FRANCE/FILE: European Commission rejects plan by Poland's Gdansk shipyard to take until 2014 to complete reduction in capacity

European Commission rejects plan by Poland's Gdansk shipyard to take until 2014 to complete reduction in capacity. The European Union's executive arm on Tuesday (September 4) rejected a plan by Poland's Gdansk shipyard, birthplace of the anti-communist Solidarity movement, to take until 2014 to complete a reduction in its capacity. The European Commission says Gdansk must slim down to avoid having to repay hefty state subsidies, which could trigger the yard's bankruptcy. Speaking on behalf of EU Competition Commissioner Neelie Kroes, Charlie McCreevy said the Commission's goals were threefold. "First, that the restructuring of Gdansk shipyard leads to its own long-term viability. It could possibly mean scaling down its activities, but would eventually lead to the emergence of a smaller, but more efficient shipyard capable of standing on its own feet. Second, to limit the distortion of the level playing field and any harm European competitors cause by state intervention. The yard's production capacity has to be reduced," McCreevy told the European Parliament. The yard is set to be privatised and either a Ukrainian or Italian company will buy a majority stake under the plan. The collapse of the Gdansk yard would be political dynamite in Poland, which is poised for an early parliamentary election in October or November. In a news conference on Tuesday, five Polish MEPs from the Alde Group, an alliance of liberals and democrats, said that Gdansk needed more time to reform. "When the European Commission is saying that it means one month, I would say immediately, it's not enough. The management, the reform of the management in the shipyard demands more. And we wouldn't like to propose in too concrete terms, but my personal opinion would be to give one year," said Bronislaw Geremek, from the Alde group. "So what we have proposed is - and McCreevy said it in a very good way - the dialogue. We need a European dialogue concerning the future of the European shipyard. And let's say for some months, I would say for one year," he added. Under EU rules, governments can give financial help to ailing companies only if the cash is accompanied by plans to make the firms viable in the long term. The aid paid to three Polish shipyards including Gdansk since Poland entered the EU in 2004 totals 1.3 billion euros. Brussels has accepted capacity cuts at the other two yards, in Gdynia and Szczecin, in return for clearing past state aid. Ukrainian metals holding company Donbass Industrial Union and an Italian shipping firm have been selected as the final bidders to acquire 75 percent of the Gdansk yard for some 100 million euros. Polish workers protested in Brussels against the EU's demands last Friday, the 27th anniversary of the signing of agreements between workers and Poland's communist government that led to the creation of the Soviet bloc's first independent trade union. Solidarity helped trigger the fall of communism in 1989 in Poland, and shipyard electrician Lech Walesa became president. Unionists said the commission's demand to shut two slipways would make it next to impossible to privatise the company and save its 3,000 jobs.

ITN Source | September 5, 2007

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