EU to give Poland final chance on shipyards

The European Commission will give Poland one last chance on Wednesday to respect EU rules in rescuing its historic shipyards, ordering repayment of illegal state aid but deferring execution until September, EU sources said.

The move follows Prime Minister Donald Tusk's plea for three more months to try to rescue the yards at Gdansk, Gdynia and Szczecin which were the cradle of the Solidarity free trade union that helped topple communist rule in 1989.

It is also an attempt by the EU executive to avoid blame for forcing the politically symbolic shipyards into bankruptcy. Brussels says successive Polish governments over the last five years have failed to keep their word or deal with the problem.

EU Competition Commissioner Neelie Kroes will put a decision to her 26 fellow commissioners on Wednesday on two of the shipyards -- Gdynia and Szczecin, her spokesman said, but the EU sources said it would not be applicable immediately.

The sources said the Commission would rule that the Warsaw government must recover an estimated more than 1 billion euros ($1.6 billion) in aid from the shipyards, but give Poland until Sept. 12 to come up with a compliant rescue plan.

The EU executive will then take a final decision on any new Polish plan by the end of September, they said.

"They will take a deferred decision on Wednesday looking to the autumn," one source told Reuters, speaking on condition of anonymity.

"The aid will have to be repaid unless they give us a restructuring plan that actually complies with the (EU) rules by then," the source said.