The Greek State Council ruled on Friday that the transfer of a majority stake in Athens Water SA and Thessaloniki Water SA to the Hellenic Corporation of Assets & Offering (HCAP) privatization fund is unconstitutional.
The Greek Supreme Court said that, in accordance with the constitution, the Greek state should have full control over the country’s water utilities, both in the board and in share capital.
The court’s decision is based on a law approved by the Greek Parliament in 2016 that provides for the transfer of most of the share capital of both utilities to HCAP.
Transfer of a controlling stake ΕΥΔΑΠ and ΕΥΑΘ (Vodokanals of Athens and Thessaloniki) was declared unconstitutional in a plenary session of the Council of State (Supreme Court of Greece) following a decision by the Board of Directors of the Council of Europe in 2020.
The court ruled that the provisions of the 2016 law were unconstitutional, stressing that the state should control most of the share capital and management of the water utilities. In fact, the reasoning behind the decision clarifies that it is not enough for the Greek state to have supervision through a company that controls the same to which the controlling interest in ΕΥΔΑΠ and ΕΥΑΘ was transferred, but it must also retain control over its management.
“In accordance with the constitution, the ordinance states that the provision of water and sanitation services to the population of Attica does not constitute an activity inherent in the core of state power and, therefore, can be entrusted to a public company with limited liability, such as ΕΥΔΑΠ ΑΕ,” the statement reads. decision.
However, in addition to this, the decision clarifies that it is not enough for the state to simply control a joint-stock company, it must have control both over the shares and over the management of the company.