Poland wins extra time to rescue historic Gdansk shipyards
RENATA GOLDIROVA
17.07.2008 @ 09:18 CET
Following personal intervention by Polish Prime Minister Donald Tusk, Warsaw has won an additional eight weeks to rescue two docks at the Gdansk shipyard, once Europe's leading shipbuilder.
"It is essential that the Polish authorities use this final opportunity to come up with solutions that will guarantee the viability of the shipyards without undue subsidies," EU competition commissioner Neelie Kroes said in a statement on Wednesday (16 July).
Gdansk - the cradle of the anti-Communist Solidarity movement (Photo: European Commission)
The gesture came after Poland pledged to submit by 12 September new "viable restructuring plans" that would respect EU competition rules.
"In view of ongoing negotiations with potential buyers of the two yards and of the commitment of Prime Minister Tusk, ... the formal adoption of the negative decision is postponed," commissioner Kroes said. She referred to a possible requirement to repay unjustified state aid to the yards - a move that is likely to result in their bankruptcy.
The confrontation between Warsaw and Brussels over two shipyards, Gdynia and Szczecin, has been ongoing for years.
EU investigations launched in June 2005 revealed that Polish shipyards had enjoyed state aid worth at least €1.3 billion since Poland joined the EU in 2004 - something illegal under EU law, unless paired with an economic restructuring of the business.
The two yards have been in constant difficulties since the 1990s. For more than five years, neither of them has made a profit on any of the ships produced, and neither would have survived in the absence of the subsidies.
Warsaw already submitted two restructuring plans for the two yards - in 2005 and 2006 - but both were rejected by the EU's executive body, as they failed to "ensure long-term viability for the yards" and restructuring was to be financed entirely by the state.
If such a scenario repeats for the third time, the commission has warned it will not hesitate to declare the state aid provided to the yards since 2004 to be "incompatible" with EU rules and to "order its recovery with interest".
Polish Treasury Minister Aleksander Grad, cited by AFP, has welcomed extra time granted by Brussels, saying it was "very much needed".
"I'll be happy on 12 September when we will have a restructuring programme agreed with the European Commission," he said, hinting the Polish treasury could "partially absorb" old debts racked up by the Communist-era shipyards as part of the solution.
Gdansk on the Baltic sea coast is a major political icon in Poland. The Solidarity movement was founded by Lech Walesa and his colleagues at the shipyard in 1980 and it became a central force leading to Communism's downfall in Eastern Europe.