Side effects

Germany\’s cabinet is expected to approve a far-reaching new law this week to stop "giant locust funds" from Russia, China and the Middle East from launching takeover raids on the country\’s prized industries.

All the discussion is about the soveriegn wealth funds but the laws would have the effect of crippling bids by US private equity houses too. And the phrase "locust funds" was indeed first used in Germany to refer to private equity.

Ho hum.

6 thoughts on “Side effects”

  1. Does no-one think there might be some good reasons not to allow the Russian government to own large parts of German industry?

  2. “Does no-one think there might be some good reasons not to allow the Russian government to own large parts of German industry?”

    No, because the Russians would rely on the German government to enforce its property rights. This gives leverage to the Germans, not the Russians (c.f. TNK:BP). If anything, it binds the Russians tighter into a global economic community.

  3. Does no-one think there might be some good reasons not to allow the Russian government to own large parts of German industry?

    Reasoning by analogy, Tony Makara would probably oppose it. But I doubt many intelligent people see a problem with it.

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