Poland's Gdansk Shipyard at Risk

♠ Posted by Emmanuel in at 8/22/2007 01:40:00 PM
The Gdansk shipyard in Poland (Polska) will forever be known as the birthplace of the Solidarity (Solidarnosc) trade union movement, whose actions against the then-Communist government helped lead to the government's eventual downfall and inspired other folks in Soviet bloc countries to free themselves from their Bolshevik shackles. A lot is owed to the Solidarity movement for inspiring others to put up a brave fight against these totalitarian regimes, though I'd bet Vladimir Putin would take umbrage with this version of history.

The Commanding Heights website which I feature on my links list features tons of excellent material on international political economic history. All the contents of the PBS documentary of the same name is available there. (As an aside, we use this material for some IPE courses here at the University of Birmingham--what higher recommendation can I make?) If you have a QuickTime viewer, you can relive the pivotal moment when the Iron Lady, Margaret Thatcher, met with the Solidarity movement's leader, the electrician Lech Walesa. It was an odd juxtaposition in many ways, yet the union-bashing Hayek follower Thatcher and the union man Walesa thought the same way: with Poland's economy in shambles, the Communists had to go.

Today, however, it seems that the free market is having its revenge on Gdansk shipyard as it has not fared very well in spite of receiving subsidies in recent years. Ironically, whereas the Soviet Union was a big customer back in the day, Gdansk now faces uncertain commercial demand. The EU is prodding the Polish leadership to reconsider the economic viability of keeping the shipyard open just because of its iconic status. From the BBC:

The future of Poland's iconic Gdansk shipyard remains in doubt as a key European Union (EU) deadline approaches for the site to reduce its capacity.

Brussels has given Poland until the end of Tuesday to either close two of Gdansk's three slipways or else repay 51m euros ($69m; £35m) of European aid.

EU Competition Commissioner Neelie Kroes is now studying Poland's calls to keep open two slipways at Gdansk.

The shipyard is the birth place of the celebrated Solidarity trade union.

Solidarity founder Lech Walesa said he would consider it a "personal failure" if the Gdansk shipyard was not saved.

Back in 1980, a strike by 17,000 ship builders at Gdansk saw Solidarity recognised as the first non-communist trade union in the then Soviet Eastern Bloc.

The move was one of the first successful steps that led to the eventual collapse of communism, not just in Poland but Eastern Europe as a whole.

Under communism Gdansk could count on regular work from the Soviet Union, but it has struggled to compete in the post-communist free market and now employs 3,000 people.

The historical importance of the Gdansk shipyard is a central reason why the Polish government is loath to see its capacity cut too deeply.

The government argues that leaving Gdansk with just one slipway would turn it into "a tiny company instead of a shipyard".

However, under EU rules, state aid for struggling shipyards can only be granted if it is accompanied by extensive cost-cutting aimed at restoring long-term viability.

Another condition is that private investors must be brought on board.

Without such moves, the EU insists that the aid paid to Gdansk is illegal and therefore needs to be repaid.

Reports suggest that Ukrainian company Donbas, Italian shipbuilder FVH, and Middle Eastern investors are interested in taking over the Gdansk site.