Struggling for a policy

Author: | Published: 1 Dec 2007

Two years ago Germany's former labour minister likened foreign investment firms to a swarm of locusts, and fears of a Teutonic chill arose. In 2006, such fears almost disappeared when Blackstone Group took a 4.5% stake in the state-controlled Deutsche Telekom. Everybody speculated about which DAX company would be the first to surrender to a private equity bid. Now the tide appears to be turning again. The German Federal Government's attitude towards financial investors is certainly an interesting one.

On October 24, the German Federal Government approved the draft of the Law for the Limitation of Risks Associated with Financial Investors (Gesetz zur Begrenzung der mit Finanzinvestoren verbundenen Risiken). According to the legislative materials, the bill strives to make it "more difficult for those financial investor activities undesirable to the economy as a whole, while not negatively affecting finance and M&A transactions that increase economic efficiency". Only a few...