Government, union silent over Brussels' concerns about shipyards' privatisation

Neither the government nor the General Workers' Union will comment on the European Commission's reaction to the shipyard's privatisation, despite the fact that the EU seems to be questioning the very fundamentals of the whole process.

The Times yesterday reported that the Commission was questioning whether the government's plan to write off the yard's pending losses, which amount to about €100 million, is in line with the country's EU commitments.

"Strictly speaking, the striking off of the company's losses constitutes direct state aid and we are still not sure whether this is legal and according to EU Competition rules," Commission sources told The Times. The implication is that the government could be forced to liquidate and sell off the 'yard's assets, rather than transfer the company as a going concern. In turn, this would mean that the company's circa 1,600 workers would be made redundant and would not benefit from the early retirement schemes on offer.

Asked for his reaction, GWU general secretary Tony Zarb yesterday echoed the minister in his no comment. "I cannot comment on the matter. For the time being all our resources are focused on finding a solution with the government," he said.

Negotiations in fact continued yesterday, even if no particular progress was reported. A source close to the negotiations said "things are moving slowly but they're moving... at least there's a will on both sides now."

Finance Minister Tonio Fenech would not comment on the Commission's position on Wednesday. Yesterday he could not be contacted but ministry sources said the position is not likely to have changed.

The ministry did react, however, to the letter which Alternattiva Demokratika sent to the EU Commissioner for Employment and Social Affairs Vladimir Spidla.

In its letter, AD questioned the part in the government's call for expressions of interest in the 'yard's sale, released earlier this month, which says that the 'yard's prospective buyer is not obliged to take on the current workforce.

According to the EU's transfer of business laws (which have been transposed into Maltese law) workers cannot be laid off as a result of a company being sold.

The government insisted in a statement that it had no intention of breaching the transfer of business laws and reiterated its commitment to have the 'yard's prospective buyers take on the workforce left after the early retirement scheme process.

The statement also reiterated that the government had worked out that it would be better for the company to be sold after the workforce is downsized through early retirement schemes. Its conclusion was drawn from a series of internal management reports and assessments made by other shipyards, which had expressed an interest in taking on the shipyards late last year.