DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.com PLC.
Jan Willem Goudriaan is secretary general of the European Public Services Union (EPSU).
In an interview with EURACTIV.com on 6 June and an opinion piece on 7 June, the European Commissioner for International Cooperation and Development, Neven Mimica, gives a dangerously mistaken defence of the role of public private partnerships (PPPs) in EU development policy. He wants the private sector to play a larger part in the EU’s development policies and invest massively in projects of public interest. This, he claims, will be to the benefit of people in developing countries and so the EU should therefore facilitate PPPs.
EPSU, the European Federation of Public Service Unions, does not agree. Based on our experience with PPPs, promoting the private sector through such projects is wrong and costly for people in developing countries.
There are several reasons for our view. Firstly, the well-documented experience with PPPs across the world should make the Commission refrain from promoting them. PPPs tend to be expensive for public coffers, loading countries with more public debt. The experience in the EU itself provides a glimpse of this. One of the first things the IMF/EU/ECB ‘Troika’ did in Portugal and Cyprus was to identify PPPs as a contributory cause of those countries’ fiscal problems. No new PPPs were allowed. It was recognition that they trap public authorities in long-term contracts that divert resources away from developing public services and addressing people’s needs.
Another concern is that PPPs lead to issues with corruption. Again the EU’s experience sheds light on this with a European Commission report on corruption identifying public contracts as one of the areas of most concern for EU countries. Meanwhile, the European Parliament’s report on the modernisation of public procurement was equally critical of public-private partnerships, their finance and financial risks to governments. It would be wrong to ignore this and continue promoting PPPs in developing countries.