Part 1
Why the state is an owner

2 Historical background

The companies with a state ownership interest can roughly be divided into three groups based on how the state came to own them: Business activities initiated by the state, existing businesses that were taken over by the state, and the production of goods and services by state-owned undertakings.

Business activities initiated by the state

The state has initiated business activities partly motivated by industrial development, but also out of consideration for civil protection and emergency preparedness or ownership of natural resources.

In the post-war years, many European states established business activities. The international and domestic capital market was subject to stringent regulation, and access to private capital was limited. In Norway, the state contributed capital to achieve industrial development that was desirable for political reasons. The state’s role between the 1940s and the 1960s in companies such as Årdal and Sunndal Verk, Norsk Jernverk, Norsk Koksverk and SAS must be seen in light of this practice. When oil and gas production started on the Norwegian continental shelf in the 1970s, it was a clear political ambition to build a Norwegian oil industry. The Norwegian State Oil Company (later Statoil and Equinor) was established in 1972. The then Ministry of Industry emphasised in the proposition1 that this would both provide better opportunities for maintaining ownership of the oil resources and that it could ‘play a key role in realising the state’s policy in the establishment of an integrated Norwegian oil community’.

Another rationale for state ownership has been civil protection and emergency preparedness. Defence materiel was manufactured by the state-owned undertakings Kongsberg Våpenfabrikk, Horten Verft and Raufoss Ammunisjonsfabrikker. These undertakings were established in the 19^th century and were organised under the Norwegian Armed Forces before they were hived off into separate companies in 1947. The companies were eventually merged into other industrial production. The state has continued its ownership of the munitions business through Nammo, and of the production of military materiel through Kongsberg Gruppen. Horten Verft went into compulsory liquidation in 1987.

The state has had various policy instruments at its disposal for channelling capital into business and industry. State loan schemes such as Noregs Småbruk- og Bustadbank (the Norwegian smallholdings and housing bank), Fiskarbanken (the national fisheries bank) and Industribanken (the industry bank) were established already before World War II. More were established in the post-war years, and in 1992, several of the loan schemes were merged into the Norwegian Industrial and Regional Development Fund. In 2003, the fund was merged with other business-oriented institutions to create Innovasjon Norge, which the state owns together with the county authorities. The credit markets were gradually liberalised in the 1980s, but in several areas, the state has seen a need for supporting access to capital for newly established businesses or specific industries. This was part of the rationale behind the establishment of Argentum Fondsinvesteringer, Investinor and Nysnø Klimainvesteringer in the 2000s.

Existing businesses that were taken over by the state

The state took over a large ownership interest in Norsk Hydro after World War II.

During the banking crisis in the 1990s, the state took over the shares in a number of Norwegian banks. Due to great losses, the share capital in several banks was written down to zero, and the state infused fresh capital to enable the banks to continue to operate. The state thereby gained ownership of large parts of the Norwegian banking system. The banks were later privatised, but the state has maintained an ownership interest in DNB.

Production of goods and services by state-owned undertakings

Goods and services have been produced by state-owned undertakings, which have later been hived off into separate companies.

Based on the recommendation of the Hermansen Committee,2 several government agencies were given greater operational autonomy in the 1990s and 2000s. A number of government corporations were also converted into companies. This often coincided with the introduction of regulatory reforms that facilitated the establishment of new markets. Examples include the conversion of Statskraftverkene into Statkraft and Statnett and Televerket into Telenor in the 1990s. Also later, the state has converted state-owned undertakings into companies, such as Entra in 2000 and Mesta in 2003.

Since the 2000s, several comprehensive reforms have been introduced that have led to the establishment of companies for which the state has set public policy goals. One example is the regional health authorities and health trusts, which were established when the state took over the specialist health service from the county authorities and delegated it to companies with greater operational autonomy. A number of companies have also been established in the transport and communications sector, for example when the government agency the Civil Aviation Authority was converted into Avinor, when Bane NOR took over the majority of the activities of the Norwegian National Rail Administration, and when the newly established Nye Veier took over some of the Norwegian Public Roads Administration’s tasks. The railway reform led to the establishment of several companies under direct state ownership in 2017, when Entur, Mantena and Norske tog were hived off from the then NSB group (now Vygruppen). Mantena and Vygruppen run commercial operations in competition with others, while Entur and Norske tog perform public policy functions.

Development in the scope and exercise of state ownership

Several historians point to the current system of substantial state ownership as a result of pragmatic choices made in a number of individual cases rather than long-term planning.3 In the post-war years and into the 1970s and 1980s, considerations such as national production, employment and regional development were often prioritised over companies’ efficient operation and profitability. In addition, the state infused capital to save companies from crisis and covered substantial financial losses. Necessary rationalisation and restructuring was postponed or dropped. This resulted in a weak commercial orientation on the part of the board and management and reduced value creation for both the companies and the state.³ Internationally, many countries reduced the scope of state ownership in the 1980s and 1990s. This did not happen on the same scale in Norway. There are several reasons for this, one of them being that Norway did not have the same need as many other countries to reduce its national debt.

However, several steps were taken to professionalise the Norwegian state’s exercise of ownership from the late 1990s, based on some costly lessons learnt. In 2002, the Bondevik II Government submitted the first white paper on ownership policy to the Storting, which set out an overall policy for the state’s ownership based on generally accepted corporate governance principles.4 The central principles underlying the state’s exercise of ownership, including that companies that primarily operate in competition with others shall be run based on making a profit and that the state’s role as owner shall be distinguished from its other roles, have remained in force through changing governments. Managing companies that primarily operate in competition with others based on the goal of the highest possible return over time helps to ensure efficient utilisation of each company’s resources and that they remain profitable, competitive and create value over time. This is a precondition for responsible management of the Norwegian people’s assets.

In recent years, the state has regularly considered whether it should continue to own companies. In the 2000s, several changes were made to the state’s ownership.5 The state has reduced its ownership interest in some companies, for example through the listing of Telenor, Equinor and Entra. In several other companies, the state has sold all its shares, for example in Arcus, BaneTele, Cermaq and SAS. In addition, a reorganisation of the state’s use of policy instruments has led to adjustments in the rationale for ownership and the state’s goal as an owner in some of the companies.

3 Rationale for state ownership

The rationale for state ownership in companies today can be divided into two groups. The first group includes rationale for owning companies that primarily operate in competition with others, see. section 3.1. The second group comprises rationale to organise state tasks through a company, see section 3.2. The companies in the latter group do not primarily operate in competition with others.

3.1 Companies that primarily operate in competition with others

The underlying rationale for state ownership in these companies is usually that the state believes that some form of market failure exists, so that the market solution does not result in the highest level of welfare.

In a modern market economy, there is market failure in a number of areas. One of the state’s key tasks is to limit the effects of market failure. In some cases, this can be achieved by the state eliminating the market mechanisms in whole or in part, and instead using state-owned undertakings to produce goods and services for the population. In other cases, a failure in the market is resolved through direct regulation, which allows the market mechanisms to operate within certain limits, for example instructing industrial companies to avoid emissions to prevent pollution of the environment. This can be combined with use of the tax system, for example by introducing emission pricing.

In some cases, however, it can be challenging to establish a good regulatory regime. An alternative solution in such cases can be for the state to own, in whole or in part, companies that operate in competition with others.

Section 6.2 describes the rationale for state ownership for each company that primarily operates in competition with others.

Spillover effects from head office functions

Economic activity can lead to different externalities, or external effects, that are not traded in a market. A classic example of an externality is pollution from a factory, which inconveniences others without the enterprise having to compensate anyone. The state often seeks to correct for such externalities through direct regulation or taxes. There are also positive externalities.

A special form of externalities are the spillover effects of a company’s head office functions. Research into the effect of major companies’ head office location is limited. Reduction of trade barriers and better possibilities of contact across national borders mean that production facilities are increasingly located where it is most financially favourable for the business, regardless of where the head office is located. However, it seems reasonable to assume that there are some direct effects relating to value creation in the head office and demand for specialised services.

Several decision-making, specialist and staff entities with a high level of expertise are naturally based at the head office. This can, for example, apply to management and control of business areas and subsidiaries, as well as tasks relating to strategy, transactions, finance, management development, risk management, control and compliance, legal issues and investor relations. This leads to competence-building in that both existing and potential specialists and managers can be given a broader range of tasks and arenas. This helps to ensure that there are employees with expertise that others can benefit from.

Large groups of enterprises often contribute to value creation through a network of subcontractors. Large companies are also often involved in several national industry and technology clusters and can thus stimulate cooperation and transfer of expertise between and in the clusters.

International players, such as investment banks, competitors and partners, will usually contact the company’s decision-makers, who are often based at the head office. This allows head-office functions to become learning arenas for international know-how in industries and the international capital market, which can in turn be spread to other business and industry.

It is more uncertain whether the head office’s location can have a bearing on decisions of material importance to the company’s development. However, decision-makers are often more knowledgeable about investment opportunities and framework conditions in their home country, which can influence their investment decisions. In addition, companies with operations in several countries may wish to prioritise their home markets in periods of unrest and weak international growth, which we have seen signs of in, for example, the financial sector. Such decisions can potentially have substantial spillover effects.

The potential spillover effects from the head office will probably vary considerably depending on both the company and the industry structure in the area. In general, it is reasonable to assume that the company must be of a certain size in order for the head office to generate significant spillover effects. Companies that compete in international markets probably generate greater spillover effects, since they generally have higher productivity than companies that do not. In addition, the sum of spillover effects from several major companies’ head offices can be greater than for each company seen in insolation.

There is often a historical basis for the head office’s location, and companies rarely move their head office. Changes in ownership and mergers are important driving forces when head offices are moved, however. Maintaining state ownership in some companies can therefore be expedient in order to ensure that their head office remains in Norway. This is one way of ensuring that important businesses in Norway are owned and operated by parties with a strong connection to Norway, rather than as branches of foreign companies. More general contributions to ensuring that Norwegian companies maintain their head office and business activities in Norway are made through other industry policy instruments. The most important policy instrument is good general framework conditions for business and industry.

The magnitude of spillover effects from the head office to individual companies is uncertain. Although positive spillover effects exist on average, it is a challenging task to ascertain whether they are substantial enough to justify state ownership in individual cases. If state ownership means that the company is not organised in the most rational way possible, this can reduce the company’s value.

For several of the companies with a state ownership interest, and especially for the companies seen as a whole, the spillover effects are assumed to be substantial, and the Government therefore chooses to maintain ownership of a number of companies in order to keep their head offices in Norway.

Civil protection and emergency preparedness

Historically, civil protection and emergency preparedness were part of the rationale for the establishment of a Norwegian defence industry under the auspices of the state. The Norwegian defence industry’s capacity in important technological areas of expertise is still crucial to providing the defence sector with the right materiel and expertise at the right time. This increases the capability to safeguard national security in areas where special circumstances require special expertise. If the state solely relied on purchasing defence materiel from foreign suppliers, this could lead to an undesirable dependence on other nations and their defence industry, as well as make it difficult for Norway to cover its needs in critical areas. In order to ensure national ownership of central parts of the Norwegian defence industry, the state will maintain its ownership interests of 50.001 and 50 per cent, respectively, in Kongsberg Gruppen and Nammo. Without state ownership, there is a risk of this defence industry capacity being moved abroad over time.

In special cases, the state may consider it necessary to prevent undesirable interests from gaining an influence over companies of importance to civil protection, which can be ensured, among other things, by maintaining a given ownership interest in certain companies. Kongsberg Gruppen and Nammo are examples of such companies.

However, regulation is and should be the primary policy instrument for addressing civil protection considerations, including through the Security Act, the Regulations relating to Preventive Safety and Emergency Preparedness in the Energy Supply, and the Act relating to Electronic Communication.

Market failure in parts of the capital market

The state has a number of capital policy instruments at its disposal that are intended to counteract market failure consisting of a shortage of available capital for presumably profitable projects. Such lack of capital can affect early-stage companies in particular. Policy instruments can be established in the form of, for example, funds managed by private investment companies. The state also owns investment companies, such as Investinor and Nysnø Klimainvesteringer.

Former natural monopolies

In the 19^th century, new infrastructure was established in the form of railway lines, the telegraph system and later also telephone lines and the power grid. This type of infrastructure and services were, and some of them still are, natural monopolies that are difficult to regulate to achieve socio-economically optimal production through market mechanism. Because this infrastructure builds networks that connect either hubs or end users, there is typically only room for one provider in each market. If two providers compete, customers will usually be interested in connecting to the network with most users. The biggest network therefore often ends up as a monopolist that can choose to raise prices due to the lack of competition. In several other countries, it was private enterprises that established these services, while in Norway they were developed by the state.

Today, it is more common to regulate these types of network services to open the market to competition. One company can be given responsibility for the infrastructure and be instructed to sell access on equal terms to other companies that provide services to the end users. This has, for example, resulted in ownership of the power grid being separated from power production. The system was most recently introduced in the railway sector, through the 2016 railway reform. Several of the government agencies that used to operate these natural monopolies have been converted into companies, at the same time as changes in the regulation have opened the market to competition. These developments have reduced the need for state ownership. In a transitional period, however, it may be necessary for the state to own companies that were previously monopolists until a more well-functioning market has been established. This applies to some of the companies in the railway sector, for example.

Natural resources and ground rent

Businesses can be granted access to a form of ground rent, for example access to natural resources such as oil or hydropower. Ground rent provides businesses with a greater return than if their labour and capital were employed in other production. If ground rent is appropriately taxed, it will not influence the choices of producers or consumers.

In cases where the collection of ground rent is desirable, different policy instruments can be used, especially auctions and taxes on ground rent. Large hydropower producers are also subject to rules on compulsory yield of power and must pay a licence fee. In some cases, state ownership has also been used as a way of safeguarding the right of disposal of and, to some extent, revenues from the country’s vast natural resources. Statkraft is one example of this type of arrangement.

It is open for debate whether state ownership is necessary to address the above-mentioned considerations, since a lot has changed since the exploitation of natural resources started. Natural resources are bound to the land. The state will therefore, regardless of ownership, have a certain degree of control over the resources and may in different ways regulate how they are managed, as well as secure a reasonable part of the return and ground rent generated from the resources through the tax system.

3.2 Organising state tasks in companies

There are different reasons why it may be necessary for measures and tasks to be performed under the auspices of the state. Section 6.3 provides a description of each company and the rationale for the measures or tasks the company is set to perform on behalf of the state. Normally, these companies do not primarily operate in competition with others, and the alternative to state ownership is often to organise the tasks in a government agency. The reasons why it may be expedient to organise these activities in a company are explained in more detail below. The differences between government agencies and companies are described in section 3.3.

One rationale for organising tasks in a company is a wish for greater operational, strategic and financial autonomy than can be achieved in a government agency. Several reforms have therefore led to the establishment of new companies, for example the regional health authorities and health trusts.

In other cases, the state’s tasks have been organised as a separate legal entity due to a special need for professional independence from political control. Several enterprises engaged in cultural and value management are organised as companies, including several dramatic art companies and the Norwegian Broadcasting Corporation (NRK). The company structure restricts the possibility of exercising political control, which can be desirable in order to emphasise independence in decisions of a professional, editorial or artistic nature. Such independence can also be achieved through other forms of organisation, and NRK was organised as a foundation for a period in the 1990s. Another alternative is to continue to let the activity be performed by a government agency, but to enshrine independence on certain matters in law, which is the solution used for the university and university college sector. The state also owns several companies engaged in research and development, including Simula Research Laboratory.

Professional independence can also be desirable for enterprises that manage grant or support schemes. Such schemes must be managed in accordance with the Regulations on Financial Management in Central Government, including that criteria must be defined for the awarding of grants. In some cases, a formally independent grants administrator is assigned responsibility for making decisions in order to avoid political consideration of applications. One way of doing this is to establish a company, which the state has done, for example, in the case of Enova.

The company structure is also used for activities with an exclusive right of sale to customers. The activity is organised as a company that is allowed to operate normally in the markets, without seeking the highest possible return. This applies to, for example, Vinmonopolet and Norsk Tipping, both of which have an exclusive right to sell products subject to restrictions based on public health considerations. The latter consideration is achieved in part through high taxes and marketing restrictions, but, in addition, the state owns the companies to prevent private profit from motivating increased sales.

It may also be expedient to organise tasks in a company if its activities entail an element of market-oriented activities, for example by selling products directly to customers. Such activities can also be performed in competition with others, and, in such case, the normal state aid provisions in the EEA Agreement will guide the companies’ financing, see section 8.4.

Furthermore, a wish to limit the state’s responsibility can be an additional consideration when the state organises an activity as an independent legal entity. By choosing the company form of organisation, the state is in principle only liable for the capital invested in the company.

3.3 Company organisation has a bearing on management and control

The performance of state tasks can be organised as part of the public administration, and then often as a government agency, or as an independent legal entity, meaning a form of company or foundation, see Figure 3.2. When the state choose the company form of organisation as a policy instrument, it entails a different set of framework conditions for the management than if the tasks are performed by a government agency.

A government agency makes decisions on behalf of the state, and based on the minister’s authority. In principle, the minister has direct constitutional and parliamentary responsibility for all decisions made by a government agency. An independent legal entity, on the other hand, has the competence to make decisions in its own name and at its own risk. The relationship between the state as owner and a company follows from the legislation governing the form of organisation in question. The different forms of organisation used for state ownership and the legal framework conditions that apply to each of them are described in section 8.2.6

Companies differ from government agencies in other ways as well. One difference is that companies’ revenues normally come from the sale of goods or services in a market, while most government agencies’ expenses are largely covered by allocations over the national budget. When a company receives revenues from the state, the relationship between the state and the company is either organised as a contractual relationship or in the form of an assignment that the state gives the company, and not as a relationship between a superior and a subordinate public body. Another difference is that a company must have its own capital base, equity and, if relevant, external financing (loans) to finance the company’s assets. Ordinary government agencies do not have equity.7 Furthermore, a company can normally become insolvent, which government agencies, as part of the state, cannot.

Greater distance between the enterprise and the ministry is a consequence of organising tasks in a company. The need for active political control of an enterprise indicates that a government agency should be the preferred form of organisation.

3.4 Possible challenges of the state owning companies

The state’s rationale for ownership differs from that of private owners. Although the state’s goal as an owner of companies that operate in competition with others is the highest possible return over time, the ownership is not motivated by interests of asset management or saving. To avoid possible challenges relating to this, the state has gradually professionalised its exercise of ownership. When state ownership is exercised in a professional and competent manner, the state can be a good long-term owner that creates value. At the same time, it is essential to keep in mind that state ownership entails certain challenges. The Government is concerned with addressing these challenges in the best possible way in its exercise of ownership, see Part III.

An analysis of listed companies during the period 1989–2007 found no indications of a ‘state discount’, measured as a negative correlation between profitability and a direct state ownership interest, during the latter part of the period.8 The analysis also shows that the companies in the state’s portfolio did not have a lower risk-adjusted return on equity during the period. The state discount observed during the first part of the period could be the result of challenges relating to state ownership. Professionalisation of the state’s exercise of ownership in the 21^st century may have contributed to the discount only being observed prior to this.

An account of possible challenges associated with state ownership is given below.

Multiple roles

The state has many different roles. A role conflict may arise when the state is both responsible for regulating a market, or is one of the largest buyers in a market, at the same time as it owns one of the companies participating in the market. The state can also be responsible for awarding licences and for making various individual decisions that decide what a company can and cannot do. This can give rise to role conflicts, where uncertainty may arise about whether other functions are performed with a view to achieving advantages for the state’s own companies. Ambiguity and suspicions of partiality can have major negative consequences even if the suspicion proves to be unfounded. For example, it may lead to companies choosing not to enter the market, resulting in less competition.

To avoid such role conflicts, the state distinguishes between its role as owner and other functions that govern the company’s activities. Since the late 1990s, management of the state’s ownership in companies that primarily operate in competition with others has gradually become more professional and largely concentrated in the central ownership unit in the Ministry of Trade, Industry and Fisheries. This has helped to reduce the risk and suspicion of role conflicts. A clear understanding of roles and a high level of awareness in the ministries about the state’s different roles are essential. In addition, the exercise of ownership must continue to be organised to avoid role conflicts as far as possible.

The principal–agent problem

Traditional literature on ownership discusses theories on the challenges associated with delegating responsibility from the owners to the board and management.9 This is based on what is known as the principal–agent problem. The problem arises when an agent, for example the board and management, manages assets and makes decisions on behalf of a principal (the owner), but the interests of the actors differ and the agent possesses relevant information that the principal does not have. This can be intensified in connection with state ownership as a result of the distance between the real owner (the people), the party exercising ownership and the company’s board and management. To overcome the principal–agent problem, the principal may attempt to give the agent the same incentives as the principal.

The principal–agent problem can be particularly challenging in companies for which the state has public policy goals, as the goal structure is often more complex than the goal of making a profit, and it is more demanding to assess goal attainment.

Prerequisites for developing companies and exercising value-creating ownership

Most private owners with large ownership interests are represented on the company’s board and play an active role as owner. The state, as a major owner, has significant influence over the election of board members and expresses clear expectations of the companies. However, based on its different roles and in order to avoid political interference with and responsibility for the company’s decisions, the state has opted not to be represented on the companies’ board.

An important thesis in specialist literature is that the state will have weaker incentives and possibilities than private owners for following up the company’s management to improve profitability and efficiency. Politicians and civil servants have no personal rights to the cash flow. Since the voters do not receive a direct return either, this mechanism does not provide strong incentives for following up the companies as actively as many private investors do.

Passive exercise of ownership can lead to companies becoming management-controlled and prioritise considerations other than the interests of the owners; see, for example, the principal–agent problem. For example, the management may wish to lead a large, high-profile company or to avoid personal consequences in connection with downsizing. Ultimately, passive ownership can lead to the company expanding in a way that is not in the owners’ interest, or that necessary cost cuts or structural measures are not implemented.

It can also be challenging for the state to build sufficient industrial expertise as a basis for its exercise of ownership, among other things because the state owns companies in a number of different industries.

Other political considerations that do not promote the state’s goals as an owner

The state has many different goals and tasks through the different roles it plays, and often has to strike a balance between conflicting interests when implementing policies. Historically, this has been a challenge to the exercise of good ownership. Experience from both Norway and other countries shows that it weakens goal attainment if other interest than the state’s goals as an owner are allowed to interfere with the exercise of ownership.

Active exercise of ownership based on political considerations that do not promote the state’s goal as an owner is an equally big or even bigger problem than passive ownership. Governance based on such political considerations can entail unclear incentives for the company, which can have an unfortunate effect on the company’s priorities. This can lead to misallocation of resources in the company, inefficient operation and weakened competition. A company needs long-term planning.

Governance based on political considerations as described above will be in conflict with the ownership policy as described in this and previous white papers on ownership policy.

Company organisation and democratic legitimacy

The company form of organisation provides fewer opportunities for intervening in individual decisions than if the activity was carried out by a government agency. Although it is possible to instruct the company’s board through decisions at the general meeting, the state should be cautious about this, see section 8.3.1.

One consequence of the company form of organisation is that the companies that perform tasks on behalf of the state must sometimes be capable of striking a balance between conflicting interests themselves. This can be challenging, especially if the decision concerns controversial issues or issues that are subject to political debate. The legitimacy of such decisions often depends on whether they can be traced back to a democratically elected body. A precise framework and public policy goals for the companies are therefore decisive.

Access to external financing

A company’s assets are financed through equity infused by the owners or earned by the company, alternatively also by external financing in the form or loans or credit. It is up to the company to decide the most suitable capital structure for achieving its goals.

When a company raises capital from the markets, the price of capital will reflect the investors’ assessment of the company’s outlook. If the company does not succeed with its plans, the investors may suffer losses, and they should therefore assess the risk associated with the project the capital is intended for. The price of equity and external financing will increase in step with the level of risk the project entails. The capital market thereby helps to ensure that capital is allocated where it yields the highest return.

It is unfortunate if lenders expect the state to infuse new capital if the companies default on their loans, and that companies with a state ownership interest thereby end up with lower financing costs than they normally would have. The state must therefore be clear about and behave as if it is only liable for the capital invested in the company on a par with any other owner. This is particularly important in companies that operate in competition with others.

For companies that do not operate in competition with others and that perform tasks of critical importance to society, it can be challenging to establish credibility for the claim that the state will allow creditors to seize control of the assets. To the extent that this leads to lower loan expenses for such companies, this will have a bearing on the investments made. This can mean that projects that would not be considered profitable with another company’s financing costs will nonetheless be realised. The companies can then expand their business without it necessarily being socio-economically profitable. The state has chosen to impose lending restrictions on several companies that do not operate in competition with others and that perform tasks of critical importance to society.10

Concentration of power

The state owns a large part of the financial capital in Norway, and the scope of the state’s direct ownership is substantial. Through its other roles, including as policymaker and administrative authority, the state also has the potential to exercise great power over the population. Substantial state ownership increases the risk of concentration of power on the hands of the state at the expense of ordinary citizens. Reduced state ownership will contribute to a greater diffusion of power. Furthermore, private initiatives and willingness to invest drive the economy in a democratic society. In order to contribute to more diversified ownership, the Government wishes to reduce the state’s ownership over time.