POLAND/ BELGIUM: EU receives Poland's reply on Gdansk: could still face closure

The European Commission says it does not wish to see the closure of Poland's historical shipyard Gdansk, but Poland must accept the painful restructuring process other EU countries have had to face, if it want to compete within the 27-nation bloc. The European Union said in Brussels on Tuesday (August 21) that it was carefully analysing Poland's response to EU demands it cut capacity at the Gdansk shipyard, or return subsidies it received to help it survive. It was the EU's final deadline. This move threatens to push the home of the anti-Communist movement Solidarity to bankruptcy. Under EU rules, governments can give financial help to ailing companies only if the cash is accompanied by plans that would make the firms viable in the long term. EU spokeswoman Amelia Torres said the Commission has no wish to see the closure of the historic shipyard but that Poland must face its responsibilities if it wants to be part of a competitive union of European countries. "What the Commission wants to see, of course, is not a closed Gdansk shipyard but a genuine far reaching, restructuring of the company which will ensure its long term viability. And that is in the interest of course of the people who work in the shipyards and the people in the region. We are perfectly aware of the historical importance of the Gdansk shipyard and we are sure that the yard wishes to become a successful company able to compete on its own merits in the EU market," Torres said. She said it was too early to give a response to the 180-page reply which Poland had submitted to the EU but added that, in the worst case scenario, there were funds available to help alleviate the detrimental impact on Gdansk. "It's important to remind, because this is something we have been doing regularly, that in that restructuring process, which as I said and we acknowledge is always a painful one for the people involved, there are structural funds and other assistance available at the European Commission in order to tackle that transition to a profitable situation," Torres said. Brussels gave Warsaw a month to respond to EU queries about ways in which the government kept the shipyard open and to lay down its plans to make it a competitive operation for the future. With one of the highest jobless rate in the EU, Poland is loath to restructure Gdansk and two nearby yards - Gdynia and Szczecin - that employ thousands of people, and it has pumped 1.3 billion euros of Brussels's money into them since joining the union in May 2004. The EU has welcomed Warsaw's plans to streamline operations at Gdynia and Szczecin, and the yards will not have to give back any money; but the government's failure to reveal what it wants to do with Gdansk could result in a demand for repayment of perhaps 50 million euro in subsidies, a bill that could bankrupt the historic yard. A spokesman for the European Commission said last month that two of Gdansk's three shipbuilding slipways would probably have to close for restructuring to be effective at the loss-making enterprise. Poland's deputy economy minister Pawel Poncyliusz said a bill for 50 million euros would cripple the yard.

ITN Source | August 22, 2007

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