Taxes Blown in the Wind? The Siemens Gamesa Bailout

The German government leads the bailout of the distressed wind power company Siemens Gamesa with a guarantee of EUR 7.5 billion. Based on prior conceptual work on the limits of bankruptcy law and bailouts of critical firms, we question the rationale for the bailout. Siemens Gamesa is not a critical firm. Neither efficiency nor geostrategic considerations justify the bailout. We also question its terms and conditions. The main shareholder of Siemens Gamesa is Siemens AG (through Siemens Energy AG), a highly profitable company. Siemens contributes little (if at all) to the bailout. This is not fair to the German taxpayer.