- The German Parliament, Bundestag, authorizes the commencement of operations for Meyer Werft.
The Parliamentary Budget Committee in Germany has opened the path for a huge-scale monetary save for Meyer Shipyards. This well-known company based in Papenburg is popular for its luxury cruise liners, but it's currently grappling with an existential fiscal crisis. The budget overseers in Berlin have consented to let the national government join the financial stabilization effort with a planned 200 million euros investment.
An additional 200 million euros are set to come from the state of Lower Saxony, but the local Budget Committee still needs to give the go-ahead. Moreover, both the federal government and the state aim to provide loan guarantees amounting to approximately one billion euros each to ensure financial support.
Meyer Shipyards is required to raise around 2.8 billion euros by the end of 2027 to fund the construction of new ships. Negotiations on this matter must be concluded by September 15. The root cause of the crisis isn't a shortage of orders, but pre-pandemic contracts for new ships that don't factor in the substantial surge in energy and raw material prices since then. Plus, within the industry, 80% of the construction cost is generally paid upon ship delivery, hence the shipyard needs to cover the construction expenses with short-term loans.
The budget approval from the Committee on Budgets in Berlin is crucial for the state's planned 200 million euros investment in Meyer Shipyards. The financial stabilization effort for Meyer Shipyards requires the approval of various committees, including the Committee on Budgets.
