Memorandum of the ECSC Consultative Committee on the future of the ECSC Treaty

(90/C 302/03)

(adopted at the 287th session of 12 November 1990 with 49 votes for, 1 vote against and 11 abstentions)

I

1. In the course of its 287th session on 12 November 1990, the Committee was called upon to give its views on the Commission's working document on the future of the ECSC Treaty. The document takes into account the following three basic options:

- Maintaining special rules for the coal and steel industries after 2002, without prejudice to the legal form which this prolongation might take,

-Early termination of the ECSC Treaty before 2002, with the possibility of including some of its provisions in the future EEC Treaty,

-Expiry of the ECSC Treaty at the end of its term in 2002, it being understood that some of its provisions could be adopted in accordance with developments in the political and economic context.

Having received additional explanations from the Commission's representatives, the Committee went on to examine the different options in detail.

2. The Consultative Committee requests that the essential elements of the ECSC Treaty be maintained based on the following considerations:

-The ECSC Treaty has played an important role in the process of European unification. In particular, it provides an example for the completion of the single market, of transparency in industrial activity, and of participation by companies, social partners and their federations in political decision-making concerning its industries. Furthermore, it provides the European Commission with specific competences which are better suited to making an effective contribution to the construction of Europe.

-The coal and steel industries have a number of specific characteristics; their development has been and still is closely linked to regional and social policy. Moreover, in certain domains, there are substantial problems which have yet to be solved. This is particularly so in the case of the coal industry because of the great disparity of production costs, enlargement of the market towards the East, and integration into an energy policy. This situation requires and justifies the maintenance of a framework which can take into account these economic and social problems. In its present state, the provisions of the EEC Treaty do not meet these requirements. II

1. Nevertheless, it cannot be denied that the political and economic context in which the coal and steel industries operate has changed since the conclusion of the ECSC Treaty. The flexibility of the Treaty and the power granted to the Commission in a series of provisions makes it possible to apply these in a way which takes changed conditions into account.

2. This does not mean that the ECSC budget should be abolished. Indeed, its existence is essential for the execution of:

- the social policy as established by Article 55 with regard to social research and Article 56 with regard to social reconversion and mobility,

-loans for investments. These loans must continue to be granted, in a non-discriminatory way, in particular in the area of environment protection, technological research, energy programmes, steel promotion and the securing of the supply of raw materials,

-the system of aid for research and development.

3. One of the main provisions which should be adapted is that concerning the levy which must be clearly separated from the very existence of the ECSC budget. The levy is no longer justifiable at its present rate and should be progressively reduced. This reduction is justified by the existence of considerable reserves which should be used to the direct interest of the industries concerned and their workforce. Indeed, should the ECSC Treaty be terminated in 2002, it is essential that all the outstanding reserves should be used to the exclusive benefit of the coal and steel industries and their workers. 4. Price regulations

Whilst maintaining sufficient transparency and clarity for both producers and consumers, the regulations should be adapted in the interest of greater flexibility and the reduction of bureaucracy.

5. Agreements and concentrations

Whilst strongly supporting the authority of the Commission in agreement and concentration matters, the Consultative Committee recommends that clear, coherent and transparent rules and procedures be applied to all steel products (ECSC and non-ECSC) as well as to coal and coke.

6. Commercial policy

The Commission's current role in matters of international trade in coal and steel should continue on condition that the Commission operate the GATT instruments, notably anti-dumping and countervailing legislation, efficiently and strictly so as to prevent unfair trade. Furthermore, to ensure fair competition in steel trade, an international multilateral agreement should be concluded. With regard to coal, in the absence, for the present, of the desired definition of a common energy policy, the present system should be maintained.

III

There are in the ECSC Treaty other provisions which should be maintained as such.

1. Prohibition of subsidies

This prohibition as provided for in Article 4 (c) must be maintained. Together with the aid code, which should be prolonged, this prohibition can be applied in an appropriate manner to the steel industry.

In the case of coal, specific aids and subsidies should be allowed in order to take account of long-term needs for security of supply, as well as of social and regional needs.

2.Information system (Articles 46, 47 and 48)

- Monitoring: The continuous study of market trends which the Commission is obliged to carry out in cooperation with the producers and their associations, according to Article 46, requires the prompt gathering of data, in particular on production and deliveries. The Commission has such a statistical instrument - it should be maintained.

-Forward Programmes: the present procedure for the publication of Forward Programmes provides all interested parties with important guidance on their action and enables them to adapt quickly to changed market conditions.

The continuous study of market trends and the publication of Forward Programmes are closely linked in the Treaty.

Since the trends in the individual product areas can be totally different with regard to demand, price development, imports and exports, a Forward Programme for crude steel only is insufficient for an evaluation of the situation. Furthermore, in limiting its action to such a Programme, the Commission would not meet the obligation contained in the Treaty to provide guidance on the course of action to be followed by all concerned.

3.Information on investment projects

The transparency of new investments, and in particular the Commission's annual 'ECSC Investments` report, is useful in assisting companies in making investment decisions and in avoiding excess capacity. This instrument can also be very useful for identification and prevention of new State subsidies for investments. The Consultative Committee is pleased to note that the Commission recognizes the important role which it has played at different stages in the development of the ECSC. The Committee desires that the Commission continue to involve it closely in the Community's coal and steel policy as well as in any consideration of the future of the Treaty.

CONCLUSION

The Consultative Committee is of the opinion that:

1. The ECSC Treaty, which was concluded for a duration of 50 years (Article 97 of the Treaty) should remain in force until 2002 as an autonomous legal instrument.

2.However, the adaptation of some of the provisions of the ECSC Treaty to the current political and economic background could be considered in the context of the procedure set out in Article 95.

3.It is important to maintain in their current form certain provisions of this Treaty (see above) which have proved their usefulness and efficacity to the coal and steel industries and their workforce.

4.The ECSC budget should be maintained. However, its resources should increasingly derive from the use of the ECSC reserves and the levy rate should be progressively reduced.