Privatization in Europe To Cost Thousands of Jobs

WHEN the heavily indebted, state-owned Air France proposed cutting 4,000 of its 42,000 jobs last year, employees erupted, airports closed, and the government finally backed down.

France and other European countries may well face more such turbulence over the coming years as privatization gears up and formerly state-owned companies confront stiffer competition, a new study warns. Published by a consortium of six economic research institutes from across Europe, the study says more than 800,000 jobs could be lost as companies like Air France slim down in the transition from public to private hands.

Noting the determined competition and privatization policies of the European Union, the report says companies will have fewer opportunities to put off job-shedding - as Air France did last year. As a result, the consortium expects privatization to emerge as a leading political hot potato - especially with Europe's unemployment rate already at 10 percent.

The report predicts that by 1998, French state-owned companies set for the auction block will shed as many as 290,000 jobs. In Italy, the number is estimated at 180,000; and Germany, 140,000. Telecommunications is expected to lead among sectors trimming jobs, followed by energy and - attention, Air France - transport.

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