The purchase of 10% of Telefónica by the State Society of Industrial Participations (SEPI) was greeted with suspicion by both the political opposition and some financial companies. The return of the State as the first shareholder in the capital of the operator after its full privatization in 1997 is seen as an interventionist maneuver in the private sector. The government defends itself by claiming that this is a common practice in the large countries around us, whose states are present in the capital and even in the management of the country's strategic companies.
The Spanish state is the largest investor in Ibex 35 companies. If the purchase of 10% of Telefónica takes effect, one in five companies listed in the selection process will have a public shareholder presence, with the total value of these shares rising to 24,000 million euros, at market close last Friday. Through SEPI, the state has a 27.99% stake worth 700 million euros in the capital of Indra; Redeia, 20% (1,635 million); IAG, 2.52% (200 million); Enagas with 5% (220 million) and Telefónica itself with 10% (2,070 million). However, the two largest public holdings are Aena, in which it owns 51% through Enaire, valued at 12,560 million euros; and that of CaixaBank, in which the Fund for Orderly Banking Restructuring (FROB) holds 17.3%, worth 4,900 million, the result of the rescue of Bankia. Apart from Ibex, SEPI's biggest treasure is 4.12% of Airbus, worth 4,540 million, followed by Ebro Foods, of which it controls 10.36% (243 million).
In addition, SEPI has a wide portfolio of unlisted companies whose management it fully controls, such as Navantia, Enresa (20%), Tragsa, Hispasat (7%), Alestis (24%), Agencia Efe, Correos, Hunosa, Mercasa, Enusa, Ensa, Sepides, Mayasa, Saeca, Cetarsa, Epicom, Hipódromo de la Zarzuela and Cofivacasa.
The France of the “liberal” Macron
Emmanuel Macron, according to the caricature that some critics make of him, appears to be an ultra-liberal politician, a kind of Thatcher in the French style. In reality, he is the president who renationalized the electric giant EdF, who made the state the first shareholder in Air France and who put an end to decades of privatizations in France. The French president does not deviate from the Colbertist tradition, as his name is Jean-Baptiste Colbert, finance minister of Louis XIV and forerunner of the French-style doctrine of state capitalism. Although this wasn't his original idea. When he came to power in 2017, he harbored liberalizing whims. “The state – said his economy minister Bruno Le Maire at the beginning of the first term – has no vocation to manage competitive companies instead of shareholders who have the skills and knowledge to do better.”
Macron and Le Maire's plan was to get rid of three crown jewels: Paris Airports (AdP), gas company Engie and gambling and betting company Française des Jeux (FdJ). In the end, only FdJ was privatized. Meanwhile, what made the president reconsider privatizations was the pandemic in 2020. The state came to Air France's aid, increasing its stake to 28.6%. And as part of a new civil nuclear program and at a difficult time for the sector, it rose from 84% to 100% of the electricity company EdF. Since the mid-1980s, successive governments, both right and left, have moved toward privatization. The last wave of nationalization occurred after the socialist François Mitterrand came to power in 1981. The previous ones occurred in the post-war period and in the 1930s with the Popular Front.
In total, the French state now has a stake in 85 companies worth 153 billion euros. Among them are jewels of domestic capitalism, such as the telephone company Orange (the former France Télécom (23% of capital)) or the automobile group Renault (15.01%), of which it is the largest shareholder. The State Participation Agency (APE), under the supervision of the Ministry of Economy and Finance, “embodies the shareholder state, an investor with its own resources in companies that are considered strategic (…) in order to stabilize their capital or assist them in their To accompany development and transformation,” says his company website. In today's France it plays a role, as Le Monde pointed out in a recent article, “accompanying government policies in favor of sovereignty and the decarbonization of industry.” “These companies structure our economy” and our society and represent in some Cases the great public services that care about the French,” writes Le Maire in the latest APE report. The times have changed.
Portugal, back and forth on privatizations
The Portuguese State's entry into a strategic venture for the country, the most important in recent years, was the repurchase of the airline TAP. As soon as he came to power, Socialist Prime Minister António Costa halted part of the privatization approved in 2015 by his predecessor, the conservative Pedro Passos Coelho, who had handed the company over to David Neeleman, owner of Azul Airlines. At the end of 2021, the state acquired 100% of the company after providing 3.2 billion euros to save it from bankruptcy. The operation sparked both criticism for its economic impact and applause for preventing its collapse. The political crisis following the resignation of Prime Minister António Costa has slowed down the process of renewed privatization during 2024. This decision will now depend on the new government that emerges from the March elections.
António Costa's cabinet also made a tour with the company Efacec, which is dedicated to energy and mobility projects such as subway lines or charging infrastructure for electric vehicles. After nationalizing it in 2020, he sold his shares to the German investment fund Mutares a few months ago.
Portugal lost control of several strategic companies during the Euro crisis and the Troika intervention. During these years, the electricity network company (REN), Correos (CTT) and the company that manages the country's airports (ANA) were privatized and the state completely exited the energy company EdP. However, ownership of Caixa Geral de Depósitos remained, a state entity that is the first bank in the Portuguese financial system.
Aircraft from TAP.Rafael Marchante (Portal)
State Germany
Germany holds industrial interests in energy, telephone, banks, airports and a whole range of companies that it considers strategic. According to the federal government's current investment report, the federal government owns shares in 117 companies and special funds. In the telecommunications sector, the shareholding in Telefónica's counterpart, Deutsche Telekom, is striking, where it holds more than 30% of the capital, both directly and through the state investment bank KW. Public participation has increased recently. A year ago, the coalition government of the Social Democrats, Greens and Liberals acquired a 99 percent stake in the energy company Uniper in order to secure the country's energy supply. The company ran into difficulties after the Russian invasion of Ukraine. Germany is also a shareholder in Commerzbank, where it holds a 15% stake after saving the major Frankfurt bank from collapse during the 2008 and 2009 financial crisis. Commerzbank returned the aid, but the government retained its stake.
Due to the budget crisis triggered by a devastating ruling by the Constitutional Court last month, liberal Finance Minister Christian Lindner recently floated the possibility of selling some holdings and receiving billions of euros in return. Lindner had already brought up the idea during the negotiations on the coalition agreement, but his proposal came to nothing at the time. There doesn't seem to be much interest from his government partners either. For example, the Social Democrats would refuse to get rid of 20% of Deutsche Post, the equivalent of the postal service, because it is a large employer. The three parties agree to rule out a possible sale of the Telekom shares because telecommunications is of national interest.
Headquarters of Monte dei Paschi in Siena.Portal
The ambitious Italian plan
The right-wing extremist government of Giorgia Meloni has again spoken about privatizations in Italy. Meloni's ambitious plan is to raise 20 billion euros by 2026 to tackle the ever-growing national debt, a figure that economists consider quite difficult. The executive branch, which on the other hand is wary of getting rid of large state-owned companies, is examining formulas for carrying out divestments in non-strategic sectors, from the postal company (Poste) to the energy company Eni, the state railway company Ferrovie or public television Rai. One of the operations that seems certain is the sale of the Italian state's majority stake in the bank Monte dei Paschi di Siena, which it rescued in 2017 and which, according to the agreement with the European Union, it must withdraw from the public ban next year. . And the sale of 41% of the flagship airline ITA Airways, which emerged from the liquidation of the old Alitalia, to the German airline Lufthansa is also taken for granted.
Although the trend is to reduce government participation, at the same time the number of companies over which the government wants to exercise the so-called “golden power” to protect industries of national interest and condition sales to foreign companies is growing. In this sense, last summer the Italian government agreed to return the state, albeit in a minority, to Telecom Italia. The board will take a maximum of 20% of Netco, the network infrastructure business of Telecom Italia (TIM), worth €2.2 billion. The decision came after American investment fund KKR bought the Italian telecommunications giant's infrastructure.
With information from Ramón Muñoz, Marc Bassets, Tereixa Constela, Elena G. Sevillano and Lorena Pacho.
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