Privatisation by stealth: ongoing struggles for public water in Italy.

On 12 and 13 June 2011, the Italian Water Movements Forum secured a clear victory in the referendum against water privatisation. More than 57 per cent of the Italian electorate cast their vote and both questions related to water had been approved by a majority of more than 95 per cent (see Road to Victory). And yet, the implementation of the referendum outcome, legally binding according to the Italian Constitution, has been slow ever since (see La lotta continua). Based on a series of interviews with water activists carried out at the end of May 2018, in this post I will assess the current situation in the struggle for public water in Italy.

Holding out? The strategy of ‘civil obedience’.

The second question in the 2011 referendum was directed against the guaranteed profit of 7 per cent for companies involved in the provision of water, the so-called ‘guaranteed capital remuneration’. Instead of simply abolishing this charge in line with the referendum outcome, however, the national regulatory agency responsible for water re-introduced this charge at a slightly lower level of 6.4 per cent under a different name. In response, several local water committees started a campaign of ‘civil obedience’, deducting this charge from their water bills. As the initiators argued, by withholding the 6.4 per cent of water charges when paying the bills they actually complied with national law resulting from the referendum.

Additionally, the Forum challenged the re-introduction of the charge in the Courts. However, first the Administrative Tribunal of Milan decided against the complaint in March 2014. When referred further up to the Constitutional Court, the Consiglio di Stato, the latter first consulted three economics professors for an evaluation of the charge. On the basis of these economists’ assessment in May 2016, the Constitutional Court then confirmed the earlier decision of the Administrative Tribunal of Milan in 2017. The re-introduced charge, it was argued, does not constitute ‘guaranteed capital remuneration’, but represents the principle of ‘full cost recovery’, in line with EU legislation. In other words, the re-introduction of the charge does not contradict the outcome of the referendum according to the Constitutional Court.

As a result, the campaign of ‘civil obedience’ collapsed. Households had to pay back all the withheld payments and the Forum had to cover the costs of the Court trial. Those households, which continued to hold out, were cut off from the water supply. In Arezzo, one of the centres of the ‘civil obedience’ campaign, activists attempted to supply cut-off households with water in containers and brought one case as a test trial to Court. When this was lost, the campaign came to an end. Importantly, water activists had been unable to form an alliance with water workers and failed to convince them not to cut off water supplies. In Rome, there was an initiative called ‘Supermario’, which reconnected water ‘illegally’, but this too did not work in the long run. Water workers had been worried about losing their jobs, if they did not obey orders, and the trade union organising the sector was not supportive.

Hoping for political parties?

From the beginning, the Forum had been very reluctant about relying too closely on political parties. Water, it was argued, is an issue which goes beyond left versus right divisions and is relevant across the whole political party spectrum. And yet, the Five Star Movement does offer hope to some water activists, considering its recent electoral successes in various cities (e.g. Turin, Rome), as well as at the national level, where it currently heads a coalition government together with the right-wing League political party. After all, one of its initial five stars had been ‘public water’.

Nevertheless, there are question marks over the party’s commitment to public water. Although elected in June 2016, it took the new Five Star Movement administration in Turin until November 2017 to even start discussions about transforming the regional water company into a public company with special status. No further concrete developments have occurred since. In Rome, the new Five Star Movement administration, also elected in 2016, started a roundtable to discuss the re-municipalisation of water services, but participants criticise that it is actually the party’s representatives at the roundtable, who block innovative thinking.

Photo by Nodoingola Blogger

The recent coalition government of the Movement with the League does include a commitment to implement the referendum outcome, but without specifying what this means in practice. In any case, the Movement’s combination of populist policies including increased welfare benefits for Italian citizens with anti-migrant, xenophobic measures such as the coalition agreement on expelling 500,000 migrants from Italy make it a rather dubious ally for progressive politics (The Guardian, 21 May 2018).

In 2007, the Forum had submitted a national law on public water to the Italian parliament on the basis of a successful collection of 400,000 signatures in support. This law, initially shelved and never debated in parliament, had been re-introduced by an inter-parliamentary group of MPs from the Five Star Movement, the centre-left Sinistra Ecologia Libertà (SEL), as well as a few members of the Partito Democratico (PD) in March 2014 and was finally debated in parliament in 2017. Nevertheless, any hopes by water activists invested in this process soon evaporated. The law was modified in a way making re-municipalisation a possibility rather than mandatory, thereby losing completely its effectiveness. In the end, water activists considered having successfully blocked this law to be a success.

What future for public water in Italy?

Water activists point to the danger of creeping privatisation pressures. While the Berlusconi government in the period of 2008 to 2011 had intended to privatise water through direct legislation forcing all providers to part-privatise services, privatisation pressures are now being increasingly introduced by stealth. Ongoing public services restructuring facilitates privatisation indirectly while cuts to municipalities’ budgets incentivise raising finance through privatisation, activists point out.

Additionally, there is a tendency towards the creation of large water companies in Italy with public and private participation. For example, a merger in the region of Lombardy brings together a number of companies with the water company A2A, which is quoted on the stock market like all the other large Italian multi-utility companies. Yes, the majority part of this new company is held by the still fully publicly owned water companies from Milan and Brescia. Considering, however, that this company will operate like private companies, profit-making will be at the heart of the company’s strategy.

Previous PD prime ministers Renzi and Gentilone had even talked about creating four to five large Italian water companies, which would then be able to compete on the global water market for contracts. These are all developments, which clearly go against the spirit of the 2011 referendum outcome. Despite the clear result in the 2011 referendum, the political elites and forces of capital have used every opportunity to delay and circumvent its implementation. This process is a stark reminder about the limits of representative democracy in pushing for policies, which go against the interests of capital.  

Photo by Felix Zingarelli

Against the background of a very difficult economic situation characterised by high unemployment, slow growth, high debt, the proliferation of part-time, insecure jobs and increasing poverty levels (The Guardian, 2 March 2018), the future of public water is highly uncertain in Italy. And yet, the struggle goes on. Although the large trade unions are less involved in the day-to-day running of the Forum and fewer local water committees are active across the country, the Forum continues its activities and has organised regular meetings at the national level with a focus on mobilising against new legislation facilitating privatisation.

In a recent, comprehensive analysis the Forum outlines its vision for public water, the way this relates to the preservation of the environment and the need for direct, participatory democracy in running water services (Forum 2018). Water activists may be on the back foot at the moment, but the struggle for public water is far from over in Italy.

Andreas Bieler

Professor of Political Economy

University of Nottingham/UK

Andreas.Bieler@nottingham.ac.uk

Personal website: http://andreasbieler.net

28 June 2018