Title: Shocking Disbelief over Meyer Werft's Financial Aid Request from Economist Fratzscher
Popular shipbuilder Meyer Werft, renowned for its luxurious cruise ships, leaves renowned economist Marcel Fratzscher baffled. The anticipated financial aid to this company, despite Germany's current economic stability, leaves Fratzscher puzzled. "Honestly, I just can't wrap my head around why this company needs such critical support at this very moment in Germany. It doesn't," he shared with NDR, serving as the head of the German Institute for Economic Research Berlin.
Fratzscher emphasized the importance of limiting government intervention in each business crisis. "It's essential to remember that we can't intervene in every company's predicament. We can't manufacture every product."
The economist also raised concerns regarding Meyer Werft's commercial viability. "What's most concerning is that a business is struggling, however, no private investor is prepared to team up, even with such generous government assurances," he noted. "That must serve as a cautionary flag that this company might not have a promising future ahead."
The federal government and Lower Saxony state have vowed to provide state aid to Meyer Werft, intended to cover a nearly 2.8 billion euro funding gap by mid-September. However, the final decision remains unclear.
Reports from Berlin government circles indicate that both the federal government and Lower Saxony could contribute around 900 million euros in guarantees and temporarily acquire up to 80-90% ownership of the shipyard. Media reports also suggest additional payments of 200 million euros for this mission.
Fratzscher expressed his shock regarding the need for financial aid, stating, "I find it hard to fathom why Meyer Werft needs such substantial support in this period, considering Germany's current strong economic standing." He added, "Despite the possible government and Lower Saxony investment, it's still worrying that private investors shy away from supporting Meyer Werft, bringing up questions about the company's long-term survival."
Additional Insights:
- A majority of private investors are hesitant to invest due to the shipyard's heavy reliance on public aid, its historical financial instability, and unclear long-term prospects.
- The capacity for state intervention and justification in financial aid cases differ depending on the company's impact on the national economy and the strength of the overall industry.
- Effective immigration policies, workforce infrastructure, and strategic partnerships may be necessary to foster private investment and promote the shipbuilding industry's growth.
