Dutch State buys shares in Air France-KLM, apparently surprising France

By Janene Pieters on February 27, 2019 - 08:53
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The Dutch State bought 12.68 percent shares in Air France-KLM, worth 680 million euros, Minister Wopke Hoekstra of Finance announced at a press conference on Tuesday evening. The French government did not know about this move in advance, according to French Minister of Economic Affairs Bruno Le Maire, NU.nl reports.

"I have taken note of the Dutch interests. It happened without prior notification to the board of directors and the French government", Le Maire said to French newspaper Les Echos. He also confirmed that the French government supports the strategy of the aviation company, and said that it is essential for Air France-KLM to be run without national public interference. 

Hoekstra and Prime Minister Mark Rutte stated that they had informed their French counterparts about their plans on Tuesday evening, but had not received any reaction from Paris before the press conference.

The French State has had an interest in Air France-KLM since to two airlines merged in 2013. Currently the French State owns 14 percent of the shares. Hoekstra wants to eventually expand the Dutch State's shares to the same percentage.

According to the Dutch Finance Minister, more and more important decisions are being made within the airline combination that the Dutch State is only informed about afterwards. KLM has fewer and fewer representatives in important positions, which means that there is less balance, Hoekstra said. 

For the purchase of the shares, the Dutch State borrowed money on the capital market. This means that the national debt rose, and also that no direct tax money was involved in the purchase. The purchase has no effect on the planned government expenditures or the budget balance. 

Over the past weeks there was again unrest in the airline combination, including about the reappointment of Pieter Elbers as CEO of KLM. Ben Smith, the CEO of Air France-KLM, did not want to reappoint Elbers, according to the newspaper. Elbers has now been reappointed. 

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