15:
On the Privatization FrontWilliam Krehm
A
s the world’s stock markets sag, the need for new more reliable assets in which to nest the accumulated excess profits of the past becomes acute. Hence the increasing popularity for the privatization of existing highways over which our excessive fleets of SUVs and trucks can race their excessive loads of financing.From Dow Jones Newswires (19/07) we learn: "The French government kicked off the privatization process of three highway operators, inviting interested buyers to submit proposals by August 22.
"The Finance and Transport ministries yesterday said the state will tender all its holdings in Autoroutes du Sud de la France, Autoroutes Paris Rhin-Rhone and Sasnef SA, in which the Government owns stakes ranging from 51% to 74%. The sale is part of a larger selloff of holdings to raise money to pay down France’s national debt. The partial privatization earlier this month of Gas de France SA raised
€1,8 billion ($2.2 billion) for the government and ¤1.6 billion for the natural-gas utility. Market participants have projected the state could get €11 billion from the sale of the highway operators. The government intends to use proceeds to help cut its debt and for ‘investments to guarantee the future of our economy,’ the ministries said."The alternative course: have the central bank of the EU take over the financing of the highways by holding government bonds that would represent the amortized value of the highways on a virtual interest-free basis. But that is not even considered. The EU and the central banks of at least some of the constituent countries already pay the banks for the reserves they deposit with them against the short-term credit they create – a sort of inverse seigniorage that they have taken to calling "banks’ seigniorage."
Once the powerful financial groups that are being created with privatization of the highway system hold unified Europe in their clutch, they will represent a still more powerful vested interest in the growth of highway traffic regardless of the damage it does to our atmosphere.
The debt of the EU countries, capped at 3% which Germany, France and Italy exceed, could readily be resolved by simply depreciating and amortizing the value of the highways and other national systems over their useful lives, and going on to do the same with the human capital, which is at the top or near top in the world. That would undoubtedly reveal that there is in fact no net debt (debt less the value of depreciated investments). Instead, the present rampage of speculative finance has wiped out that alternative from official memory.
William Krehm
-- from Economic Reform, August 2005