Catching Up: Schleswig-Holstein's Budget Adjustments Amidst Northvolt's Woes
Government introduces additional financial plan for allocation of funds - Government presents supplementary financial plan for additional expenses and funding needs
Hey there! Let's chat about some recent financial shuffles in Schleswig-Holstein, shall we? The state's government has dropped a bombshell—a draft for a supplant budget! You heard that right, a supplant budget! But what's it all about?
Here's the skinny: turned out the promotion for Northvolt, a Swedish battery producer, didn't go as planned, resulting in lower supplies and expenses. Finance Minister Silke Schneider (Greens) made the announcement following a cabinet meeting, "Due to the delayed Northvolt promotion and lower supply and interest expenses, we can scrap the emergency loan in 2025 and cover the remaining expenses with the current budget," she said.
Originally, the black-green coalition had the bright idea of an emergency loan worth 271 million euros in 2025. But the insolvency of the battery maker Northvolt has injected a dash of uncertainty, as it's unclear if and when the prerequisites for the promised promotion (around 136 million euros) for the planned factory in Heide will be met. If this juncture arrives in 2025, the coalition intends to provide the necessary funds via a new go-ahead.
The remaining 135 million euros from the previous emergency loan, as well as additional measures amounting to 191 million euros, Schneider plans to include as routine expenses. To offset these additions, the coalition has decided to slash supply expenses by 70 million euros and trim provisions for interest rate risks by a snappy 9 million euros. The total savings to be achieved in the 2025 budget rises to 247 million euros. The net credit demand drops to approximately 637 million euros.
However, it's still all about savings. "Even though we no longer require the emergency loan in 2025, the pressure to save is still high," mentioned Schneider. She declares that the coalition will deliberate within the year to figure out how to bridge the budget gap. A second supplant budget is on the horizon for the fall, aimed at refinancing emergency loans from the year 2024, worth around 492 million euros.
These loans won't vanish without a trace, though; they'll just get a new lease in the budget. Schneider aspires to utilize the planned enhanced borrowing capabilities for the states for this purpose. The state parliament is set to approve the first supplant budget in July.
Initially, the black-green state government planned to respond to the constitutional court ruling with a supplant budget in the fall. The judges in Schleswig had declared the authorization for taking up emergency loans in the previous year’s budget unconstitutional since there was no constitutional-compliant repayment plan. Surprisingly, the coalition chose to finance part of the 2025 budget with an emergency loan once more.
- Supplant Budget
- Emergency Loan
- Schleswig-Holstein
- Silke Schneider
- Schleswig
- Northvolt
- State Government
- Insolvency
- In response to Northvolt's insolvency and the subsequent delay in the promised promotion, Schleswig-Holstein's government has proposed a new supplant budget for 2025, which aims to cover remaining expenses and abolish the emergency loan originally planned for the same year.
- Finance Minister Silke Schneider, a member of Schleswig-Holstein's state government, has announced that the proposed supplant budget will be funded through savings from lowered supply expenses and reduced provisions for interest rate risks, totaling 247 million euros in savings, and a refinancing of emergency loans from the year 2024, amounting to approximately 492 million euros.
