Dream or Delusion? More Cracks in Europe’s Masterplan

Another bankruptcy and structural weaknesses in the EU's economic recovery plan

Dear readers,

Europe has ambitious targets for its green transition but finds it very difficult to implement them. In early June, another element of its masterplan failed – bad luck or a structural weakness? After five years of economic stagnation, the continent is in urgent need of economic recovery. Probably EU leadership will have to make difficult decisions soon. Let me know what you think!

On June 1^st, German firms Meyer Burger Industries and Meyer Burger Germany filed for bankruptcy. Meyer Burger was Europe’s only larger manufacturer of solar panels. It had been struggling for years. Despite Europe’s booming PV installations, its most recent financial reports disclosed a loss of EUR 292 million on revenues of EUR 141 million. A search for new investors didn’t go anywhere. In early April, the company reduced working hours, citing temporary shortages of materials; in reality, the company was running out of cash and suppliers probably stopped deliveries.

The Meyer Burger bankruptcy follows the bankruptcy of another key pillar of Europe’s Green Deal, battery producer Northvolt of Sweden. Northvolt filed in Sweden in March, in one of the country’s largest company failures, after filing in Germany in December of last year. It blamed supply chain disruptions, but also geopolitical instability, shifts in global demand, and rising capital costs. Northvolt was supposed to become the European champion for battery production, creating a counterweight to Chinese producers. However, the company had essentially only one customer, truck producer Scania of Sweden.

Solar panels and battery production were among the key pillars of the EU’s industrial policy – not only to enable the Green transition, but in parallel to build new areas of competitive strength. The failures of Meyer Burger and Northvolt are alarming signals but have been widely ignored. Time to take a look at the broader picture.