MEMORANDUM OF THE EUROPEAN COAL AND STEEL COMMUNITY CONSULTATIVE COMMITTEE CONCERNING THE ECSC BUDGET (91/C 291/02)

(Adopted unanimously at the 294th Session of 1 October 1991, with one abstention)

I. General principles

The Consultative Committee, in confirmation of the positions it adopted in the memorandum on the future of the ECSC Treaty of 12 November 1990 (1) and the resolution on the level of the levy of 18 December 1990 (2), requests that the following general principles should guide the Commission in its preparation of the 1992 ECSC budget:

- gradual reduction of the levy,

- gradual use of the ECSC reserves,

- definition of a certain number of priority areas for ECSC expenditure, particularly with regard to the financing of necessary social measures and research and development,

- more realistic estimates of genuine expenditure requirements.

II. Expenditure

REQUIREMENTS ARE AS FOLLOWS:

1. Financing of social measures

It is essential that Article 56 of the ECSC Treaty should continue to play the major part which it has played since the beginning of the European Coal and Steel Community, and in particular during the last 15 years.

The funds allocated under this Article should be used to finance the requirements in the area of social expenditure in all Member States. This not only concerns the consequences of restructuring measures, but also training and regional redevelopment.

2. Financing of research

(a) The Consultative Committee is of the view that research policy should continue to be financed at a level sufficient, on the one hand, to enable new technologies to be developed which would allow the ECSC producers to face up to the competition from other producers, other materials and other forms of energy and, on the other hand, to allow research in the social area to be continued to its

full extent. Such a policy must bring with it a deepening of the areas of application of research concerning environment protection, the use of energy, and new uses for and marketing of coal and steel products.

(b) The Consultative Committee notes that, since the signature, in 1989, of the bilateral steel consensus between the Community and the United States, uncertainty has reigned regarding the maximum percentage to be granted for each research project. In 1990 and 1991, this uncertainty has led to damaging delays in the preparation of a coherent research programme.

The Committee emphasizes again that the Community's aid to research comes entirely from the ECSC levy which is paid by undertakings and cannot, therefore, be classed as a subsidy from public funds.

The Committee takes note of the current negotiations on the conclusion of a multilateral steel agreement.

The Committee requests:

- that in any event, the authorization procedures for financing ECSC research for 1992 should be defined as rapidly as possible in order to avoid serious prejudice to the preparation and execution of the Community coal and steel research programmes,

- that these procedures should be in conformity with currently valid international agreements, but should not be discriminatory when compared with the provisions of Community texts.

3. Subsidized interest rates on loans

The Consultative Committee notes with regret that for several years now, funds intended for the reduction of interest rates have been used for ends that were frequently very far removed from the ECSC Treaty's objectives. The Committee requests that in 1992 these funds should be used for projects directly linked to the creation of jobs for workers from the ECSC industries and for industrial reconversion under Articles 54 and 56 (1) (b).

4. Standardization

The Consultative Committee is surprised to note that the European Community is planning to make a substantial reduction in the financial support granted by the EEC budget to the European Committee for Iron and Steel Standards (ECISS).

Should the EEC budget no longer cover this expenditure during 1992, the Consultative Committee requests that the ECSC budget provide the ECISS with funding sufficient for its needs, so as to guarantee that adequate funds are available for standardization activities. In this way there would be no disruption of the present dynamic in the field of standardization which is essential for the completion of the single European market. III. Revenue

All the requirements defined above can and must be financed by the adoption of a more coherent revenue policy which is in closer accord with existing availability of finance. To achieve this, the Commission should take the following elements into consideration:

(a) Matching revenue and requirements

Budget requirements must be calculated as closely as possible, i.e. without over-estimates. In recent years and, in particular, in 1991, a major part of revenue (60 % in 1991) has come from unused resources which were carried forward from the previous year.

(b) Reduction of the levy rate

This reduction began in 1991. It must be pursued during the financial year 1992, taking into account the following:

- the need to end discrimination against the products of the coal and steel industries compared with those of other industrial sectors and with imports of ECSC products, to which the levy does not apply,

- the deterioration in the economic situation in the coal and steel industries with regard to deliveries and prices,

- stricter definition and control of expenditure requirements,

- Priority use of the balance from previous financial years.

(c) Use of funds from the ECSC reserves

Maintaining and permanently tying up the accumulated ECSC reserves at the level reached at the end of 1990 (ECU 726 million) is no longer justified, in particular in view of the expiry of the ECSC Treaty in 2002. From the financial year 1992 onwards, the reserves should be gradually drawn on, in particular in order to finance research programmes.

In its communication to the Council the Commission appears to think that maintaining the ECSC reserves until 2002 is essential in order to preserve the Community's 'triple A' rating. The Consultative Committee is of the opinion that there are alternative solutions to guarantee loans and that the Community's financial credibility does not rest on the existence of the reserves.

The Committee suggests that one of the alternatives to be studied is whether the European Investment Bank (EIB), whose banking credentials are undisputed, could be entrusted with the ECSC operations. Another alternative would be to investigate whether it would be possible to have direct recourse to the other EEC loan instruments.

The Consultative Committee requests that the use of the reserves should go together with the exclusive use of the ECSC's financial instruments for the benefit of the Community's coal and steel industries which, together with their workers have, after all, enabled the reserves to be built up.

(1) OJ No C 302, 1. 12. 1990, p. 3.

(2) OJ No C 10, 16. 1. 1991, p. 5.