A Business Deal That Threatened To Break Up a Government

There are groundbreaking business deals. And then there are ones that threaten to break up governments.

Thus spake Danny Hakim in the New York Times a few months ago.

When Denmark gave the global financial giant Goldman Sachs the go-ahead on Thursday to buy a stake in its state utility, the move was not exactly followed by a celebratory signing ceremony.

So divided was the Socialist People’s Party that it withdrew its ministers from the country’s governing coalition. Some party members said the deal ceded too much power to Goldman. Annette Vilhelmsen, the party’s leader [pictured below], who supported the deal, stepped down from her leadership role since she could not reach agreement within her party.

The party’s withdrawal from the coalition left the government of Helle Thorning-Schmidt [she of the Cameron/Obama selfie at the Nelson Mandela funeral, pictured above], the prime minister, with a tenuous grip on power.

That so many Danes have been aghast at the idea of giving Goldman Sachs a prominent role in the country’s energy future reflects how far the damage to the investment bank’s reputation has spread since the financial crisis.

However much the financial world might envy Goldman’s trading prowess, many Danes see Goldman as an emblem of an industry that helped cause the crisis and then profited handsomely even as much of the Continent still struggles to recover.

… The deal was approved … by a parliamentary committee. The departure of the Socialists left the two remaining parties in a precarious position.

 … But Prime Minister Thorning-Schmidt, who is best known internationally for her recent “selfie” with President Obama at the funeral of Nelson Mandela, said she would form a new government. 

 … Under the terms of the deal, Goldman would invest about $1.45 billion for an 18 percent stake in Dong Energy, the state utility, which has become a green energy exemplar in its push for electricity from wind turbines. Though the deal buys far from a controlling share, the minority stake would come with special privileges.