Denmark recently gave global financial giant Goldman Sachs permission to buy a stake in its state utility service. The move was not met with celebration. The Socialist People’s Party withdrew its ministers from the country’s governing coalition after the deal was announced. Party leader Annette Vilhelmsen, who supported the deal, stepped down from her position of leadership after she could not reach agreement within her party.
Some party members said the deal ceded too much power to Goldman. Under the deal, Goldman would invest about $1.45 billion for an 18 percent stake in Dong Energy, the state utility. While far from a controlling share, the minority stake would come with special privileges, like a seat on the utility’s board and veto power over changes to the utility’s strategy or its executives.
Many Danes have been solidly against the idea of giving Goldman Sachs a prominent role in the country’s energy future. The investment bank’s reputation has been severely damaged since the financial crisis. Many Danes see Goldman as the poster child of an industry that helped cause the crisis and then profited handsomely from it.
Prime Minister Helle Thorning-Schmidt said she would form a new government after the ministers quit. The departure of the Socialists left the two remaining parties in a precarious position. The Prime Minister’s Social Democrats and the Social Liberal party hold about a third of the seats in the Parliament. A parliamentary committee approved the deal.
Benny Engelbrecht, a Social Democratic lawmaker, said in an interview, “It is quite an odd day in the Danish Parliament, considering one of the three parties that was in the government has left.” He disclosed that the departure of the Socialist People’s Party “was over a number of things, but inspired by this.” He continued, “In Danish, we have an expression, ‘The drop that makes the glass spill over,’ and this was what made the glass spill over.”
