Europe fights back

The EC has given European governments permission to double research grants for shipbuilders. The move is designed to defend the industry against South Korea?s shipbuilders who undercut competitors with heavily subsidised vessels.

The EU and South Korea have lodged complaints at the World Trade Organisation accusing each other of unfairly supporting their shipbuilders. Research funds for shipyards will be subject to strict guidelines and only be allowed to build “state of the art” ships.

“The percentage of state support for expenditure on investments needed to fund the innovative aspects of the projects is doubled from 10 to 20%,” the statement said. European shipbuilding turns over £24 billion a year, more than half through exports, and employs 350,000 people.

Last year, the EU granted exemptions from state aid rules to let governments bail out shipbuilders competing with Korean-built container ships and some tankers. South Korean shipyards have seen their market share soar to 36% of the world market while the EU share has shrunk to only 8%.