EADS stake decision could leave Berlin in bind

"We have to make a break from nationalisations, they were necessary during the crisis but only during the crisis," Michael Fuchs, economic spokesman for the ruling conservative CDU/CSU parties, told the Berliner Zeitung daily on Friday.

Fuchs said a desire to maintain the shareholder balance in EADS between French and German interests did not justify the government taking a direct participation.

He spoke to the newspaper following reports that Daimler, which owns 15 percent of the equity in EADS, the parent group of the plane maker Airbus, wants to sell half of its stake.

Such a move would upset the balance of French and German interests in EADS, because Daimler also controls 22.5 percent of the voting rights, the same level as that held by the French state and industrial group Lagardere.

Daimler chairman Dieter Zetsch has not confirmed the reports, but said last week that "the shareholder structure will have to be discussed in the future."

Speculation resurfaces regularly over plans by both Daimler and Lagardere to sell their EADS holdings and invest in core activities, and analysts say that is bound to happen at some point.

A sale by Daimler will happen fairly quickly, according to Metzler Bank analyst Juergen Pieper who sees the group that also owns Mercedes-Benz selling "half of its (EADS) shares now and the other half next year."

Daimler shareholders "do not understand why it has held on to this stake," he added.

Pieper said Daimler wanted to raise funds to invest in auto technology of the future, a pressing issue for the sector.

NordLB auto analyst Frank Schwope noted that Daimler has done "a lot of sorting" through its portfolio in recent years as it sold off US car maker Chrysler, Mitusubishi of Japan and part of its EADS stake already.

But Berlin feels pressured by Daimler to buy the stake it wants to sell now, the daily Sueddeutsche Zeitung said, and Chancellor Angela Merkel has called a meeting of ministers on Wednesday to discuss the subject.

"The situation is difficult" for the government, noted Christian Moelling, an expert in international security issues at the SWP Institute.

"In Germany, many feel the state is a poor business manager. In France and Spain it is different," he told AFP.

A 5.47 percent stake in EADS is owned by by the Spanish state holding company SEPI.

"But German taxpayers have paid a lot to create EADS and again to finance military orders, the government cannot let the company go."

Authorities in Berlin want to make sure that German manufacturing sites linked to Airbus and EADS' military and aerospace activities are maintained.

Moelling said Berlin might buy the stake that Daimler wants to unload via the public investment bank KfW, in effect a partial nationalisation.

Berlin lacks a plan B. An earlier scenario under which EADS suppliers might buy into the company has apparently been abandoned owing to a lack of financial resources.

That would also result in EADS being burdened "with a fragmented shareholder structure that would make decision making even more difficult," than it has been to date, Moelling said.

Copyright AFP (Agence France-Presse), 2011

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