Territori 17: the black swan theory

The recent events that have shaken the banking sector may have a far-reaching impact on the economy and our lives. Can these crises be foreseen and avoided? In this episode of La Plaça, Xavi Viñolas, editor of 11Onze, analyses retrospective economic predictability through the black swan theory.

Is the current economic model reliable? One might think that we go from crisis to crisis in a cyclical concatenation of inevitable catastrophic events in the financial markets. But are these economic cataclysms unpredictable, and can the economic analysis be improved to predict the future?

In economics, the black swan theory is a metaphor that refers to highly improbable events that occur by surprise and have a large negative impact on economies. They are characterised by retrospective predictability, i.e. some factors explain why they occurred and how they could have been avoided.

Anticipating black swans

Any type of investment is exposed to possible black swans that negatively affect market performance. It is therefore essential to have a diversified and structured portfolio with different types of assets that can act as counterweights in case of a sudden change in the economic outlook triggered by such an event.

That said, and given that black swans are increasingly common, Viñolas suggests that “perhaps it is the economic model itself that should be questioned“, and continues, “banks have become accustomed to privatising profits and socialising losses. Taking the risk element out of risky investments”, therefore, they have little incentive to prevent these events from occurring, since others end up paying the consequences, i.e. us, the taxpayers.

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In addition to gold’s usefulness in the financial, ornamental and technological fields, it can also contribute to the sustainability of the planet. Research has found that a nanoparticle catalyst of this precious metal can convert waste materials, such as biomass and polyester, into useful organic silicon compounds. 

Plastic waste is a problem for humanity. That is why many resources are being invested in the search for ways to recycle them and give them a new useful life. Several lines of research aim to convert these waste materials into useful compounds and products in an efficient way.

One of them, involving scientists at Tokyo Metropolitan University, has found that gold nanoparticles supported on a zirconium oxide support can convert waste materials, such as biomass and polyester, into organosilane compounds, which are valuable chemicals with a wide range of applications. The results of their study were recently published in the prestigious Journal of the American Chemical Society.

The new protocol takes advantage of the combination of gold nanoparticles with a zirconium oxide support, whose characteristics allow it to react both as a base and as an acid. This makes it possible to recycle the waste under less demanding conditions and in a more environmentally friendly way than with the systems investigated so far.

New life for plastic waste

The research team has been working for some time on converting plastic and biomass into organosilanes, which are organic molecules with a silicon atom attached to carbon used in high-quality coatings and in the production of pharmaceuticals and agrochemicals. 

The problem until now was that the addition of the silicon atom involved the use of air- and moisture-sensitive reagents that require high temperatures and extremely acidic or basic conditions. As a result, the conversion process was not at all environmentally efficient.

A key step

The big finding is that the new gold nanoparticle catalyst causes ether and ester groups, both of which are abundant in plastics such as polyester and biomass compounds such as cellulose, to react with the disilane to form useful organosilanes. All that is needed is gentle heating in solution. 

The researchers have identified that the key to the effectiveness of this conversion lies in the combination of the gold nanoparticles and the amphoteric nature of the zirconium oxide support, i.e. its ability to act interchangeably as a base and an acid.

Double advantage

Not only does this system allow polyesters to be decomposed under much less demanding conditions than those used so far. More importantly, the reaction products are valuable compounds ready for use. 

The research team hopes that this new way of producing organosilanes will lead to a carbon-neutral future by allowing plastic waste to be recycled efficiently and preventing thousands of tonnes of plastic waste from burning in incineration plants.

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The enormous size of the Chinese market has facilitated the take-off of the Chinese banking sector. Two of its banks have been at the top of the ranking of the world’s most valuable banking brands for years and are leaders in revenue and net income. The United States and, above all, Europe have lagged behind.

For yet another year, four Chinese banks have once again topped the ranking of the world’s most valuable banking brands, according to the “Banking 500 2023” report. This study, carried out by the consultancy Brand Finance, measures the value of the brand and not that of the business itself. 

These are the Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agricultural Bank of China and Bank of China. They are followed by the US brands Bank of America, Wells Fargo, J.P. Morgan, Chase and City. China Merchants Bank completes the top 10.

The dominance of Chinese and US brands has been undeniable in recent years. Europe, which a decade ago had HSBC, Santander and BNP Paribas in the top 10, has now been without representatives in this select group for five years.

The Chinese ‘sorpasso’

Although the four main Chinese banking brands have seen their value fall slightly over the last year, the fact is that the advance of the Asian giant’s banks has been spectacular over the last decade. In 2013, four US brands (Wells Fargo, Chase, Bank of America and Citi) and one British brand (HSBC) topped Brand Finance’s list, while the top Chinese bank (ICBC) did not appear until seventh place. 

Since then, ICBC’s brand value has grown from less than $20 billion to almost $70 billion. Today, the financial institution founded in 1984 has several subsidiaries around the world and serves more than 500 million individuals and several million businesses. 

Interestingly, the Brand Finance report noted that Silicon Valley Bank was the fastest-growing banking brand in the world, with its value increasing by 148% over the previous year. The bank, which specialises in providing banking services to venture capital firms to support the startup ecosystem, was considered to be worth $2.8 billion before its collapse. 

Rise of the neobanks

In addition to the general recovery of the banking sector after the COVID-19 crisis, the report highlights the growth of neobanks or digital banks, whose representatives on the Brand Finance list have risen from a valuation of $795 million to almost $1.612 billion. This type of financial institution has achieved success in recent years thanks in large part to the integration of technology and sustainability in a sector as immobile as banking. 

The study notes that digital banking brands such as Tymebank and Discovery Bank in South Africa, Nubank in Brazil and Maya Bank in the Philippines are revolutionising the sector. It also highlights the emergence on the list of Revolut, whose brand value has increased by 57% and now stands at 194 million dollars. The neobank’s growth strategy has resulted in 25 million customers internationally.

The restrictions and confinements of recent years have pushed both old and new financial institutions to create banking services based on easy-to-use mobile applications, which has improved customer satisfaction and customer acquisition.

Different criteria, different rankings

Beyond brand value, the ranking of the world’s largest banks varies according to the parameters we take into account. 

Whether we look at revenue or net income, ICBC and China Construction Bank hold the top two positions. The former has a turnover of $143 billion and a profit of $55 billion, while the latter has a turnover of $126 billion and a profit of $48 billion. However, based on these criteria, the following places on the list would be occupied by four US institutions: the merged J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup.

US banks are even more important if we look at their market capitalisation figures. Two of them, J.P. Morgan Chase, with 376 billion dollars, and Bank of America, with 225 billion, lead the ranking. They are followed by the four big Chinese banks, with a stock market value ranging from 154 billion for the Agricultural Bank of China to 224 billion for ICBC. 

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Toni Mata, director de continguts, Oriol Tafanell, director financer, i Càrol Rafales, de l’equip de producte d’11Onze, et presenten l’Or Llavor. El darrer producte que 11Onze ha posat a disposició de la seva comunitat perquè generis guanys amb la compravenda del metall rei!

Com que per tenir collita, primer cal sembrar, des de Preciosos 11Onze t’oferim l’Or Llavor, un nou producte pensat per fer créixer els estalvis en moments d’incertesa. Com explica Oriol Tafanell, “davant les turbulències de la situació econòmica actual tothom s’ha espantat, les borses han baixat, però l’or segueix pujant de valor”.

Preciosos 11Onze fa més d’un any que col·labora amb un gestor especialitzat en la compravenda de metalls preciosos. La idea és ben senzilla, “consisteix a agrupar diverses persones interessades a participar en una compra col·lectiva d’or amb l’objectiu d’aconseguir una plusvàlua amb la compra i venda d’aquest or”, detalla Càrol Rafales. Durant 12 mesos el teu or s’anirà venent en els millors moments del mercat per aconseguir-ne guanys. I al final de l’any, veurem com ha anat la collita!

Consolidacions esglaonades

La inversió mínima és de 4.000 € i durant el període contractat hi haurà informes trimestrals per veure l’evolució de la inversió que has fet en aquest servei. L’objectiu de les compravendes és aconseguir consolidacions esglaonades del 2%. És a dir, “des que s’inicia el contracte, si el gestor aconsegueix una plusvàlua amb el metall adquirit, igual o superior al 2%, aquesta plusvàlua queda consolidada”, apunta Rafales.

Deixant clar que guanys passats no en garanteixen de futurs, durant els darrers anys s’ha confirmat el bon comportament de l’or en períodes d’inestabilitat. El producte en què es basa l’Or Llavor ha generat guanys molt per sobre dels que s’aconsegueixen amb fons d’inversió espanyols i ha contrarestat la inflació, solidificant a l’or, com el valor refugi per excel·lència.

Tota la informació sobre l’Or Llavor la trobaràs a Preciosos 11Onze.

Households reduce savings accumulated during the pandemic to sustain spending in the face of sharp price rises. The fall in the savings rate is reflected in the decline in household financial wealth.

While rising prices have been strangling families for months, the rise in central bank interest rates to try to curb inflation is pushing up mortgage prices, adding up to a perfect storm, forcing households to use the savings accumulated during the sanitary crisis to maintain the same level of consumption at much higher prices.

Data collected by the Bank of Spain and the National Statistics Institute (INE) suggest that households saved some 269 billion euros during the peak phases of the pandemic. Even so, the gradual reopening of the economy and the rising cost of living has caused a large part of these accumulated savings to evaporate.

The INE report shows that in the third quarter of 2022, the household savings rate stood at 5.7% of disposable income, the lowest figure in four years. It should be borne in mind that this rate is calculated by eliminating seasonal and calendar effects, due to the fact that savings tend to fall in the first and third quarters and rise in the other two. If we disregard these seasonal adjustments, the data show a negative savings rate of -3.2% compared with 6.4% in the same quarter of the previous year.

Less saving and less investment

Although the Bank of Spain has improved its GDP growth forecast by three-tenths of a percentage point to 1.6%, the forecast for private consumption falls by seven-tenths of a percentage point from 1.9% to 1.2%. On the one hand, the rise in the cost of living has ‘artificially’ increased consumption figures, but, on the other hand, the rise in interest rates and the reduction in the accumulated savings pool mean that the increase in household spending is expected to be weak. A slowdown in consumption could directly affect economic activity as it is a fundamental component of GDP.

Another consequence of the increase in spending and the reduction in savings capacity caused by inflation is reflected in a decrease in the household investment rate. The stock of household financial assets, whether in equity and investment fund (IF) holdings or a reduction in bank deposits, has been reduced by 53,431 million euros, or -2%, a fall not seen since the early 2020s.

In this context, the latest macroeconomic projections of the European Central Bank (ECB) indicate that although real household consumption is expected to recover gradually as the fall in real household income due to inflation and energy supply problems subside, the household saving rate will continue to fall this year to a level close to that recorded before the pandemic.

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The Finança Litigis product, presented by 11Onze Recommends, is now up and running and lets you make money by fighting the abuses committed by the big British banks. Farhaan Mir, CFO of 11Onze, explains why now is the best time to get involved.

In a year marked by record inflation, depressing economic growth forecasts and the possibility of a new banking crisis, investor confidence remains in negative territory. This is reflected in the quarterly Investor Confidence Index compiled by the international asset manager J.P. Morgan Asset Management, with negative sentiment (-0.99) across the board among private investors.

In this context, diversification of our savings into safe-haven assets such as precious metals or investments that help us fight inflation is essential if we want to protect our capital. Although bank deposits are beginning to improve their yields as a result of rising interest rates, they are still not enough to compensate for the loss of purchasing power caused by high inflation.

As 11Onze’s CFO Farhaan Mir explains, “inflation is high and, to reduce it, central banks have to cool the demand for money, which means that companies have to reduce their workforce and consumers have to spend less. In these uncertain times, central banks must be careful about raising interest rates to curb inflation. Inflation is bound to be high for the foreseeable future”.

One of the few viable and safe alternatives

With the aim of achieving a gain of more than 27% in relation to average inflation in Spain, Finança Litigis “secures the short-term purchasing power of our investors when there are no viable alternatives to maintain the value of money,” says Mir. In addition, this product has a social justice component, you will be helping those affected by bank abuses to recover their money.

Specifically, UK banks face claims of over €60 billion that have been set aside to cover compensation for malpractice, to date, with a claims success rate exceeding 90%. More importantly, with Finança Litigis, independent and accredited insurance covers the entire principal of unsuccessful cases. As Mir explains, “having an “excellent” credit rating from a major credit rating agency, such as AM Best or S&P, makes Finança Litigis fundamentally better and safer than having a bank deposit“.

That is why 11Onze recommends this product, considered a unique opportunity and with low risk, “especially if you take into account that you earn more than what a bank deposit would give you in interest and that your capital is 100% protected“, assures Mir.

Fund lawsuits against banks. Do justice and get returns on your savings above inflation thanks to the compensation the banks will have to pay. All the information about Finança Litigis can be found at 11Onze Recommends.

The expansion of the fintech sector and the increasing integration of financial services into mobile apps and e-commerce are revolutionising the way we interact with our money outside traditional banking. But what exactly is embedded finance and why is it becoming so important?

Embedded finance is a model whereby non-banking companies integrate banking services and products directly into their virtual channels through mobile applications or e-commerce platforms. The aim is to allow customers to access financial products and services without having to leave the platform or application they are using, carrying out transactions where the contracting or purchasing process is easy and fast.

This is possible thanks to the use of technologies such as APIs (Application Programming Interfaces), a set of definitions and protocols that enable communication between two software applications and facilitate interconnection between financial services platforms and other sectors through mobile phones in an immediate and intuitive way. This saves time and money when setting up a business, without the need to create an application and all its services from scratch.

A typical case of the use of this technology is online payment, which has become an indispensable tool for consumers. For example, a fintech offering payment services could use an API to connect to an online banking platform so that its customers can transfer money directly from their bank account.

Similarly, e-commerce companies offer payments integrated into their platforms, so that customers do not need to leave the website to make a transaction. This is not only convenient for customers but also offers merchants the possibility to customise their services and improve their efficiency.

The fintech revolution

This technology is especially useful for fintechs that do not have the resources to develop their own banking products or that want to offer more accessible and personalised financial services to their customers, providing an alternative to the traditional banking model. Previously, customers had to visit a bank branch or cash point to access financial services, but now they have access through the platforms and apps they already use, reducing the need for travel, paperwork and waiting.

In addition, embedded finance has also enabled the creation of new business models. For example, e-commerce platforms can offer financing to their customers for their purchases, eliminating the need to use a traditional financial institution. This can help companies improve customer loyalty and increase sales

Embedded finance can also help improve financial inclusion. Many people do not have a bank account or are unable to access financial services for various reasons, such as poverty or lack of access to the banking system. Through embedded finance, these people can access basic financial services from a simple mobile device.

In short, the symbiosis between banks, technology providers and distributors of financial products has created an ecosystem that is transforming the sector, broadening the range of services on offer, fostering competitiveness and improving the customer experience with greater accessibility, convenience and flexibility.

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

Machine learning is a branch of artificial intelligence on which applications such as ChatGPT are based. Ariadna Font, a leading international authority in machine learning and ethics, talks to us about the possible applications of these new technologies and the ethical challenges they pose.

The emergence of artificial intelligence through applications such as ChatGPT, developed by OpenAI, is changing our lives and revolutionising many jobs. The evolution of machine learning aims to develop algorithms and systems that can learn and make predictions from data or from interaction with users. “It allows computer systems to automatically improve their performance in a specific task through experience,” says Font.

This technology is being used in various fields such as health, security, commerce, robotics and industry to automate processes, perform financial operations, detect fraud and diagnose diseases. However, their use also raises a number of ethical challenges that need to be considered.

Unintended consequences

If algorithms are trained on data reflecting societal biases and inequalities, the results can be unfair to specific individuals or groups and lead to discrimination. This is of particular concern in contexts such as recruitment, law enforcement and lending, where prejudice can have a significant impact. As Font explains, “machine learning models can make important decisions that affect our lives, so it is very important to consider what effects these decisions have on us”.

On the other hand, machine learning can put people’s privacy and security at risk. For example, the data used to train the algorithms may contain personal and sensitive medical information, and if not properly protected, it can be stolen or misused.

To address these ethical challenges, it is important for designers and developers of this technology to adopt an ethical perspective and think about the implications for individuals and society at large. Adopting privacy protection practices, considering fairness and equality in data selection or ensuring transparency will be essential to ensure that the ethical and human side is not lost with the implementation of artificial intelligence.

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

Artificial intelligence facilitates the fulfilment of 79% of the sustainable development goals set globally in the 2030 Agenda. We analyse a Nature Communications’ study to find out why this figure has been reached and from which areas it will be achieved.

What is artificial intelligence (AI)?

Although there is no single way to describe it, an accurate way is the one described by Britannica, understanding AI as the ability of a digital computer or robot to perform tasks that require human intelligence. In other words, taking advantage of technological tools to optimise human tasks and, at the same time, achieve challenges that until now seemed impossible. Social and economic development cannot be understood without these AI mechanisms that, today, already mark our daily lives. Facial, fingerprint and voice recognition, weather forecasting, interactive communication with machines, automated knowledge extraction and logical reasoning are some of the achievements that will undoubtedly mark this century. The focus, and the challenge, is to create and use this technology to contribute to sustainable development on a global scale.

The three pillars of sustainable development

Society, economy and environment form the basis for understanding today’s world and are therefore the key points for developing strategic actions. The Objetivos de Desarrollo Sostenible (ODS), have been created from these three pillars. 17 goals and 169 targets shape the present and future challenges on a global scale to keep technological advances at bay and ensure that every step contributes positively to social progress.

The 169 goals address all areas such as poverty, quality education, access to food, health and water for the population, clean and affordable energy and the creation of sustainable cities. The Nature Communications’ study, based on more than 60 sources, finds that the right AI development can have a positive impact on 134 of these goals, 79%. The uses of AI are multiple and we find them represented in most everyday actions.

AI to reduce social inequalities

Technology is opening up to reach all pockets, also from an economic point of view. Today, using AI through our smartphones is part of our routine. Voice, touch and fingerprint recognition, device localisation, connectivity… AI tools are being incorporated at full speed to simplify the user experience and make technology accessible to everyone. The aim is to reduce the digital divide.

But AI goes further and seeks to create inclusion mechanisms for certain groups. One example is tools such as Google Lookout or Microsoft Seeing AI that facilitate the perception of the environment for blind people thanks to the identification of objects, people or text.

At home, applications such as the Localizador de la Fundació Arrels use technology as a way to care for groups at risk of social exclusion, in this case focused on supporting homeless people. Another example is the Refugee Aid App, which provides migrants with the location of NGOs, social and humanitarian aid centres where they can be assisted.

This is one of the key points of AI, favouring interconnection between users from all over the world and facilitating the creation of meeting spaces from which to collectively tackle egalitarian and inclusive social development. Technology provides the platform, but it is the citizens who have to take action.

AI for a circular economy

In terms of sustainable development, the concept of a circular economy is emerging, in which production is aligned with the life cycle of products and moves away from the traditional system based on buy, use and throw away. AI encourages this system based on the simplest everyday actions. Beyond connecting brands and consumers, digital platforms encourage the exchange of second-hand products and, from the digital environment, a trend has been created based on reusing products and promoting DIY.

The industry is also joining production based on the 7Rs, and it is doing so in many different ways. Machines are put at the service of the environment to carry out production based on recycled materials, from tyres to making roads to clothing. The technology is also reaching into means of transport, which are increasingly sustainable and encourage co-operation over private ownership.

In the area of wealth generation, AI is also key in the business sector in terms of efficiency and process optimisation, as well as in the recruitment process. From bringing companies and job seekers together to creating automated talent selection processes. Along the same lines, investment companies such as Circularity Capital connect, through applications, investment and sustainable projects. The business fabric is adapting to environmental needs with technology as its main ally.

AI in the environment: technology to understand the world

With the aim of environmental preservation, platforms have been created that use data analysis to identify species at risk of extinction, prevent desertification in at-risk areas or favour the maintenance of forests. For a more everyday use, there are applications that encourage the consumption of seasonal food, promote local commerce or encourage sustainable consumption of fish, without forgetting the weather forecast that is key in the maritime or outdoor sectors.

At the same time, from our mobile and thanks to AI, we can calculate air quality in real time, greenhouse gas emissions or the carbon footprint we generate on a daily basis. All facilities that demonstrate that leading a sustainable lifestyle is just a click away.

Technology allows us to understand and know what is happening all over the planet, and even on other planets. The applications created through AI extend to all areas and a global vision is positive: we are managing to create a type of technology that makes life easier for humans and, above all, that strives for sustainable development, thinking in terms of the community. The real challenge in this matter, which the study emphasises, is to ensure that the creation and maintenance of this technology does not have a negative impact on the planet. AI can favour sustainable development, but this will only be achieved if the process of achieving it is also environmentally friendly.

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

Come rain, snow or shine, the supply of water consumed by more than 80% of Catalans is still in the hands of totally or partially private companies. Despite efforts to recover the public management of this service, the multinationals in the sector are reluctant to lose a very lucrative business.

Through the public company ONAIGUA, the Osona county council took over the management of water supply in the county in April last year, serving 11,400 consumption points and more than 25,000 inhabitants. It became the first county council to take such a step.

We could say that this is a market anomaly, as water supply in Catalonia is mostly in private hands. A small number of private companies manage and profit from this precious commodity in our country thanks to concessions that are often questioned. And yet, in the world, public management supplies 90% of the population and the United Nations recognises water as a human right.

According to data from the Water is Life platform, more than 80% of Catalans obtain their water through a fully or partially privatised service, while those who receive it through a public company do not even represent 20% of the population. This imbalance is explained by the dominance of the private model in the municipalities with the largest population, which are the most profitable.

Pressure to municipalise a basic service

Faced with this reality, there is growing pressure to recover the public management of this service. The Association of Municipalities and Entities for Public Water (AMAP) already has 68 members and represents 47% of the population of Catalonia. It recently published a report with proposals for legislative reforms to change this situation.

Six municipalities, the Association of Microvillages of Catalonia and a newly public company joined this entity in 2022. Of the new municipalities, only Mieres (La Garrotxa), Collbató (Baix Llobregat) and Torroella de Montgrí (Baix Empordà) manage water directly. Castelló d’Empúries is in the process of municipalizing the service, while Manlleu and Sitges are still tied to concessions for more than a decade with Sorea and Agbar. As for the Association of Microvillages of Catalonia, it should be noted that 70% of municipalities with less than a thousand inhabitants already manage their water supply directly.

Almost a monopoly

Although the private companies that manage water in Catalonia go by different names depending on the municipality, most belong to the Agbar group, which is valued at around 3 billion euros.

This group fully controls the company Sorea and owns almost 80% of Companyia d’Aigües de Sabadell (CASSA), 68% of Aigües de Rigat (Igualada) and 49% of Empresa Municipal Aigües de Tarragona (Ematsa). In addition, it owns around 35% of Mina Pública de Terrassa and 31% of Girona SA.

Its profits come not only from the sale of water, which last year it intended to make 7.4% more expensive in Barcelona. They also come from subcontracting services to its subsidiaries. This means that in Barcelona, for example, the cost of water meters for the end user ends up more than tripling the original cost. We are talking about 17 million euros of additional profit per year.

Prosecution strategy

Faced with a business of this size, it is not surprising that Agbar would take to court any initiative aimed at recovering the public management of the water supply, as detailed by the ctxt portal. In Barcelona alone, this multinational and its related entities have filed around forty legal actions. 

Its strategy of bogging down these processes in court to delay or dilute them has even led it to file a lawsuit against a simple agreement between Barcelona City Council and the Metropolitan Area for the exchange of information between institutions.

One of the most notorious cases has to do with the consultation that Barcelona City Council wanted to promote in order to find out the opinion of the citizens on the possible public management of water. Various entities, including Agbar, lodged appeals. Finally, the High Court of Justice of Catalonia (TSJC) suspended the regulation on citizen participation in the part relating to consultations and prevented the initiative from going ahead.

The case that affects the largest number of municipalities is the one that Agbar brought against several councils in the Metropolitan Area of Barcelona. Initially, a ruling by the TSJC in 2016 annulled the concession to Aigües de Barcelona for the water supply in several municipalities in the metropolitan belt, with which the company ensured the service to almost three million inhabitants for 35 years and revenues of 3.5 billion euros. The court saw “grounds for annulment due to defects in the contracting process” when the joint venture in which Agbar participated was set up. However, the Supreme Court overturned this ruling in 2019, considering that the procedure used by the Administration to award the service without a public tender was endorsed by the Public Sector Contracts Act.

Shady practices

As denounced by Eloi Badia, councillor for Climate Emergency and Ecological Transition of Barcelona City Council, Agbar’s shady practices to obtain concessions have led it to be indicted in three macro legal cases (Pokémon, Punica and Petrum), in addition to being expelled in 2017 from water management in Girona after its links with the 3% scheme were demonstrated.

The reports of the latter case found that, for more than two decades, the people of Girona paid more than 1 million euros in overcharges for the water service. In addition, the Tax Agency warned that the company’s directors had charged personal expenses to the company and concluded that Girona SA had charged hundreds of thousands of euros for services not rendered. 

As we explained in the article “Public services, increasingly privatised”, the privatisation of essential services has been advancing relentlessly in Europe since the 1980s. And this is having an unquestionable price for the citizens as a whole. 11Onze agent Jordi Coll points out that this process has meant subjecting the provision of these services “to the logic of market criteria and, therefore, of private profit”.

If you want to discover how to drink the best water, save money and help the planet, go to 11Onze Essentials.