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State participation – the German government is barely privatizing News

Sunday, August 13th, 2017 | Economy

The participation of the German state in Commerzbank and the date of its sale are always a source of speculation. In this context, the Federal Government's participation and privatization policies are also becoming increasingly important. According to federal budget law, share purchases by the state are subject to strict conditions. In principle, "private initiatives and ownership of companies" would have priority, it says.
Accordingly, they should be kept "only in the case of a continuation of the" important federal interest "and even only if the purpose pursued by the Confederation with the participation can not be fulfilled better and more economically by private persons". Measured in this respect, the Confederation has been passive in the last few years when it was a question of repudiating once-owned participations.
A list of the German finance ministry shows that there has been a standstill in this area since 2014. A single federal participation was sold during the reign of the Grand Coalition, which was at the PPP Deutschland Beteiligungsgesellschaft mbH. Lastly, it was lively in 2013. At that time, the federal participation in the Gästehaus Petersberg was sold, the Deutsche Post share was doing something and the third share in Duisburger Hafen was also sold.
Over 100 direct participations
The Confederation has a lot in its portfolio. "The federal government currently holds direct investments in more than 100 companies," the government announced in the "Beteiligungsbericht 2016", published just a few months ago. It is owned or co-owned by the Deutsche Telekom, Deutsche Post and Deutsche Bahn. The company also owns the airport Berlin Brandenburg GmbH with its breakdown airport project BER as well as the Bundesdruckerei, which prints passport documents for many countries.
As a matter of principle, the premise is that the federal participation is not primarily profit-oriented. Last year, more than half of the 61 direct participations received grants from the federal budget – together six and a half billion euros. Most of it went to Deutsche Bahn with more than four and a half billion euros.
Much of what the Confederation is doing as co-owners of farms has rather obvious reasons. "The Confederation can carry out its tasks through its own authorities as well as through publicly or legally organized companies". This is about activities in the cultural sector, for example, in infrastructure or public services. Otherwise strict requirements apply. One of them is that there must be an important interest of the federal government, which can not be achieved by other means.
Liberals want telecom and post-privatization
"An essential element of the Federal Government 's privatization policies is the regular review of the federal participations, which is also being pursued with a view to opening up freerooms for private entrepreneurship and for competition in order to further strengthen Germany as a business location" Federal Ministry of Finance. However, this did not have any major consequences. Perhaps this will change after the Bundestag election.
After all, at least in the election program of the Free Democratic Party (FDP), which according to the surveys can even make hopes of a government participation, the subject of privatization appears. "We Free Democrats want the Confederation to sell its direct and indirect shareholdings on Deutsche Telekom and Deutsche Post in full," it says. For the Union and the SPD, on the other hand, privatization with regard to the elections is hardly an issue.

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