Sat Oct 11th, 2008 at 11:00:24 AM EST
On Thursday, the partial privatization scheme for Deutsche Bahn by the German government was postponed and, according to German commentators, it is unlikely ever to get back on track. The privatization scheme was disrupted by the worldwide financial crisis.
Deutsche Welle reports the German Government Postpones Deutsche Bahn Share Listing.
The German government has announced that it will postpone an initial listing of shares in the national railway Deutsche Bahn "for at least several weeks," a source close to the matter said on Thursday...
Turbulence on equity markets caused by the international financial crisis prompted the delay of the sale of a 24.9 percent stake, in what is set to be the last major privatisation in Europe's biggest economy.
Promoted by -- you never guess it -- DoDo
Spiegel Online has a round up of German newpaper reports about 'A Deathblow to Privatization'
for Deutsche Bahn.
Among the objects of second-guessing are plans to privatize Deutsche Bahn, Germany's national railway company. The initial public offering process had been scheduled to begin on Monday and the company, expecting to take in upwards of 4 billion, had already been courting international investors for months.
Thursday, government officials announced that the privatization would be delayed until further notice. "We are not going to put the assets on the capital markets at the wrong time," Finance Minister Peer Steinbrück said.
Politicians insist that they reckon only with a delay, not a cancellation of Deutsche Bahn's privatization. As Angela Merkel told reporters Thursday, "I assume that there will eventually be a business environment in which the privatization can take place."
Despite assurances from Germany's ruling "Grand Coalition" between Christian Democrats and Social Democrats, German newspaper commentators are skeptical.
My personal favorite comment came from the business daily Handelsblatt that wrote:
The fact is, the already botched, partial privatization of the Deutsche Bahn received on Thursday ... it's death blow. And that's a good thing.
The Wall Street Journal reports on the IPO delay
Getting the IPO back on track could prove a challenge. German politicians have long been divided about privatizing Europe's largest railway network, and efforts by free-market advocates have been stymied for years...
Observers warn the latest delay could allow lawmakers to reconsider their positions, especially as Germany heads into what are expected to be heavily contested national elections next year. DSW, a German shareholder-rights association, said Thursday that the IPO "will be more difficult politically" in a campaign year.
I wonder why that is?
Maybe this international financial meltdown, where financial institutions are being nationalized, shows how capitalism has failed? Maybe because taking something owned by the public and putting it into to private hands isn't such a winning idea after all?