Poland tries to save shipyards from EU

Polish Treasury Minister Aleksander Grad will meet European Union competition authorities on Friday to discuss the future of two bankruptcy-threatened major shipyards, officials said.

The European Commission, the EU's executive arm, said last month that it was likely to order state-controlled yards Gdynia and Szczecin to repay state aid -- a move that could bankrupt the firms where anti-Communist movement Solidarity was born.

The Polish government aid, estimated at 1.3 billion euros ($2 billion), will be considered illegal unless the companies quickly present restructuring programmes involving cuts in production capacity.

The Commission hopes Grad will convince EU Competition Commissioner Neelie Kroes that Poland is serious about overhauling the yards quickly so the aid need not be repaid.

"We would expect the visit of the minister will help to throw further light on the situation and will help in our assessment," Commission spokesman Jonathan Todd told a daily news briefing on Tuesday.

"Unfortunately, unless we are convinced that there will be serious restructuring in the short term ... we would have no option but to continue our preparations for a negative decision," he said.

Grad said in late May that Poland hoped to get a few more months from the Commission to resolve issues relating to the shipyards, possibly by finding strategic investors.

Brussels has warned it is running out of patience after investigating the issue for three years.