Neelie Kroes News

The European Commission has concluded, following four years of investigation, that state aid granted to Gdynia shipyard and Szczecin shipyard gives rise to disproportionate distortions of competition within the Single Market, in breach of EC Treaty state aid rules, and must be repaid. The Commission has simultaneously agreed to accept commitments from Poland for the implementation of the decisions in a way that will quickly create opportunities for viable and sustainable economic activities at the Gdynia and Szczecin sites and so maximize the number of sustainable jobs there. In particular, the Polish authorities have committed to sell the yards' assets through open…

The European Commission has prolonged the Framework on state aid rules for shipbuilding for three more years, until 31 December 2011. This extension follows an earlier extension in 2006 (see IP/06/1452). The Commission has concluded that the Framework, which came into effect on 1 January 2004 (see IP/03/1607) has been applied without any problems and does not need to be revised at this stage. The Framework's main principle is that horizontal state aid rules apply to shipbuilding except where specific provisions apply that reflect the specific characteristics of the shipbuilding industry and market. The specific provisions contained in the Framework concern regional aid, closure aid, export credits, development aid, employment aid and aid for research, development and innovation.

Following the European elections of June 2004, the newly elected European Parliament held its first plenary session from 20 to 22 July. During this session, MEPs formally approved the nomination by the European Council of Portugal's Jose Manuel Durao Barrosso as Romano Prodi's successor as European Commission President. The key institutional change on the maritime front is that the former "RETT" Committee of the European Parliament ("Regional Policy, Transport and Tourism) has been split into two separate committees, Transport and Tourism on the one hand, and Regional Policy on the other. This is a positive development for the shipping industry as one can expect members of the new Transport and Tourism Committee to be more specialised and focused on transport issues.

The European Commission has decided to open formal inquiries into public support for three shipyards in Gdynia, Gdañsk and Szczecin. 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. “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.

The European Commission 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 (Article 296 of the EC Treaty), 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 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.

The European Commission has authorized, under the EC Treaty’s state aid rules, a state guarantee scheme introduced by The Netherlands. Guarantees will be granted to financial institutions providing loans to Dutch shipyards in order to finance the construction of ships. Guarantee premiums will be charged and vary according to the risk of the loan. The premium level will cover the risks of payments and the administrative costs generated by the scheme. Consequently, the scheme should be self-financing. This measure therefore does not constitute state aid and does not threaten to distort competition in the single market. EU Competition Commissioner Neelie Kroes said: “Financial institutions remain reluctant to grant financing to shipbuilding…

Gdansk shipyard will have to be scaled back or face possible closure as Brussels turns the screw on illegal state aid to the Polish shipbuilding sector. Neelie Kroes, the European Union competition commissioner, has given the Polish authorities one month to reduce capacity at the yard or face having to repay the state aid. Ms Kroes on Friday accepted capacity cuts at Poland's Gdynia and Szczecin yards in return for past state aid but said no satisfactory solution had been proposed for Gdansk. The three shipyards have together received 1.8bn in subsidies since Poland joined the European Union in 2004. In Ms Kroes's eyes, that gives the yards an unfair advantage over European competitors. The Commission is pushing for Gdansk to reduce its capacity and to cut its three slipways to one.

The European Commission has approved investment aid of 500,000 eur for the Slovakian shipbuilding company Slovenske lodenice Komarno which operates shipyards on the Danube river in the south of Slovakia. The aid will form part of a 2 mln eur investment project to optimise the shipbuilding yard's layout and make its production processes less dependent on the water level of the Danube. The commission said that, under EC Treaty state aid rules, the investment is compatible with the single market and will not distort competition. EU competition commissioner Neelie Kroes said in a statement: 'The investment project will enhance the competitiveness of this yard. It complies with the stringent conditions applicable to investment aid in the shipbuilding sector.' Source: AFX

The European Commission said it has approved a $5.5m regional investment aid package for the German shipyard Volkswerft Stralsund. The commission said the investment will enable the yard to build larger ships at competitive costs, thereby increasing the productivity of the yard without creating a result in a disproportionate capacity increase. The total investment will be $24.8m, with $5.5m paid as state aid, corresponding to 22.5 pct -- the maximum aid intensity allowed under the Framework on State aid to Shipbuilding. Germany said it would provide aid to Volkswerft Stralsund, situated on the Baltic coast in Mecklenburg-Vorpommern, in August 2005. The region has a standard of living is below the EU average and serious unemployment.