Polish negotiators likely to satisfy EC demands on restructuring the steel sector

Polish negotiators have offered the European Commission (EC) considerable cuts in the production capacities of the major Polish steel mills. Today the chief EC negotiator Francoise Gaudenzi will evaluate if that is enough to deem the Polish steel restructuring program reliable and sufficient to close competition policy negotiations. The decision is likely to be positive. According to Rzeczpospolita the cuts in the production capacity offered by negotiators go further than the radical program considered by the government, which envisaged reducing capacities by one third and to lower sector employment by one quarter to 30,000 workers. The main cuts will affect the Sendzimira and Katowice steel mills which produce around 70% of the nation's steel. EU steel concerns fear that if the two Polish steel mills are granted aid they may become tough competitors on the European steel market. If the Polish government decides to reduce the steel mills output, they will become less attractive for EU concerns, which would like to take advantage of lower production costs in Poland. EC analysts estimate that both mills need at least euro 1 billion investment to meet quality standards demanded by the market. (Rzeczpospolita, p. B2) A.Z.