The European Commission, seeking to save troubled European shipyards, gave governments the green light to double research aid for shipbuilders. The move is designed as a defence against South Korea’s shipbuilders who, according to the EU, get millions in subsidies to undercut rivals around the world. Research funds for shipyards will be subject to strict guidelines. They will only be allowed to build “state of the art” ships. The percentage of state support for expenditure on investments needed to fund the innovative aspects of the projects is doubled from 10 to 20%, according to the EC statement.
European shipbuilding turns over £24 billion a year, more than half through exports, and employs 350,000 people. Last year, the EU granted exemptions from state aid rules to let governments bail out shipbuilders competing with Korean-built container ships and some tankers. South Korean shipyards have seen their market share soar in recent years to 36% of the world market while the EU share has shrunk to only 8%. European shipyards have reported bankruptcies and massive layoffs. The EU and South Korea have lodged complaints at the World Trade Organisation accusing each other of unfairly supporting their shipbuilders.