A new step in the privatisation of the industrial public sector in Spain

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On 5 September 1997, the Spanish Government approved a reorganisation of the industrial public sector in order to smooth the way for restructuring and privatisation. The aim is that by the end of 2000 all industrial public companies will have been privatised. The Government's privatisation policy is still a point of conflict with the trade unions, which have uncompromisingly rejected this measure.

On 5 September 1997, the Government approved a reorganisation of the industrial public sector in order to facilitate the process of restructuring and privatisation.

The previous (Socialist) Government had separated public companies into two entities: the Industrial Holding Company (SEPI) which included profitable companies and aimed to create a healthy industrial group that could be quoted on the stock exchange; and the State Industrial Agency (AEI) which included companies making losses without a future, which were to be gradually closed down. The AEI included mainly companies in the steel-making, mining, naval and defence sectors.

The current People's Party (PP) Government has adopted a different strategy, namely, to sell the profitable public companies and to use these resources to close the loss-making companies. In order for this transfer of funds to be legal, it has been necessary to reunify SEPI and AIE into a single entity. The expected mechanism is the assignment of a large part of the funds obtained from the sale of companies to pay for the labour commitments arising from industrial restructuring. Early retirements have up until now been an important financial burden for the state and for some public companies. From now on, the state will create a fund to make these payments with part of the proceeds derived from privatisation. The public sector is thus totally separated from the budgets, and the loss-making public companies, once freed from these commitments, will reduce their losses considerably. Some of them may even make profits and could be sold. The aim of the Government is to have privatised all the industrial public companies by the end of 2000; only the coal sector will continue to receive budgetary contributions, but increasingly small ones. The only companies that will continue in the hands of the state will be RTVE (television), Renfe (rail transport), Hunosa (mining), Efe (the state news agency), Enresa (nuclear waste) and the Paradores (tourism).

The disagreement of the CC.OO and UGT trade union confederations with the Government's industrial policy, and in particular with privatisation, has grown throughout 1997, with disputes and rallies organised across public companies (ES9707117N). The unions have thus clearly rejected both the form and content of the reorganisation of the public sector.

As regards content, the unions argue that the objective of the reorganisation is the total liquidation of the industrial public sector, which they consider to be a serious mistake since it involves wasting industrial assets, giving up an active industrial policy and destroying more jobs. They consider that this measure serves only to liquidate the public deficit by using financial engineering to manage the budget. It also reduces transparency and lines of accountability by hindering parliamentary control.

As regards form, the unions believe that the Government has made a unilateral and arbitrary decision that has been adopted without resorting to dialogue and bargaining with the social partners.