Choori Dar Pajama Cutting

About Boes extraordinary and privatization

Within the general context of extraordinary measures, unpublished Gazettes Publications and reform-horse killed last Friday saw the light of a new decree-law this time on actions in the fiscal, labor and investment liberalization to promote and job creation.

concern is the aftertaste that is taking the government to use the decree-law and several measures drawer disaster, and that this legal instrument is designed for those exceptional cases that warrant urgent decisions.

Comment on this is not the subject of this blog. If it is, however, discuss the various reforms that decree sets up in the field of public sector. And there are several.

Two of them are important legal changes in the field of airport management and public play. Because this is exactly what the decree speaks and not the (announced) privatization, which will take place as soon as these changes occur (although it opens the door as this new business structure that provides the objective permmite to the inflow of private capital, while maintaining in every case state the nature of society).

is therefore necessary to define these two distinct areas: change of status and privatization . Regarding the first to say that the state corporatisation of public entities and LAE AENA seems quite reasonable if it will help increase efficiency, autonomy and flexibility in management, which is very likely that it happens. Upgrade will also allow the operation of both services in a demanding context of demand (airport) and major technological changes (set).

Regarding privatization things change. We are talking about pure and simple privatization (sale of equity shareholding public private investors) while it is true that the state will maintain majority control of both companies. Privatizing ideology hit me like a bug, too (much worse) do in the rush to plug budget holes, now that's bread for today, hunger tomorrow.

Assuming that political processes are complex and marked by certain circumstances, privatization (in my opinion) may have some effect, but from a rational perspective, and having reviewed various aspects. For example:

1. Nature of goods and services provided by the entity to privatize : if more or less essential, more or less strategic, more or less has a social dimension.


2. market conditions served by the entity to privatize: if it is a real free market with strong private players to compete freely, or if instead it will privatize a public monopoly into private monopolies. If a market is working properly or if there distortions which would require a public presence that balance.


3. the market really makes an improvement in the service of citizens : it is assumed in many cases it gives better service private than public. There are cases like that, but not in others. Are those public organizations with centuries of history whose only fault was that simply have not had good wicker to make the pot (legal framework, budget, etc..) and thus their service has deteriorated.


4. Conditions to ensure compliance with the obligations of public service by the privatized entity: private investors will be interested in the profitable, but what about the deficit segment?


5. a buyer and the price offered is adequate : not always the case, there may be buyers and market conditions do not allow a good sale. Or simply do not have buyers who take the least good of the organization privatize public.


6. The entity is a burden on public coffers : does not make sense to privatize what works well and gives a lot of money to government coffers. Nor do with organizations which are not the crown jewels, they provide a public service is valued by citizens at a reasonable cost. However, heavily loss-making and inefficient institutions can be studied for privatization.


7. take into account the social dimension : the public sector is a sister of quality but like it or not a source of employment for many families and help maintain ocial and territorial cohesion. It is necessary to assess this appearance and define commitments especially with the potential private buyer in this regard.

AENA and Lotteries Do they meet these conditions? Partially. Airports are basic and strategic infrastructure for a country. Some very greedy for private investment, which can provide an interesting know-how. But it is also a network deep deficit, fattened by territorial decisions are not always rational, but with a political aspect to be considered. Therefore a partial privatization and a form of decentralized management and unique to each airport may have some meaning. Not so the public game, not being an essential commodity is a public monopoly which provides billions of euros of profits to the coffers. Moreover, state support ensures proper development of the game and prevent fraud, not to mention the significant sales network that supports it and its economic and social tradition. That is, a jewel that will certainly fatten the box will be a short but significant structural decline of public resources in the medium and long term.