The EU yesterday ordered the Polish government to repay €2.3bn (£1.9bn) of illegal state aid to two shipyards, Gdynia and Szczecin, at the heart of the union-led revolt against communism in the 1980s.
The European commission gave the government to the end of May to sell the yards' assets to recoup aid spent over the past four years. It must then liquidate the companies owning them.
But it held out the hope that the more famous yard at Gdansk, birthplace of the Solidarity movement, could be rescued through a new restructuring plan. It is now owned by Ukraine's Donbass group.
Paying tribute to the "tremendous integrity" shown by the Gdynia and Szczecin workers in their prolonged campaign to save their yards, Neelie Kroes, competition commissioner, said the commission's ruling was one of the toughest she had submitted to her 26 colleagues.
The decision follows the recent move to reclaim hundreds of millions of euros in illegal state aid from the Greek national airline Olympic, which is also being sold off and broken up.
It is a warning to EU governments that the EU will clamp down on state bail-outs of manufacturing firms hit by the recession as a distortion of competition.
Kroes rebutted criticism that the EU was unfairly discriminating against industry by allowing governments to rescue distressed or struggling banks with huge injections of capital and loan guarantees.
"First, we have been authorising rescue aid for banks whose failure could have had catastrophic knock-on effects on member states' financial sectors and in turn their economies as a whole, potentially harming seriously every citizen and every business in Europe," she said.
She added that rescue aid for banks was approved for only six months. "If the banks concerned receive aid going beyond pure rescue, they too will have to undergo restructuring to restore their viability, just as the shipyards were supposed to do."
Kroes, who is investigating an "over-generous" state scheme to stabilise Germany's second-largest bank, Commerzbank, indicated she would call in Austria's plan to inject €2.9bn into Erste bank. She believes the interest rates charged on fresh capital from the two states are too low.
The decision on the two Polish yards ends a four-year dispute between Brussels and Warsaw over successive governments' use of subsidies and their failure to submit restructuring plans on time.
"But the sad reality is that the very large subsidies received were consistently used for day-to-day operations, to keep the yards going in the short term rather than invested to make them viable in the long term," Kroes told reporters. In the middle of a global shipbuilding boom, the two yards made a loss on every ship they built.
Under the new scheme Poland will have to sell off assets, at market prices, so it will not be saddled with any liabilities. Kroes said that the yards could carry on building ships but the government could not insist that the new owners retained the current workforce of 10,000.
The European commission gave the government to the end of May to sell the yards' assets to recoup aid spent over the past four years. It must then liquidate the companies owning them.
But it held out the hope that the more famous yard at Gdansk, birthplace of the Solidarity movement, could be rescued through a new restructuring plan. It is now owned by Ukraine's Donbass group.
Paying tribute to the "tremendous integrity" shown by the Gdynia and Szczecin workers in their prolonged campaign to save their yards, Neelie Kroes, competition commissioner, said the commission's ruling was one of the toughest she had submitted to her 26 colleagues.
The decision follows the recent move to reclaim hundreds of millions of euros in illegal state aid from the Greek national airline Olympic, which is also being sold off and broken up.
It is a warning to EU governments that the EU will clamp down on state bail-outs of manufacturing firms hit by the recession as a distortion of competition.
Kroes rebutted criticism that the EU was unfairly discriminating against industry by allowing governments to rescue distressed or struggling banks with huge injections of capital and loan guarantees.
"First, we have been authorising rescue aid for banks whose failure could have had catastrophic knock-on effects on member states' financial sectors and in turn their economies as a whole, potentially harming seriously every citizen and every business in Europe," she said.
She added that rescue aid for banks was approved for only six months. "If the banks concerned receive aid going beyond pure rescue, they too will have to undergo restructuring to restore their viability, just as the shipyards were supposed to do."
Kroes, who is investigating an "over-generous" state scheme to stabilise Germany's second-largest bank, Commerzbank, indicated she would call in Austria's plan to inject €2.9bn into Erste bank. She believes the interest rates charged on fresh capital from the two states are too low.
The decision on the two Polish yards ends a four-year dispute between Brussels and Warsaw over successive governments' use of subsidies and their failure to submit restructuring plans on time.
"But the sad reality is that the very large subsidies received were consistently used for day-to-day operations, to keep the yards going in the short term rather than invested to make them viable in the long term," Kroes told reporters. In the middle of a global shipbuilding boom, the two yards made a loss on every ship they built.
Under the new scheme Poland will have to sell off assets, at market prices, so it will not be saddled with any liabilities. Kroes said that the yards could carry on building ships but the government could not insist that the new owners retained the current workforce of 10,000.