EU sets Poland shipyard deadline

Thousands of jobs in Poland's shipyards are at risk

The European Commission has set a new deadline of 12 September for the Polish government to submit a restructuring plan to rescue its ailing shipyards.

If the commission is not satisfied with the new restructuring plan it will order the shipyards to repay state aid - a move that could bankrupt them.

The deadline affects the famous Gdansk shipyard, birthplace of the Solidarity union which ended communist rule.

The commission says it is awaiting the outcome of talks with potential buyers.

Besides Gdansk, the main shipyards affected are the nearby Gdynia and Szczecin yards. They received hundreds of millions of euros in illegal state subsidies after Poland had joined the EU in 2004.

In all, the commission says, Gdynia received capital injections, loans and production guarantees worth 1.41bn euros (£1.12bn), while Szczecin received 735m euros (£583m) in similar illegal aid.

Speaking on Wednesday, EU Competition Commissioner Neelie Kroes said that "in the last four years, we've made a tremendous effort to work with the Polish authorities to find a positive solution, to ensure sustainable jobs and the long-term profitability of the yards.

"Unfortunately, the restructuring plans on the table today are not acceptable for the commission because they would not achieve that objective."

The Polish government has pledged to submit a new restructuring plan by 12 September conforming to EU competition rules.

According to the commission, Polish Prime Minister Donald Tusk has said talks with potential investors are very advanced.