Competition from State-Owned Enterprises
The formal term for state-owned enterprises (SOEs) in Germany translates as “public funds,
institutions, or companies,” and refers to entities whose budget and administration are separate
from those of the government but in which the government has more than 50% of the capital
shares or voting rights.
Appropriations for SOEs are included in public budgets and SOEs can
take two forms, namely, so-called public and private law entities. Public law entities are
recognized as legal personalities whose goal, tasks and organization are established and defined
via specific acts of legislation, with the best-known example being the publicly-owned
promotional bank KfW (Kreditanstalt für Wiederaufbau).
The government can also resort to
ownership or participation in an entity governed by private law if the following conditions are
met: doing so fulfills an important state interest, there is no better or more economical
alternative, the financial responsibility of the federal government is limited, the government has
appropriate supervisory influence, yearly reports are published, and such control is approved by
the federal Finance Ministry and the ministry responsible for the subject matter.
EU Forecast
euf:ba18a:181/nws-01