Köhler Halts Privatization

The law would have allowed Germany's federal government to sell off up to 74.9 percent of the state-owned German Flight Security Company, the DFS. The organization employs some 5,300 people, including 1,800 air-traffic controllers.

In withholding his signature from the law, which was passed by a wide parliamentary majority and with support from opposition political parties, Köhler said the German constitution required the federal government to retain sovereignty over matters of public security.

It was the first time that Köhler has declared legislation passed by Germany's two parliamentary bodies, the Bundestag and the Bundesrat, unconstitutional. A largely ceremonial position, the German president generally stays out of daily political discussions but is required to sign laws before the can take effect.

State duty or single European sky

Opponents of the law welcomed Köhler's move.

"The president has reached a landmark decision," said Peter Heesen, the head of the German Civil Servants Association, which represents many of the DFS's employees. "It's an important contribution to the debate about what the state's sovereign duties are and must continue to be in the future."

Hans-Rudolf Wöhrl, the owner of small German carrier LTU Airlines, also said he thought Köhler made the right choice. The sale, he said, "would have been tantamount to a hike in fees since a private investor would have demanded a profit."

But proponents of the law, while saying they understood Köhler's reasoning, continued to argue for the benefits of privatization. The German government maintains that the sale is essential in efforts to create a "single European sky," eradicating the national borders that complicate air traffic control in Europe.

Lufthansa spokesman Stefan Schaffrath said privatization would allow for the start of a system of incentives that would improve air traffic control performance. Schaffrath said he hoped the constitution would be changed, pointing out that Köhler himself had mentioned that possibility in his decision.

Conservative air safety expert Norbert Königshofen said the government would now examine a variety of options, including the sale of a smaller percentage of the DFS. For now, air traffic control remains in public hands, but it could still be privatized in the future.