The authorities propose an additional financial plan - Expanded budget proposal delivered by the government
Title: Scha-Bang! Schleswig-Holstein Shifts Gears with Supplementary Budget
Say bye-bye to the emergency loan in 2025, or so says Finance Minister Silke Schneider (Greens) after a recent meeting. The reason for this unexpected turn is a change in the cards for Northvolt, that Swedish battery manufacturer in deep, deep financial trouble.
Initially, Schleswig-Holstein's black-green coalition had planned to borrow a whopping 271 million euros for 2025, due to the uncertain fate of Northvolt's promised promotion for their planned battery factory in Heide, which would have cost around €136 million. But here's the kicker: if Northvolt gets its act together in 2025, the coalition intends to send the cash their way via a new, shiny authorization basis.
Schneider wants to funnel the remaining €135 million from the previous emergency loan, plus additional action requirements worth €191 million, into regular provisions. As a trade-off, the coalition will trim supply expenses by €70 million and cut provisions for interest rate risks by €9 million. This leaves the 2025 budget with an additional €56 to €247 million in underspending. The net credit intake will drop to a more manageable €637 million.
As Schneider advised, the pressure to save is still as high as ever, even with the emergency loan in the dumpster. The coalition will be consulting within themselves on how to fix the fiscal mess by year's end. There's even a rumor of a fall-time Supplementary Budget 2.0 to refinance the emergency loans from 2024, worth around €492 million.
These loans will stick around, alright, getting reclassified like a cat adopting a new home. Schneider wants to make the most of the states' increased debt allowance to handle this business. The state parliament will hold a vote on the first Supplementary Budget in July.
The规ERS, that's the Schleswig court, previously lit a match under the black-green state government's plans. Back in 2024, they declared the authorization for those emergency loans in the previous budget as unconstitutional, because, well, there was no legitimate repayment plan in sight. See, even in 2025, the coalition was still holding onto the ol' emergency loan crutch for the budget. Oh, life, you are a wild ride!
- Supplementary Budget
- Emergency Loan
- Schleswig-Holstein
- Silke Schneider
- Schleswig
- Northvolt
- State Government
- Insolvency
Insights:
- Northvolt, a Swedish battery manufacturer, has filed for bankruptcy in Sweden. This insolvency raises significant financial concerns for both the federal government of Germany and the state of Schleswig-Holstein due to large subsidies and loans granted for Northvolt's factory construction near Heide.
- The factory received substantial support from German public funds: €600 million from KfW, €20 million for interest and legal costs, €700 million in direct subsidies from the EU Commission, with €137 million expected from the state and €564 million from the federal government, but these funds have yet to be disbursed.
- The insolvency and its financial repercussions are significant enough to prompt discussions within the Budget Committee of the German Bundestag, involving various political parties and ministers, highlighting the importance and sensitivity of the issue. However, the specifics of the factory's future and the exact financial burden on the budgets remain uncertain.
- Schleswig-Holstein’s broader fiscal environment includes efforts to manage costs in other areas, such as the digital transformation, where the state is transitioning to open-source software to reduce expenses associated with proprietary software licenses. However, these savings might be offset by hidden costs and operational challenges, indicating ongoing budgetary pressures.
- In light of Northvolt's financial troubles and the potential ramifications for Schleswig-Holstein, Finance Minister Silke Schneider plans to redirect funds from the emergency loan towards regular provisions, aiming to finance vocational training programs within the EC countries.
- Despite the expected reduction in emergency loan expenditure, Schleswig-Holstein faces persistent budgetary pressures as they aim to manage costs in various sectors, such as digital transformation, while also exploring possibilities for refinancing the remaining emergency loans through a Supplementary Budget, thus ensuring the long-term financial health of the region and fostering business growth, particularly in the sphere of vocational training.
