Troubled Meyer shipyard: Economist warns of state intervention

The federal government and the state of Lower Saxony have promised Meyer Werft state aid. IfO boss Clemens Fuest criticizes the decision.

The president of the Munich Economic Research Institute, Clemens Fuest, has spoken out against the rescue. “It is not the state’s job to save struggling private companies from bankruptcy,” the economist told the Reuters news agency on Friday. “If the business model is promising, private investors will be found.” If the state steps in, there is a risk that losses will be passed on to taxpayers.

State bailouts can only be justified in situations of macroeconomic crises in which capital markets are disrupted,” stressed Fuest. But that is not the case at present. The fact that Meyer also builds warships could at best justify supporting this part of the shipyard – but not promoting the production of cruise ships. The construction of gigantic cruise ships makes up the lion’s share of Meyer Werft’s business.

The Meyer Werft is in an existential crisis because the energy and raw material costs for shipbuilding have gotten out of hand. The shipyard urgently needs a lot of money to finance new shipbuilding. There is currently talk of the federal government and the state of Lower Saxony taking a temporary stake in the shipyard in order to increase equity by around 400 million euros. The shipyard also needs guarantees to get new loans for shipbuilding.

Because: “Leading in terms of ecological drives”

Lower Saxony’s Prime Minister Weil, on the other hand, stresses that the cruise industry is a growing market and that Meyer Werft is urgently needed. It is “a world leader in terms of ecological cruise ship propulsion systems”. This also applies, for example, to the use of methanol or LNG. In addition, over 17,000 jobs nationwide depend on the shipyard. In reality, however, cruise ships are anything but ecological.

The FDP, which normally also rejects state aid for companies, is apparently giving in. The FDP parliamentary group’s budgetary spokesman Otto Friecke also stressed that taxpayers should only help if there is a clear profit-oriented future perspective, he said. The taxpayer can only help “by building a bridge” for Meyer Werft. At the end of this, the federal government must withdraw from the company, otherwise there can be no entry, stressed Fricke.

“If the federal government helps the shipyard despite these objections, it must at least be ensured that the shipyard’s existing losses are borne by the shareholders and the banks, not by the state,” said Ifo President Fuest. “It would be better, however, if the federal government did not intervene.”