Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — LeaderSHIP 2015 — Defining the Future of the European Shipbuilding and Repair Industry — Competitiveness through Excellence’ (COM(2003) 717 final)
Date: 2004-06-30
Institutions: European Economic and Social Committee
Subjects: EU industrial policy, aid to industry, competitiveness, shipbuilding

7.12.2004

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II

(Preparatory Acts)

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

410th PLENARY SESSION OF 30 JUNE AND 1 JULY 2004

Opinion of the European Economic and Social Committee on the ‘Communication from the
Commission to the Council,
the European Economic and Social
Committee and the Committee of the Regions — LeaderSHIP 2015 — Defining the Future of the
European Shipbuilding and Repair Industry — Competitiveness through Excellence’

the European Parliament,

(COM(2003) 717 final)

(2004/C 302/01)

On 21 November 2003, in accordance with Article 262 of the Treaty establishing the European Com-
munity, the Commission decided to consult the European Economic and Social Committee on the above-
mentioned proposal.

The Section for the Single Market, Production and Consumption, responsible for preparing the Committee's
work on the subject, adopted its opinion on 9 June 2004. The rapporteur was Mr Van Iersel.

At its 410th plenary session of 30 June and 1 July 2004 (meeting of 30 June), the European Economic and
Social Committee adopted the following opinion by 109 votes to three with one abstention.

1. Executive summary

2. Background

The Commission has devised a new policy framework in close
cooperation with the European shipbuilding and repair
industry. It is surprising that stakeholders have rapidly been
involved in putting together a broad package of measures
aimed at securing production and competitiveness in this
sector. The EESC notes with approval the method used and the
contents of LeaderShip 2015. All the parties involved recognise
that a national approach no longer has any future and that
only a European approach will provide sustainable solutions. In
this approach the right choice has been made for a coherent
package and for complying with market rules. The EESC would
stress that the credibility of the proposals depends entirely on
their implementation. Follow-up is therefore crucial. Participa-
tion, transparency and careful control of the various processes
must be ensured. The EESC fully supports the proposals' objec-
tive of producing a competitive European level playing field.
This in turn is a precondition for achieving a world playing
field.

2.1 The shipbuilding market

Strong continuous growth in the production of ships
2.1.1
has been experienced for more than two decades. Rapid tech-
nological progress has led to considerable reduction of costs
for waterborne transportation, providing an effective stimulus
to global trade and making world-wide shipping the key driver
of globalisation.

Ships,

2.1.2
from an economic perspective, are mobile
investment goods, which are not imported but registered under
a flag, chosen by the ship-owner. As such, the product does
not require extensive marketing efforts or dealer or mainte-
nance networks. Naturally, transportation costs of vessels are
also very low. With low transaction costs generally and no
anti-dumping rules which apply, the shipbuilding market is
heavily determined by offer prices.

As a result of its crucial role in providing the essential
2.1.3
transportation for global
trade, building modern
means of
for security and defence needs and developing
equipment
advanced technologies with numerous
to other
sectors, shipbuilding is regarded as a strategically important
industry for most industrialised and industrialising countries.

spin-offs

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2.1.4
In Europe a diversified network of companies related
to the production of ships, including shipyards, marine equip-
ment manufacturers, and a variety of specialised service provi-
ders has developed, providing directly more than 350,000 jobs
for a highly qualified workforce. The sector in the EU has a
turnover of around EUR 34 billion (1).

2.1.5
Commercial shipbuilding in the EU has however lost
massive market share due to damaging business practices
mainly from South Korea and faces serious difficulties. Since
2000 the market share for new orders (in compensated gross
tonnes – cgt) has dropped by two thirds, from 19 % in 2000 to
6.5 % in 2003 (2). The situation worsened by mid-2003 with
prices at their lowest level for 13 years together with a further
strengthening of the euro exchange rates with respect to the
shipping currency, the US dollar, as well as with respect to the
currencies of the main Asian competitors. In particular in the
last year international trade has increased dramatically, driven
by the extraordinary strong growth of China's demand for
energy and raw materials as well as the import and export of
manufactured goods. This demand has led to a record of new
orders,
tankers, bulk carriers and
containerships. European shipbuilders benefited from this
demand surge and have been able to almost double the order
intake in 2003 compared to 2002. Nevertheless, their share of
the world shipbuilding market continued to decrease.

in the segments of oil

2.1.6
The dramatic trend until mid-2003 has levelled off to
a certain extent in several Member States. However, the latest
developments may not last and Europe should seek sustainable
solutions for the shipbuilding industry in the near future. If
not, Europe could run the serious danger of losing this vital
high technology sector. Experience shows that once ship-
building capabilities are lost, they are unlikely to be recovered.

2.2 Developments in shipbuilding policy

2.2.1
As a strategically important sector, shipbuilding has
traditionally been an industry with strong government interven-
tion world-wide. In the European Community as well ship-
building policy has, since the 1970s, focused on defining the
conditions for state-aid systems. The authorised ceiling for
operating aid was gradually reduced from 28 % of the contract
value in 1987 to 9 % in 1992 and finally completely eliminated
from 2000.

2.2.2
In 1989 on an initiative of the USA, negotiations were
started in the OECD context with the objective of putting in
place a new international discipline for all government support
to shipbuilding. These negotiations were successfully concluded
the Agreement Respecting
in 1994 and the Final Act of
Normal Competitive Conditions
in the Commercial Ship-
building and Repair Industry was signed by the European
Communities, Finland, Japan, the Republic of Korea, Norway,
Sweden and the United States. However, since the United States
failed to conclude their national ratification procedures, the
Agreement never entered into force.

2.2.3
In the absence of an international agreement, in 1998
the Council concluded a new shipbuilding regulation [EC
1540/98] establishing a new set of rules for state aid, including
a full abolition on a unilateral bases of operating aid by the end
of 2000. The regulation also required the Commission to
monitor closely the world shipbuilding market and to appraise
whether European yards were affected by anti-competitive prac-
tices.

2.2.4
Already in its first monitoring report to the Council
issued in 1999, the Commission provided clear evidence of
damaging business practices in particular from shipyards in
South Korea that offered prices below cost. All the monitoring
reports (seven in total until 2003) that followed confirmed the
initial findings, providing more and more detailed evidence.

2.2.5
Based on such convincing facts, the Council repeatedly
expressed its serious concerns and initiated bilateral consulta-
tions with South Korea. After several rounds of talks, an agree-
ment in the form of Agreed Minutes relating to the World
Shipbuilding Market was signed in June 2000. However, in the
subsequent talks the Korean Government proved unable to
implement the principles laid down in the agreement.

Since the bilateral

2.2.6
talks with Korea ended without
results, the shipbuilding industry filed a complaint under the
Trade Barriers Regulation (TBR – [EC 3286/94]) in October
2000.

2.2.7
The Commission remained firmly opposed to an
extension of the operating aid at the end of 2000. However,
the Commission did agree to bring the case to the WTO in
order to seek remedy against unfair Korean practices if a nego-
tiated solution with Korea satisfactory to the EU could not be
achieved by May 2001. In addition the Commission proposed
in parallel a defensive temporary support mechanism specifi-
cally designed to counter unfair Korean practices for the period
necessary for the conclusion of the WTO procedure.

(1) Data from the study on the Economic Impact of Maritime Industries
in Europe commissioned by the European Commission from the
Policy Research Corporation N.V. & ISL.

(2) Source: Lloyds' Register.

The Community finally implemented this so-called
2.2.8
twin-track policy in summer 2002, with the filing of a panel
request to the WTO and the decision on the Temporary Defen-
sive Mechanism (TDM – [EC 1177/02]).

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2.2.9
Renewed efforts to achieve a world-wide level playing
field in the shipbuilding sector were launched in 2002 also in
the OECD framework context, this time without the participa-
tion of the USA. The OECD Council established a Special Nego-
tiating Group, aiming to find a new and effective solution to
the existing problem. Progress until now is regarded as being
rather slow and it remains to be seen to what extent this
approach will be feasible.

3.2.2 With the end of operating aid, the industry accepted
that subsidies were not the way forward, nor was protectionism
of the kind that resulted in uncompetitive industries in ship-
building nations outside the European Community. However,
the aggressive industrial policy in South Korea had to be chal-
lenged urgently. A new approach was therefore needed.

3. A new approach

As an overview, the steps towards LeaderSHIP 2015 are

3.1
listed chronologically:

3.2.3 When the Committee of EU Shipbuilders' Associations
(CESA) presented its outline proposal for the Leadership 2015
initiative to the European Commission in spring 2002, the
value of the project as a sector specific response to the EU's
longer term strategy as defined by the Lisbon Council was
immediately recognised. LeaderSHIP 2015 did in fact address
the key elements of the Lisbon strategy.

February 2002:

Industry

the European Shipbuilding and Ship-
repair
outline
proposal for an initiative under the title
LeaderSHIP
Commissioner
Liikanen;

presents

2015

an

to

May 2002

European Commission President Romano
Prodi endorses the initiative and Commis-
sioner Liikanen is asked to coordinate the
follow up;

October 2002

the industry hands over a road map to
Commissioner Liikanen;

January 2003

Commissioner Liikanen chairs the inau-
gural meeting of
the LeaderSHIP 2015
High Level Advisory Group;

October 2003

the High Level Advisory Group hands its
report to the European Commission;

November 2003

the European Commission releases the
Communication on LeaderSHIP 2015;

November 2003

the Competitiveness Council addresses
LeaderSHIP 2015 in the context of indus-
trial policy;

January 2004

the new framework on State Aid to Ship-
taking
building is entering into force,
already into account some of
the key
issues from LeaderSHIP 2015 and thereby
implementing the first recommendations
of the High Level Advisory Group.

3.2 Industry's Roadmap

3.2.1 While the Community approach to the shipbuilding
sector has mainly focused on competition and trade policy, the
industry felt that a third corner stone - competitiveness policy
and in particular a sound concertation of all three policy fields
- was lacking. It also acknowledged its own shortcoming in
bringing forward its own concerted response to the competitive
challenges it was facing.

3.2.4
An overall-strategy had to be elaborated, based on
elements of the existing approach but the new element being
the invitation of the Commission to industry to formulate an
integrated plan. In October 2002, CESA presented LeaderSHIP
2015, a Roadmap for the Future of the European Shipbuilding
and Ship-Repair Industry.

For the European shipbuilders,

3.2.5
the objective is to
improve leadership in selected market segments by strength-
ening competitiveness through innovation and selective R&D,
focus, production optimisation and the
greater customer
improvement of
the industry structure. According to the
industry, objectives in which the EU should be directly involved
include the promotion of advanced financing and guarantee
schemes, higher safety and environmental standards in relation
to new high quality vessel orders and the maintenance and
enhancement of the protection of European intellectual prop-
erty.

3.2.6
common policy on procurement of defence materials.

A European approach to naval defence needs implies a

3.2.7 Macro trends up to 2015 in this sector imply in par-
ticular developments in relation to multi-modal
transport,
inland waterways and short sea shipping, reinforcement of
innovation and R&D, EU enlargement, environmental and
health regulations and a progress towards a Common Defence
Policy. Because of the impact of government and EU policies in
all these areas in the view of the industry the Commission
should actively participate in the development of ideas in view
of forthcoming policies.

3.2.8
The shipbuilding sector itself accepts a big responsi-
bility for bringing its own house in order. The Roadmap advo-
cates therefore the development of new vessel types and new
generations of marine equipment, combining efficiency, safety,
comfort, environment and specialisation.

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3.2.9
As far as the structure of the industry is concerned
two complementary approaches involving the companies are
foreseen:

— restructuring the industry to arrive at a limited number of

large companies;

— small, very flexible companies networking to serve smaller

niche markets.

3.3 The High Level Advisory Group

At the beginning of 2003, a High Level Advisory
3.3.1
Group, chaired by Commissioner Liikanen, started discussions
on LeaderSHIP 2015 based on the CESA Roadmap. The Group
included seven European Commissioners,
two prominent
Members of the European Parliament, the CEOs of the 10
major Shipyards,
the marine equipment
industry association and the General Secretary of the European
Metalworkers Federation.

the Chairman of

3.3.2
The Advisory Group published its report LeaderSHIP
2015 in October 2003 (1). It embraces eight chapters, reflecting
all the issues covered by the Industry roadmap plus a final
chapter on needs of consolidation for the European ship-
building industry. The overall conclusion of the Group is that
‘LeaderSHIP serves as a good example for an effective European
industrial policy on sectoral level’.

3.3.3
In these eight chapters the Group identifies objectives
for the shipbuilding sector and for the EU as such. First of all,
it proposes the creation of a level playing field in world ship-
building through the EU trade policy, enforcement of applic-
able WTO rules and enforceable OECD disciplines.

3.3.6 Maritime environment protection is streamlined by
the European Maritime Safety Agency. A joint
expert
committee of relevant maritime stakeholders who holds tech-
nical knowledge is to be established in order to provide both
the Agency and the Commission with technical advice. Quality
assessment improvement, safety and control on both ship-
building and ship repair should be intensified in order to guar-
antee that appropriate quality standards are applied world-
wide.

The call of

industry for more cooperation in the
3.3.7
defence sector according to the Group can be supported at EU
level by promoting industrial cooperation between yards and
between yards and suppliers, access to export markets and
consolidation of the industry. Common operational require-
ments of national navies and common rules for defence equip-
ment are needed via the planned European Defence Agency.

3.3.8
Since European shipbuilders strongly depend on their
technological leadership the existing instruments for protection
of intellectual property rights have to be fully exploited. Knowl-
edge data bases are required and international rules to protect
patents have to be improved.

The shipbuilding sector has formally established a
3.3.9
committee for the sectoral social dialogue (the first of its kind
within the metal trades), in which programmes for new skill
requirements are to be analysed and addressed.

3.3.10
An optimal industrial structure is needed to achieve
the desired results. A dynamic development process is leading
to new relationships and project partnerships between yards
and suppliers, given that today suppliers account for 70-80 %
of a yard's production. A consolidation process with special
incentives should be facilitated, based on the concept of ‘aid for
consolidation’.

On the central issue of R&D and innovation a close
3.3.4
cooperation between the EU and the shipbuilding sector is
needed. The relevant Community regulation did not fully take
into consideration the specific needs of shipbuilding and its
technology.

3.4 Commission Communication

3.3.5
This is also true for developing advanced financing
and guarantee schemes. The present tools are not competitive
on the world market. The possibility of establishing an EU-wide
guarantee fund for pre- and post-delivery financing should be
explored as well as an intensified cooperation with export
credit insurance companies, covered by appropriate re-insur-
ance.

(1) LeaderSHIP 2015. Defining the Future of the European Shipbuilding
and Ship repair Industry published by the European Commission,
Brussels, 2003.

3.4.1 With its Communication on LeaderSHIP 2015 (2) the
Commission transposes the work of the High Level Advisory
Group into formal Community policy.
It emphasises once
again that a horizontal policy needs to be complemented with
specific sectoral approaches. The Commission provides an
assessment on each of the chapters and endorses the recom-
mendations of the LeaderSHIP 2015 report.

(2) COM(2003) 717 final.

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In the Communication, in which the strategic dimen-
3.4.2
sion of shipbuilding and ship repair is acknowledged,
the
Commission in line with the LeaderSHIP report confirms its
responsibility and co-responsibility in the following areas
covered by the eight chapters of the Advisory Group report:

— in the OECD Sector Understanding on export credits and
related OECD agreements together with the promotion of a
world level playing field via WTO;

3.5 Council Conclusions November 2003

3.5.1
On 27 November 2003 the Competitiveness Council
has discussed the Commission Communication on LeaderSHIP
2015 in the wider context of industrial policy (2). The Council
recognised the importance of sectorial analysis to sharpen hori-
zontal policies and invited the Member States and the Commis-
sion to strengthen industrial competitiveness, notably by taking
into account the needs and specificities of individual sectors.

— the Commission has adopted rules applicable to innovation
aid and it will monitor the effects of Community-funded
research;

3.5.2
and textiles and clothing are specifically addressed.

In relation to sectoral issues shipbuilding, aeronautics

— together with the industry the Commission will explore the
possibilities of pre- and post-delivery financing in coopera-
tion with the EIB;

— the Commission fully supports the recommendations of
LeaderSHIP on the promotion of safer and more environ-
mentally-friendly ships and on policies to exploit opportu-
nities for Short Sea Shipping across Europe;

— on naval shipbuilding the Commission supports the recom-
mendations which are in line with its Defence Communica-
tion of March 2003 on preparations for a European
Defence Agency in 2004 in order to strengthen the defence
and technological base and competitiveness of the defence
industry. With respect to consolidation among naval ship-
yards, it is worthwhile to note that privately owned yards
point to the structural differences between European yards,
claiming that
‘private ownership is a pre-requisite to
succeed in any consolidation effort (1)’;

3.5.3
The views of the Council are inspired by the need of a
fully integrated approach to enhance competitiveness. The
same goes for LeaderSHIP 2015.

The objectives of

3.5.4
the strategy of Lisbon require
sectorial analyses, improvement of the framework conditions
and an open and transparent consultation of all stakeholders,
including a social dialogue. The Council emphasises continuing
initiatives in this respect.

As regards LeaderSHIP 2015 the Council recommends
3.5.5
particular efforts of industry and of public authorities relating
to:

— EU state-aid rules on investment in innovation;

— encouragement of research, development and innovation;

— protection of intellectual property rights by Member States

and industry;

— the Commission will cooperate with industry in exploiting
the existing instruments for Intellectual Property Rights
Protection and in setting up appropriate knowledge data
bases;

— facilitating a consolidation process among European produ-

cers;

— the Commission will cooperate with industry through an
active social dialogue on new skill requirements, exchange
of staff on all
training courses and the
support for a vital and sustainable shipbuilding industry;

levels, special

— encouraging approaches designed to bring about greater
cooperation between naval and shipbuilding resources in
Europe;

— addressing new skill requirements, in the context of a social

dialogue within the sector.

— since a consolidation process is needed in commercial and
naval shipbuilding, and ship repair, which are primarily the
responsibility of industry and of the Member States, the
Commission is ready to facilitate the process, respecting
competition rules.

(1) COM(2003) 717 final, page 14 line 22.

3.5.6
The Council wants to be informed regularly on the
results of LeaderSHIP and on the implementation of its recom-
mendations.

(2) Council conclusions on the ‘Contribution of industrial policy to
European Competitiveness’ — Brussels, 24 November 2003
(15472/03).

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4. General remarks

5. Conclusions and recommendations

The EESC agrees that Europe needs a viable shipbuilding

4.1
industry and that sector specific policies have to be foreseen.

4.2
It is remarkable to note that industry has succeeded in
defining a cohesive programme for the period to 2015. This
model for a modern sectoral approach is correctly based on EU
rules as regards market conformity and competition.

Equally remarkable is that

4.3
industry itself and seven
Commissioners have issued a common plan for the future:
LeaderSHIP 2015. This reciprocal commitment has led to the
approval of LeaderSHIP by the Commission.

4.4
The EESC appreciates positively the new approach of
the Competitiveness Council as regards horizontal and sectoral
industrial policy. The case of LeaderSHIP shows how such
industrial policy can fine-tune requirements resulting from
sectoral aspects with horizontal approaches.

4.5
The EESC welcomes the specific recommendations of
the Council concerning the shipbuilding and ship-repair sector.
These correspond with the recommendations of the Commis-
sion and the sector itself in LeaderSHIP 2015.

4.6
The EESC welcomes this change of perspective for ship-
building policy as the fruit of both a new method of working
and of a new approach to industrial policy on a sectoral level.
These could serve as a model for similar initiatives in other
sectors.

4.7 More specifically, the EESC is of the opinion that instead
of the continuation of national policies, only shared views and
principles and commonly agreed practices in the EU will create
a sound base for a sustainable shipbuilding and repair industry
in Europe.

4.8
The enlargement of the European Union holds opportu-
nities as it can add valuable assets, which allow a European
presence in market segments not served any more by EU ship-
yards before Enlargement (1). Applicable Community rules must
be fully respected.

LeaderSHIP 2015 can only be successful,

if action is
4.9
undertaken simultaneously by all participating partners (indus-
trial partners, the Commission and, in some cases, the Member
States) on all chapters, each player acting in areas for which he
is responsible.

(1) Such as e.g. large crude oil tankers and bulk carriers which require
lower technological skills and for which labour cost constitutes a
comparatively large cost element.

5.1
The credibility of the proposed policy depends on its
implementation. Follow-up is crucial and this has to be a trans-
parent process that is carefully monitored. Participation, trans-
parency and adequate monitoring have to be safeguarded. In
addition to the Conclusions of the Council the EESC is strongly
in favour of a yearly progress report by the Commission to the
Competitiveness Council.

LeaderSHIP 2015 starts with the objective of a world-
5.2
wide level playing field. The EESC underlines the importance of
this policy area as a corner stone for the entire strategy. It fully
supports the present EU trade policy approach, aiming at an
effective international agreement which ensures tight disciplines
world-wide.

the impact of

The EESC underlines that

5.3
the unfair
competition from some shipyards in Asia not only constitutes
a considerable threat to the European shipyards, but should
alarm also the European marine-equipment
industry. The
the leading Asian shipbuilding
announcements in some of
countries that they will concentrate on local content, for their
supplies must be taken very seriously.

5.4
In the context of a level playing field, the sector disci-
pline in the EU itself is not specifically mentioned, although
there are still different levels and methods of support to ship-
building by Member States. The internal level playing field and
the transparency and monitoring of it are points of special
concern. In order to promote the credibility of the process and
trust in accordance with the agreed rules and objectives the
EESC stresses the importance that the Commission monitors
the application of state-aid rules and possible unfair practices.

R&D and innovation are of paramount

importance,
5.5
because Europe is still the source of shipbuilding ideas for the
world. This is therefore another key element to ensure success.
It is therefore important that various instruments provide effec-
tive support and implemented in a practical manner. Industry
can be helpful in providing policy-makers with concrete advice.
In any case the application of innovation instruments must be
transparent.

5.6
In order to streamline ship financing tools both at
national and EU-level the EESC's view is that the European
guarantee fund as suggested in LeaderSHIP should become
operative as soon as possible. Its implementation should be a
priority for the Commission. This fund can contribute to
creating an effective level playing field in the EU itself.

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5.7
The EESC welcomes the agreement between industry
and the Commission on the kind of environmental require-
ments and policies which are necessary in the sector. The EU
should continue to take the lead in protecting the maritime
environment and in pushing for strict implementation of rele-
vant international rules. A coordinated European approach to
the International Maritime Organisation can help to ensure a
satisfactory level of effectiveness to support authority of the
IMO to act exclusively in setting the global rules.

5.8
Considerable improvements in the legislation on safe
shipping have been achieved in the EU over the last years.
However, greater attention is required as regards appropriate
standards for maintenance of ships, as suggested by Leader-
SHIP.

5.9
The EU still has considerable weaknesses concerning the
enforcement of applicable rules on safety and security in ship-
ping. The EESC therefore strongly advocates effective coopera-
tion between European coastguards.

5.10
The strengthening of short sea shipping and the objec-
tive of moving traffic from road to sea are also important
environmental goals. To achieve these goals modern infrastruc-
ture, including ports as well as ships, must be further improved.
As far as public funding of this infrastructure is concerned,
public authorities should safeguard that the investments are
carried out to the benefit of EU producers.

The human factor is an essential element and the EESC
5.11
welcomes the intention to intensify the sectoral dialogue in
which the Commission, employers and the trade unions each
have their role to play. It is remarkable that it is in shipbuilding
where the first formal Social Sectoral Dialogue Committee in
any of the metal trades has been established; another indication
for the innovative attitude of the sector.

5.12
The Social Dialogue is already making valuable contri-
butions to a broad range of social topics, including training,
to cyclical
life-long learning and adjustment
recruitment,

Brussels, 30 June 2004.

waves. To date two working groups have been established, one
aiming to improve the image of the industry and the other to
identify new skills required within the shipbuilding sector.

5.13
able differences in labour productivity world-wide.

The Social Dialogue should also address the consider-

5.14
The EESC agrees with the increasing approach in
Europe in favour of special segments of the manufacturing
industry such as shipbuilding and aeronautics in relation to
defence objectives, with an interaction between civil and
defence industry.

In this context it is pleasing that LeaderSHIP calls for
5.15
European naval projects and cooperation between naval yards.
National security considerations and divergent traditions have
hampered these so far. But if the Europeans do not decide on
closer cooperation, costs will continue to spiral upwards and
endanger the lead in innovation and technology danger.

and between France

5.16
Successful cooperation projects already exist, such as
those between Germany and the Netherlands on the building of
frigates
and the United Kingdom
concerning carriers. New projects may be planned in collabora-
tion with the forthcoming European Armaments Procurement
Agency. Optimum synergy between yards is very important for
maintaining and improving knowledge and know-how. It is
desirable that the Agency be asked for an inventory of available
capacities, technology and innovation at naval yards, so that
the best value for money can be pursued in new calls for
that naval yards clients are
tenders. Taking into account
Governments,
and
spill-over of
merchant vessels production should be avoided.

subsidies between naval

5.17
Consolidation of the industry is seen as a cornerstone
for the future viability of the sector. It remains to be seen,
however, how this process will be realised, given the compli-
cated relationship between the core business and the high
percentage of suppliers.

The President

of the European Economic and Social Committee

Roger BRIESCH