12. Privatisation and Nationalisation Policies and the Financial Sector

The structure of the German banking system, involving private, public and cooperative banks, has not changed significantly in recent years, despite some pressure for liberalisation and privatisation. In other sectors of the economy, however, privatisation has had an impact. In quantitative terms, the post-unification wave of privatisations in East Germany was the most important. It was organised by the federal agency Treuhandanstalt, whose aims were to save as much as possible of East German industry. Whether planned or not, in practice, the Treuhandanstalt’s activity resulted largely in the takeover of East German enterprises by West German companies. Because of the Treuhandanstalt’s extensive role, that of financial institutions was quite limited. Another important field for privatisation concerned public utilities. This was in part motivated by a desire to either raise revenue or to sell off loss-making units, and in part a response to European Commission directives. Privatisation has affected former state monopolies such as the postal, telecommunications and, to some extent, transport sectors. The healthcare sector was never a state monopoly, but public hospitals have been increasingly privatised since the early 1990s and private hospitals are now a dominant form of healthcare provision. In the course of the crisis several privately-owned financial institutions were either partly (Commerzbank) or completely (Hypo Real Estate Holding AG) nationalised. On the other hand, the German Industriebank, IKB—up until the crisis in majority ownership of the government—was privatised after German government had taken over all of its debts.