The market share for European shipbuilding has dropped 15 percent since 1999, with the Korean slice reaching 38 percent in 2003. While the legal dispute between EU and Korea continues, the European Commission is discussing laws offering temporary aid to boost ailing EU shipbuilding. European state aid regulators are ready to extend the aid measures until 31 March 2005, as the present legislation reaches its expiry date. The regulation from June last year outlines the so-called ‘temporary defensive mechanism to shipbuilding’, set down by Brussels in the wake of its legal dispute with South Korea over anti-dumping practices in the shipbuilding industry.
Under the terms of the law, EU regulators allow member states to offer aid payments, normally seen to contravene strict EU competition policy, to their shipyards involved in constructing tankers carrying gas, chemicals and containers. A 6 per cent total threshold was set for aid of total contract sums in a bid to balance need for subsides and excessive sector-based competitive advantages. The temporary aid measures are only one part of a Brussels attempts to revamp European shipyards. In November last year EU competition authorities authorised national governments to double research aid spent on ailing European shipyards. It was just one part of a 30 stage project from January this year to boost EU shipbuilding by 2015.