Next big challenge: public utilities
Troubled public corporations saw their deficit swell by some 20 percent in less than a year during 2003-2004. Over the same period, their outstanding loans rose by 30 percent. These debt-ridden public corporations are the government’s next great challenge. Should the trend remain unchanged over the next six years (2005 to 2010), the state will have to pay the mammoth sum of 4,600 million euros – half the budget for last summer’s Olympic Games – to pay off the total debt of these 13 state companies. Abandoned like many other state institutions, these corporations are drowning in deficits and taking taxpayers with them. The bulk of state subsidies goes to their operational costs, not to better equipment or quality of services. Problems abound. Public utilities are shouldering the burden of commissions and projects mainly because of their ties to business cronies. They are slammed for their insufficient or excessive absorption of EU funds. They receive thoughtless state subsidies that serve political objectives. They were unreasonably pressured by Olympic-related expectations. As a result, the operational costs of public utilities skyrocketed. The government is faced with a conundrum that no manager, no matter how skilled, can fix without causing friction. To make matters more complicated, nine of these corporations are in the public transport business, which is one of the most sensitive sectors as it affects citizens’ incomes and the running of the country’s infrastructure.
