Why Lufthansa became good business for the state


Ahen the financial crisis escalated in September 2008 with the bankruptcy of Lehman Brothers, the word "systemic importance" was still largely unknown. Nowadays, systemic importance has almost become a catchphrase. This reflects extensive action by the state. The federal government believes that not only banks but also other private companies that play a (too) important role in the national economy have to be rescued. Since they are part of the critical infrastructure, the state also supported aviation and tourism companies during the corona pandemic Lufthansa and TUI ; now it provides equity to gas importers such as Uniper and VNG. The federal government has learned lessons from the mistakes it made when entering into ownership of banks during the financial crisis.

In addition to the emergency nationalization of the real estate financier Hypo Real Estate, the rescue of the Commerzbank in winter 2008/2009 the prime example of today's state rescues of companies. At that time, the federal government provided Commerzbank with 18.2 billion euros from its Soffin bank rescue fund created in 2008. The entire Commerzbank was not even worth four billion euros on the stock exchange at the time, but the federal government did not want to become the majority owner. Any impression that the state is influencing business policy should be avoided. The federal government is now sending representatives to the supervisory board, but as the largest shareholder, it shies away from chairing the supervisory body.

18.2 billion euros for Commerzbank

In the winter of 2008/2009, the state bought Commerzbank shares for only 1.8 billion euros, which then corresponded to a 25.1 percent stake. The majority of the state money, 16.4 billion euros, flowed as a silent contribution, for which Commerzbank should pay interest of 9 percent annually. This mixture of direct participation via shares and indirect participation via silent contributions was also practiced by the federal government in the Lufthansa rescue.

However, the finance agency, which has managed the bank rescue fund since 2018 and the economic stabilization fund set up during the corona pandemic since 2020, learned lessons from the bank rescues. In the winter of 2008/2009, for example, Soffin entered Commerzbank via a capital increase, and the entry price was based on the stock market price. In addition, the federal government later participated in further capital increases by Commerzbank on the stock exchange, acting like a normal investor. Its entry price is around EUR 26 per share. That is far from today's Commerzbank share price of around 8 euros. The invested 5.05 billion euros has become a state share package that is only worth 1.6 billion euros on the stock exchange. In other words, the state is a good 3.4 billion euros in loss and no longer has 25.1 but only 15.6 percent of Commerzbank shares.



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