The real prize of state control

There is an untold question that has rarely engaged the interest of public opinion regarding the companies of the broader public sector. Even during periods of tension, such as today when social security and labor issues are being hotly debated, this fearsome question is ignored: In whose interest do state companies operate? This question does not arise for private firms; they primarily serve the interests of their stakeholders. In the large public corporations, the spontaneous answer is that they operate for the benefit of their employees, and possibly also their suppliers. Although most state-controlled companies are listed on the Athens Stock Exchange and have hundreds of thousands of shareholders, the opinion of the latter hardly seems to matter. Be they the state, institutional or private investors, the shareholders are not really considered. The government’s current show of determination toward tackling banks’ social security issue and the agreement for OTE Telecom’s voluntary retirement scheme has pushed those companies’ stocks higher. The market discerns rehabilitation moves under way and is evaluating the situation accordingly. Still, even this activity remains on the sidelines. One would expect that the prevalent reasoning in favor of state control would consider it a success to raise the value of big public corporations in which the state holds the majority. Yet even that, which adds value to state portfolios, does not grab the headlines. Maybe because the mentality behind state control has as its pretext only the strengthening of the state presence in the economy, supposedly in order to provide social justice. But the real motive is the distribution of power and income among those in authority. The real prize is power.

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