Let utilities be proper companies

A key issue still to be tackled by the Greek state concerns its attitude toward public utilities (DEKO). Should they be treated as corporations or as public benefit foundations? The lack of a coherent strategy to a large extent explains the bankruptcy of Olympic Airlines, Greece’s state-owned carrier. The Public Power Corporation (PPC) is now in trouble for more or less the same reasons. It’s time for the government to make up its mind on the issue. If it decides to treat the PPC as a corporation then it must allow it to operate in a manner that will minimize financial loss. However, if the government decides to treat the company as an instrument of social policy then it should go ahead and subsidize it. As demonstrated by Olympic’s woes, vague strategies and dual objectives often have the reverse effect: companies end up in bankruptcy, with little benefit accruing for social welfare. This not to say that the state should not have a comprehensive welfare program. Only that social policy should be implemented using state money, in other words through the national budget.