Financial expert criticizes subsidies for Northvolt battery factory as a mistake

Financial expert criticizes subsidies for Northvolt battery factory as a mistake

According to a report from www.kn-online.de, the Kiel Institute for the World Economy (IfW) criticizes the establishment of Northvolt. The high subsidies for the construction of the battery factory near Heide could not reduce Germany's dependence, but they harmed everyone who had to raise the millions. The Minister of Economics disagrees.

The establishment of Northvolt and the high subsidies for the construction of the battery factory in Schleswig-Holstein raise important questions about long-term economic stability. According to Prof. Stefan Kooths from the Kiel Institute for the World Economy (IfW), the state is taking on too much risk and overestimating its ability to predict the products and technologies of the future. In his opinion, security of supply can be achieved through diversification and not through the one-sided production of certain goods at one's own location. In addition, he points out that the final use of the products will be determined by Northvolt or other companies on the global market, and not by those who provide the highest subsidies.

These views have important economic implications. The high subsidies could lead to distortions of competition and disadvantage other companies. In addition, there is a risk that taxpayers will have to bear the costs without receiving adequate benefits for the entire economy. In addition, dependence on government subsidies could affect the long-term competitiveness of German industry.

The discrepancy between the position of the Kiel Institute for the World Economy and that of the Minister of Economic Affairs shows that current policy in promoting industries with long-term importance needs to be carefully reconsidered. Long-term investments should aim to strengthen the competitiveness of German industry without being overly dependent on government support. This would ensure a balance between short-term economic incentives and long-term goals.