Decision of the European Parliament

of 10 April 2002

concerning discharge in respect of the implementation of the budget of the European Coal and Steel Community (ECSC) for the 2000 financial year

(2002/448/ECSC)

THE EUROPEAN PARLIAMENT,

- Having regard to the financial statements of the ECSC at 31 December 2000(1) and the Court of Auditors' report thereon(2),

- Having regard to the Court of Auditors' annual report on the ECSC for the 2000 financial year (including the statement of assurance on the ECSC), and the Commission's replies (C5-0043/2002)(3),

- Having regard to the ECSC Treaty, and in particular Article 78g thereof,

- Having regard to Rule 93 and Annex V of its Rules of Procedure,

- Having regard to the report of the Committee on Budgetary Control (A5-0079/2002),

1. Grants discharge to the Commission in respect of the management of the ECSC for the figures relating to the implementation of the operating budget for the 2000 financial year, shown in the annex below;

2. Records its observations in the attached resolution;

3. Instructs its President to forward this decision and the resolution which forms an integral part thereof to the Council, the Commission, the Court of Justice, the Court of Auditors, the European Investment Bank and the ECSC Consultative Committee and to have them published in the Official Journal (L series).

The Secretary-General

Julian Priestley

The President

Pat Cox

(1) OJ C 185, 30.6.2001, p. 2.

(2) OJ C 363, 19.12.2001, p. 40.

(3) OJ C 366, 20.12.2001, p. 1.

ANNEX

ECSC BALANCE SHEET AT 31 DECEMBER 2000

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PROFIT AND LOSS ACCOUNTS FOR YEAR ENDING

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IMPLEMENTATION OF THE ECSC OPERATING BUDGET

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Resolution

of the European Parliament containing the observations which form an integral part of the decision concerning discharge in respect of the implementation of the budget of the European Coal and Steel Community (ECSC) for the financial year 2000

THE EUROPEAN PARLIAMENT,

- Having regard to Article 78g and Article 97 of the ECSC Treaty,

- Having regard to the Protocol annexed to the Treaty establishing the European Community on the financial consequences of the expiry of the ECSC Treaty and on the research fund for coal and steel, agreed at Nice on 26 February 2001(1),

- Having regard to the ECSC Financial Report for the year 2000, published by the Commission's Directorate-General for Economic and Financial Affairs (Financial Operations Service),

- Having regard to the financial statement of the ECSC at 31 December 2000(2) and the Court of Auditors' report thereon(3),

- Having regard to Article 89(7) of the Financial Regulation of 21 December 1977, pursuant to which each of the Community institutions is required to take all appropriate steps to act on the observations appearing in the discharge decisions,

- Having regard to the Court of Auditors' report on the ECSC for the 2000 financial year (including the statement of assurance on the ECSC), together with the Commission's replies (C5-0043/2002)(4),

- Having regard to the Joint Declaration of the European Parliament, the Council and the Commission concerning post-ECSC arrangements adopted on 21 November 2001 in the context of the "trialogue" budgetary procedure (Council of the European Union)(5),

- Having regard to the Council recommendation of 5 March 2002 (C5-0124/2002),

- Having regard to the Council resolutions of 20 July 1998(6) and 21 June 1999(7),

- Having regard to the Commission's communication to the Council, the European Parliament, the ECSC Consultative Committee, the Economic and Social Committee and the Committee of the Regions, "Expiry of the ECSC Treaty: financial activities after 2002" (COM(2000) 518), containing proposals for Council Decisions, now amended to take account of the Protocol to the Treaty of Nice (COM(2001) 121),

- Having regard to the follow-up report on the 1999 financial year presented by the Commission (COM(2001) 735),

- Having regard to the report of the Committee on Budgetary Control (A5-0079/2002),

A. Whereas, in view of the forthcoming expiry of the ECSC Treaty, the ECSC has ceased to grant new loans out of borrowed funds since 1997 and did not engage in any borrowing activity in 2000, although loans outstanding amounted to EUR 1851 million from borrowed funds and EUR 130 million from own funds at 31 December 2000;

B. Whereas the ECSC continued in 2000 to finance research and redeployment of workers with an additional EUR 81 million committed from its operating budget for the first and EUR 31 million for the second of these purposes and with a further commitment of EUR 19 million to the Rechar programme of social measures in the coal industry;

C. Whereas, since 1 January 1998, the ECSC levy on coal and steel products, which was until then one of the main resources of the ECSC budget, has been set by the Commission at 0 %;

D. Whereas the ECSC's main sources of funding are now represented by the net balance from the management of the various reserves and the cancellation of commitments which have not been implemented;

E. Whereas the balance sheet of the ECSC, which has continued to decline since 1997, shows a fall of EUR 504 million from 1999, with loans to credit institutions and to customers representing 54,1 % of total assets in 2000;

F. Whereas the profit and loss account posted a fall of EUR 75,3 million from the previous year, with net losses on financial operations falling from EUR 42 to EUR 24 million, while on the income side interest received fell from EUR 254 to EUR 249 million and income relating to the operating budget fell from EUR 105 to EUR 75 million;

G. Whereas the level of reserves is expected to reach 100 % of loans still outstanding which are not covered by government guarantees by 23 July 2002, and whereas the Guarantee Fund stood at EUR 565 million on 31 December 2000 or 98,8 % of such loans;

H. Whereas the resolution of the European Council on growth and employment adopted in Amsterdam on 16 and 17 June 1997 and the abovementioned Council Resolution of 21 June 1999 on the future of the ECSC call for the revenues of outstanding reserves to be used for a research fund for activities related to the coal and steel industries;

I. Whereas the Commission indicated in its abovementioned Communication (COM(2000) 518) that the ECSC's assets in liquidation will amount to EUR 1,6 billion in 2002,;

J. Whereas the sum remaining after deduction of repayment of outstanding debt should be considered as EU budgetary "own resources" which should yield annual interest to the sum of approximately EUR 45 million, to be allocated to research related to the coal and steel industries (outside the Framework Programmes for research);

K. Whereas the expiry of the ECSC Treaty on 23 July 2002 will entail the complete disappearance of the ECSC's legal regime and procedures and the dissolution of the Consultative Committee set up by that Treaty;

L. Whereas the Annual Report on the ECSC for the financial year 2000 was adopted by the Court of Auditors on 10 October 2001;

M. Whereas the Court of Auditors concludes that the financial statements of the ECSC at 31 December 2000 give a true and fair view of the assets and financial situation of the ECSC at 31 December 2000 and of the results of its operations for the financial year ending on the same date,

N. Whereas the Court of Auditors states that the legality and regularity of the transactions, on the whole, are adequately guaranteed, and therefore proposes a positive statement of assurance,

1. Welcomes the progress made in winding up the ECSC's activities, in particular its loans and interest subsidies, but regrets the delays in concluding an agreed legal basis for the new Research Fund for Coal and Steel which will replace the ECSC's activities in this area;

2. Notes that the forecasts of expenditure in 2000 for rehabilitation aid made on the basis of estimates provided by Member States overstated actual expenditure by 46 % and that the resultant surplus has, together with the cancellation of commitments, contributed to a further improvement in the solvency ratio;

3. Accepts the arguments of the Commission concerning the impossibility of assessing the real impact of the ECSC Treaty on economic expansion, employment and the standard of living separately from the many other factors involved, but urges the Commission to publish a booklet summarising the work of the ECSC since its inception;

4. Urges the Commission also to publish as soon as possible an overall assessment of research funded by the ECSC, in particular an assessment of the coal research programme and the criteria proposed for selecting new coal research projects, as has already been done for the steel sector; sees such assessments as an essential basis for the work of the proposed new Research Fund for Coal and Steel;

5. Notes that 100 % of those loans outstanding after 23 July 2002 which are not guaranteed by the government of a Member State will be covered by the ECSC reserves and acknowledges the strategy of prudent financial management of the ECSC up to the expiry of the Treaty adopted by the Commission;

6. Notes the progress in reducing administrative costs reported in the document "Expiry of the ECSC Treaty: Impact on the Administrative Costs at the Commission" provided to the Committee on Budgetary Control by Commissioner Schreyer on 8 March 2001; requests the Commission to inform Parliament of the outcome of its Annual Policy Strategy for 2003 with regard to redeployment of those staff currently involved in administering the activities of the ECSC;

7. Welcomes the progress in transferring to the Economic and Social Committee the experience obtained in the context of the ECSC and supports the Commission in its efforts to promote a new working structure within the Economic and Social Committee to deal with issues involving industrial conversion, which will incorporate best practice as it has evolved in the context of the coal and steel industries;

8. Urges the Commission to begin negotiations with candidate countries on the conditions of their participation in the new research fund as soon as the latter has been established, and asks the Commission to inform it of progress in these negotiations;

9. Asks the Commission to explain the delays in improving the accounts relating to loans to officials, with particular reference to the presentation of the missing reports promised for the end of the year 2001, in its replies to point 22 of the Court of Auditors' annual report on the ECSC for the financial year 2000;

10. Welcomes the positive assessment by the Court of Auditors of the Commission's management of the ECSC budget in the financial year 2000 and the introduction by the Commission of a performance measurement system which has revealed an average rate of yield on liquid assets of 4,72 % for the financial year 2000; considers, however, that this rate of return should be accompanied by a benchmark rate of return for subsequent financial years if a meaningful assessment is to be made by the auditors;

11. Asks the Commission, therefore, to submit to Parliament and Council a proposal regarding investment guidelines and a target rate of return on financial assets under its management, in particular those assets currently managed for the ECSC but which will become the revenue source for the proposed Research Fund for Coal and Steel; suggests that this target rate of return be tied to an objective calculation of average rates of return on government bonds in the EU;

12. Asks the Commission also to explain the measures which it will adopt to ensure that all the revenue accruing from this financial management will be strictly limited to the Research Fund and not diverted in part to the general budget;

13. Urges the Commission once again to ensure maximum transparency in disclosing data affecting the value of the ECSC's assets;

14. Stresses that Parliament will continue to monitor the effective use of taxpayers' money, especially for the purpose of research in the areas of coal and steel, even after the winding-up of the ECSC.

(1) OJ C 80, 10.3.2001, p. 67.

(2) OJ C 185, 30.6.2001, p. 2.

(3) OJ C 363, 19.12.2001, p. 40.

(4) OJ C 366, 20.12.2001, p. 1.

(5) SN 4609/01 Rev 1.

(6) OJ C 247, 7.8.1998, p. 5.

(7) OJ C 190, 7.7.1999, p. 1.