Schleswig-Holstein's 300 million euro guarantee: what now?

Schleswig-Holstein's 300 million euro guarantee: what now?

A dramatic financial game is unfolding in Schleswig-Holstein! The state government is faced with the challenge of defending a guarantee of 300 million euros for the battery manufacturer Northvolt. Dirk Schrödter, the head of the State Chancellery, emphasizes that the convertible bond is a common financing instrument and that the risks have been intensively examined beforehand. But time is of the essence: The federal government has not yet asked Schleswig-Holstein to pay, but Finance Minister Silke Schneider warns that payment could be due by the beginning of March 2025 at the latest.

The situation is getting worse! In order to create the “budgetary conditions” for the payment, the country would have to take on a further 300 million euros in debt. This would not only increase the debt burden, but also drive up interest expenses. Minister Schrödter tries to calm the situation by emphasizing that the funds are not lost, but are being invested in the construction of the factory in Heide. But the opposition is skeptical: Beate Raudies from the SPD expresses dissatisfaction with the state government's answers and is considering a file inspection procedure.

Is the construction of the battery factory in danger?

Schleswig-Holstein guarantees half of the convertible bond, which totals 600 million euros. This sum was already paid out to Northvolt in December 2023 and January 2024. Schrödter and Gaby Schäfer, President of the State Audit Office, assure that the money will be used exclusively for the construction of the battery factory in Heide. A large part of the funds has already been used for machine down payments. But the question remains: Did the money actually go into the construction? State Secretary Julia Carstens explains that the funds are in a blocked account and an audit is possible. However, the opposition remains suspicious and sees the convertible bond as a risky financial instrument.