THE whole of Deutsche Telekom could be privatised soon to enable Germany to qualify for the launch of the single currency, the German Foreign Minister, Mr Klaus Kinkel, has stated. The news came after Finance Minister, Mr Theo Waigel revealed last week that tax revenue this year was likely to fall short of forecasts by 18 billion deutschmarks (more than £7 billion).
Mr Kinkel said the state might bring forward the sale of part of Deutsche Telekom as part of a plan to ensure that the public deficit was restrained to 3 per cent of output as required by the Maastricht treaty for economic and monetary union.
Mr Kinkel said yesterday: "We could go further regarding Deutsche Telekom. I have nothing against total privatisation." The state still owns 74 per cent of the telecommunications group. Stock was first floated in November 1996.
On the basis of the current price, this outstanding holding is worth about DM80 billion.
Mr Waigel also said that the state might revalue gold held by the Bundesbank to reduce liabilities in the national accounts, but stressed that no gold would be sold.
Mr Kinkel also stressed that other countries had revalued their gold reserves a long time ago.
Meanwhile, a trio of German economic reports showing inflation creeping higher failed to depress markets. Analysts dismissed the gains as largely due to one off factors and stressed the Bundesbank had nothing to worry about.
Economists said underlying price pressures remain tame and inflation should be subdued for the rest of the year.
Two of the four states whose data is used to compute preliminary west German consumer prices said May inflation climbed from the same level a year earlier while another report showed that Germany's producer price index climbed in April to a 16 month high.
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