Croatia needs to cut shipyard aid

Croatia’s next government will have to cut subsidies to the shipbuilding industry to move on with efforts to join the European Union, the country’s top EU negotiator said.

With 11,000 jobs at stake at five main shipyards, Croatia has put off the subsidy cuts until after elections on 25 November. ???After the election, this will be one of the top priorities for the new government,?? Vladimir Drobnjak, Croatia’s chief EU negotiator, told a European Policy Centre conference in Brussels today. ???We are not entirely in conformity with the rules at this moment.??

Some of the 2.6 billion kuna ($500 million) in cash and guarantees that Croatia offered the shipyards in 2006 breaks EU rules, Drobnjak said. No aid went in 2006 to the steel industry, also under EU pressure to modernize.