The privatization of France Telecom is looming. A bill allowing the state to sell down its stake to a minority holding is expected to become law in February. And the cash-strapped government badly needs privatization receipts. The company’s shareholders face being swamped with a deluge of new stock this year or, worse, a more complicated strategy.
The French government has several incentives for privatizing France Telecom. France is running a huge budget deficit. And even if privatization receipts don’t count towards cutting deficits under EU accounting rules, they provide much-needed income.
Moreover, France Telecom looks to be finance minister Francis Mer’s most dependable source of income.
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