Borrow adding to their debts and increasing their

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borrow, adding to their debts and increasing their deficits still further.The situation outlined above is not universal.In France, for example,some major nationalenterprises reported a profit in 1994: EDF (Electricity) (+FF 3 197 billion), GDF (Gaz) (+FF 2 628 billion),France Télécom (Telecommunications) (+FF 9 912 billion), the Post Office (+FF 3 589 billion), Renault(Car) (+FF 3 636 billion), Usinor-Sacilor (Steel) (+FF 1 006 billion).Others reported losses, due eitherto cyclical factors [Thomson (Electronics) (-FF 2 103) billion, Péchiney (Aluminium) (-FF 3 573 billion,GAN (Insurance) (-FF 3 142 billion)], or structural factors (Air France (-FF 1 261 billion), SNCF (railways)(-FF 8 442 billion) or, occasionally, to mismanagement:Crédit Lyonnais (Bank) (-FF 12 102 billion).These financial difficulties are to some extent symptomatic of unwieldy management structuresand lack of dynamism, which have contributed to the increasingly poor image of public enterprises in somecountries over recent decades.Criticism has been levelled mainly at the vagaries of political control:appointing directors for political reasons rather than on the strength of their professional credentials, forinstance, or the sometimes unrealistic or contradictory directives issued by government.Rigid structuresand employment regulations, which impede necessary changes, have also come in for criticism.294
On this basis, it does not take long for the whole principle of public management to be called intoquestion;in fact, this has already happened in some countries.The following section examines the Community approach to these problems and currentdevelopments in European Union Member states in the light of the foregoing.II - COMMUNITY APPROACH AND CURRENT DEVELOPMENTSThe public sector is now undergoing a radical transformation in the EU Member States.Thecurrent reforms are as much the result of the enlargement of the Community as of new trends in nationalpolicies.Initially, the common market had little effect on the workings of the public sector of the economy.Gradually, however, public enterprises came to be included within the scope of European competitionpolicy, a trend that became more pronounced towards the end of the 1980s in the run-up to the target datefor the establishment of the Single Market, 1 January 1993.Meanwhile, national economic policies had been turning increasingly to solutions that relied solelyon free market forces; the United Kingdom ventured furthest down this road, but many other countries alsointroduced privatisation and deregulation programmes.Nevertheless, the public sector is still with us. Everywhere it is striving to modernise and its role,at both national and community level, is the subject of a debate.Amongthecurrentdevelopments,privatisation,openingupmarketstocompetitionandmodernisation of public enterprises are the three main trends to emerge.

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Term
Fall
Professor
Dr Naveed
Tags
Budget Office

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