Gdansk Shipyard Faces Uncertain Future

Brussels has become wise to Poland's underhanded protection of its precious, yet inefficient, Baltic shipyards in Gdynia, Szczecin and Gdansk - and they want their money back. Since joining the EU in 2004, Poland has poured an estimated 1.3 billion in aid into its shipyards to keep them afloat. But under EU law, governments cannot give aid to ailing companies without enacting active plans to make them financially viable in the future - something which Poland has shown no evidence of doing. Now Warsaw faces an ultimatum: provide information on 'adequate capacity reductions' and restructuring plans at the yards by August 20th, or start paying back the money.

"Poland must be able to demonstrate that the restructuring plans would ensure the yards' long-term viability free of further state support. New private owners, to be chosen in the on-going privatisation process, must therefore draw up restructuring plans enabling the yards to stand on their own two feet and become profitable," the EU Commission reported. Quick to respond, Warsaw proposed 'capacity reductions' at the Gdynia and Szczecin shipyards which have been welcomed by the EU Commission. However, reductions for the Gdansk shipyard were deemed inadequate and the Commission has basically given Poland its 'final chance' to save the shipyard, with the August 20th deadline standing firm. A failure to make the necessary reductions by the deadline will result in Poland's obligation to reimburse the ill-spent aid. Repaying the aid could easily bankrupt Gdansk and cause the loss of thousands of jobs. The Gdansk, Gdynia and Szczecin shipyards employ about 16,000 people. With the recent reductions, one Gdynia dock has been closed and one left open, while at Szczecin one slipway has been closed and two left in operation. Commission spokesman Jonathan Todd has said, At Gdansk it would be necessary, in the Commissions view, for two slipways to be closed." The issue with the Gdansk shipyard is obviously the touchiest due to its place in history as the birthplace of Solidarity - a central force in communism's fall throughout Eastern Europe. However, the Gdansk shipyard is also probably the least efficient of the three shipyards and most in need of help.

Former Solidarity trade union leader and former Polish president Lech Walesa has openly condemned this attempt by the EU to close down most of the Gdansk shipyard, saying, "The European Union should help us to bring efficiency to the shipyard, and we should not lose it as part of some stupid political game."

In all fairness, this has been an ongoing process for over two years now, the initial EU investigation having been launched in June 2005. The EU has thus far shown nothing but patience and flexibility toward Polish authorities, but it seems the grace period has officially come to an end and the EU is intent on demonstrating that this is not 'some stupid political game.' The Gdansk shipyard's years of inefficiency have been a huge drain on the economy and Poland's failure to reform the shipyard's operation (instead pouring billions of dollars into it) needs to come to an end. Hopefully Poland and the EU Commission can come to an agreement in the next week that will encourage the Gdansk shipyard's financial viability, rather than the impotent downfall of such a historic symbol of the people's power.