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Deutsche Bahn privatization seen netting €4.5 billion

The partial privatization of Germany's rail operator Deutsche Bahn should bring in €4.5 billion - far less than estimated by the government - according to the Welt am Sonntag newspaper.

Published: 28 September 2008 10:36 CEST

Deutsche Bahn privatization seen netting €4.5 billion

Photo: DPA

The report on Sunday quotes confidential analyses by 14 banks involved in the operation. While lower than the government figure of between €5 and €8 billion ($7 and $12 billion), it is higher than the most pessimistic forecasts of barely more than €4 billion, given the current global financial crisis.

Deutsche Bahn announced the timetable Friday for its long-awaited stock market listing next month, one of the biggest in Europe in 2008, despite what it called a “tense” situation on financial markets.

The company will offer to investors a 24.9 percent stake in its main freight and passenger train activities unit, while retaining full control of Germany’s railway network and train stations.

In view of the current financial turmoil, with Frankfurt’s blue chip DAX 30 stock index down by more than a fifth since January 1, there had been speculation that the listing would be delayed until markets picked up.

The Financial Times Deutschland on Friday cited financial sources as saying that going ahead with the listing at such a turbulent time could slash Berlin’s hoped-for proceeds by at least 10 percent.

The move has also aroused protests from members of the Bundestag, the German parliament, with opposition Green Winfried Hermann telling Saturday’s Berliner Zeitung that “it’s the worst possible moment for a market launch.”

Hermann Scheer, whose Social Democrat party is in coalition with Chancellor Angela Merkel’s Christian Democrats, called for the operation to be postponed or cancelled if it was likely to make less than €6 billion.

But government spokesman Thomas Steg told a regular government news conference on Friday: “In our point of view there is currently no reason to deviate from the timetable.”

ANALYSIS: What's at stake in Germany's eastern state elections?

German politics’ “eastern September” is set to finally end Sunday – with more ruminations and reflections likely to come about the recent fortunes of the far-right AfD at the ballot box.

If current polls are anything to go by, the AfD could come in first in the eastern state encircling Berlin – which counts Potsdam as its capital.

After overtaking the governing Social Democrats (SPD) in a recent shock poll, the party is currently at around 28 percent, compared to the SPD on 25 percent. The centre-right Christian Democrats come in at 16 percent in the latest poll and the left-populist Sarah Wagenknecht Alliance (BSW) – named after its founder – charts in at 14 percent.

The remaining parties come in much lower – with the Greens, Left and liberal Free Democrats all facing possible ejection from the state parliament.

Another victory for the AfD – or even a strong showing should the SPD still manage a narrow surprise win – will certainly boost the far-right’s confidence, after it came in first in Thuringia and second in Saxony earlier this month, following state elections that saw all three of Germany’s federally governing parties take massive losses.

Thuringia and Saxony results will likely hang over Brandenburg on Sunday – with Germany’s governing parties, many everyday Germans, and foreigners all watching with some trepidation. Here’s what to watch out for following the Brandenburg result.

READ ALSO: ‘Political earthquake’ – What the far-right AfD state election win means for Germany

A newly confident AfD insists it must be part of government

The AfD has repeatedly argued that it must be considered as a possible coalition partner to join German governments – whether at the federal, state, or local level.

“There are no politics without the AfD,” its co-leader Tino Chrupalla said following the Thuringia results. However, all other parties have explicitly refused to work with the AfD to form a governing coalition – meaning that as high as its results this month have been, they fall well short of the absolute majority that would be required to govern alone.

READ ALSO: ‘We need change’: Germany’s far-right eyes power after state election win

However, its getting more difficult to form coalitions to keep the AfD out, with the centre-right CDU in Thuringia even open to governing with the leftwing populist BSW after mainstream parties like the Greens and FDP were thrown out of state parliament entirely.

University of Mainz political scientist Kai Arzheimer, who specialises in the German far-right, says whether the far-right ever get into a German government or not depends mostly on whether – and how – the CDU is willing to work with the AfD.

Thuringia election results on a screen

People watch the first exit polls results for Thuringia’s state elections come in at the State Parliament in Erfurt on September 1st, 2024. Photo by Joerg CARSTENSEN / AFP

“For the time being, it should be able to form coalitions against the AfD, even if they are rather awkward,” says Arzheimer, who adds that even the different regional chapters of the CDU may have different opinions about working with the AfD.

“Within the eastern state parties of both the CDU and the FDP, there seems to be some appetite for coming to an arrangement with the AfD. While a formal coalition would probably split either party, we have already seen some tentative moves towards an informal cooperation.”

Ultimately, the Brandmauer or “firewall” concept in German politics – in which all other parties refuse to work with the AfD – may end up coming under increasing stress on the back of eastern state election results, where governing with the far-right no longer becomes unthinkable.

READ ALSO: EXPLAINED: Could the far-right AfD ever take power in Germany?

What the mainstream parties take from eastern election results

It’s probably no coincidence that Germany’s ruling government decided to re-institute border controls at its land borders with other EU states shortly after the AfD topped the Thuringia state poll, according to Arzheimer, who says the elections are just the latest in a number of things at work when if comes to Germany’s migration debate.

“The border controls, the plans for the stricter enforcement of repatriation orders, and most of all the government’s harsher rhetoric are as much a reaction to Saxony and Thuringia as they are an attempt to control the fallout from the Solingen knife attack and a response to the whole ‘debate’ on immigration,” he says.

“Many experts seem to agree that they are neither practical nor that useful, and introducing them more or less overnight smacks of a degree of panic.”

READ ALSO: Should foreign residents in Germany be concerned about far-right AfD win?

Polls conducted following the election found that migration and internal security issues were big drivers of the AfD vote – despite these being issues for the national, rather than regional, government.

Of the AfD voters in Thuringia, more than 70 percent said either migration or crime and internal security played the largest role in influencing their vote. Slightly less than ten percent said social security. Despite the AfD’s pro-Russian views, only three percent of AfD voters in Thuringia said Germany’s support of Ukraine decisively influenced their votes.

Besides the mainstream parties like the SPD reacting with spur-of-the-moment migration policies, the Brandenburg result may end up putting pressure on Chancellor Olaf Scholz from within his own SPD.

Brandenburg SPD’s Dietmar Woidke may still be able to hold onto the premiership, but he has said he will resign if he doesn’t beat the AfD outright. Should he lose, calls may grow louder within the SPD for Scholz to resign himself – or at least declare that he won’t stand as a chancellor candidate again.

READ ALSO: How an explosive row over immigration has divided Germany

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