Revenue, competition, growth: Potential for privatisation in the euro area

Privatisation can make a major contribution to the consolidation of public budgets required in much of the euro area. It is not only a matter of raising new revenues in the short term to tackle an increasing debt load. Rather, countries that are determined to bite the bullet inspire investor confidence, which should have a positive impact on sovereign funding costs. Moreover, this is a way for a government to bolster growth capacities and expand opportunities for private-sector companies. Even though the topic has been on the economic policy agenda for at least twenty years there is still considerable privatisation potential in a number of EU countries, and this is likely to be worth 3-6% of their GDP.