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Shipbuilders strike over subsidy payback fears

Hundreds of shipyard workers protested in northern Spain on Thursday against a possible European Union ruling forcing the industry to return state aid.

Shipbuilders strike over subsidy payback fears
Workers fear Brussels may demand that the industry return €3 billion euros it received in the form of tax incentives between 2005 and 2011. Photo: RAFA RIVAS/AFP

Spanish shipbuilders are struggling since the European Union in 2011 ordered the end of subsidies for the sector.

Workers now fear Brussels may demand that the industry return the bulk of the €3 billion euros ($4.0 billion) it received in the form of tax incentives between 2005 and 2011.

Protesters in Vigo in the region of Galicia marched from the port to the European fishing agency offices shouting "We want to work, not emigrate!"

Navantia workers in the industrial city and naval station of Ferrol, also in Galicia, went on strike for two hours.

Construction of the Australian Royal Navy's 25,000 tonne Landing Helicopter Ship HMAS Adelaide, the last ship being made at the Ferrol estuary shipyard,  came to a temporary halt as 2,000 workers downed tools in protest.  

In Sestao, a city in the Basque region, workers marched between two yards with a banner reading: "Shipyard industry: a solution".

The protests coincided with a visit by a Spanish delegation led by Industry Minister Jose Maria Soria to Brussels to argue against the payback.

The minister and regional leaders met with the European competition chief, Spaniard Joaquin Almunia.

Brussels is due to make a decision on July 17 on the fiscal advantages offered to the sector by the Spanish government.

Almunia said on Thursday that only investors, not the shipyards, would be asked to return the aid, delegates at the meetings said.

But shipyards fear that they would be sued in turn by their partners for compensation.

The regional president of Galicia Alberto Nunez Feijoo said in Brussels on Thursday that Almunia's solution "does not solve the problem" and the delegation asked the commission to reconsider its position before July 17th.

The Spanish shipyard association representing 19 private yards, has warned that paying back the aid would mean the end of the industry in Spain and the loss of 87,000 jobs.

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EUROPEAN UNION

The Euro celebrates its 20th anniversary

The euro on Saturday marked 20 years since people began to use the single European currency, overcoming initial doubts, price concerns and a debt crisis to spread across the region.

The Euro celebrates its 20th anniversary
The Euro is projected onto the walls of the European Central Bank in Brussels. Photo: Daniel Rolund/AFP

European Commission chief Ursula von der Leyen called the euro “a true symbol for the strength of Europe” while European Central Bank President Christine Lagarde described it as “a beacon of stability and solidity around the world”.

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002, greeted by a mix of enthusiasm and scepticism from citizens who had to trade in their Deutsche marks, French francs, pesetas and liras.

The euro is now used by 340 million people in 19 nations, from Ireland to Germany to Slovakia. Bulgaria, Croatia and Romania are next in line to join the eurozone — though people are divided over the benefits of abandoning their national currencies.

European Council President Charles Michel argued it was necessary to leverage the euro to back up the EU’s goals of fighting climate change and leading on digital innovation. He added that it was “vital” work on a banking union and a capital markets
union be completed.

The idea of creating the euro first emerged in the 1970s as a way to deepen European integration, make trade simpler between member nations and give the continent a currency to compete with the mighty US dollar.

Officials credit the euro with helping Europe avoid economic catastrophe during the coronavirus pandemic.

“Clearly, Europe and the euro have become inseparable,” Lagarde wrote in a blog post. “For young Europeans… it must be almost impossible to imagine Europe without it.”

In the euro’s initial days, consumers were concerned it caused prices to rise as countries converted to the new currency. Though some products — such as coffee at cafes — slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more stable inflation.

Dearer goods have not increased in price, and even dropped in some cases. Nevertheless, the belief that the euro has made everything more expensive persists.

New look

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

In December, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

“After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds,” Lagarde said.

Euro banknotes are “here to stay”, she said, although the ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world’s second most-used currency, accounting for 20 percent of global foreign exchange reserves compared to 60 percent for the US greenback.

Von der Leyen, in a video statement, said: “We are the biggest player in the world trade and nearly half of this trade takes place in euros.”

‘Valuable lessons’

The eurozone faced an existential threat a decade ago when it was rocked by a debt crisis that began in Greece and spread to other countries. Greece, Ireland, Portugal, Spain and Cyprus were saved through bailouts in return for austerity measures, and the euro stepped back from the brink.

Members of the Eurogroup of finance ministers said in a joint article they learned “valuable lessons” from that experience that enabled their euro-using nations to swiftly respond to fall-out from the coronavirus pandemic.

As the Covid crisis savaged economies, EU countries rolled out huge stimulus programmes while the ECB deployed a huge bond-buying scheme to keep borrowing costs low.

Yanis Varoufakis, now leader of the DiEM 25 party who resigned as Greek finance minister during the debt crisis, remains a sharp critic of the euro. Varoufakis told the Democracy in Europe Movement 25 website that the euro may seem to make sense in calm periods because borrowing costs are lower and there are no exchange rates.

But retaining a nation’s currency is like “automobile assurance,” he said, as people do not know its value until there is a road accident. In fact, he charged, the euro increases the risk of having an accident.

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