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Poland: EU To Reject Shipyard Plans

European Union suggested it will reject Warsaw's plans to save two troubled shipyards in northern Poland, the Polish treasury minister said.

WARSAW, Poland (AP) -- The European Union suggested it will reject Warsaw's plans to save two troubled shipyards in northern Poland, the Polish treasury minister said Wednesday.

Aleksander Grad met EU Competition Commissioner Neelie Kroes late Tuesday in Brussels to discuss Poland's rescue plans for the ailing yards in Szczecin and Gdynia.

Grad told reporters in Warsaw that Kroes made "general statements as to why the programs cannot be accepted" by the European Commission -- but he made clear that Poland plans to keep fighting to save the shipyards.

"In the light of what we heard yesterday, the huge discrepancies between the assessment of these programs by our experts and what the commissioner said, I believe that we cannot consider the matter closed today," Grad said.

He urged Kroes and European Commission President Jose Manuel Barroso to set up an independent team of experts to analyze Warsaw's restructuring plans, and asked Kroes to present her reservations in writing by Friday.

Last month, Poland submitted to the European Commission a business plan for preserving the indebted yards, currently kept afloat by hefty government subsidies.

EU regulators warned that, without a tenable plan to make the yards independently profitable, they would order the Polish government to reclaim the aid money. Brussels argued that artificially supporting failing shipyards violated EU state aid rules and distorted competition.

Retracting the money could push the yards into bankruptcy, endangering thousands of jobs.

The EU has a say over the fate of the yards because the aid was allotted after Poland joined the 27-nation bloc in 2004.

In the past four years, the Gdynia yard received €497 million ($704 million) in aid and production guarantees of €915 million ($1.3 billion). The Szczecin yard received €165 million ($233 million) and production guarantees of €570 million ($807 million).

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