Polish government backs shipyard plan

Poland’s cabinet approved yesterday a rescue plan for its debt ridden shipyards but workers and opposition politicians said the proposal would trigger large job losses and harm support among Poles for the European Union.

The EU Commission has given Prime Minister Donald Tusk’s government a 12 September deadline to present restructuring plans for the three shipyards, or else repay illegal state aid that would force them into bankruptcy.

The yards at Gdansk, Gdynia and Szczecin have not made profit on a single ship built since at least 2004, when Poland joined the EU, and would not have survived without subsidies. Successive governments have failed to tackle the problem and treasury minister Aleksander Grad announced last week a preliminary accord with investors on the restructuring plans involving additional state aid, allowed under EU rules provided it leads to a company’s long-term financial viability. “The plans we have prepared after 10 months of hard work allow investors and the treasury to prepare the privatisation agreements and finalise the restructuring process,” Grad said on Tuesday after the cabinet approved them.

Polish and European Commission officials are today holding further discussions on the plans before they are officially submitted to Brussels on Friday. The Commission will have the final say and, if it decides the plans are not sufficient, state-owned Gdynia and Szczecin and the privatised Gdansk yard will have to repay state aid totalling more than 2.3 billion Euros ($3.34 billion). Polish officials say up to 60,000 jobs could be at stake. Bankruptcy would prove a big headache for the government and potentially for the EU.