By Piotr Skolimowski and Gabriela Baczynska
WARSAW (Reuters) - Poland vowed Wednesday to fight on to save its historic shipyards from bankruptcy after emergency talks between the European Commission and Warsaw failed to resolve doubts over state aid they received.
Polish Treasury Minister Aleksander Grad met EU Competition chief Neelie Kroes Tuesday over restructuring programs for the shipyards in Gdynia and Szczecin, where the anti-communist movement Solidarity was born in 1980.
An adviser to the Polish government who took part in the meeting said Kroes had said she would recommend that the 27-member Commission take a negative stand on the plans.
"We've lost the battle, but not the war," Grad told a news conference in Warsaw. "I still expect the entire European Commission to show a minimum of good faith."
Grad called on Kroes to present a written justification for her decision by Friday and said he would ask European Commission President Jose Manuel Barroso to appoint a panel of experts to assess the viability of the plan.
Barroso had previously expressed satisfaction with the government's commitment to resolving the state aid row but Grad accused Kroes Tuesday of "lack of good will in this case."
Under EU rules, governments can give financial help to ailing companies only if it ensures long term viability.
If the Commission rejects the plans, the two yards plus the privatised Gdansk will have to repay state aid worth more than 2.3 billion euros (1.85 billion pounds), forcing them into bankruptcy.
Grad said the main sticking point between Poland and the Commission concerned the extent of the state aid. He said that Poland would still move to privatise the yards but it would be more costly if they have already been declared bankrupt.
"It is not in the interest of the European Union's competitive position in the world, particularly against Asia, because it would cost us more to go through the bankruptcy procedures," he said.
Poland's deputy prime minister also said that Polish yards deserved state help just as some countries have been helping their banks to endure the global financial crisis.
"How is a bank different from a (ship) yard?," Waldemar Pawlak said Wednesday.
PROTESTS
The yards' bankruptcy would deal a serious blow to the centre-right, pro-EU government of Prime Minister Donald Tusk.
The government submitted its latest plans on Szczecin and Gdynia to Brussels on September 12 after Warsaw's plea for a last chance. The Commission, which is conducting a separate probe on Gdansk, is expected to deliver official verdict in a few weeks.
Workers at the Gdansk shipyard plan to stage protests in Brussels Friday.
"We want to apologise to Commissioner Kroes for what in our opinion is the outrageous behaviour of minister Grad," said Karol Guzikiewicz, deputy head of the Gdansk yard union. "The restructuring program that he presented was bad and unrealistic right from the start."
Unions oppose the plans fearing it would bring job cuts. But the government says all workers might have to de fired in case of bankruptcy.
State-owned Gdynia and Szczecin and the Gdansk yards employ about 15,000 workers but Polish officials say as many as 60,000 jobs could be at risk including f suppliers and related sectors.
Successive governments have failed to deal with the problem since Poland joined the EU in 2004. The yards have not made profit on a single ship built since then and would have collapsed without subsidies. But, if properly managed, they could still flourish, analysts say.
(Editing by Gareth Jones and Sami Aboudi)
