Meyer: Economy in MV cannot grow, hopes for 2024

Economic situation - Meyer: Economy in MV cannot grow, hopes for 2024

According to Economics Minister Reinhard Meyer (SPD), hopes of a noticeable economic upturn in Mecklenburg-Vorpommern after the challenging coronavirus years have not been fulfilled in the year that is drawing to a close. "The effects of international events, high interest rates and high energy and commodity prices continue to cause problems for companies. The search for skilled workers also remains a major challenge," stated the minister. A slight decline in economic output is expected for 2023.

At the end of September, the Leibniz Institute for Economic Research in Halle forecast a 0.5 percent increase in gross domestic product (GDP) for eastern Germany as a whole. According to the statistics office in Schwerin, GDP, which indicates total economic output, fell by 0.2 percent in MV in the first half of the year. Mecklenburg-Vorpommern had already brought up the rear in the east in 2022 with marginal economic growth of 0.2 percent.

Nevertheless, Meyer believes that the economy in the north-east is in "robust" shape: "Industry, trade and the healthcare sector remain stable constants in the local economy." Tourism, one of the most important employers in the country, has developed better than in the previous year. Inflation weakened significantly over the course of the year. Meyer saw this as a positive sign that Mecklenburg-Vorpommern has good opportunities for growth again in the coming year.

The state will continue to be prepared to support new companies and the expansion of production in the future. A total of 33 million euros in grants have been approved for 59 investment projects in the commercial sector in 2023. The total investment for new buildings and expansions amounted to 247 million euros. Meyer cited the Birkenstock shoe factory in Pasewalk and the medical technology manufacturer Ypsomed in Schwerin as examples. The promotion of company relocations is an ongoing task, as is the expansion of the necessary infrastructure.

"We will continue to support the local authorities here in order to offer attractive business locations," assured Meyer. In 2023, the state had earmarked 188 million euros for this and thus covered two thirds of the total costs. For the conversion of the shipyard basin in Warnemünde into a maritime business park for sustainable energy technologies alone, there are grants amounting to 67.5 million euros. However, marketing the industrial and commercial areas is also becoming increasingly challenging as investors' requirements are rising. Mecklenburg-Vorpommern had come away empty-handed with major investments such as the new chip factories, which had earned the state government criticism.

Meyer was convinced that after the bankruptcy of the Asian Genting Group, which wanted to massively increase its fleet of cruise ships in Mecklenburg-Vorpommern, the shipyards had managed the structural change. For example, the federal government operates the naval arsenal in Rostock with around 500 employees, and Thyssenkrupp Marine Systems wants to build submarines in Wismar. However, IG Metall had pointed out that no concrete contracts for this were known to date. According to Meyer, a maritime business park is being built at the former MV Werften site in Stralsund and the Neptun shipyard in Rostock has just received orders to build ten river cruise ships. The construction of converter platforms for offshore wind farms offers further prospects for Rostock. "The developments at the state's shipyard locations are positive," said Meyer.

According to him, more money is available from EU programs to promote research and development. Instead of 168 million euros, there will now be 266 million euros for this in the 2021-2027 funding period. In addition to medical technology, hydrogen technologies are an important focus of funding and Mecklenburg-Vorpommern hopes that their application will provide strong growth impetus. However, critics warn against exaggerated expectations and point to technical hurdles and uncertainties regarding financing.

Meyer assured SMEs of additional support in their digitization efforts. Small and medium-sized companies with fewer than 100 employees could expect up to 50 percent funding. The upper limit is 50,000 euros per project.

The business community in Mecklenburg-Vorpommern had demanded more reliability from politicians at the end of the year. The most recent austerity decisions by the federal government called important investments into question. "This does not make Germany any more attractive in international competition," stated the President of the Rostock Chamber of Industry and Commerce, Klaus-Jürgen Strupp. He called on the state government to push for the implementation of hydrogen projects such as the one in Rostock. He also called for concrete steps to be taken for the state's planned skilled labor strategy.