When the Meyer Werft undocks its cruise ships, it regularly attracts hundreds of onlookers. But the shipyard is in a serious crisis. Decisions on state aid are now pending.
On Wednesday, the budget committees in the Bundestag and the Lower Saxony state parliament will decide on the billion-euro rescue of Meyer Werft. The Papenburg-based company is known for its cruise ships, but is in a financial crisis that threatens its existence. In order to secure thousands of jobs and preserve the maritime industry, the state now wants to step in.
The plan is for the federal government and the state of Lower Saxony to acquire 80 percent of the shares in the currently loss-making shipyard for 400 million euros. In addition, both the federal government and the state want to provide guarantees of around one billion euros each to secure loans.
Financing must be in place by September 15
There is no fixed exit date for the state participation. However, both Berlin and Hanover say that the shipyard should not remain in public hands in the long term. However, state involvement is currently unavoidable because no private investor could be found and the company is “of great structural importance” for the federal and state governments, the Lower Saxony state government said.
Meyer Werft must raise almost 2.8 billion euros to finance new ship construction by the end of 2027. Agreements must be reached by September 15.
The reason for the crisis is not a lack of orders, but rather contracts for new ships that were signed before the coronavirus pandemic and do not provide for any adjustment to the sharp rise in energy and raw material prices since then. In addition, in the industry, 80 percent of the construction price is usually only paid when the ship is delivered – so the shipyard has to finance the construction with loans.
Chancellor Scholz sees Meyer Werft as an “industrial crown jewel”
In principle, state aid must be registered with the EU Commission before a country can provide financial support to its companies. There is no deadline by which the Commission must decide whether aid is permissible. To save Meyer Werft, the Commission announced that it was holding constructive discussions with the German authorities. According to information from Lower Saxony, the state aid in this case is designed in such a way that it is not legally dependent on the approval of the EU. The EU was nevertheless informed voluntarily about the project.
Federal Chancellor Olaf Scholz had promised the company federal support at the shipyard in Papenburg at the end of August. “The Meyer Werft is an asset that we cannot and will not give up,” said the SPD politician. Germany’s position as the world’s third largest economy requires a strong maritime economy, and the Meyer Werft is an “industrial crown jewel.”
Source: Stern
