Sinking hopes

The historic Gdańsk Shipyard - birthplace of the Solidarity movement - could be forced to close down if it does not comply with the European Commission's demand to present a plan to limit its production. This limiting of production is a trade-off for the state aid Gdańsk Shipyard has received from the Polish government and the resulting advantage it has had over other European shipyards, the EC argues.

The deadline for presenting the plan is August 21. If the deadline is not met, the EC will demand the shipyard repay the state aid. So far the shipyard has received zł.36 million out of a planned zł.192 million, but it might have to pay even more, due to possible fines, and doing so could lead to the shipyard's liquidation.

A source close to the shipyard explained to WBJ that the reduction of work expected by EC would involve the closing of two out of three slipways, likely making the shipyard unprofitable. The source contended that such a move would not be necessary, since due to the strong demand for ships, European shipyards do not have to compete against each other. The source emphasized that the EU should concentrate on competing with countries such as China.

The source added that the state aid given to the Szczecin and Gdynia Shipyards was much higher, and that the EC's decision may be appealed by a private investor, which is expected to join the shipyard by the end of the year.

Tomasz Teluk, an economic expert from the Centre for the New Europe, a Brussels-based think tank, said that it's worth finding a compromise with the EC. Such a radical production reduction at Gdańsk Shipyard may be discouraging for any new investor, he told WBJ. Given the size and significance of Gdańsk Shipyard's production, it could also put the entire Polish shipyard industry in danger.