Crunch talks with EU for striking shipbuilders

4th October 2004, Comments 0 comments

4 October 2004, MADRID –Unions representing striking shipbuilders and bosses of the state-run company Izar were meeting the EU competition commissioner Mario Monti Monday in an effort to resolve the long-running dispute

4 October 2004

MADRID –Unions representing striking shipbuilders and bosses of the state-run company Izar were meeting the EU competition commissioner Mario Monti Monday in an effort to resolve the long-running dispute

The main talking point will be how to resolve the repayment of EUR 1.2 billion of EU aid which was later declared illegal.

Unions will press Monti to allow the state-owned company to delay the repayment of at lest EUR 357 million of EU aid until a plan has been worked out for the future of the company.

If the EU imposes a deadline for repayment of the illegal payments, it could put Izar out of business.

SEPI, the management organisation representing Izar, wants to separate the civil and military wings of the company and sell-off the civil side, which is less profitable.

The military part of the company could receive state help because it is associated with Defence department spending.

The European Commission hopes that Monday's meeting would confirm the two parts of the company will split, with a new public military shipbuilder and a privatised civil company.

Unions have opposed this with a series of violent protests as they claim it will lead to the loss of jobs.

EC competition commission spokesman Tilman Lueder said last week a plan to save the company had still not been worked out.

He added if the two sides of the company were split, it would leave at least 9,000 jobs intact. Currently Izar employs 10,700 workers.

But unions have planned more strikes for Wednesday and later in October.

In recent weeks, the violent dispute has seen at least 30 injured in clashes between police and the strikers.

The Izar workers have used catapult to shoot metal pellets at riot police, while officers have replied with tear
gas.

Unions representing the troubled shipbuilding giant have rejected a government rescue plan.

The strike is being seen as the first real test of new Socialist prime minister Jose Luis Rodriguez Zapatero.

Izar has been in crisis since the EU demanded in May that it repay EUR 300 million of EU aid that Brussels says breached competition rules.

And the European Commission may also demand Izar repay more than EUR 600 million of additional aid, according to SEPI.

Izar is struggling because of tough competition from Asia.

[Copyright EFE with Expatica]

Subject: Spanish news

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