Polish Shipyard Aid Under Scrutiny

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. We need to see a plan which is likely to result in viable companies capable of facing up to competitive pressures within the EU”, the Competition Commissioner Neelie Kroes commented. The formal state aid investigationconcerns 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 Gdañska - Grupa Stoczni Gdynia S.A. (Gdansk Shipyard) started their restructuring process already in 2002. New Szczecin Shipyard is owned by the public Agencja Rozwoju Przemys³u S.A. (Industrial Development Agency, ARP), Gdynia Shipyard Group is majority owned by the State Treasury. 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. The Commission has doubts 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. The Commission has therefore opened formal investigation procedures to allow Poland and third parties to submit comments in order to verify these points.