Privatization in Greece and Its Negative Effects on the Nation's Social Welfare (Expropriation of the National Wealth)

The objective of this paper is to present and discuss the pros and cons of an imposed privatization (transferring the ownership and management of state-owned enterprises to private firms) in Greece and its effect on the economy, financial markets, employment, national wealth, and social welfare. Moderate privatization, under normal conditions, might increase efficiency, productivity, and liquidity in the financial markets, if the country is not in financial distress and depression; at the same time, however, it causes enormous unemployment, dependency on foreign capital and multinational firms, and, worst of all, the loss of its national wealth and the decline of social welfare. Governments have to increase productivity and efficiency of the public sector and keep the state-owned enterprises, which provide national security, safety, and other public services, as public ones. Nationalization has proved, recently with the current financial crisis, created by the uncontrolled private firms (financial institutions), that it can improve stability and preserve jobs. The European integration with its strange Maastricht criteria, the common overvalued euro for 10 years, the recent debt crises, and the austerity measures by Troika have created an enormous social cost to the member-nations (mainly in Greece), and the benefits from this union are too small to cover its cost; especially irreplaceable are, the loss of public policy for the members and the destruction of the sovereign nations. The optimal level of privatization is the one that maximizes the social welfare (at the point, where the marginal benefits of privatization are equal to the marginal cost of socio-economic distress) and does not eliminate the wealth of the nation. [PUBLICATION ABSTRACT]