Government claims that water metering & charges won’t lead to privatisation are dishonest or ignorant

EU Competition rules, fiscal treaty and troika deal mean charges will certainly lead to water privatisation

In a statement, Richard Boyd Barrett TD, for People Before Profit/United Left Alliance has said that government assertions that water metering and water charges won’t lead to privatisation of water are either dishonest or based on ignorance of EU rules on competition and state aid.

Deputy Boyd Barrett said that EU law requires that once a service is charged for it becomes legally subject to EU rules on competition and state aid – requiring the de-regulation and privatisation of such services and the removal of state subsidies that may be considered to “distort” competition in the market.

Quoting the Lisbon treaty, Deputy Boyd Barrett pointed out that EU law clearly states that:

“Services of general economic interest or having the character of a revenue producing monopoly shall be subject to the rules contained in these treaties, in particular to the rules on competition.” (Article 106.2 TFEU)

He further quoted the section of EU law relating to state aid which states that:

“Any aid granted by a member state or through state resources which distorts or threatens to distort competition by favouring certain goods shall be insofar as it affects trade between member states be incompatible with the internal market.” (Article 107 TFEU)

Richard Boyd Barrett said: “In The Dail today Enda Kenny rightly said that the privatisation of water would have” disastrous consequences” but that the government’s proposals for water charges and a new semi-state water company would not lead to privatisation of water services.”

He is either deliberately lying to the public or is ignorant of EU laws on competition and state aid in the area of public services. The truth is the opposite of what he is saying. Under EU law, the introduction of charges for water will lead inexorably to the privatisation of water.

It seems difficult to believe that that this government is unaware of this – which suggests they are lying deliberately to the public or maybe they are so rattled by popular outrage against household charges and now the planned water charges that they are making the policies up as they go along, and have not even bothered to work out whether they are compatible with EU law. Either way, they are giving out false information and make false assurances on the consequences of introducing water meters and water charges.

EU law states clearly that once a service is charged for or becomes a “revenue generating monopoly”, as envisaged with the government’s new water board under the auspices of Bord Gais, the state will be required to de-regulate the market, open it up to private competition, and almost certainly remove any state subventio

EU law on services of general economic interest require that once a service is revenue producing, any private provider of that service can demand equal access to that market – meaning the market is de-regulated and that any state support for a state provider of that service is removed or given equally to the private company. Either way, it means privatisation of the service under pain of EU law.

In conjunction with EU competition laws, a second EU-IMF deal which would come into force in 2014 or the Fiscal treaty, if passed, will put further pressure on the government to sell state assets and cut subsidies to services run by public companies. All this adds up to the certainty of water being privatised once water is metered and charged for, and to the cost of water rapidly increasing from there on. Waivers or “free” water allowances will then be quickly reduced or abolished as private companies and the profit motive move in.

So, the introduction of water charges will lead precisely to the privatisation of water, which the government say they want to prevent and which they rightly claim would be a “disaster.” The government are either too dishonest or too stupid to inform the public of these facts.

The government should now admit the truth to the public on the real consequences of introducing water charges. The only beneficiaries will be multinational companies who are dying to get their hands of the most vital resource of them all – the water human beings need to live.

The only hope to stop this madness is a mass movement of people power and protest. And that is certain to come. If the government think they have seen a rebellion on the issue of household charges – wait until they see the rebellion on water charges. Enda Kenny should shelve these “disastrous” plans now.”