EU regulations threaten future of Gdansk shipyard
Gdansk shipyard, the birthplace of the anti-communist Solidarity movement, will have to be scaled back or face possible closure as the European Union turns the screw on illegal state aid to the Polish shipbuilding sector.
Neelie Kroes, the EU's competition commissioner, has given Polish authorities a month to reduce capacity at the shipyard or face having to repay the state aid.
Repayment of at least $71 million could close Gdansk and cost thousands of jobs, but Kroes says she wants to give Warsaw one last chance to avert closure.
Pawel Poncyliusz, the Polish government official responsible for shipyards, said, "That would mean bankruptcy. The yard doesn't have the resources to pay that kind of money."
Kroes recently accepted capacity cuts at Poland's Gdynia and Szczecin shipyards in return for past state aid but said no satisfactory solution had been proposed for Gdansk.
The three shipyards have together received $1.8 billion in subsidies since Poland joined the EU in 2004. In Kroes' eyes, that gives the yards an unfair advantage over European competitors.
"The European Commission has welcomed the proposal by Poland to reduce capacity in the Polish shipyards in Szczecin and Gdynia, as a necessary step forward in the restructuring process financed by state aid," the commission said. "As for Gdansk shipyard, Poland has so far not proposed adequate capacity reductions."
The commission is pushing for Gdansk to reduce its capacity and to cut its three slipways to one. The yard wants to keep two slips, which, with improvements, would allow it to increase capacity over today's level.
Kroes is aware of the political sensitivity at the EU's Brussels headquarters forcing job losses and capacity reduction at Gdansk, let alone closing the yard, but believes measures are necessary to ensure free competition in the sector.
The Gdansk yard has enormous symbolic importance for Poland and particularly for its conservative government, many of whose senior members cut their political teeth during the 1980 strikes that led to the creation of the Solidarity labor union and eventually the downfall of communism.
But the advent of market economics in 1989 left the yards in a difficult position, competing against efficient and often heavily subsidized yards in Asia. The yards have gone in and out of bankruptcy and in and out of private and government hands and are heavily in debt.
The government is now committed to privatizing all three yards.
"Poland's government cannot allow the Gdansk shipyard to fall," Poncyliusz said. "In addition to being a symbol, we want this to be a functioning shipyard."
Neelie Kroes, the EU's competition commissioner, has given Polish authorities a month to reduce capacity at the shipyard or face having to repay the state aid.
Repayment of at least $71 million could close Gdansk and cost thousands of jobs, but Kroes says she wants to give Warsaw one last chance to avert closure.
Pawel Poncyliusz, the Polish government official responsible for shipyards, said, "That would mean bankruptcy. The yard doesn't have the resources to pay that kind of money."
Kroes recently accepted capacity cuts at Poland's Gdynia and Szczecin shipyards in return for past state aid but said no satisfactory solution had been proposed for Gdansk.
The three shipyards have together received $1.8 billion in subsidies since Poland joined the EU in 2004. In Kroes' eyes, that gives the yards an unfair advantage over European competitors.
"The European Commission has welcomed the proposal by Poland to reduce capacity in the Polish shipyards in Szczecin and Gdynia, as a necessary step forward in the restructuring process financed by state aid," the commission said. "As for Gdansk shipyard, Poland has so far not proposed adequate capacity reductions."
The commission is pushing for Gdansk to reduce its capacity and to cut its three slipways to one. The yard wants to keep two slips, which, with improvements, would allow it to increase capacity over today's level.
Kroes is aware of the political sensitivity at the EU's Brussels headquarters forcing job losses and capacity reduction at Gdansk, let alone closing the yard, but believes measures are necessary to ensure free competition in the sector.
The Gdansk yard has enormous symbolic importance for Poland and particularly for its conservative government, many of whose senior members cut their political teeth during the 1980 strikes that led to the creation of the Solidarity labor union and eventually the downfall of communism.
But the advent of market economics in 1989 left the yards in a difficult position, competing against efficient and often heavily subsidized yards in Asia. The yards have gone in and out of bankruptcy and in and out of private and government hands and are heavily in debt.
The government is now committed to privatizing all three yards.
"Poland's government cannot allow the Gdansk shipyard to fall," Poncyliusz said. "In addition to being a symbol, we want this to be a functioning shipyard."