EUROMARKET: Water Liberalisation Scenarios

The Euromarket research project studies the consequences of the liberalisation of the water sector in economic (water prices), ecological (sustainability) and social (employment) terms. The focus of the research is on water distribution, however it also considers water sanitation and treatment aspects.

The project has delivered the following outputs:

• Analysis of the EU Explicit and Implicit Policies and Approaches in the Larger Water Sector
• Analysis of the European Water Supply and Sanitation Markets and its Possible Evolution
• Analysis of the Strategies of the Water Supply and Sanitation Operators in Europe
• Analysis of the Legislation and Emerging Regulation at the EU Country Level
• Identification and Description of Plausible Water Sector Evolution Scenarios
• Analysis of the Economic Implications of the Scenarios
• Analysis of the Environmental Implications of the Scenarios
• Analysis of the Social Implications of the Scenarios
• Analysis of the Institutional, Legal, and Organisational implications of the Scenarios
• Recommendations

Water management and policy have historically been approached from a technical perspective. The shortcomings of such an approach were addressed by various European Union research programs. Nevertheless, the study and the approach towards the water sector seems isolated from the changes that are occurring in other sectors in the public services sphere.

The Euromarket project started from the need to understand the specificities of the water sector, and in particular the implications of the liberalisation process in economic, ecological, social, legal and institutional terms, and to provide recommendations for local, national and European policymakers, as well as for water professionals, on how to manage such a process.

The project studies the liberalisation process in a twofold way. First, it provides an in-depth case study of the European water market in the U.K., France, Germany, Italy, Spain, Belgium, the Netherlands and Switzerland. Secondly, it provides a new theoretical understanding of the interactions between the water supply and sanitation sector's dynamics, the enterprises' behaviour and strategies, and the emerging regulatory activities. More precisely, this project offers a better understanding of the three dynamics and their interactions from an empirical and theoretical point of view.

At a theoretical level, these three dynamics are usually dealt with separately and there is no study that has tried to elaborate and construct the linkages between sectoral dynamics, enterprises' strategies and regulation. Within these three elements we conduct research on:

• Enterprises strategies: to better understand how the enterprises' strategies and behaviour affect the sectoral dynamics and structure (e.g., concentration processes), as well as regulation and the behaviour of the regulators.
• Sectoral dynamics: to better understand how the evolution of the water supply and sanitation sector influences the enterprises, as well as the regulators' behaviour at various levels (national, local, EU).
• Legislation/regulation: to better understand how legislation and subsequently regulation drives the enterprises' strategies and behaviour and subsequently the sectoral dynamics

The project ended in 2005. During the project implementation, the following activities were undertaken:

• Formulation of the past, present and future objectives of the European Union in the water sector
• Analysis of the European water sector today by looking at the structure and definition of water markets, the strategies of TNCs and local firms, and the different countries' legislation and regulation with regard to water liberalisation
• Exploration of various water liberalisation scenarios
• Analysis of the economic, ecological, social, organisational, legal and institutional implications of these liberalisation scenarios
• Elaboration of practical recommendations for EU policymakers