17.12.73 OfficialJournaloftheEuropean Communities NoL346/15
COMMISSION DECISION
of14November 1973
approving newaidsfromtheFederalRepublicofGermanyfortheyear1972forthe
benefitoftheundertakings inthecoalindustry
(OnlytheGermantextisauthentic )
(73/397/ECSC)
therefore becamenecessary which,withone
exception ,relatespecifically toRAG;
WhereastheGovernment oftheFederalRepublicof
GermanyinformedtheCommission ,pursuantto
Article2ofDecisionNo3/71/ECSC,ofthenewor
supplementary interventions whichitproposesto
implement directlyorindirectlyforthebenefitof
thecoalindustryinrespectoftheyear1972;
whereas,oftheseinterventions ,thefollowing aids
requireapprovalpursuanttotheaforementioned
Decision :
MillionsofDM
Thetransferduringtheyears1972
to1975ofRAG'sredemption
moneystotheformerproprietors'
guaranteed claimsaccount,withthe
effectofextinguishing proratathe
amountoftheguarantee 53'7
Grantofadebtregisterclaimto
RAG ' 1000-0THECOMMISSION OFTHEEUROPEAN
COMMUNITIES ,
HavingregardtotheTreatyestablishing the
European CoalandSteelCommunity andin
particularArticles2,3,4and5thereof;
HavingregardtoCommission DecisionNo3/71/
ECSC(*)of22December 1970onCommunity rules
forintervention byMemberStatesforthebenefitof
thecoalindustry ;
HavingregardtotheDecisionNo70/1/ECSC(2)of
19December 1969oncokingcoalandcoke,andin
particularArticle9(1)thereof;
HavingconsultedtheCouncil;
Havingconsidered thefollowinggrounds;
Whereas theCommission oftheEuropean
Communities adoptedDecisionNo72/372/ECSC(3)
on19October 1972;whereasthisDecision
approvedfortheaidsintendedbytheGovernment
oftheFederalRepublicofGermanytobegranted
forthebenefitofthecoalindustryinrespectof
1972totheextentthattheyhadbeenincludedand
examined bytheCommission inthe'Memorandum
onfinancialinterventions byMemberStatesforthe
benefitofthecoalindustryin1972'(4);
Whereasduringthepreparation forconsultations
withtheCouncilon6September 1972concerning
theMemorandum onfinancial interventions in
respectof1972bytheMemberStates'Governments
forthebenefitofthecoalindustry,the
representative oftheCommission wasinformedby
theGovernment oftheFederalRepublicofGermany
thatnewmeasuresshouldbeadoptedfor1972~
becausethesituationontheGermancoalmarket
haddeteriorated muchfurtherthanexpectedduring
1972owingtoanappreciable dropinsales
accompanied byrisingcosts;whereasasaresult,the
mostimportant miningundertaking intheFederal
RepublicofGermany,Ruhrkole AG(RAG),was
facedwithincreasing difficulties asregardsprofits
andliquidity;whereas intervention measuresGranttotheentireGerman coal
industryofaguaranteeforfinancing
pitheadstocks 720*0
Revolving utilization ofthehitherto
existingguaranteelimitforthejoint
andseveraldebtsofRAG 200*0
Whereastheaforementioned aidsareinaccordance
withthecriterialaiddowninArticles6to9of
DecisionNo3/71/ECSCfortheadmissibility ofsuch
Stateassistance ;
WhereaswhenRAGwasfoundedin1969,the
formercollieryownersreceivedclaimsagainstRAG
forthefixedassetscontributed ;whereasthepublic
authorities tookoverthedeficiencyguaranteefor
this;whereas,becauseoftheundertaking 's
unfavourable financialsituation,thelossesinthe
financialyears1970and1971greatlyexceeded
RAG'ssharecapital;whereasin1972theprofit­
and-losspositionagainshowednoimprovement ;
whereas,onthecontrary,thefinancial losses
increasedevenfurther;
WhereastheeconomicandsocialsituationinLand
ofNorthRhine-Westphalia ,whereRAGcarriesout(*)OJNoL3,5.1.1971,p.7.
(2)OJNoL2,6.1.1970,p.10.
(3)OJNoL256,14.11.1972,p.13.
(<)Doc.NoXVII/52/2/72.

NoL346/16 OfficialJournaloftheEuropean Communities 17.12.73
thegreaterpartofitsactivities,isatpresent
relatively favourable ,although therearestill
problemsincertainfields,mostlytodowithcoal­
mining(*);however,thatthissituationwouldchange
if,intheeventofdiscontinuance oftheaidsgranted
bytheGermanauthorities ,RAGhadtoceaseits
activities anddismissovernight the170000
employees whosejobsitatpresentprovides ;
whereasinthecircumstances itfollowsthatthe
transferofredemption moneys (DM53-7million)is
compatible withtheprovisions ofpoint1,
Article9(1),sincetheeffectofthisistopreventa
dropinproduction duetomarketforceswhich
wouldresultinseriouseconomic andsocial
difficulties inanareawhere,intheshortterm,there
areinsufficient opportunities ofemployment for
suchalargenumberofworkers;
Whereas,asregardstheallocation oftheaid
accordingtothedifferencebetweenproduction costs
andrevenue,itcanbeseenthattheaidwillcover
onlyabout10°/ooftheexpectedRAGoperating
lossesfor1972;whereastheoperating lossesstem
almostexclusively fromthecollieriesandaredueto
thefactthatontheonehandtherevenuedoesnot
covertheproduction costsandontheotherhand
thathighcostsareincurredforthemaintenance of
pitheadstocks;whereastheaidsthereforecomply
withtheprovisions ofArticle9(2)ofDecisionNo
3/71/ECSC;whereasitthereforefollowsfromthe
foregoing thatthetransferofRAG'sredemption
moneysbythepublicauthorities totheguaranteed
claimsaccountisconsistent withtheprovisions of
Article9ofDecisionNo3/71/ECSC;toimprovetheliquidityoftheundertaking andto
provideitwithaninterestadvantage ;
Whereastheadvantages oftheimprovement in
liquiditycannotbequalified asanaid;whereas
therearealsonofiguresavailablefordetermining
theinterestadvantage ,sincethedebtregisterclaim
wasonlyallocatedtoRAGon14November 1972
byadecisionoftheGermanauthorities ;
Whereasforanappraisaloftheseinterventions in
thecontextofDecisionNo3/71/ECSC,thesame
observations applyasweremadeearlierwith
referencetothetransferofredemption moneysto
theguaranteed claimsaccountandaccording to
whichtheinterventions measures iscompatible with
theprovisions laiddowninpoint1,Article9(1),of
DecisionNo3/71/ECSC;whereasthisappraisal
appliesonlytotheaforementioned caseof
improvement inliquidityorgrantingofaninterest
advantage ;whereaswheretheRAG's1972debt
registerclaimsisusedtowriteoffaccumulated
operating losses,thecoveringoflosseswouldhave
betheobjectoffreshexamination bythe
Commission ;
Whereastheguarantee forthefinancingofpithead
stocksenablestheGermancoalindustrytoborrow
moneyfromthebanksagainstitsstocksofcoking
coalandcokeinordertoincreaseitsownliquidity;
Whereas thisintervention doesnotaffectthe
production costs,revenueorresultsofthecollieries ;
whereas ithasconnection withthenetcostsof
maintaining pitheadstocks,whichmustbeborne
entirelybytheundertakings themselves ;whereasif
thecoalindustryreceivesbankloansagainstpithead
stocks,ithastopaytherelevantinterestitself;
whereastheadvantages ofimproved liquidityasa
formofaidcannotbequantified ;
Whereasforanappraisalofthisintervention the
sameobservations applyasweremadeearlierwith
referencetothetransferofredemption moneysto
theguaranteed *claimsaccountandaccording to
whichtheintervention measureiscompatible with
theprovisions laiddowninpoint1,Article9(1),of
DecisionNo3/71/ECSC;
WhereasinordertoimproveRAG'sliquidityandto
ensuretheundertaking 'scredit-worthiness atthe
banks,theFederalGovernment hasstatedthatitis
nowpreparednottoreducetheguarantee limitof
DM3700millionsetin1969buttoretainit
unchanged ;whereasthismeansthatifRAGwereto
reduceitspreviously incurreddebtsbymaking
redemption payments,itwouldbeabletoraisenewWhereas,withtheguarantee ofadebtregisterclaim
aboutDM1000million,theFederalGovernment
andtheGovernment oftheLandofNorthRhine­
Westphalia areendeavouring tostrengthen thebasic
capitalandliquidassetsofRAG;whereasthe
capitalsumisnotbeingpaidoutallatonce,butthe
publicauthorities arepayingRAG8°/ointerestand
2<Voredemption annually ;whereasfor1972the
totalamountofinterestandredemption wasDM
46'7million;whereasinordertopayinterestand
redemption onthetotaldebtregisterclaim,annual
payments aretobecontinued until1997;whereas
providedthatthetotaldebtregisterclaimisnot
erodedbyoperating losses,RAGisinapositionto
borrowmoneyfromthebanksagainstthedebt
registerclaimguaranteed bythepublicauthorities ,
butmustthenitselfpayinterestandredemption to
thebanks;whereasthesetermsshowthatinterest­
freecapitalofDM1000millionwasplacedatthe
disposalofRAGbytheGermanauthorities inorder
(*)SeeCommission Decisionof17December 1971on
investment premiums intheGermancoal-producing
areas(OJNoL57,10.3.1971,p.19).

17.12.73 OfficialJournaloftheEuropean Communities NoL346/17
Whereas inordertodosotheCommission mustbe
informed inparticular oftheamountandthe
apportionment oftheseaids.
HASADOPTED THISDECISION :
Article1
TheGovernment oftheFederalRepublic of
Germanyshallbeauthorized tograntthefollowing
newaidsforthebenefitoftheundertakings ofthe
Germancoalindustry :
1.TransferofRAG'sredemption moneystothe
guaranteed claimsoftheformerproprietors
againstRAGforthevalueofthefixesassets
contributed totheundertaking ,uptoan
amountofDM537004)00 .
2.Transferofaguarantee totheamountofDM
720000000forthefinancingofpitheadstocks.
3.Grantingofadebtregisterclaimamounting to
DM1000000000forthepurpose of
strengthening thebasecapitalandtheliquidity
ofRAG.
4.Utilization ofrevolvingcreditsuptoanamount
ofDM200000000forthepurposeofimproving
theliquidityandsafeguarding thecreditworthi­
nessofRAGatthebanks.loansfromthebankswhichwouldautomatically be
guaranteed bytheFederalRepublic aslongasthey
didnotexceedthelimitofDM3700million;
whereasthisutilization ofrevolving loanstotals
approximately DM200millionin1972;
"Whereastheadvantages ofimproved liquidityasa
formofaidcannotbecalculated ;
Whereasforanappraisaloftheseinterventions the
sameobservations applyasweremadeearlierwith
referencetothetransferofredemption moneysto
theguaranteed claimsaccountandaccording to
whichtheintervention measureiscompatible with
theprovisions laiddowninpoint1,Article9(1),1
ofDecisionNo3/71/ECSC;
Whereasforanexamination ofthecompatibility of
thenewGermanaidswiththeproperfunctioning of
thecommonmarket,itisonlythetransferof
redemption moneystotheguaranteed claims
accountbythepublicauthorities thatcanbe
assessedquantitatively ;whereas allothernew
interventions servetoincreaseliquidityorconstitute
non-quantifiable interest advantage forthe
undertaking ;
Whereas anamountofDM53*7millionisinvolved
inthetransferofredemption moneystothe
guaranteed claimsaccount;whereasifthisamountis
addedtotheaidsalreadyapprovedfor1972,the
totalaidstoRAGin1972areincreasedby0'65DM
(=0-18u.a./t);whereasinrelationtotheaids
receivedbycoalproducers inotherMemberStates
thosegrantedtoRAG,permetrictonproduced
wouldstillbeconsiderably less;
Whereasconsidering thelowamountof0'18u.a./t
noimportant effectsareexpectedontheconditions of
competition betweenRAGandtheotherGerman
coal-producing areasorbetweentheformerandthe
Ruhrcollierieswhichdonotbelongtoit;whereas
thenewaidmeasureisdesignedtosuitthespecific
circumstances ofRAG,whichapplyonlytothat
undertaking ;
WhereasthenewmeasuresproposedbytheGerman
Government for1972arethereforenotlikelytobe
prejudicial totheproperfunctioning ofthe
common marketpursuant toArticle3(1)of
DecisionNo3/71/ECSC;
Whereas theCommission inaccordance withArticle
11(1)ofDecisionNo3/71/ECSCmustensurethat
theaidsithasapproved areusedforthepurpose
specifiedinArticle9ofthatDecision ;Article2
TheFederal Government shallnotifythe
Commission by31December 1973ofthedetailsof
theaidsgrantedpursuanttothisDecision ,especially
asregardstheamountandapportionment ofthe
paymentsmade.
Article3
ThisDecision isaddressed totheFederalRepublic
ofGermany .
DoneatBrussels,14November 1973.
FortheCommission
ThePresident
Francois-Xavier ORTOLI