According to foreign media reports, the German federal government has launched a special guarantee program for the country’s shipbuilding companies, specifically to support orders from large shipyards. This guarantee initiative was announced by Christoph Ploß, the German Federal Government’s Coordinator for Maritime Industry, during a visit to the Blohm+Voss shipyard in Hamburg.
Christoph Ploß points out: “Including the shipbuilding industry in a special guarantee scheme will help shipyards secure more new ship contracts… If German shipyards cannot finance their orders, these orders will be lost.”
According to official German announcements, the German Federal Ministry for Economic Affairs and the Federal Ministry of Finance have decided to include the shipping industry in the “Large-Scale Guarantee Program.” Shipyards can apply if they require a guarantee of at least €20 million. The federal government and participating states will provide guarantees of up to 80%. This means that if a shipyard is unable to repay its bank loans, the government must intervene and assume responsibility.
It is understood that Germany’s “massive guarantee program” initially targeted only companies in economically weak regions, but its scope has since been expanded. For years, state politicians and industry representatives have consistently called for the shipbuilding industry to be included in the program. This is because shipyards typically need to advance shipbuilding costs, which can amount to hundreds of millions or even billions of euros. Insufficient funds could very likely cause orders to fall through.
Take Meyer Werft, a German shipyard renowned for building luxury cruise ships, as an example. Currently, it holds numerous orders for large cruise vessels. Two years ago, the shipyard faced a predicament of having orders but no money to build them due to insufficient cash reserves to cover upfront shipbuilding costs. It was only through the joint efforts of the German federal government and the Lower Saxony state government that it successfully weathered the bankruptcy crisis.
The main reason for this situation is that, typically, cruise ship owners only pay a 20% down payment when ordering a new ship, with the remaining 80% of the construction costs settled upon delivery. This means that shipyards must hold sufficient cash reserves to cover construction costs upfront. However, compared to before the shipping crisis, fewer banks are now willing to provide financing loans to shipyards, resulting in insufficient financial reserves to meet the demand for shipbuilding.
It is also worth mentioning that Meyer Werft will be one of the main beneficiaries of the German Federal Government’s newly launched special guarantee scheme. Meyer Werft will sign a formal construction contract with MSC Cruises for 4+2 New Frontier-class cruise ships in the first half of 2026, an order worth at least €10 billion, meaning the shipyard can apply for additional guarantees through this order.