
into extreme poverty. People were hungry and they were
surviving on their gardens. Life expectancy for Russians dropped
by a decade in this period. Explosion of AIDS, child prostitution. It was a decimation of a nation. The fire sale of a whole country, planned in the West and
implemented by Russian oligarchs, couldn’t take place without
limiting democratic freedoms. Ârutal privatization
was one of the reasons why… …the opposition started
to fight… …and why Yeltsin
and the oligarchs, the newly appeared bourgeoisie
and the bureaucrats… …started to fight
against the parliament. The rules of the game
must change. After the 1993 mini coup d’etat
against the parliament, Yeltsin feels ready
to accelerate privatization. I’m absolutely certain
that privatization in 1994… …wouldn’t be
even technically possible… …without the coup d’etat
of 1993. This process was called
Catastroica. Catastroica in Russia is usually
presented as an exception… …in the history of mass
privatization. In fact, it was just
an extreme example… …of how the fire sale
of national assets… …is incompatible with political
or economic democracy. The core neoliberal policies
of privatization, deregulation and cuts
to social spending, often accompanied by increases
in military spending, these policies were first imposed
under dictatorships. The first laboratories
of neoliberalism… …had nothing to do
with democracy. The practice of fire sales
comes with the neoliberal wind… …that blows for the first time
through the Univesrity of Chicago. Professors such as Friedrich
von Hayek and Milton Friedman… …seek a laboratory
in order to test… …the so-called free market
and minimal state intervention. But, since no democratic government
agreed to implement their ideas, they turned to Pinochet’s Chile… …and afterwards
to General Evren’s Turkey. There is actually
a really interesting exchange… …between Friedrich von Hayek
and Margaret Thatcher, that I quote in the Shock Doctrine,
where Friedrich von Hayek said: I’ ve just come back from Chile.
It’s wonderful what Pinochet’s done. And he is describing this fantastic
experiment in neoliberalism… …and says I think
you should do this too. And Hayek was a mentor
of Margaret Thatcher’s. And she wrote him back quite
a stern reply and she said: “These policies are incompatible
with constitutional democracy”. Margaret Thatcher
will finally find a way… …to bring neoliberal privatization
to western Europe. In order to achieve this,
it will take two wars… …and the limitation
of democratic freedoms. What saved Thatcher’s career
as a politician, what got her reelected
was the Falklands war. She literally said:
“We won the war abroad”. “Now we must win the war at home”. And the war at home was
a war against trade unions. She was explicitly referring
to the coalminers. In an extraordinarily
violent way… …the Thatcher government
just beat down that union. It was some
of the most violent attacks… …on trade unions
in the western world. Thatcher’s Britain is a typical
case of how the infringement… …of labor laws and the violation
of workers’ rights… …coincided with an increase
in repressive measures.I still hate ThatcherIt is characteristic that, nowadays,
according to British law, when more than four people are
picketing outside a workplace, the protest can be banned… because it can affect the morale
of those working in the company. Neoliberalism, which promises
less state control, demands a strong state mechanism
in order to be implemented. We should never forget
that neoliberalism is an ideology. I don’t mean this
as just dismissing it. By ideology I mean… …it’s never or very rarely
really followed in actual politics. Take Reagan,
the first neoliberal in power. Are you aware that state machinery
as such exploded under Reagan? It is clear that neoliberalism
can function… …only through an extremely strong
regulative role of the state. So the question should not be
these pseudo-problems… … “what amount of state regulation
or capital?”, but “who will do this regulation?”. Á private enterprise system doesn’t
mean a free enterprise system. It means someone controls it
that you haven’t elected. So the idea is a vulture’s picnic. However, the blood-thirsty dictators
and Thatcher’s shock policy… …have an expiration date. New means must therefore
be found… …for the infliction
of mass privatization. It started off without democracy,
it started off with dictatorship… …imposed with brute force,
with torture and fear. When the democratic era
began in the ’80s, there needed to be another mechanism
to keep countries in line. And that mechanism became debt. Institutions such as the IMF and
the World Trade Organisation… …played a leading role
in the sell-off of whole countries. The European Union followed suit. The emergency packages
with the IMF… …have enabled the EU
for the first time… …to actually advocate
privatizations. Technically, under the treaty,
it shouldn’t do this, but of course
it’s part of the troika… …that’s imposed the conditions
on Greece, on Portugal, …and written very clearly
in those documents… …is this is conditional
on privatization. The conditions laid down
by the IMF, as well as the big American
and European banks… …demand the total surrender
of peoples’ rights. No one privatizes or deregulates
unless there’s a hammer… …over their head, like in Greece
now, in Spain, in Italy, where basically there’s tremendous
pressure on the government… …because there’s a desperate
financial situation. Debt becomes the excuse
to push for Greece’s fire sale. However, once again, a small
obstacle must be overcome: Democracy. This has been
one of those moments… …when really the mask
completely comes off. The market system
is at war with democracy. The project’s been saying to people
that you know… …you can vote but it’s going
to be a popularity contest. The so-called independent
central bank is a mechanism… …for saying that politicians
cannot touch our toys. The European Union
and the Greek financial elites… …got to the point of appointing
a former central banker… …as prime minister of Greece. Taking over from Papandreou, Lukas Papademos
appoints bank executives, like Gikas Hardouvelis of Eurobank, in the prime minister’s office. Political and economic
power relations… …turn into an interbank deal. Direct cancelling of democracy. The idea is:
You play with democracy, but, when things get serious
experts should take over. We don’t have time to play
these games and so on and so on. Greece is portrayed
as a nation of children… …that needs to have the keys
to the car taken away. What is happening in Greece
is very serious. Democracy was born here… …and the international financial
system now decides… …that it should die here as well. I think that the scientific term
is junta. We have a group of politicians
headed by a banker, who is, in fact, responsible for
Greece’s bankrupcy to a great extent. It is a bankers’ junta… …with no more popular
legitimisation than the 1967 junta. Papademos’ government is only one step
towards the control of Greece. The EU, however, sends many
more supervisors to the country. Floridians gave up their sovereignty
to a large extent to Washington D.C. but in return they get to decide
what Washington D.C. is going to do, because they send representatives
and senators to Washington D.C. So I think one would need to make
a commitment to that path, not to one where a German
pro-consul comes to Athens… …and runs, you know,
greek fiscal policy. That raises the question of
democratic legitimacy to the extreme. The German pro-consul
is Horst Reichenbach. He arrives in Greece as head
of an army of technocrats. He is followed by many EU
and IMF employees… …that are appointed
to major ministries. The task force is then,
so to speak, the vehicle… …to bring the member states,
the IMF, the OECD into the picture. We find ourselves
in a neo-colonial period… …when international financial
and political centers… …impose policies not only in Africa
or Latin America, but also in Europe… …and this becomes an inherent
part of capitalism’s organization. You are a trial case like
laboratory rabbits for all of Europe. A new authoritarian form, which even if it remains in
a superficial sense democratic, as we have seen in Greece, Italy… …and it will follow I can
guarantee you elsewhere, is being tested. The country’s control by foreign
and Greek financial interests… …is achieved mainly
via two loan agreements. The goal is to impose
the creditors’ conditions… …and turn work into slavery. Labour relations return
to the 19th century. In order for these regulations
to pass, another coup is necessary.
This time a parliamentary one. The first loan agreeement never came
to the parliament for ratification, which is clearly unconstitutional. The second one was presented
three times as a blueprint. The creditors were obviously
asking for changes… …and needed the pre approval
of this blueprint. It is obvious that our political
leaders do not intend… …to implement the constitution, but the political orders
they receive from abroad. Whoever dares to talk about
a parliamentary coup… …and to question the policies
of the government and the troika… …is characterised as a populist. This is impudent, it is an insult!
You talk about a coup… …because the government which
was elected by a vast majority… …asked for a bill
to be voted on urgently. You have to apologise for
this insult towards the institutions. You are the advocate
of the Greece of the drachma, the Greece of poverty,
the Greece of humiliation, you and everyone like you.No more rescuingIdeological terrorism
escalates. Mainstream media
blackmails citizens… …saying that, if they do not accept
the loan agreements, …the super market shelves
will soon be empty… …and the country will return
to the stone age. There will be chaos. Greece will
become a third World country. There will be ration coupons… Having done away with democracy… …Greek governments prepare
for the sale of public assets. They start off
with a tested recipe…. …of turning public servants
into the crisis’ scapegoats. There is a sort of ideology
that the public sector… …performs worse
than the private sector, but the empirical evidence
for that is not strong. And generally the public sector
and the private sector… …perform pretty much
as well as one another. The Greek government is lying,
by saying that it doesn’t know… …the number of public servants
and then that they total 1 million. It withholds that the size and the
average wages of the public sector… …are not greater than
the European average. The public administration’s
defects are well known. But it is usually the state-
nurtured financial elites… …who are the first to accuse
the public sector. After preparing public opinion
for the fire sale, the only thing missing is
the mechanism to implement it. All eyes turn
to the German Treuhand, the company that transformed
the 10th largest industrial power… …into a shopping catalogue
of 510 pages. Eurosaal – the euro room. In a 280 sq.m. room beats the heart
of the German ministry of finance, for some, the heart of the eurozone. The room has
its own dark history… …synonymous with the history
of the modern German state. Here, the Luftwaffe officers
planned their strategy… …for the bombardment
of European cities. After the war, the Soviet army
established its headquarters here, whereas in this very room,
the first constitution… …of the German Democratic
Republic was signed. The architectural monster
that Goering constructed… …as the largest building block
in Europe… …now houses the biggest industrial
enterprise of that period. After the dissolution
of the Eastern Bloc, Treuhand undertakes the sell-off
of East Germany’s public assets. A disastrous experiment… …that results in millions
of unemployed workers… …and a crushed industrial base
in the area. Historically, it is a tragic event, because the Treuhand idea derived
from East Germany popular movements. When the people
of East Germany realized… that reunification was in fact
an acquisition by West Germany, Treuhand was already a state
within a state in Berlin. In order for the bureaucratic
monster to function, it used equipment and networks
of the East German armed forces. Treuhand is transformed into
an economic occupation army. It started working before
the dissolution of East Germany, but it was basically influenced by
western politicians and managers… …and economic sharks. They had this popular slogan at the
Treuhand: ÔÉÍÁ… …which stands for
There Is No Alternative… …and Thatcher’s portrait
was hanging in many offices. Treuhand owns 8,000 companies,
40,000 factories… …and 4 million sq. km. of arable
land and forests. More importantly, it holds the fate of 4.5 million
workers in its hands. And then, the plundering begins. Even on weekends they privatized
up to 10-15 businesses. This of course
was the real dilemma… …which brought about
chaos and fraud. People with no financial
background appeared… …in order to buy businesses.
They didn’t have any money, but took part in auctions,
took the money from the companies, paid their bills… and dissolved the company.
There are innumerable examples. A lot of companies went bankrupt. For the 4.5 million workers
there were 1.5 million jobs left. The privatization criteria were
not always financial. Many decisions were taken
in political offices, while several businesses closed… …so as not to threaten their
competitors in West Germany. Truehand’s companies had value.
It is said they were problematic. Some of them indeed were,
but others were competitive… with western companies
and exported goods to the West. There were accusations that
political parties were bribed… …in order apply pressure
for certain privatizations. In Bischoferrode
there was a potash factory, which is important
for industrial activities. Such factories were found
both in the east and west. But BASF’s influence
was very big… and as a monopoly this company
didn’t want any competition. Thus, although there were investors
interested in the factories… …they had to be destroyed. The toll of Treuhand’s action
is terrifying. The GDP in the areas of the former
East Germany shrank by 30%, while unemployment
rose from 0 to 20%. But, most importantly, after
selling off a whole country, Treuhand succeeded in
presenting billions in losses. Treuhand created a 300 billion DM
debt and a 60 billion DM profit, but we expected to get 600 billion DM.
There is a lot of debt left… …which is still owed
to the corresponing fund. This fund is not included
in the federal budget. It cannot be considered a model as
many companies were destroyed. With a 250 billion DM debt, it can
not be a model for other countries. However, the president of the
Eurogroup, Jean-Claude Juncker, presented Treuhand
as a model for Greece. I’ve noted with satisfaction… …that Greece is willing to set up
a privatization fund. A month later, the Greek “Asset Development Fund”
was created. The Greek Treuhand
is housed in a building… …behind the former parliament. The three parties supporting
the austerity measures… …share the organisation’s
administration. This is Emeritus Professor Koukiadis
of Aristotle University. Mr. Konstantinos Mitropoulos is
the manager and central figure. He owns a company, Kantor,
and has worked for the Latsis group. A few months later, the journalist that presented
the fund’s structure… …is appointed as its spokesman. Other key-positions are occupied
by many executives… …of the two companies managed
by Kostas Mitropoulos. The politicians,
the technical advisors… …and the senior managers
in the public companies themselves… …are all very aware that
the privatization process… gives them opportunities of extremely
high paid directorships… …consultancies etc. with the newly
privatized companies. The fund is supervised… …by Herve Le Roy
of the French embassy… …and Maarten Verwey of
the Dutch ministry of finance. The troika also appoints 3 members
of the fund’s board of experts. The conditions set by the troika
in Greece for the fund’s function… …resemble those
in occupied countries. The privatization costs are
borne by Greek taxpayers, whereas the profits, which were initially estimated
to reach 50 billion euro, go to the creditors. If these proceeds are collected
by the government, they will be used
for debt reduction. The fund operates
with great secrecy… …assigning extreme powers
to its members. The latter take on the sale
or the concession… …of buildings, land, infrastructure
and share portfolios. The fund can exploit the littoral
zone or the ancient monuments. The only condition is
that they remain in place. Even before
the creation of the fund, government officials had started
advertising Greek assets… …in road shows,
like a travelling circus. I turn up in central London,
at Claridge’s hotel, one of the swankiest hotels
in all of Britain. You walk all way to the back
room and it’s a kind of ballroom… …and it’s got five chandeliers,
it’s got more mirrored surfaces… …that I can possibly count. And you turn up in this room… …and it’s basically a group of Greek
businessmen and Greek officials… …talking about how they’re going
to sell off Greek assets. Big key assets of the Greek state,
belonging to Greek tax payers… …which are to be flocked off. No more fooling around.
Not in this place. We will pull up our pants and we’ll
make some money. A pile of money. At one point they played
the music from Zorba the Greek… …and in this country… …you can’t now think
of the music from Zorba the Greek… …without thinking of plates
being smashed in the ground. The other thing you kept
hearing in the intervals… …was a song by some Monica
who is this Greek pop-star… …and the lyrics went something
along the lines of: “tell me why you don’t call me
anymore, you don’t come anymore”. Here is this image, which I have
no need of summoning up, of Greece that is now
a kind of pariah state… …where it’s now the pariah
within Europe. Zorba’s Greece is a country
subject to foreign multinationals, which control its infrastructure. A country in serious debt
with a corrupt political system. The situation is similar
to the interwar period. Especially between
the years 1924-1930… …Greece was an ideal candidate
for lending. There was a series
of huge scandals. The governments were bribed,
even Venizelos’ consultants. Foreign embassies directly
intervened in all this. One example was the contract
with the company “Power”, another one was
the contract with “Ulen”. These contracts were
of a colonial nature… …and proved to be very profitable
for those who invested in them. Almost a century later,
the troika, in collaboration
with the Greek governments, demands the privatization
of the country’ s infrastructure. What isn’t explained
to the citizens… …is that privatization and
derregulation experiments… have failed even in the most
powerful economies of the planet. The biggest failures
concern infrastructure… …such as railways, water
and electricity networks. People say you can read the history
of the economic system… …on the railways. The steam that powered
the industrial revolution… …turned into a speculative bubble
for the American economy, when dozens of private companies… …spread kilometers of metal rails
across the USA.See the USA in your Chevrolet!At first, the railways symbolised… …the state’s central role in
the economy and infrastructure. But after World War II, economic liberalism replaced most
mass transportation with the car. Four wheels and a steering wheel… …led the lower
middle-class dream… …into the highways
of the new economy. This trend reached Europe
a few decades later. When the Turkish dictators tried
Pinochet’s neoliberal experiment, Turgut Ozal characterised the
railways as a communist creation. However, railways in Europe… …remained mainly
under state control. That is until Great Britain
tried a disatrous experiment. Like a movie without
a happy ending. We made the navigators
about privatization of the railways, after a railway worker got in touch
with me with an idea of a script. But in the course of making it, it
became plain what we knew already: That the privatization
of the railways was a disaster. British rail is gone. Woodport depot
is now more than infrastructure… …and they’re going
to be competing with us. Even Margaret Thatcher
recognised that… …trains do not function effectively
outside of the public sector. But John Major proceeded with
their privatization in 1993… …and the British public reacted. They thought they belonged to them. Ôhey were public service, not something to be run by
companies who put on cheap logos… …and really seem to be just in it
to make money. The trains, the rail network
and the maintenance services… …ended up in the hands
of different private companies. So many of them, that
the maintenance alone… …was undertaken
by 2,000 companies. What that meant was that there
was a divergence of interests… …between two parts of the system
that should really belong together. Ôhe stupidity of it came
through the subcontracting, that is when a private company gets
to maintain a section of track. While the first company may
have strict rules about safety, by the time you subcontracted 2-3
stages, who’s to know who is safe? Deaths have got to be kept
to an acceptable level. Shut up.
What’s an acceptable level? Eh, two a year. Yeah, but nobody’s been killed
for the past 18 months. Any volunteers? I think there has to be
a case made. We say that as an indecent haste:
In the end it cost lives. The loss is tragic. The three most serious accidents
caused by privatization… …cost 42 lives
and 600 were injured. Ét was undoubted that
in the early days of privatization, the way that the industry was
privatized caused those accidents. Potters Bar tragedy
on May 10th 2002 The derailment of privatization
did not just cost lives. Privatization was supposed
to free up the railways, but has actually made it very
difficult to make decisions… …on opening new routes or closing
down routes or changing schedules. It has left a system,
which is very complicated, very difficult to administer. It was bad for the passengers,
it was a chaotic organization. It didn’t work and hasn’t worked.
It’s lost a huge amount of money. In a three year period, the state paid to the private
companies in the form of subsidies… …what it had earned
from the sale of the railways. And the cost for the taxpayers
did not stop there. To some extent the railways
have been renationalized. Really it has left us with a semi-
government administered system… …that costs a lot more than it
cost under the nationalization. And hasn’t really delivered
the investment, as the investment has largely been
paid for by the public sector. Greece did not learn anything
from the British experience. The Greek governments put the
rail privatization plan forward. Their effort is supported
by the media. The trains are slow, never
on time, usually dirty. The annual losses of the OSE
and TRAINOSE group… …has reached 1.2 billion euro. They present Greek railways… …as the biggest loss-making
public service in Europe. But to whom does this debt belong? The state forced the railways to
borrow money for their development. There is no equivalent case
in Greece… …as highways, ports and airports
were all funded by the state. These loans are now presented
by the governments as OSE’s debt. This is untrue. 70-80% of it is money borrowed
for infrastructure development. The major TV stations, behind
which lie major contractors, are bombarding us
with lies and slander. The critique is focused… …on the employees’ salaries
and the operation cost. This way major scandals
go unnoticed… …which involve politicians,
Greek and foreign companies. Tens of millions of euro… …are spent on railway lines
that never work. Trains are rented for prices
which they could be bought for. The state buys trains
from Siemens… …without the appropriate
network to use them. It also pays contractors for works
that are never delivered. There is a certain deliberateness. We degrade our national wealth to
slander it after its degradation, and convince Greek
public opinion… …that maybe a private company… ….is a far better solution
for the Greek railways. In the name of rationalisation, the government further
degrades the railways. It cuts personnel
at the expense of quality, increases prices by over 60% and
closes a large section of tracks. Especially in the section between
Argos-Tripoli-Kalamata… …several million euro
were invested. And today
there are no trains there. When counting only profits
or losses, the privatization advocates
forget that… …the railways are first of all
a service for the citizens. A service paid by generations
of Greek taxpayers. There was a time in Greece when
private debts were nationalised… …but today there is an effort
to privatize the profit… …that the citizens could enjoy
through public services. What did private companies
invest in this sector… …in order to buy it at a price
much lower than its value? If the railways are like a book
on economic history, the water network teaches us
how to manage a monopoly. In this sector, its Paris’ turn
to pay the bill of privatization. Water is the outstanding
example of a monopoly. No water company in the world
operates on a competitive basis. There’s only ever one network, it’s not worth ever investing
in to competing networks. Two multinational companies… …of great financial and political
power, Veolia and Suez, claim administration of
the water network in Paris. And Jacques Chirac
offers it to them. In 1985, a political decision
was taken by Jacques Chirac, Mayor of Paris at the time, to divide Paris in two, based on
the banks of the river Seine… …and by dividing it this way… …to allocate to each major private
group and its subsidiaries… …a bank for the distribution
and the billing of water. There was no technical
or economic argument. I think there was
an ideological stance… …that said that the private
sector is more effective. The citizens received more and
more expensive bills. The prices kept rising
for 15 years. As far as prices are concerned,
the bills rose by 260%. It is true that we’ve had an
increase in the price of water… …without a technical
or economic explanation. When the municipality changed
in 2001, with a majority of the left,
the ecologists, the communists, it was decided to take back
the water services. The new municipal water company,
which was created in 2010, decreased the bills by 8%… …and invested all the profits
in network amelioration. There is also a very important
question, a question of democracy. If public administration is properly
implemented, it permits… …greater political control
by the citizens of Paris. Veolia and Suez reacted,
as they lost… …a net income of 60 and 30 million
euro a year respectively. They put pressure on the government,
the municipality and the unions… …against Anne Le Strat
that started the process. They kind of see me
as the devil incarnated. The fight for Paris brought forth… …the intertwining of interests of
multinationals and politicians. Jerome Monod, the manager
of Lyonnaise des Eaux, was a leading figure
in Jacques Chirac’s party. Regardless of their connections,
however, the water multinationals seemed to
lose the battle against the citizens. Ôhere were number
of political campaigns… …and battles fought across Europe
and right across the world. The result of those battles
was largely … …that people rejected
water privatization very strongly. However, the EU turned its back
to the citizens’ decision. The multinational companies are
the decision makers in Brussels and Italy became
their next target. There was a referendum
on water privatization. 57% of the population
turned out to vote… …and 96% of them voted that they
didn’t want water privatization.Vote YesFor public water servicesÅven Berlusconi said:
“I can’t privatize the water”. “There’s been a referendum
that says we’re not allowed to”. Berlusconi is now being replaced by
a government headed by bankers… …a similar process
as it happened in Greece. Again European officials have said
to the Italian government: “we expect a privatization program
and we expect to include water”. With a secret letter that they sent
to the new Italian prime minister, Trichet and Draghi,
of the European Central Bank, demanded the same thing that was
rejected by the Italian people. The fact that it was now illegal
under the Italian constitution… …to privatize water,
was irrelevant. Á fundamentally
undemocratic process, and again similar to the pressures
that are being put on Greece. I spoke just this weekend with
the Prime Minister, Mr. Papademos, I spoke also
with Prime Minister Monti, and I know that they are committed
to respect the commitments taken… …because they understand
that without this… …there is not gonna be financial
stability in their countries. We know that in the countries
where the IMF intervenes… …the water services
are privatized. We know very well that senior
executives of Suez and Veolia… …are executives
and consultants of the IMF. We know very well that
executives of Suez and Veolia… …are related to the ECB, that in the European Parliament
many people are paid to lobby… …and promote the interests of
these multinational companies, that people from these
companies join governments… …and when these governments go
they return to the companies. In Greece, the Papandreou
government appointed… …as CEO of the public water
company, a former executive of Veolia. Nikos Bardis,
who promoted privatization… …on behalf of the French
multinational company, now characterises Greece as
a stronghold of the Soviet Union. However, privatization plans didn’t
start in the era of the Troika. The fire sale of the water
networks of Athens and Thessaloniki… …began during Simitis’ government,
when the networks went public. Within a decade,
bills rose more that 200%, whereas services did not improve
by 200%, they got much worse. In 2008, the New Democracy party
restarted the privatization process… …and three joint ventures
prepared for battle. There was the Suez group
with Ellaktor, there was Veolia
with the Marfin group, and there was the Spanish Aqualia
with GEK-Terna. Suez executives visited the public
water company’s buildings. I do not know what was discussed
behind closed doors. What we do know is
that these companies… …and Suez in particular… …have been accused abroad… …of bribing public servants
and politicians… …in countries
of the civilised West. If something like that
happened elsewhere… …it is very likely that it will also
happen in Greece.International Fair of Thessalonica,
2009 -(Journalist) Elections have
interrupted or temporarily halted… …the privatization process
of the Thessaloniki water company. If you get elected, will you
continue the privatization process, or do you disagree
with privatization? (G. Papandreou) We are against
water privatization. This was another unfulfilled campaign
promise of the PASOK government. After the elections,
the government continued… with the privatization plans of
two profitable enterprises: The Athens and the Thessaloniki
water companies. The main argument
of the government… …and the companies that are
after the water resources… …is that they are not going to
buy our rivers, our springs; That they are not going to
take our networks and leave. The networks stay here.
Just as the Acropolis stays here. They are only going
to take over the management, the maintenance, the distribution,
the billing policy. What these privatization advocates
fail to mention is that the cost… …of the replacement of the network
will still be paid by the citizens. Therefore, the companies have no
incentive to maintain this network. Insufficient maintenance means
profit for the private company; infrastructure destruction means its
replacement by the Greek citizens. The profit goes
to the private company, the damage is inflicted upon
the Greek taxpayer.Water is not for saleLike a sorcerer’s apprentice, Europe will pay for the privatization
of infrasture. The market forces, however,
will show their true face… …even in the birthplace
of neoliberalism, the USA. Towards the end of the ’90s… …California deregulates
the electricity market. But the deregulation civilisation… …is lost along with electricity power. It is a fantasy that… …you can have a market
in electricity or gas. That is just not possible.
It is a natural monopoly. There is only one wire
going to your house. This is a basic kind of
introductory economic story, that if you have something in tense
towards a natural monopoly, then you don’t have the
competitive forces of the market… …to discipline producers. But you need some sort
of regulatory structure, otherwise you’re just inviting
basically companies to rip you off. Historically, utility rates in the
US were heavily regulated. In the 90’s they changed that,
they started to change that. We were going to deregulate
the construction, operation and ownership
of the generation plants, while leaving the transmission
and the distribution system… …in the hands of the utilities. The power companies can increase
the wholesale price uncontrollably. In order to achieve this, they develop complex fraud
strategies with code names. In the case of Enron,
they even had names for it: Death star, get shorty, ricochet,
cramming, false scheduling. One was named “fat boy”
after the first nuclear bomb. The companies even stop
producing electricity… …to create shortages and increase
the kilowatt per hour price. – Las Vegas Cogen, this is Rich.
– Hey Rich. This is Bill up at Enron. This is gonna be a word
of mouth kind of thing. We want you guys
to get a little creative… …and come up with
a reason to go down. Ok, so we’re just coming down
for some maintenance. We have people from Enron
on tapes laughing… …about how they were pulling
power off line… …and how they were sending
grandma’s rates through the roof. -So the rumor’s true? They’re fucking taking all the
money back from you guys? All the money you guys stole from
poor grandmonthers in California? -Yeah, granma Millie man. -Now she wants her fucking money
back for all that power… …you jammed right up her ass for
fuckin’ 250 dollars a megawatt hour. The other was to game the market. So, basically they could get paid
for electricity… …that they were never
actually delivering. And what ended up happening was
prices rising hundreds of percent, even thousands of percent
during those peak periods. Enron corrupted our system.
Deeply. But it wasn’t just Enron. And the idea that Enron
was one bad apple is wrong. All six of the big power companies
were involved in conspiracies. Enron could not act alone. In California, citizens pay
the cost of the experiment, when market forces leave millions
of them literally in the dark. The first blackouts were
in June of 2000. You had producers refusing to
produce at the prices given… …and the utilities ended up
having blackouts. The deregulation of the energy
market in California… …was imposed under huge
pressure by big businesses. But even they suffered losses
from the deregulation. The irony of course
is that major utility users, big businesses who used
vast amounts of energy… were major advocates
for the deregulation. When the energy crisis hit, they
were among the significant victims, given the amount of energy
they consumed. As retail prices
could not follow… …the mad speculative game
of wholesale prices, the system began to collapse. Ôhe more energy they provided, the more money they lost
and faster and faster. One of our two investors in
California declared bankrupcy… …and the other one
was awfully close. The end of the story
was reregulation. If you leave that to the markets,
then you can run into a situation… …at those peaks that the price
literally becomes ridiculous, which is what happened
in California. Regulation is the application
of democracy in the economy. It’s how we democratically
control monopoly businesses… …so they don’t control us. Europe will experience
its own dark days… …due to the deregulation and
privatization of the energy market. The deregulation starts
with the Maastricht Treaty… …when the EU promises improvement
in services and a decrease in prices. Én the European union where
the market is been opened up, any electricity producer or supplier
can access transport… …and distribution networks
to supply its customers, which encourages competition. Until 2006, no private company
invested in electricity in Greece. This is basic public infrastructure, it demands major capital
and the return is slow. There is no easy and quick profit
for the private companies. Therefore, gradually,
from 2000 to 2006, in order for the market
to attract private investors, the consumption bills
started to rise. The taxpayers do not just pay
more expensive bills. Without knowing it, they subsidize
the private energy producers. Mytilinaios owns the “Aloumina”
and Latsis the oil refineries. They needed electricity… …so they created power production
units for their own companies. However, they realised that it is less
profitable to consume their own power. So, they sold their electricity
to the public power company… …for a 100 euro per
megawatt hour wholesale, while the public power company sold
electricity to them… …and to other industrialists
for 43 euro. In the case of photovoltaic power,
the public company buys it at 51 cents, while it sells it for 11 cents
per kilowatt hour. Due to the constant increase
of the bills, private companies… … realise they can also profit
from electricity provision. Hellas. The no1 private
power company is here. Dr. Lampros the rheumatologist
and Mrs. Fotini… …changed power companies
without changing their meter. So, at some point, there appeared
private electricity providers. Provider simply means middleman. They sold thin air. With a share capital of 60,000 euro,
a very small amount, one could get a license
to provide electricity. A company that produces electricity
via renewable sources. Where did they get the renewable
energy they advertised? From the public power company. At first, private companies
had to guarantee… …that they had the electricity
they promised to sell. But the EU released them
from this obligation. They did not have to guarantee… …that they had
what they intended to sell! The Greek regulatory authority
for the energy sector… …will open the door
to companies… …among which the Enrons
of Greece will emerge. 63 licenses were issued. The biggest such providers were
Energa and Hellas Power. Both companies did not pay back
to the public sector, expenses… …it had incurred for electricity
production and distribution. At some point they ceased
paying back any money, even the amount necessary
for the energy… …they had agreed
to purchase by contract. They also collected the tax
added to the electricity bills… …and the money went
straight to Switzerland. The cases of Energa
and Hellas Power… …are just the tip of the iceberg
of the millions of euro… …that the deregulation costs
Greek citizens. During the 12 years of energy
market deregulation… …there was no decrease
in bureaucracy… …nor did the services improve… …nor did the fuel mixture
ameliorate. On the contrary, the energy
dependence of the country grew… …while the bills rose by
more than 80%. The taxpayers are
the first victims. But employees are also affected. Before the deregulation of the market,
that started in ’98-’99, the public power company had 35,000
employees, while today it has 22,000. There was a considerable
decrease in personnel… …who were replaced by contractors, contractor employees
and a lot of casual workers. The contractors are not
interested so much in quality. On the contrary
it is of their interest… …when the maintenance
is not sound. There have also been
a lot of accidents. Not a year goes by without two,
three or four fatal accidents. Indifferent to the public interest
and the consequences on society, the parties supporting
the memorandum now promote… …more privatization
of the public power company. Its real value,
according to the official data, is 16-17 billion euro. What is its value
in the Greek stockmarket? 750-800 million euro. Unit five that is planned
to be built in Ptolemaida… …has a budget of 1.5 billion. The whole company will be sold… for a price lower than the cost
of one of its units. The Greek people paid… …for the electricity networks to
reach even the smallest villages… …and these networks will now
be exploited by private companies. Most of these private companies… …feed off the state
and earn instead of offering. The public power company was not built
by the private sector. It operated for 60 years
thanks to the public’s money. It brought electricity
to the whole country. It is ours
and we cannot give it away. A lot of examples from around
the world prove that… …privatization negatively affects
citizens, workers and services. Today, privatization is presented
as necessary… …in order to cope
with the debt crisis. However, even privatization
advocates disagree. Doing a lot of privatization… …isn’t necessarily the best thing
in the middle of an economic crisis… …because privatization is going
to lead to people being laid off. And the worst thing
you can do during a crisis… …is give people more reasons
to lay off workers. You will get a bit of money in
the short run, because of that. So it will be good for your balance
sheet for maybe a year, but in after you loose income. In real economic terms, it will be a drop in the ocean
in a short term… …and an economic loss
in a long term. The world crisis that the private
sector has created… …becomes a pretext for a general
attack against public assets. An attack that is sometimes
disguised. Privatization does not concern
only the cases… …when whole services
are taken away from the state, in the form of, let’s say,
concessions. It is also privatization
when universities are evaluated… …not for the level of education
they provide… …but according to how attractive
this education is to the market. Ôhe supposedly public universities… …are being forced to adapt
to the same market imperatives, so what we will find is
a process of assimilation… …in which the public universities
become like the private ones: Profit making enterprises that
seek essentially to sell education, and the whole principle
of public education… …is that education
isn’t a commodity. It is the right of every citizen. The privatization effort
is expanded… …even to what Marx
called “general intellect”, namely, the accumulated social
and technological knowledge… …that produces the wealth
of a society. How Bill Gates became
the richest man in the world? It was precisely through
privatization of commons. What Bill Gates offers… is something that constitutes the
very common space that we use… …in order to communicate,
to exchange notes, not only knowledge, but generally
news, Internet, whatever. In order to be in touch
with each other, we have to enter
the Bill Gates domain. However, the effort
to privatize everything… …leads to the emergence
of strong resistance by the people, who realize that everything
can change… …if there is political will. The problems of the economy aren’t
mainly legal; they are political. When a political decision is taken,
everything can be reversed. In places like Argentina,
Bolivia, Ecuador, there was a retaking of the
private, the privatized systems. In some cases because they had to. There are re-municipalizations
happening now in Europe. What’s happening in Germany
over the last two years… …is being quite widespread:
Remunicipalization of electricity. The answer to privatization,
however, cannot be a return to the situation
that brought us to where we now stand. The goal is for public property
to be controlled… …by those who created it:
The workers. I think we have to learn lessons
from the past… …and the management structure
needs to be more democratic. Authority needs to come from
the bottom, not from the top. The Greek people must fight for that,
because, if they don’t, they won’t be able to rise up again. I hope that Greek people
will fight it. And I hope all the European trade
unions will help them fight it. To students and workers
in Greek universities, I say that you resist
with all your might and main. You are not victims.
Ok, you are… …but basically you are fighting,
my God. Will the modern person be able
to fight their tendency… …to be inactive, to stay calm? Besides, Thucydides has
already said that: It’s either freedom or calmness.
You need to choose. You will either be free
or calm. You can’t have both.

5 comments on “Catastroika – Privatization goes public

  1. I watched up until the part that talks about "limiting democratic freedoms". Like there were democratic freedoms in Russia? Democracy is based to a great extend on the rule of law, and there was never truly a rule of law in Russia. And it's not the West's fault. Leftist rhetoric and propaganda starts to look more and more like a bad Hollywood film, creating imaginary "superevil" without any shades of gray, thus creating an army of brainwashed youth who think they know it all.

    Look at all this #$%$. The higher power(s) see that Greece has alot of natural resources, and so they put the country into and big debt with their corrupted leaders, and in return, Greece gives them the riches, and they feel thankful to not owe anymore money. It's like the middle east and how the U.S and their "Peacekeeping" take place there. But of course things like bombings and massacres can't take place in Europe, so they strike them with a different way… Pathetic…

  3. @murshata

    So, the Paris City Council re-nationalises the water, and the Italian govmnt is told to privatise water ALTHOUGH the people voted against it in a referendum, and this is what you have to say: "Leftist rhetoric and propaganda starts to look more and more like a bad Hollywood film, creating imaginary "superevil" without any shades of gray, thus creating an army of brainwashed youth who think they know it all."???

    What's the matter with you? Maybe you're the brainwashed one that you cannot see beyond your nose any more, unless your master says so?

  4. What propaganda is this it isn't even a discussion of privatization just condemnation against it why is privatization evil is it wrong to have private businesses as opposed to state run businesses

    Why not discuss the real pros and cons of privatization
    Of course privatization steps on toes and upsets people but so would nationalization any change of order upsets established interest wether business owners or labor unions

    If you wanna discuss the weight the imf puts on nations to liberalize often unrealistically without considering on the ground conditions that's fine that I understand but again you give no reference to the established interest which goes against them like nationalism and corruption in government is not reporting

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