EU to demand aid repayment for Polish yards

The European Commission said on Thursday it is preparing to demand the repayment of Polish government aid to the Gdynia and Szczecin shipyards, while Warsaw signaled it needed more time to find a way of saving the yards. A spokesman for EU competition commissioner Neelie Kroes said: “As regards the shipyards at Szczecin and Gdynia, the commission, on the basis of information that it currently has, has no choice but to make preparation for a negative decision requiring the repayment of state aid.” “If the Polish authorities produce within a short space of time new concrete and credible solutions that could be implemented immediately to ensure the long-term viability of these two shipyards, the commission would naturally assess such proposed solutions before taking a decision.” The spokesman said he is pessimistic about the chances of finding a viable solution for the shipyards.

“There was a restructuring planned for the shipyards at Szczecin and Gdynia due to be implemented by a private company that was due to take over those two shipyards. Our understanding is that the company has now withdrawn, and therefore as things stand at the moment, it is difficult to see how the restructuring of those two shipyards would proceed. You not only have to have a buyer but also to satisfy the commission that serious restructuring will be implemented,” he added. “The commission’s patience is becoming very thin.”

Polish Treasury Minister Aleksander Grad told a news conference in Warsaw that there were other investors interested in the plant but that the government would ask for more time to find a solution for the yards. “We believe that we are capable of privatising these shipyards. We have asked the commissioner to give us more time to do so,” Grad said.

“I would stress that this decision (on demanding the return of aid) has not been taken.”

The yards, which have struggled to compete on the shipbuilding market since the mid-1990s, are still major employers on Poland’s Baltic coast. On the third Polish shipyard under investigation, Gdansk, Kroes’ spokesman said the commission delivered an information injunction to the Polish authorities on 26 May, giving them one month to provide the EU executive with information concerning the shipyard’s restructuring.

“If we do not receive that restructuring information within a month, then the commission will have to assess the situation on the basis of the information that it currently has,” he said.

In June 2005, the commission opened a formal inquiry into Polish shipyard aid worth at least 1.3 billion euros and said at the time that it would only be deemed legal if it was accompanied by ?meaningful restructuring plans?. Gdynia, Szczecin and Gdansk are Poland’s biggest yards and altogether they employ around 16,000 people.