Little enthusiasm for EU at Croatia's sinking shipyards

The cafes are packed on Riva, the palm-fringed promenade on the waterfront at Split, where people sip drinks in the shade of the Emperor Diocletian’s palace and watch white-and-blue ferries glide out across the glinting Adriatic towards Croatia’s myriad islands.

But across the peninsula from where Diocletian – a local boy made good in the Roman Empire – built his vast retirement home at the start of the fourth century, there is no hint of Riva's joie de vivre. Here at Brodosplit, the biggest shipyard in Croatia, the palm trees are dwarfed by cavernous workshops from which engineers emerge blinking into the bright sun, and the sea is glimpsed only between the iron bones of two enormous cargo ships that are taking shape in the slipways. Split has built ships for centuries, and Brodosplit has made them at this site for almost 80 years.

Radical restructuring

Now Croatia is about to join the European Union, but accession day on July 1st will find Brodosplit labouring under a heavy cloud. Last month, almost all the yard’s 3,350 workers were sacked following a privatisation deal demanded by Brussels, which would not let Croatia continue subsidising its loss-making shipyards. The Croatian firm that bought Brodosplit pledged to re-hire at least 2,000 people this year, and hopes to increase the workforce once a radical restructuring of the yard is complete.

But for now, none of the workers can be certain that they will have a job and a salary next month – a plight that does not fire their enthusiasm for the EU or for Croatia’s leaders. “If in one year, I still have a job and prices for basic goods have gone down, then I will think the EU is a good thing. But for now, the EU is not giving us any hope,” said Damir Vucak, an assistant manager at the yard. Shipbuilding in the region has been in the doldrums for two decades. Yugoslavia was a major global player in the industry, but the wars of the 1990s, the loss of the Russian market and the rise of cheaper shipbuilders in Asia spelled disaster for Brodosplit and its peers.

In the last 20 years, Croatian governments are believed to have pumped some €3.75 billion in subsidies into its loss-making shipyards – a situation that could not continue once the country was subject to EU competition rules. "The state tried for 10 years to restructure the industry and failed...Here at Brodosplit, sometimes the cost of producing a ship was double the sale price," said the firm's new vice-president, Darko Pappo.

Non-existent growth

Economically speaking, the country of 4.4 million people is limping into the EU with low or non-existent growth, a rising budget deficit and unemployment climbing beyond 18 percent. “Times are tough and there’s no sign of thing improving soon. It will be hard but I am optimistic,” said Mr Pappo, who urged the EU to value more highly “firms that actually produce something – not just ideas or designs or financial services”.

“We can build a new and successful Brodosplit,” he insisted. “I want this firm to be here forever.” He would have found agreement down on the slipway. “I believe in this place – we can do it,” said Mr Vucak. “We workers love our jobs here, because it’s not just a workplace – it’s our second home and our heritage.”