EC will demand EUR 550m from troubled Izar

19th October 2004, Comments 0 comments

19 October 2004, BRUSSELS - The European Commission will urge the Spanish government Wednesday to repay EUR 550 million in aid which was illegally paid to struggling state shipbuilding firm Izar, commission sources said Tuesday.

19 October 2004

BRUSSELS - The European Commission will urge the Spanish government Wednesday to repay EUR 550 million in aid which was illegally paid to struggling state shipbuilding firm Izar, commission sources said Tuesday.

The EC will ask for the cash plus interest to be repaid despite Izar's current industrial problems.

Enrique Martínez Robles, president of SEPI, owners of Izar, warned that paying back the cash would "drive Izar into liquidation in under five months".

Izar has already been ordered to repay EUR 111m and EUR 308m in aid, which were also declared illegal.

The total cash which the company will have to return to the EC will be EUR 1.2 billion, with interest included.

Bosses at Izar and unions were expected to meet Tuesday to discuss the latest plans to save the company, which has been badly hit by competition from Asia.

The government has proposed privatising the civil side of the business, which is less profitable, and concentrating on the military side.

But in a serious of violent strikes, workers have opposed this plan as they fear it will mean some of the 10,700-strong workforce will lose their jobs.

Last week, the troubled state-run shipbuilding company Izar won a government contract worth EUR 500 million.

The contract Izar will be to construct four S80 class submarines, two naval ships and 12 speed launches.

They will  also carry out modernisation work on the current Spanish navy.

Two weeks ago, unions representing Izar workers and bosses of the state-run company met EU competition commissioner Mario Monti in an effort to resolve the long-running dispute over the EC cash.

Industrial unrest at Izar is 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.

[Copyright EFE with Expatica]

Subject: Spanish news

0 Comments To This Article