The European Commission and Croatian government have reached an agreement on the privatisation and restructuring of the country’s ailing shipyards.

Deputy Prime Minister Damir Polancec announced yesterday that the agreement, a key stage of Croatia’s EU accession negotiations, will concentrate on Uljanik shipyard in Pula, the only one of Croatia’s five yards that remains profitable. The model agreed will see 25 per cent of Uljanik’s shares offered to employees, while 59 per cent of its shares will be sold for their nominal value.

Meanwhile, the other five ailing shipyards – including Brodosplit, one of Europe’s oldest yards – will be sold for the symbolic price of 1 Kuna (GBP 0.80), but the buyer will have to take on all debt and renovation costs. International tenders will be launched by the end of July.

According to IHS Global Insight, the lack of accord on how best to privatise Croatia's yards had held up the opening of talks on competition, widely recognised as the toughest chapter for aspirant EU nations. The privatisation of the shipyards had been in the pipeline for a number of years, however, given the high level of government subsidies (illegal according to EU legislation) provided to five of the six shipyards, progress had been slow.