PUBLIC CORPORATIONS IN EASTERN EUROPE
PUBLIC CORPORATIONS IN EASTERN EUROPE

Author(s): Dan Lupu
Subject(s): Economy, Law, Constitution, Jurisprudence, Law on Economics, EU-Legislation
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: public corporation; Eastern European countries; financial stability;
Summary/Abstract: The role of the state in the economy, especially after the transition to a market economy, has been reconfigured in Eastern European countries. The mass privatization of state- owned enterprises has not always led to the expected results. Many sectors considered important by the rulers (energy, transport, water, electricity) remained the property of the state. These state-owned companies, true giants in terms of the market, often do not behave according to the rules of the economy. Under these conditions, it is normal to ask ourselves whether state-owned enterprises contribute to economic growth or are real black holes for state finances. This article aims to analyse the contribution of public enterprises to the economy, for three Eastern European countries (Bulgaria, Hungary and Romania) compared to France. The results of the analysis show that the profitability and efficiency of state-owned companies in Eastern countries is much lower than in Western ones. Sometimes these state-owned companies become real cornerstones for the economies of those states, endangering the public finances and financial stability of those states. As policies to be implemented for the efficiency of these public companies, the actions should be focused on the following directions: corporate governance, professionalization of the boards, financial strictness.

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