EU needs to be 'convinced' by Polish shipyard restructuring to avert decision

The European Commission said on Tuesday it needs to be convinced by restructuring plans put forward by the Polish government for the Gdynia and Szczecin shipyards to avoid a decision demanding repayment of aid. Polish Treasury Minister Aleksander Grad will be in Brussels on Friday for discussions with EU competition commissioner Neelie Kroes on the matter. A spokesman for Kroes said: "Unless we are convinced that there will be serious restructuring in the short term that would render the yards viable and that there would be sufficient compensatory measures, then we would have no option but to continue our preparations for a negative decision." The spokesman said he hoped Grad's meeting with Kroes would "shed further light on the situation and help (the commission's assessment)".
Poland has struggled to find a formula to prop up the yards, which were at the heart of the solidarity movement that overturned communism in Poland, since its accession to the European Union put stiffer limits on the public aid it could award.
The yards, which have struggled to compete on the shipbuilding market since the mid-1990s, are still major employers on Poland's Baltic coast. On the third Polish shipyard under investigation, Gdansk, Kroes' spokesman previously said the commission delivered an information injunction to the Polish authorities on May 26, giving them one month to provide the EU executive with information concerning the shipyard's restructuring.
In June 2005, the commission opened a formal inquiry into Polish shipyard aid worth at least 1.3 billion euros and said at the time it would only be deemed legal if it was accompanied by "meaningful restructuring plans". Gdynia, Szczecin and Gdansk are Poland's biggest yards and altogether they employ around 16,000 people.

Source: CNBC