Page last updated at 00:48 GMT, Friday, 7 November 2008

Polish subsidies unfair, rules EU

Polish shipyard workers
Thousands of jobs in Poland's shipyards are at risk

The European Commission has ordered Poland to reclaim more than 3bn euros of state subsidies paid to two shipyards which were facing bankruptcy.

The move means Poland will have to sell the Gdynia and Szczecin yards, putting some 60,000 jobs at risk.

The commission said the subsidies were unfair on other EU shipbuilders and has promised to help anyone made redundant.

The shipyards have historic importance in Poland as the focus of the country's anti-communist struggle in the 1980s.

Poland has paid more than $2.7bn (1.7bn:2.1 euros) in illegal subsidies to Gdynia and Szczecin since joining the EU in 2004.

EU Competition Commissioner Neelie Kroes said the decision to force their sale to repay the subsidies was the most difficult she had ever had to present the Commission.

But she said she was confident the solution would increase the chances of profitable activity at the sites and bring good prospects for lasting employment.

Under the deal, Warsaw will sell the shipyard's assets to reclaim the money, then sell off the yards themselves.

But the new owners would be under no obligation to continue building ships or to keep on the thousands of workers employed there.

Jobs fears

Polish shipyard workers protest at EU headquarters in Brussels (28/10/2008)
Workers have protested against the sale at EU headquarters
Polish Treasury Minister Aleksander Grad said that the compromise was "good for Poland and good for the shipyards".

"It allows us to go ahead with the privatisation calmly," he told reporters in Warsaw.

"We will try to carry out the sale of the assets in a way that ensures the buyers could both continue ship-building activities as well as other economic operations."

Mr Grad said the sell-off would ensure "all of the possible protection measures for workers" under EU programmes.

Gdynia and Szczecin employ about 4,500 people in all, but the Polish government has said up to 60,000 jobs could be threatened in related supply and service areas.

Unions have expressed concern over the fate of employees and said the sale could mean "the end of the shipbuilding industry in Poland".

Marek Lewandowski, a spokesman for the Solidarity union at Gdynia, said they were waiting to hear details of the deal before making any decisions.

The Commission has not yet reached a decision on the nearby Gdansk shipyard, the birth place of the celebrated Solidarity trade union which overthrew communist rule in 1989.

The yard is currently in the hands of a Ukrainian investor, Industrial Union of Donbass (ISD).

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