I. A Legal Concept of Privatization: Transfer of Legal Power from the State to Private Persons
The first problem one faces when dealing with privatization from a constitutional law perspective is the absence of a commonly accepted definition of ‘privatization’. There exist, of course, various definitions of the term in statutes or other legal texts. However, these usually refer to rather particularistic aspects of a significantly broader phenomenon. Already in the 1980s it has been rightly stressed that ‘privatization’ is used as a ‘portmanteau’ or ‘umbrella’ term. It denotes various policies which may entail the transfer of assets from the public to the private sector; the substitution of public by private law; the delegation of state tasks to private persons; or, more generally, a responsibility shift from the organized community to the individual.
What is common in all these is that they describe a process, and more particularly a transition process from some point of the public realm (the ‘Public’) towards some point of the private realm (the ‘Private’). Hence, privatization is some kind of move form the ‘Public’ towards the ‘Private’.
Now, the ‘Public’ and the ‘Private’ are not absolute instances. Rather they attain their meaning by their relation to each other –that is, by their placement in a given ‘Public/Private’ dichotomy. This dichotomy can have many varying contents –for instance: accessible/closed, transparent/secret, common/individual, society/individual, state/society, state/market etc. One and the same category can be seen as public in one respect, and private in another. For example, in relation to the individual, society is attributed to the ‘Public’; but, in relation to the state, society is attributed to the ‘Private’. Moreover, the distinction between the ‘Public’ and the ‘Private’ is being blurred, but also at the same time confirmed, by their respective placement in some trisection such as ‘Private – Social – Public’; or ‘Private – Social/Public – the State’. The varying meanings that the privatization’s starting point (the ‘Public’) and its direction (the ‘Private’) can have indicate that there is no single notion of the privatization but many differing ones which vary according to the context in which they are being understood.
It is apparent then that a great variety of social phenomena may be described as a transition process from the ‘Public’ to the ‘Private’, and hence labelled as ‘privatization’. Moreover, the term may be used with varying degrees of generality. It may refer to the specific act of a sale or it may describe far more general trends as indicated by expressions such as ‘privatization of politics’; ‘privatization of law’; ‘privatization of rights’; or even ‘privatization of the world’. One can easily assume that not all of these notions are constitutionally relevant, and even if so, not to the same extent.
Thus, in order to assess the constitutional relevance of privatization it is important to draw the boundaries of the phenomenon. And to do so, we first need to construct its defining criterion. For an economist, the defining criterion of privatization is the transfer of assets from the public to the private sector. For a political scientist, it is the transfer of power from the state to the society, especially the strengthening of the market and of the individual responsibility.
Respectively, the defining criterion of a legal concept of privatization could be the transfer of legal power from the state to private persons. By ‘legal power’ it is meant the power, i.e. the rights or competences, which the legal order recognizes to a person or entity. The ‘state’ is understood here as synonymous to public authority, hence encompassing not only the central government but also local authorities and other public law entities. The distinctive attribute of the state is the exercise of public power. The latter is exercised by public authorities not as a right but as a competence, provided for and organized by public law. On the other hand, the private persons exercise rights instead of competences, and their relation to each other is regulated by private law. Nevertheless, this distinction is not an absolute one. The state may act not only in its capacity as public authority but also in a fashion similar to that of private persons, in which case it is subjected to private law. Therefore, as ‘private persons’ should be understood not only the individuals (natural persons) and the legal entities created by them (associations, companies etc.) but also the private law entities created by the state, such as a state-owned private law company.
It becomes apparent then that, for the concept of privatization proposed here, the distinction between ‘Public’ and ‘Private’ resembles the distinction between public law and private law, the former being understood as the law of the exercise of public power while the latter as the law of private relations.
II. A Typology of Privatization: Proprietary, Functional, Substantial, and Formal
One way to construct a typology of privatization is by asking the following two questions. Firstly, what kind of legal power is being transferred? More simply: What is being privatized? We can call this the ‘object of privatization’. And secondly, who obtains the transferred legal power? Or: Who obtains the privatized object? Let us call this the ‘subject of privatization’. (We do not need to ask the question of who transfers legal power to a private person, since this would in any case be the state in the broad sense understood here, i.e. some public authority).
The object of privatization can be either a state-owned asset or a state task. What is an ‘asset’ is of course readily apparent, for example real property, an enterprise, shares etc. Less obvious is the meaning of the term ‘state tasks’. For our purposes, suffice is to say that a state task is an activity for which some public authority is responsible and which involves either the provision of a public service, such as social security, or the performance of a public function, such as policing. A more neutral, although not always accurate, term that is sometimes used is ‘public activities’. It is important to note that the problem of the state tasks is essentially a constitutional problem.
The respective privatization types can be referred to as ‘proprietary privatization’ and ‘functional privatization’. Proprietary privatization is the transfer of property rights from the state to private persons. This usually involves an act of sale. The most prominent and most common case is of course the sale of public enterprises. Functional privatization, on the other hand, takes place when the state delegates the exercise of a state task –say, the provision of health services– to a private person without any property rights being transferred. This involves some kind of an act of delegation. Given that state tasks are characterized by the responsibility of some public authority, the central issue here is what kind of responsibility (if any) the state retains after the delegation.
There is a crucial difference between proprietary and functional privatization. In the former case, the state simply transfers property rights, which are private rights. These rights as such are not in any way altered; the only thing that changes is their subject: a private person instead of the state. In the latter case, the state delegates public competences exercised by public authorities. This is a more subtle process, since it entails not only a change of the subject (a private person instead of the state) but also the transformation of the object, the formerly public competence, so that it can be exercised by the private person as its right. To put it simply, a public activity is transformed into a private one.
The subject of privatization can be either an enterprise of the private sector or a private law entity of the public sector. In the former case, legal power is being transferred from the state to what we can call a ‘genuinely’ private person, i.e. a natural person, an association of such persons, or rather, in the standard case, a private enterprise. Indisputably, these are subjects of constitutional rights and of the private autonomy. In the latter case, legal power is being transferred to entities, such as a private law company of the public sector, which may be seen as emanations of the state. However, the state acts here not in its capacity as public authority –it does not exercise public power– but rather at the same level as private enterprises, that is as a market actor. Thus, a private law company of the public sector (e.g. a state owned commercial bank) enters into common market transactions and acts more or less in the same manner as the respective private enterprises (e.g. a private bank). Nevertheless, it remains questionable to what extend the state-owned companies are subjects of constitutional rights.
The respective privatization types can be referred to as ‘substantial privatization’ and ‘formal (or organizational) privatization’. Substantial privatization is the transfer of property rights or the delegation of state tasks to ‘genuinely’ private persons; that is from the public to the private sector. Formal (or organizational) privatization, on the other hand, is the transfer of property rights or the delegation of state tasks to private law entities, such as companies, of the public sector. These are established by the state in order to perform economic activities, which are essentially private. The state acts through them no longer as public authority but rather it uses private law forms of organization and action instead. Whereas the substantial privatization involves a transition from the public to the private sector, in the formal privatization the transition is within the public sector. What is common in both cases is that legal power is being transferred to an entity organized by, and subjected to, private law.
The aforementioned typology, constructed on a double axis, according to the object (proprietary and functional) and to the subject (formal and substantial) of privatization, produces the categories presented in Table 1.
Asset transfer from the state to private law entities of the public sector (formal proprietary privatization)
Asset transfer from the public to the private sector (substantial proprietary privatization)
Delegation of state tasks to private law entities of the public sector (formal functional privatization)
Delegation of state tasks to the private sector (substantial functional privatization)
Needless to say, this is a purely logical schematization. The privatization practice has produced a great variety of legal techniques, which do not always fit into those categories. Moreover, various combinations and refinements of the respective types exist. The point to be made here is that there is no single notion of privatization but rather many differentiated ones. Thus, it is useful to discern at least three broad categories:
– The most obvious type of privatization, and the most commonly perceived as such, is of course the sale of public enterprises, or, more broadly, the property transfer from the public to the private sector.
– A different type of privatization is the shift from public to private law in the implementation of public policies by the state. Using private law to re-organize public services and public functions the state substitutes its pubic offices by public enterprises, a process which could also be labelled as ‘de-administration’. This makes the government more flexible but at the same time –which is a crucial issue– less restraint by public law obligations.
– Another type of privatization then is the delegation of state tasks to the private sector. However, whereas public authorities are bound by constitutional constraints and by the principle of legality, the private undertaker stands under the protection of constitutional rights and of the principle of private autonomy. This raises the danger that such a delegation could undermine constitutional accountability.
III. A Typology of the Constitutional Limitations on Privatization
Privatization as a Constitutional Problem
Do constitutions matter for privatization? A possible answer could be simply: no. According to this, constitutions are principally neutral towards privatization, in the sense that they usually neither prohibit nor prescribe a certain privatization. The decision for a privatization then would be just a matter of governmental policy whose implementation depends on the legislature, while the constitution confines itself just to posing the general framework for the transformation of policies into legal acts. After all, constitutional texts rarely make mention of privatization.
This perception, however, seriously undermines the political and normative magnitude of the constitution. A constitution is the act by which a state is constituted, i.e. the act of the political organization of a society, which implies the separation between the political sphere and the sphere of civil society. To put it simply, through the constitution are drawn the separating lines between the public and the private. Now, if privatization represents a shift in those separating lines, then there is an inevitable constitutional dimension to it. The argument goes as follows: The constitution permits a certain margin of alteration in the relationship between public and private; privatization involves such an alteration; the question then is whether privatization remains within the constitutionally permitted margin.
Therefore, constitutions do matter for privatization. The central issue is to draw the boundaries of the realm that, according to the constitution, has to remain public. This is of great importance, since a constitution is able to guarantee a realm of freedom and autonomy, a private realm, only when –and indeed because– it entrenches at the same time a public realm, a realm of politics and authority. The constitution guarantees quite as much the private as well as the public realm. And, as the public cannot exist without the private, similarly the private cannot be maintained without the public.
Constitutional Law as the Law of Constitutional Limitations on Privatization
A privatization requires a political decision, which is often formulated as a programme of governmental policy (privatization programme). Law has a double function here. On the one hand, law is the necessary means for the implementation of a political decision. The legislature transforms the political programme proposed by the government into a legal act. On the other hand, law has a relative autonomy towards politics, so that it may impose external constraints to the implementation of governmental policies. Certain political choices may be unacceptable to law, which then sets substantive or procedural limitations in order to prevent (or repeal) their transformation into legal acts. Therefore, law functions at same time as an implementation means and as a limitation to governmental policies.
Ordinary law is of course at the disposal of the legislature –and also, to a great extent, of the government through the governmental majority in Parliament. Generally speaking, ordinary law may be seen as a variable that, at least up to a point, adapts to political choices. On the contrary, constitutional law –as well as EC law– is not at the disposal of the legislature. Hence, political choices have to adapt to constitutional law, which poses the constant upon which political decisions have to be reviewed. While ordinary law functions mainly as an implementation means for privatization programmes, constitutional law functions mainly as their limitation. Therefore, the constitutional law of privatization is mainly the law of constitutional limitations to privatization.
Certainly, constitutional law may also function in a way that facilitates privatization, for instance by providing justification for the relevant political decisions and inspiration for the formulation of privatization programmes. But this is clearly a secondary role of the constitution in relation to privatization. A short note has also to be made here. While constitutional law is mainly restrictive to privatization, on the contrary, EC law is to a great extend facilitative to it. A possible –although rather schematic– explanation for this is that, while a constitution constitutes a political union, and hence defines a public sphere that is being separated from the private sphere, EC treaties constitute, at least at the present stage of their development, primarily an economic union. The creation of a common market with free competition (still) forms the defining element of EC law. Therefore, EC law has an extended private sphere –and only a limited public one– to guarantee.
Substantive/Procedural, Explicit/Implicit Constitutional Limitations on Privatization
Generally, we can discern two sets of constitutional limitations on privatization. These are, firstly, substantive and procedural limitations and, secondly, explicit and implicit ones.
The substantive limitations initially deal with the question of whether a certain privatization is constitutionally permitted in the first place, or not (we can call this the ‘Whether’ question). To mention but two examples, art. 16 par. 5 of the Greek Constitution prohibits the establishment of universities by private persons; and arts 87d – 87f of the German Grundgesetz prescribe that certain public services, especially utilities infrastructure, be provided by federal administration (bundeseigene Verwaltung). Certainly, more often than not such limitations are not explicitly stated in the constitutions but rather derive from constitutional principles. Thus, the democratic principle may prohibit that certain so-called ‘core’ activities of the state be delegated to, constitutionally unaccountable, private persons; or the social principle may prescribe that certain fundamental social services should be provided by the state. Furthermore, the substantive limitations deal with the –practically, much more important– question of the conditions under which a principally permitted privatization may take place (the ‘If so, under which conditions’ question). This is the problem of the constitutional guarantees that should accompany a privatization, including those imposed after the actual act of privatization has taken place. A major issue here is what kind of responsibility (if any) the state retains towards the privatized activity. It may be seen as a constitutional requirement, for instance, that, when the state delegates a public service to a private enterprise (hence privatizing the responsibility for the provision of the service), it nevertheless retains the responsibility for safeguarding the service to the citizens by way of regulation.
The procedural limitations deal with the question of how a political decision for a privatization will be legally implemented (the ‘How’ question). The central issue here is whether a privatization should be implemented through statute, or whether (and if so, to what extend) this can be made by governmental decree or by an administrative act. Generally, the involvement of the Parliament should be regarded as a major guarantee not only of the rule of law principle but also, through the publicity of the parliamentary procedure, of the democratic principle. A somewhat different issue poses the case where a constitutional amendment is required before a privatization may take place. This, in turn, raises the problem of the limits on the power to revise the constitution, notably the problem of a constitutional core, within which possibly also a ‘domain réservé’ of the state, which cannot be amended.
Now, as has already been indicated, explicit limitations, i.e. limitations expressively provided for in constitutional provisions, are rather rarely to be found in constitutional texts. Moreover, it is highly unlikely that we find any constitutional clauses, such as those provided for in many constitutions for nationalization, relating to privatization. The reason for this may be quite simple. Contrary to nationalization, which represents a direct interference with constitutional rights, the state needs no constitutional justification for privatization. To put it simply, the state may not nationalize unless this is allowed by the constitution, while it may privatize unless this is prohibited by the constitution.
Therefore, the limitations that a constitution poses on privatization are for the most part implicit limitations. This means that they are not readily apparent in the constitutional text but need to by discovered, namely to be derived from some explicit constitutional provision or, in most of the cases, from some constitutional principle. It becomes apparent, then, that the identification of the constitutional limitations on privatization requires a great deal of effort by way of constitutional interpretation.
In the remaining of the paper, I will propose a classification of the constitutional issues related to privatization, which might be helpful to the undertaking of identifying the constitutional limitations on privatization.
IV. A Classification of the Constitutional Issues Related to Privatization
Generally speaking, we can discern two broad types of state activity. An activity that the state performs can be regarded either as an economic activity or as an activity that entails the exercise of public power. In the former case, the state participates in the process of production and distribution of goods or services; it stands at the same level as private persons and therefore it is subjected to private law. Contract is the main legal form though which the state performs its economic activity. In the latter case, the state acts in its capacity as public authority and it is therefore subjected to public law. The exercise of public power takes the legal form of a legislative, an administrative, or a judicial act.
Certainly, this is not a straightforward distinction. It is not always obvious whether an activity that the state performs is of the former or of the latter type, and indeed many mixed forms exist. Nevertheless, this distinction provides the basis for the classification of state activity in four main categories:
a) Provision of (ordinary) market goods or services;
b) Provision of public services of an economic nature (or economic services of general interest);
c) Provision of public services of a non-economic nature (or non-economic services of general interest);
d) Activities of policy-making, lawmaking and law enforcement.
Privatization raises different constitutional issues for each of the above categories. These can be summarized as follows:
a) Provision of market goods or services. The state provides ordinary goods or services through public enterprises –mostly, in the form of a private law company. These usually operate within a competitive market (e.g. in the industrial, agricultural, commercial, credit sector etc.), along with similar private enterprises and in the same manner as any market actor. We can regard this as a purely market activity of the state. In most of the cases, there would probably be no particular constitutional reason (although there may exist political or economic reasons) for the state to undertake such an activity. Hence, there would also be no constitutional obstacle if the state decided to dispose of it by selling the enterprise. However, the constitutional issues raised here have to do with the conditions upon which this sale takes place. We can assume that, even in its decision to sell an enterprise, the state remains bound by the constitutional rights of the citizens as well as by a public law obligation to pursuit the public interest. If that is the case, then the state has no power to sell an enterprise to any buyer and at any price it wishes. An arbitrarily choice of the buyer or a pricing below the real value would entail an unfair advantage to the buyer and would thus be detrimental to the public interest. Hence, a possible constitutional limitation on the sale of public enterprises would be the requirement for an open and objective privatization procedure and for a fair pricing.
b) Provision of public services of an economic nature. Public services differ from ordinary commodities in that the state assumes responsibility for (ensuring) their provision to every member of the community. Hence, they are addressed not to consumers but rather to citizens. There exist economic and non-economic public services. In the former case, the provision of the service takes place through an act of market exchange (consumers enter into a contract with the provider); however, the state intervenes in the market process, in order to ensure that all citizens will be able to enter such a contract –that is, to guarantee equal and universal access to the service. The main example here is the utility services, such as telecommunication and postal services, electricity and gas, water and sewerage, public transportation, and broadcasting. Traditionally, most European states have provided utility services through public, indeed nationalized, enterprises. In the standard case, these were excluded from competition; and they were operating under a special legal regime. The state then assumed both the responsibility for the provision (which is an economic activity) as well as for the ensuring of the provision to the citizens (which, as an intervention to market mechanisms, entails the exercise of public power). During the past two decades and a half, extensive privatization has taken place in the utilities sectors. This involved three main trends: the opening up of markets through abolition of monopolies (liberalization), which, in a broad sense, may be understood as delegation of (part of) the activity to the private sector; the transformation of public enterprises into ordinary private law companies, also known as ‘corporatization’; and, eventually, the sale of public enterprises. The main problem here is how the state may retain its guaranteeing responsibility, while delegating the responsibility for the provision –which makes the case for regulation. This is a constitutional problem, insofar as the guaranteeing responsibility of the state is considered as its constitutional obligation. The obligation to regulate the utilities markets would then be the main constitutional limitation on privatization and liberalization of economic public services.
c) Provision of public services of a non-economic nature. Non-economic are those public services whose provision is excluded from the market. This is the case notably with some fundamental social services –which in many constitutions are also protected as social rights– such as public education, public health, and social security. In most cases, the provision of these services does not entail any market exchange and does not establish any contractual relationship; rather they are addressed directly to citizens as such, and they are subjected to public law. The state then acts in its capacity as public authority and indeed these services are mostly provided by typical public offices, such as schools and universities, national health systems, or social security organizations. It is important to not here that similar services are also provided by the private sector as economic services, e.g. private education, private health services or private pension schemes. Privatization here shows two main trends. Firstly, market elements are introduced in the provision of social services by public authorities, which increasingly tend to operate within markets or quasi-markets. Secondly, and perhaps more importantly, by cutting down social services the state increasingly urges citizens to shift to the private sector, in order to meet their social needs. This, so to say, de facto delegation is usually facilitated by public policies, such as a tax policy that “discourages people from relying upon government programs or services…, but encourages them to rely instead upon private resources obtained through the market, or, if necessary, from family or charity”. The constitutional problem here is a rather complex one. To put it simply, it has to do with the question of whether, and if so, to what extend, the constitution –possibly, through a social clause or through the recognition of social rights– guarantees equal and universal access to a system of social services as public services (as opposed to market services). This, in turn, raises the question of whether, and under what conditions, the private sector may be incorporated into this system.
d) Activities of policy-making, lawmaking and law enforcement. The exercise of public power is the distinctive feature of the state. Private persons may not and can not exercise public power; this would be a contradictio in adiecto. Thus, the delegation of public power as such would be impossible, indeed unthinkable. This means, then, that the state may not delegate to private persons activities that are performed as public competences –that is, by means of exercising public power. However, the state might transform such competences into private activities, so that they can be exercised also by private persons. For instance, it has already been mentioned that social services may be provided either by public authorities as non-economic public services, or by the private sector as market services. The problem here is a rather different one. Are there any state tasks that can only be performed by means of exercising public power and, therefore, necessarily by public authorities? Generally speaking, activities of policy-making, lawmaking and law-enforcement require the means of public power. Even here, however, within the bundle of activities of which each state task consists there may be included some that can be exercised as private activities. Thus, many supporting or auxiliary aspects of even the so-called ‘core’ state tasks could be delegated to private persons. The constitutional challenge here is to ensure that such delegations will not undermine the democratic responsibility of public authorities and, therefore, constitutional accountability.
* Lecturer in Constitutional Law, Aristotle University of Thessaloniki.
The essay was published in Hellenic Review of European Law 2009, Special Edition, pp. 79-96. It was first presented as a paper at the VII World Congress of Constitutional Law “Rethinking the Boundaries of Constitutional Law”, Athens, June 11th-15th 2007.
 See C. Graham / T. Prosser, Privatising Nationalised Industries: Constitutional Issues and New Legal Techniques, MLR 1987, p. 16 (‘portmanteau term’), V. Wright, Le privatizzazioni in Gran Bretagna, Rivista Trimestrale di Diritto Pubblico 1987, p. 86 (‘umbrella term’). For a more detailed discussion of the issues examined in this paper see A. Kaidatzis, Συνταγματικοί περιορισμοί των ιδιωτικοποιήσεων [Constitutional Limitations on Privatization] (Athens-Thessaloniki: Sakkoulas 2006).
 Cf. Η. Bauer, Privatisierung von Verwaltungsaufgaben, VVDStRL 1995, p. 243 (254: Privatisierung als Prozess).
 For an account of the ‘Public/Private’ dichotomy see J. Weintraub, The theory and practice of the public/private distinction, in: J. Weintraub and K. Kumar (eds), Public and Private in Thought and Practice: Perspectives on a Grand Dichotomy (Chicago-London: University of Chicago Press 1997), p. 1.
 For an in-depth account of the distinction between the state (staatlich) and the public realm (öffentlich) in constitutional law see U. Preuss, Zum staatsrechtlichen Begriff des Öffentlichen, untersucht am Beispiel des verfassungsrechtlichen Status kultureller Organisationen (Stuttgart: Klett 1969). This is exemplarily expressed in Art. 25 par. 1 of the Greek Constitution, with its trisection between the state, the individual, and the member of the community; see A. Manitakis, Το υποκείμενο των συνταγματικών δικαιωμάτων κατά το άρθρο 25 παρ. 1 του Συντάγματος [The subject of constitutional rights according to Art. 25 par. 1 of the Constitution] (Athens-Komotini: Sakkoulas 1981).
 See, e.g., D. Tsatsos, Ελληνική Πολιτεία 1974-1997 [Greek Polity 1974-1997] (Athens: Kastaniotis 1998), p. 63 et seq.
 See, e.g., J. Habermas, Strukturwandel der Öffentlichkeit. Untersuchungen zu einer Kategorie der bürgerlichen Gesellschaft (8th ed., Neuwied-Berlin: Luchterhand 1976), p. 181 et seq.; see also, in a different context, C. Sunstein, Standing and the privatization of public law, Columbia Law Review 1988, p. 1432.
 See, e.g., A. Clapham, The privatisation of human rights, EHRLR 1996, p. 20, referring to what is better know as the ‘horizontal effect’ (or Drittwirkung) of human rights.
 See J. Ziegler, Η ιδιωτικοποίηση του κόσμου και οι νέοι κοσμοκράτορες [The privatization of the world and the new world rulers] (Athens: Syghronoi Orizontes 2004).
 See generally D. Parker (ed.), Privatisation in the European Union (London-New York: Routledge 1998).
 See Wright, op. cit. (n. 1).
 See J. A. Kämmerer, Privatisierung. Typologie – Determinanten – Rechtspraxis – Folgen (Tübingen: Mohr Siebeck 2001), p. 37, and also J. A. Kämmerer, Privatization – The Right Track to the ‘Slender State’? A German View, Law & State 1997, p. 7.
 For a discussion of this issue in a similar context see M. Heintzen, Beteiligung Privater an der Wahrnehmung öffentlicher Aufgaben und staatliche Verantwortung, VVDStRL 2003, p. 220 (228, 239 et seq.).
 Admittedly, the term is not broadly used in the English language. More elaborated is the German term ‘Staatsaufgaben’; see H.-P. Bull, Die Staatsaufgaben nach dem Grundgesetz (2nd ed., Kronberg: Athenäum 1977). See also, in the context of privatization, W. Weiss, Privatisierung und Staatsaufgaben (Tübingen: Mohr Siebeck 2002), C. Gramm, Privatisierung und notwendige Staatsaufgaben (Berlin: Duncker & Humblot 2001), C. Gusy (ed.), Privatisierung von Staatsaufgaben (Baden-Baden: Nomos 1998). Indeed, German-speaking authors tend to translate ‘Staatsaufgaben’ as ‘state tasks’; see, e.g., E. Denninger, State tasks and human rights, Ratio Juris 1999, p. 1.
 See Council of Europe, Recommendation No. R (93)7 on Privatization of Public Undertakings and Activities (Strasbourg 1993).
 For some illuminating contributions see D. Grimm (ed.), Staatsaufgaben (Baden-Baden: Nomos 1994); see also P. Häberle, Verfassungsrechtliche Staatsaufgabenlehre, AöR 1986, p. 595.
 Cf. G. Metzger, Privatization as Delegation, Columbia Law Review 2003, p. 1367.
 See Heintzen, op. cit. (n. 12).
 For a detailed discussion of this issue see M. Möstl, Grundrechtsbindung öffentlicher Wirtschaftstätigkeit (München: Beck 1999).
 Although not always identical with the one proposed here, the distinction between ‘materielle Privatisierung’ and ‘formelle Privatisierung’ (or ‘Organisationsprivatisierung’) is broadly used by German-speaking authors. See, e.g., L. Osterloh, Privatisierung von Verwaltungsaufgaben, VVDStRL 1995, p. 204 (210), Weiss, op. cit. (n. 13), p. 29 et seq., 48 et seq. Cf. the distinction between ‘Popularprivatisierung’ and ‘Organisationsprivatisierung’ proposed by Kämmerer, Privatisierung, op. cit. (n. 11), p. 40 et seq.
 See D. Ehlers, Verwaltung in Privatrechtsform (Berlin: Duncker & Humblot 1984).
 The typology proposed here, although not identical, draws heavily on the one proposed by Kämmerer, Privatisierung, op. cit. (n. 11), p. 48.
 The term proposed by Kämmerer, Privatisierung, op. cit. (n. 11), p. 36, 43.
 See Metzger, op. cit. (n. 16), p. 1367.
 A possible exception would be some constitutions of the formerly communist states of Central and Eastern Europe, where however privatization was a structural precondition for the transition to liberal democracy, and not just a matter of governmental policy. Up to a point, the same is also true for some Latin-American states. Cf. A. Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (Cambridge: Cambridge University Press 1991). For an excellent account of relevant constitutional reforms in Latin-American states during the 1990s see D. Schneiderman, Constitutional Approaches to Privatization: An Inquiry into the Magnitude of Neo-liberal Constitutionalism, 2000, p. 83. It should be noted however that during the past few years we are witnessing the reversal of this trend in Latin America.
 See A. Manitakis, Ελληνικό Συνταγματικό Δίκαιο Ι, Θεμελιώδεις έννοιες [Greek Constitutional Law, Vol. I, Fundamental Concepts] (Athens-Thessaloniki: Sakkoulas 2004), p. 93, 103.
 See the luminous remark by N. Lewis and I. Harden that a “constitution is above all else a definition of the public sphere” (quoted in: T. Prosser, Nationalised Industries and Public Control. Legal, Constitutional and Political Issues (Oxford: Blackwell 1986), p. 75, who similarly stresses that a constitution “sets out the lines of separation between public and private, between the realm of politics and civil society”).
 See Graham / Prosser, op. cit. (n. 1), p. 16.
 See generally T. Daintith (ed.), Law as an Instrument of Economic Policy. Comparative and Critical Approaches (Berlin-New York: de Gruyter 1988).
 See Prosser, op. cit. (n. 26), p. 4.
 For a discussion of the constitutional function of EC law in matters of economic policy, on the example of privatization, seeT. Prosser / M. Moran, Conclusion: From National Uniqueness to Supra-national Constitution, in: M. Moran and T. Prosser (eds), Privatisation and Regulatory Change in Europe (Buckingham-Philadelphia: Open University Press 1994), p. 145.
 Cf. C. Graham / T. Prosser, Privatizing Public Enterprises. Constitutions, the State, and Regulation in Comparative Perspective (Oxford: Oxford University Press 1991), p. 3-4, 243-244.
 See Bauer, op. cit. (n. 2), p. 267; Graham / Prosser, op. cit. (n. 31), p. 4-5.
 See W. Devroe, Privatizations and Community Law: Neutrality versus Policy, CMLR 1997, p. 267; R. Schmidt, Privatisierung und Gemeinschaftsrecht, Die Verwaltung 1995, p. 281; W. Weiss, Europarecht und Privatisierung, AöR 2003, p. 91.
 Cf. M. Freedland’s remark that the Community “was constructed around the notion of the free and competitive market”, so that it “was concerned, in theory at least, not with creating a supranational public sector, but, on the contrary, with putting in place an integrated European private sector characterized by free and undistorted competition”. There was then “an apparently coherent rationale for a Community which defined its private sector in expansive and inclusive terms, and its public sector in narrow and constrained terms” (M. Freedland, Law, Public Services, and Citizenship. New Domains, New Regimes?, in: M. Freedland and S. Sciarra (eds), Public Services and Citizenship in European law. Public and Labour Law Perspectives (Oxford: Clarendon Press 1998), p. 1 ).
 See generally T. Daintith / M. Sah, Privatisation and the Economic Neutrality of the Constitution, Public Law 1993, p. 465; T. Prosser, Constitutional Limitations on Privatisation, in: The U.K. National Committee of Comparative Law, U.K. Law for the Millennium (London 1998), p. 445.
 See G. Kassimatis, Article 1, nr. 183 et seq., in: G. Kassimatis and K. Mavrias (eds), Ερμηνεία του Συντάγματος [Interpretation of the Greek Constitution] (Athens-Komotini: Sakkoulas 1999). For a judicial example, see decision 1934/1998 of the Greek Council of State, which declared unconstitutional the delegation of the police competence to impose fines for traffic offences relating to illegal parking in public streets.
 For an example, see decision 5024/1987 of the Greek Council of State, which ruled that compulsory social security may only be provided by the state or by public law entities.
 For the so-called ‘After Privatization’ issue, see Graham / Prosser, op. cit. (n. 31), p. 138 et seq., Bauer, op. cit. (n. 2), p. 277 et seq., Kämmerer, Privatisierung, op. cit. (n. 11), p. 423 et seq., H. Trute, The After Privatisation: Final Conclusions, EPLR/REDP (special issue) 1994, p. 211.
 The idea of privatization as shared responsibility, whereas the responsibility for the provision (Erfüllungsverantwortung) is delegated to the private sector, while the safeguarding responsibility (Gewährleistungsverantwortung) remains with the state, has been extensively discussed in German literature. See, among others, W. Hoffmann-Riem, Modernisierung von Recht und Justiz. Eine Herausforderung des Gewährleistungsstaates (Frankfurt a.M.: Suhrkamp 2001), p. 15 et seq.; G. F. Schuppert, Die öffentliche Verwaltung im Kooperationsspektrum staatlicher und privater Aufgabenerfüllung: Zum Denken in Verantwortungsstufen, Die Verwaltung 1998, p. 415; G. F. Schuppert, Vom produzierenden zum gewährleistenden Staat: Privatisierung als Veränderung staatlicher Handlungsformen, in: K. König / A. Benz (eds), Privatisierung und staatliche Regulierung (Baden-Baden: Nomos 1997), p. 539; E. Grande, Vom produzierenden zum regulierenden Staat: Möglichkeiten und Grenzen von Regulierung bei Privatisierung, in: König / Benz (eds), op. cit., p. 576. Cf. the distinction between ‘primary’ and ‘secondary responsibility’ proposed by Freedland, op. cit. (n. 34), p. 7.
 The function of the procedural limitations can be exemplified in the case of the French Government’s privatization programme of 1986. When the President of the Republic refused to sign the ordonnances submitted to him, the Government was obliged to pass a loi through the parliamentary procedure. For a comprehensive discussion of this case see T. Prosser, Constitutions and Political Economy: The Privatisation of Public Enterprises in France and Great Britain, MLR 1990, p. 304.
 Recommendation (93)7 of the Council of Europe rightly stresses the significance of the democratic rights of citizens and of democratic control in relation to large privatization projects: see Council of Europe, op. cit. (n. 14), Explanatory memorandum, p. 14-15.
 This was the case notably in Germany, where the Grundgesetz was extensively (arts 87, 87d, 87e, 87f, 143a, and 143b) amended during the 1990s, in order for the utilities privatization programme to be implemented; see, among others, Kämmerer, Privatisierung, op. cit. (n. 11), p. 281 et seq. Similarly, in Portugal the privatization of nationalized enterprises required the amendment of the rather restrictive art. 83 par. 1 of the Portuguese Constitution; see G. da Fonseca / I. Domingos, Constitutional Limitations to Privatisation. The Constitution of the Portuguese Republic and the Constitutional Case-law, Documentação e Direito Comparado Nr. 73-74 (1998), p. 129.
 The term used by Kämmerer, Verfassungsstaat auf Diät?, JZ 1996, p. 1042 (1046). For a discussion of the implicit limitations on the constitution-revising power see, on the example of Greek constitutional law, Manitakis, op. cit (n. 25), p. 293 et seq., 319 et seq.
 The examples of art. 16 par. 5 of the Greek Constitution and arts. 87d – 87f of the German Grundgesetz have already been mentioned, supra.
 For some examples, see Daintith / Sah, op. cit (n. 35), p. 470 et seq.
 The term ‘services of general interest’ has been coined by EC law and is by now broadly used in European countries. See especially art. 16 of the EC Treaty; for a detailed account, see European Commission, Green Book on Services of General Interest, COM (2004) 374 fin., Brussels 12.5.2004. This common European concept is very closely related to, although not identical with, the concept of ‘public service’ that has been traditionally developed in many European countries (and originally, in France). As the nuances are not relevant for the purposes of this paper, both terms are understood here as synonymous. For a very comprehensive account of the matter, see T. Prosser, Public Service Law: Privatization’s Unexpected Offspring, Law & Contemporary Problems 2000, p. 63. See also the contributions in M. Freedland / S. Sciarra (eds), Public Services and Citizenship in European law. Public and Labour Law Perspectives (Oxford: Clarendon Press 1998).
 For an in-depth discussion of the related issues, see Graham / Prosser, op. cit. (n. 31).
 Both the French Conseil Constitutionnel in its famous privatisations decision of 1986 (No 86-207 DC, 25/26.6.1986) and the German Bundesverfassungsgericht already in its Volkswagen decision of 1961 (BVerfGE 12, 354) ruled that the government may not sell an asset at a price below its actual value and they may not choose the buyer arbitrarily.
 See generally Freedland / Sciarra, op. cit. (n. 46).
 For an excellent discussion of this issue, see T. Prosser, Theorising Utility Regulation, MLR 1999, p. 196; see also T. Prosser, Competition Law and Public Services: From Single Market to Citizenship Rights?, EPL 2005, p. 543.
 See, e.g., M. Taggart, Corporatisation, Privatisation and Public Law, Public Law Review 1991, p. 77.
 See C. Graham, Regulating Public Utilities: A Constitutional Approach (Oxford-Portland: Hart 2000), T. Prosser, Law and the Regulators (Oxford: Clarendon Press 1997), Prosser, op. cit. (n. 50).
 See, for instance, P. Vincent-Jones, The Regulation of Contractualisation in Quasi-markets for Public Services, Public Law 1999, p. 303. For a fascinating discussion of this issue in relation to higher education, see J. Kelsey, Privatizing the Universities, Journal of Law & Society 1998, p. 51.
 For a revealing discussion, on the example of pension schemes, see D. Kingsford Smith, Superannuating the Second Sex: Law, Privatisation and Retirement Income, MLR 2001, p. 519.
 L. Philipps, Taxing the Market Citizen: Fiscal Policy and Inequality in an Age of Privatization, Law & Contemporary Problems 2000, p. 111.
 Cf. Kämmerer, Privatisierung, op. cit. (n. 11), p. 28 et seq.
 This is the notorious problem of the ‘state core’ or of the ‘tasks necessarily performed by the state’ (notwendige Staatsaufgaben); see Weiss, op. cit. (n. 13), Gramm, op. cit. (n. 13).
 Cf. M. Burgi, Funktionale Privatisierung und Verwaltungshilfe. Staatsaufgabendogmatik – Phänomenologie – Verfassungsrecht (Tübingen: Mohr Siebeck 1999).