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Commission approves state aid to iconic Gdańsk shipyard

Published 23 July 2009
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The Polish government won the approval of the European Commission yesterday (22 July) to allocate 251 million euros of state aid to Gdańsk shipyard, seen as a symbol of the fight against Communism.

The European Commission said in a statement that the owners of the Gdańsk yard, privatised in 2007, had presented a restructuring plan that would to a large extent be financed from private resources raised by the yard and its owner. 

The executive arm of the 27-nation European Union promised on 2 June to approve Poland's rescue package for its historic Gdańsk shipyard, boosting the pro-EU, centre-right government a week ahead of the European Parliament elections (EurActiv 3/06/09). 

The Commission said the proposed restructuring plan will ensure the viability of the yard and that competition concerns, caused by years of subsidised operations, will be reduced by production capacity closures. 

The EU executive is satisfied that the plan is in line with the requirements of its guidelines on rescue and restructuring aid. 

The yard will close two out of the three existing slipways, and has committed to operating with a single slipway or alternative launching facility, with a maximum production of 100,000 compensated gross tonnage annually, the Commission said. 

There is no mention of how many jobs will have to go. But workers have claimed that the work force could shrink by a third with the loss of some 1,000 jobs, the Polish press reports. 

It was in Gdańsk in 1980 that electrician Lech Wałęsa set up Solidarity, the then Soviet bloc's first free trade union, which helped overthrow communism in the region twenty years ago. Wałęsa went on to become Poland's president (1990-1995). He won the Nobel peace prize in 1983. 

(EurActiv with Reuters.)

Positions: 

"This has been one of the longest and most difficult cases I have had to deal with, but I am very pleased that we have now found a constructive solution," said EU Competition Commissioner Neelie Kroes.

"We have made a tremendous effort to make sure that the yard will be viable for many years to come," she added. 

She said restructuring was the only way to secure jobs for workers at the yard, which was the cradle of the Solidarity trade union which helped topple Communist rule.

Jerzy Buzek, Polish president of the European Parliament told EurActiv, "I welcome this decision and hope that it will allow the employees to keep their places of work as well as that the production of ships will continue in Gdańsk".

Karol Guzikiewicz, the Solidarity  union leader at the yard, called EU approval only a "partial success". "These decisions are good for the shipyard, but moderately, because redundancies will take place," he told Polish television station TVN 24. 

Poland's deputy treasury minister, Zdzisław Gawlik, told PAP agency that the EU decision "puts an end to long-standing doubts that accompanied plans for restructuring the Gdańsk yard". 

"It's a success for the government," declared Andrzej Sadowski, an economist at the Adam Smith Center, on Polskie Radio. According to him, the Commission's decision is "beneficial for the yard, but could be nasty for a number of other companies". "The Polish economy is not reduced to the yard. There are hundreds of thousands of other companies, especially small firms. They never catch the government, whereas they should, because they are the strength of the Polish economy," he said.

 

Background: 

Last April at the European People's Party congress in Warsaw, in the presence of Commission president José Manuel Barroso, (EurActiv 30/04/09), Polish politicians vigorously appealed to the EU to help save the iconic shipyards of Gdańsk, Gdynia and Szczecin, which were at the centre of the struggle against Communism in the 1980s. 

Since 2002, Gdańsk shipyard has benefited from various aid measures including capital injections, guarantees, loans and tax write-offs designed to keep it afloat. 

Based on the notification of restructuring aid to the yard by Poland in October 2004, the European Commission opened a formal investigation in June 2005 to scrutinise the restructuring plan in detail. 

In November 2007, the yard was privatised and the new owner first attempted to merge shipyards in Gdańsk and Gdynia. A plan for this common project was rejected by the Commission, in the context of its November 2008 decision on state aid to Gdynia shipyard (EurActiv 07/11/08), mainly because it was not sufficient to secure the long-term viability of the yards. 

The owner of Gdańsk shipyard, Ukrainian industrial group ISD, has submitted a stand-alone restructuring plan for the site. 

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