German government mulls changes to privatisation plan
By Matthias Sobolewski
BERLIN (Reuters) - The German government is mulling changes to a report laying out its plans to reduce stakes in several state-owned companies after a leak of the proposals sparked a backlash from some members of the ruling coalition.
Chancellor Angela Merkel's cabinet had been expected to approve on Wednesday a finance ministry document proposing the privatisation of stakes in firms such as Deutsche Telekom , Deutsche Post and Deutsche Bahn .
But after Reuters reported its contents on Tuesday, the cabinet delayed approval and a spokesman for Finance Minister Wolfgang Schaeuble said changes to the text needed to be made.
"What I can say overall is that there are no concrete plans for privatisation at Deutsche Telekom, Deutsche Bahn or Deutsche Post," a government spokeswoman said after the cabinet meeting.
The finance ministry document seen by Reuters sketched out plans to reduce government holdings in a range of companies, the most politically sensitive being rail operator Deutsche Bahn.
The German government had wanted to sell a minority stake in Deutsche Bahn during Merkel's first term, but cancelled the plan when the global financial crisis hit in 2008. Any sale now would depend on market conditions, the document seen by Reuters said.
Merkel's "grand coalition" government has promised to balance the federal budget next year for the first time since 1969 and a sale of shareholdings could help it do that at a time of slowing growth and reduced tax revenues.
The move could also free up cash for public investments. Merkel is under pressure from her European partners and German industry to spend more to stimulate the economy and shore up the country's crumbling infrastructure.
The government holds a 31.7 percent stake in Deutsche Telekom, which includes a 14.3 percent direct stake and a 17.4 percent indirect holding via state bank KfW. It also holds a 21 percent stake in Deutsche Post via KfW.
Together, the stakes could fetch roughly 24 billion euros (18.90 billion pounds), although the government could choose to sell a portion rather than all of its shares in the firms.
(Reporting by Matthias Sobolewski and Michael Nienaber; Editing by Stephen Brown and Catherine Evans)
