EU Competition Commissioner Neelie Kroes said today that the government's strategy for the privatisation of Malta Shipyards was not acceptable under EU law.

She was speaking at the airport after a visit of a few hours during which she had meetings with the Prime Minister and ministers on whether the privatisation plans were in line with EU rules and undertakings agreed with Malta before its accession to the EU.

Asked about the government's intention to write off €100 million in losses before the shipyard is privatised, the commissioner said she disagreed with the proposed method in principle but was expecting a new business plan from the government in the coming weeks.

State subsidies to the dockyard are to cease on December 31 and the commissioner ruled out any extension, saying the agreement reached before Malta joined the EU needed to be respected.

While in Malta Ms Kroes also met President Eddie Fenech Adami and MLP leader Joseph Muscat as well as officials of the Consumer and Competition Department where she discussed the implementation of EU Competition Policy.

.