A Little Less Privacy, Please
No matter what E.U. governments may say, don't expect a bonanza of privatizations in Europe next year. Though strapped ministers might find selloffs attractive, once-booming stock markets — fueled in part by European privatizations worth an estimated $675 billion between 1990 and 2002 — have melted down, sapping investor confidence and stalling new flotations.
In 2001, for example, European selloffs amounted to just $38 billion; chances are they won't clear $10 billion this year. France's new conservative government especially is in a bind. It announced ambitious privatization plans upon winning power last June, but worker opposition and cool markets led it to postpone all sales until 2003, when it plans to place $8 billion worth of state-owned or controlled companies on the block. The leading candidate is most of the state's 54.4% stake in Air France.
Italy's Economy Minister Giulio Tremonti promised a "very ambitious" scheme slated to raise $20 billion over the next year, but will face similar opposition. And Tony Blair will continue to push a partial privatization of the London Underground. So while greater competition is definitely in, full privatizations next year look definitely out.
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