The privatization of Germany’s state-owned companies, which began enthusiastically in the early to mid-1990s, has stalled. The government is even scaling it back.
The latest evidence of this is news that German Finance Minister Wolfgang Schäuble has instructed his ministry to increase its holdings of shares in Deutsche Telekom, according to information seen by Handelsblatt.
The move goes against long-term plans to privatize state monopolies. And rather than saying that buying more shares in the telecoms company is in the public interest, civil servants have revealed themselves to be speculators.
“Overall, the government and KfW considered the conditions of purchase to be an attractive offer,” said a spokeswoman for KfW, the German state-owned development said. “We should neither reject a financially favorable offer nor accept an unfavorable offer.”
For four years, Deutsche Telekom has been offering to let its shareholders receive their dividends in the form of new shares. Now, instead of using dividend payouts to build new roads and repair bridges, Mr. Schäuble, a member of the conservative Christian Democratic Union (CDU) party, has decided to put back two-thirds of Berlin’s dividend into buying Deutsche Telekom shares.
This has increased the government’s stake from 14.3 to 14.5 percent. KfW converted half of its dividend into shares, although its holding has remained at 17.5 percent due to dilution. Mr. Schäuble has thus waived more than half of the dividend of €805 million ($894 million) in favor of receiving shares in the former telecoms monopoly.