7.5 billion euros. With this amount, the German government is supporting Siemens Energy, which is in a difficult financial situation.
The German media reports on the consequences of several weeks of negotiations about the amount of aid. ‘Tagesspiegel’ reports that the government of Olaf Scholz has granted a ‘failing energy technology company’ a guarantee of 7.5 billion euros.
This amount constitutes half of the aid package, which is expected to total EUR 15 billion. The rest comes from banks and the former parent company and main shareholder Siemens. It still owns 25 percent. shares in Siemens Energy. Siemens Energy was founded in 2020 as a result of the separation from Siemens AG. It supplies energy solutions such as gas, wind and hydrogen turbines.
Rafał Ziemkiewicz wrote about the controversies surrounding Siemens Energy and KPO in the weekly magazine “Do Rzeczy”.
“In addition to Germany, Spain is also planning aid, which is working on bank guarantees for new projects of subsidiary Siemens Gamesa, which deals with wind turbines. The amount of this aid is potentially 3 billion euros,” the daily reported. “The Spanish wind energy subsidiary Siemens Gamesa, which has been in crisis for years, is mainly responsible for the fact that Siemens Energy recorded a loss of 4.6 billion euros in the past financial year,” reports Tagesspiegel.
“A lot of uncertainty”
According to Clemens Fuestam, head of the Institute for Economic Research in Munich, “the fact that the group is currently under so much pressure is at least partly due to market problems.” These in turn are the result of the fact that “the profitability of investments largely depends on future political decisions, for example on the level of carbon compensation. Therefore, investments are currently being undertaken with great uncertainty.”
“State aid to individual companies always carries the risk of disrupting competitive positions. Shareholders must also be held accountable. If those who know the company better are not willing to participate, then the public sector should also refrain from doing so,” he says. Chairman of the ZEW Economic Research Institute Achim Wambach for the newspaper “Tagesschau”.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
