The effects of EU’s firmness towards Polish shipyards

Boguslaw Kowalski

It was neither the Treaty of Lisbon nor the EU subsidy payments for peasants nor the proposals of the reform of the EU institutions but the fate of the Polish shipyards that became the main subjects of the campaign before the elections to the European Parliament. The problem could be seen as only a national one, having little to do with our membership in the European Union. But this is only an apparent observation. After a thorough analysis we can see a strong connection between the decisions of Brussels and the fall of the Polish shipyards. Their future might have been different if the Polish government had followed a different policy. And this is the core of the argument. What kind of economic politics should we exercise, being inside the European Union?

Are all countries equal in the EU?

The fundamental task of the European Union, which was formed at the beginning of the integration process, is building a common market, embracing all member states. The market is created by introducing economic rules, which are the same for all. One of the essential rules is free competition, concerning every European company, regardless of its country of origin and functioning. The European Commission, which among other things fights against giving by particular governments national financial help to their companies, guards the principle of equal competition. Preference for national companies and supporting them infringes this principle in an obvious way. However, the problem is that there are exceptions to any regulation. The European Union has accepted a developed and complicated legal system regulating the principles to grant help. Despite the big number of regulations there is still some space for interpretation. In some cases the Commission acknowledges help as illegal, infringing the principles of common market and in other cases it regards help as justifiable or needy to realise some elements of a different EU policy or as justifiable for social reasons. These numerous cases of granting help by the state and violating the principle of free competition are the basis for objections directed towards the European Commission that it does not treat all countries in the same way.

Poland must be punished

Brussels showed such firmness towards the Polish shipyards. Last year the European Commission made a final decision that the help that had been given to the shipyards in the previous years infringed the EU law and was illegal. It demanded reimbursement of the granted sum of money, which was several billion zloty. Since the shipyards did not have such money they were to bankrupt. That concerned three biggest shipyards in Gdansk, Gdynia and Szczecin. The Polish government led by Donald Tusk did not seek other solutions and accepted the decisions of the EU officials. In January 2009 the ruling coalition of Citizen’s Platform and the Polish Peasants’ Party, against a very strong protest of the opposition, passed a special shipyard bill, which regulated in detail the process of liquidation of all three shipyards. According to the requirements of the European Commission the property of the shipyards was divided into parts and was to be sold by open tender. The bill does not force the buyers to continue production of ships. They can use the property in whatever way they want. The same concerns the employees. The new owners have a free hand to employ whomever they want. All workers of the shipyards will lose their jobs by the end of May 2009 – altogether over 10,000 people.

Mysterious investor

Most property of the New Szczecin Shipyard and the Gdynia Shipyard was bought by the United International Trust, registered in the island of Curacao in the Archipelago of the Dutch Antilles. It is a very mysterious company about which even the economic intelligence services cannot say much. Supposedly, it has Arab capital from the region of the Persian Gulf. One MP of the Citizen’s Platform said that it was a company connected with production of equipment to explore natural resources from the sea floor and it could have produced such machines in the shipyards. The place of the company’s registration is not praiseworthy. In the so-called tax paradises there are various kinds of registered speculative capital rather than serious industrial businesses. Anyway, the company is not a trade investor. It could be only some agent and in fact we do not know the real buyer. The Ministry of Treasury is to give more information about the investor after signing a purchase contract with it. The main part of the property of the Szczecin Shipyard was sold for 161 million zloty and the property of Gdynia shipyard was sold for 288 million zloty. These sums were severely critically evaluated. For example, the sold property in Szczecin included two shipways (Wulkan and Odra), a painting hall, prefabrication, the Southern Shipyard and design offices. The experts claim that their worth was much higher; some say it was even 1.5 billion zloty. The new owner declared to build ships in both cities. But this declaration serves to calm the mood and it not a real guaranty of the existence of the Polish shipyards. Since this cannot be written in the contract as the condition because neither the bill nor the conditions of the tender provide for this. And the new owner can approach the contract as speculative fund and sell selected parts or the whole to the possible buyers for a higher price. Its mysterious character can suggest this possibility. Anyway, after the sale of the property of the shipyard, divided into parts, the government has lost its control of what will happen and who will be the final buyer.

Dangerous precedence

For many years the shipyards were the pride of the Polish economy. They were symbols of industrialisation, technological and civilisational development of Poland. Their fall is an alarming sign of the times. It was in the shipyards that the workers’ revolt began and it brought about independence changes. Today, on the round anniversary of those events the shipyards are liquidated. The revolution eats its own children. The old is pulled down but you do not know whether something new will be created. And will it be better? The examples concerning other branches of industry do not bring optimism. The solution for the shipyards rather leads to destruction and marginalisation. This stand of the ruling coalition PO-PSL results from two key premises. Firstly, from the liberal attitude towards economy. Free market is favoured and so is the assumption that property is worth the buyer’s offer and that capital does not have any passport. Other factors such as the fight to destroy competition or formal-legal machination are not taken into consideration. The present ruling team was in power in the early 1990s. We remember that time as a period of big misuse of funds. Then such phrases ‘liberals-speculators’ or ‘thievish privatisation’ were created. The second premise is the way of exercising politics within the EU. Because the previous government was often criticised by the European press the present cabinet is afraid of that and wants to be politically correct and be worthy of praise. Therefore, it avoids conflicts with the European Commission. It concerns the shipyards and e.g. the issue of opening the international market of passenger trains. Our government does not use the economic crisis and does not try to change the proposals flowing from Brussels to be more beneficial to us. But on the platform of the EU institutions there are tough arguments and consistent struggle for one’s interests. Such an attitude is not egoistic but shows realism of community life. The consequences of such an attitude will be very painful for Poland. Since a certain form of our presence in the European Union will be created. Every next government that will want to change this is bound to face stronger opposition and even more acute criticism.

"Niedziela" 22/2009

Editor: Tygodnik Katolicki "Niedziela", ul. 3 Maja 12, 42-200 Czestochowa, Polska
Editor-in-chief: Fr Jaroslaw Grabowski • E-mail: