Denmark’s government is in turmoil after a socialist party quit the ruling coalition over a deal with Goldman Sachs, Richard Milne of The Financial Times reports.
The deal involves Goldman purchasing a 19% stake in state-owned utility Dong Energy for $1.5 billion. Denmark’s shareholding would fall to about 60%.
Despite the walkout, the deal has been approved and the government is expected survive.
(For an analysis on the financials of the deal, check out this post from Guan Yang.)
Denmark’s Socialist People’s Party withdrew its six ministers from the 23-member Cabinet. Party leader Annette Vilhelmsen noted that she would continue to support the ruling coalition. Meanwhile, some center-left politicians accused the government of betrayal.
Milne notes that the minority government of Thorning-Schmidt has been fragile since it was formed in 2011, but the bid by the fifth-largest U.S. bank has caused the most serious threat to its survival.
“The Dong share sale is putting more nails in the government’s coffin,” said Christoffer Green-Pedersen, a political science professor at the University of Aarhus, told Bloomberg.
Bloomberg reports that 68% of Danes are against Goldman holding the stake and thousands of protesters gathered outside the parliament last night to voice their anger over the deal. An online petition gathered more than 185,000 signatures against the deal.