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After 16 years, the federal government wants to sell its shares in Commerzbank. The news sparks discussions. Should the state get involved as a shareholder? What should a rescue look like?
Even in Germany – a free and social market economy – the state is far more often found as a shareholder or entrepreneur than one would assume. The federal government alone holds well over 100 investments. They range from shares in Deutsche Telekom, for example, to shares in the Bayreuth Festival.
There are three reasons for the involvement and share ownership. Firstly, shares in former state-owned companies such as the post office, Telekom or Deutsche Bahn, which are only being privatized gradually or not at all. Secondly, shares in companies that are of political or strategic interest, such as arms companies such as Hensoldt. There are even plans to become more involved – also in other companies.
The saving state
And thirdly: shares in companies that are rescued from dire need. One of them is Commerzbank. During the financial crisis, the federal government bought into the bank when it was on the verge of collapse and still holds 16.5 percent. Now the loss-making exit, which many believe has come far too late. “It's about free competition. And that is restricted when the state gets involved,” says Marc Tüngler from the Association for the Protection of Securities Ownership. “That's why we view this very critically.”
With the state behind it, Commerzbank was able to obtain loans more easily. An advantage that was sharply criticized, especially in the Volksbanken and Raiffeisenbanken. The opinion on the financial markets is therefore quite clear. “Ultimately, tax money has no place in stock corporations,” says Ascan Iredi of Plutos Vermögensverwaltung. But here, too, there are exceptions to every rule. Companies are repeatedly calling for the state, such as the Holzmann construction company, which was first rescued at the end of the 1990s and then later went bankrupt because the restructuring plan negotiated with the federal government failed.
Lufthansa success model
For Chris-Oliver Schickentanz, head of investments at Capitell Vermögensverwaltung, it is clear: “The state is not the better entrepreneur, but there can always be situations where the state is the last one that can actually provide money.” Then it is important to weigh things up. As with Uniper two years ago. The gas trader would not have survived Russia's attack on Ukraine. The state nationalized it, threw out the shareholders and could now bring Uniper back to the stock exchange next year.
Another example is Lufthansa: During the Corona pandemic, no one was allowed to fly, and consequently no one wanted to lend Lufthansa money in this situation. The federal government stepped in to preserve air traffic under the German flag, and received praise from the investor protection agency for this. “There was a crystal-clear plan that the state would pull out again when business returned to normal,” explains Marc Tüngler. This is what the normal case should look like. “A clear scenario that you get in and then you get out again.”
No bonuses for state entry
Sometimes the companies themselves have a great interest in getting rid of the state. In such cases, salaries are capped and bonuses are cut. For example, for years the Commerzbank board members had to make do with an annual salary of no more than 500,000 euros, while their competitors were already earning millions again.
A clear strategy is also worthwhile for the federal government. In the case of Lufthansa, the state even earned 800 million euros from its rescue operation, while in the case of Commerzbank it will probably pay significantly more. In the end, however, the taxpayer bears the risk.
