France reconsiders stake in semi-state giants

France reconsiders stake in semi-state giants
Is France ready to sell off some of its stakes in semi-state giants like rail network SNCF, Air France, and energy company EDF? Photos: Andy Mitchell/Karen Bryan
France may sell some of its stakes in several large semi-state bodies such as Air France and SNCF, in order to pave the way for future investment, French Prime Minister Jean-Marc Ayrault has announced.

French Prime Minister Jean-Marc Ayrault announced in an interview with TF1 television on Sunday that the government was considering reducing its investment in “a certain number of public companies in which the State plays a very significant role”.

The move could see the government cut some of its financial ties with giants such as EDF and Air France.    

Minister of Finance Pierre Moscovici sought to reassure the French public, however. “This is not the return of privatization,” he told French television iTele on Monday.

The proposed move could see a reduction in the government’s control over partially state-owned companies such as EDF, Air France and GDF-Suez – bodies in which it has a significant financial stake.  

During the interview with TF1, Ayrault denied that the proposed move was calculated to “fill in the holes in the budget” but rather to “fund investment” in future schemes, such as the installation of high-speed speed internet throughout the country.    

This is not the first time the government has hinted at “selling the family silver”. In April, France’s Minister for Industrial Renewal Arnaud Montebourg told the Wall Street Journal that the government was considering changing its investments, as part of its “budgetary reorganization” and the “modernization of public politics”.

However, the minister stressed that while France did not rule out this possibility, it had “no intention of losing control over the companies.”  

Currently, the government owns 100 of rail network SNCF, 84 percent of energy supplier EDF, 36 percent of electric utility company GDF-Suez, 15.8 percent of the airline Air France, and 15 percent of carmaker Renault, according to Europe 1 radio.

Other companies that currently benefit from private-public partnerships include France Telecom and industrial conglomerate Areva.  

According to Europe 1, the government could bring in as much as €50 billion from the sale of shares in such companies.

Sunday’s announcement came one month after Montebourg announced that France had sold a 3.12 percent portion of its shares in the aeronautic equipment manufacturer Safran.

The sale brought €448.5 million to the coffers of the state, which still retains 27.08 percent of the company.

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