BRUSSELS PROBES POLISH YARD AID

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THE European Commission says it has decided to open formal inquiries into public support for three shipyards in Gdynia, Gdansk and Szczecin.

The EC says that it has doubts as to whether the aid granted is capable of restoring the long-term viability of the yards. It also has doubts whether the companies undertook adequate capacity reductions to compensate for the distortion of competition and whether the beneficiaries’ own contributions are sufficient to demonstrate their commitment to restructuring.

An EC statement says: “The restructuring aid granted to these yards will be scrutinised in the light of EC Treaty rules on state aid, and in particular the rules on state aid to companies in difficulties, in so far as it has been granted after the accession of Poland to the European Union on May 1 2004. The Commission will not examine several measures granted by the Polish authorities before accession.”

Competition Commissioner Neelie Kroes said: “The type of aid proposed by the Polish authorities is only compatible with EU rules if accompanied by a detailed restructuring plan involving durable industrial restructuring and not limited to servicing debt and improving liquidity. We need to see a plan which is likely to result in viable companies capable of facing up to competitive pressures within the EU”

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The investigation will look at financial support given by various Polish authorities both at the central and local level to the restructuring of the three largest Polish shipyards in Gdynia, Gdansk and Szczecin. Stocznia Szczecinska Nowa Sp.z o.o. (New Szczecin Shipyard) as well as Stocznia Gdynia S.A. (Gdynia Shipyard Group) (and its subsidiary Stocznia Gdanska - Grupa Stoczni Gdynia S.A.

The EC statement said: “In all three cases, some aid was granted before accession, and some after accession. The Commission has no competence to assess the compatibility of aid granted before accession. However, the Commission is competent to act with regard to state aid granted after accession even if the state support falls in the context of restructuring launched before accession.”

Meanwhile the EC has approved, under the terms of the EC Treaty’s rules allowing Member States to take measures to protect essential security interests linked to defence industries, a reorganisation of the Spanish public military shipyards. These yards were formerly owned by IZAR but have recently been taken over by a new company called Navantia. The EC says: “The solution allows Spain to protect its essential security interests by rescuing its military shipyards, while ensuring that there will be no undue distortion of competition in the market for civil shipbuilding and ship repair. The solution also takes account, to the greatest possible extent, of the social and regional problems involved in this case.”

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