2 Oct 2008

Poland vows to fight for shipyards

8:51 am on 2 October 2008

Poland has vowed to fight on to save its historic shipyards from bankruptcy after emergency talks between the European Commission and Warsaw failed to resolve doubts over state aid they received.

Polish Treasury Minister Aleksander Grad met EU Competition chief Neelie Kroes on Tuesday over restructuring programmes for the shipyards in Gdynia and Szczecin, where the anti-communist movement Solidarity was born in 1980.

Mr Grad called on Ms Kroes on Wednesday to present a written justification for her decision by Friday and said he would ask European Commission President Jose Manuel Barroso to appoint a panel of experts to assess the viability of the plan.

Under EU rules, governments can give financial help to ailing companies only if it ensures long term viability.

If the Commission rejects the plans, the two yards plus the privatised Gdansk, will have to repay state aid worth more than 2.3 billion euros ($US3.29 billion), forcing them into bankruptcy.

The state-owned Gdynia and Szczecin and the Gdansk yards employ about 15,000 workers but say as many as 60,000 jobs could be at risk among suppliers and related sectors.

Successive governments have failed to deal with the problem since Poland joined the EU in 2004. The yards have not made any profit on a single ship built since then.