ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)565
Vol.1979/0196

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)565 final
Brussels.30thOctober1979
AIDE-MEMOIRE
ONTHEFIXINGOFTHEECSCLEVIESANDONTHEDRAWING UP
OFTHEOPERATIONAL BUDGETOFTHEECSCFOR1980
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C0MC79)565final

-2-
Page
Preface a
I. GENERAL INTRODUCTION c
A.ECONOMIC CONTEXT 5
1.Theeconomic outlook for 1979 and 1980 5
2.Prospects inthecoal sector 8
3.Prospects intheiron and steel sector 11
B.POLICY CONTEXT .12
1.Coal policy 13
2.Iron and steel policy - 15
3»Social policy .18
4*Borrowing andlending activity 23
C.FINANCIAL CONTEXT 26
II.ANALYSIS OPREQUIREMENTS REPORTED ANDRESOURCES 29
AVAILABLE FORTHEFINANCIAL YEAR I98O
A.REQUIREMENTS REPORTED FOR1980 30
1.Ordinary requirements 30
2.Requirements notentered inthebudgetJ 44
loans forfinancing subsidized housing
3.Summary ofrequirements reported 46

J–
Pa^e
B.ORDINARY RESOURCES AVAILABLE 46
1.Resources for thefinancial year 46
2.Covering ofrequirements notentered 50
inthe budget
3.Summary ofpossible ordinary resources •
available for 1980
51III .DRAFT OPERATIOML BUDGET FOR1980
A.IRREDUCIBLE REQUIREMENTS ' 52
B.BUDGET BALANCE 53
C.BRAFT BUDGET 54
AFiïï2XE3
A.IMPLEMENTATION OPTHEECSC OPERATIONAL BUDGET FOR 1978 55
B. FOimiC AST OUT-TURN OFTHE ECSC OPERATIONAL BUDGET 56
FOR 1979
Go BREAKDOWN OFLOANS ISSUED FOR THE FIRST SIX MONTHS 58
OF1979
D. PROVISIONAL SITUATION OFTHE ECSC AT30JUNE 1979 59
E.DRAFT ECSC OPERATIONAL BUDGET FOR 1980 - 60

AIDE-MEMOIRE
onthefixingoftheECSCleviesandonthe
drawingupoftheoperationalbudgetoftheECSCforI98O
Followingtheusualpractice,theviewsoftheEuropeanParliamentare
sought "beforetheCommissiontakesadecisionontheleviesandthe
operational "budgetoftheECSCforthefinancialyearI98O.
♦
I .• -
Thisaide-memoire formsthebasisfortheconsultation ofParliament.
Itisdividedintothefollowingchapters:
I.Generalintroduction :
II.Analysisofrequirements reportedandresources
availableforthefinancialyearI98O;
III.Draftoperational budget.
Theparticularfactorsaffeotingthecoveringofbudgetaryrequirements
forI98OaredescribedinChapterIII.
InitsResolutionof13December1978(OJNoC6,8January1979»PP43-44)
onthefixingoftheECSClevyandontheECSCoperationalbudgetfor1979»
Parliament(point14)"askstheCommission "tosubmittoitafterthe
firsthalfofnextyearaninterimreportonthesituationinthecoal
andsteelsectortonthesocialmeasuresnecessarytoovercomethe
difficulties intheseindustriesandonthefinancialimplications".
1
Theinformationrequested "byParliamentiscontainedinthisaide-memoire :
inPartA,EconomicContextfandinPartB,PolicyContext,point3,
SocialPolicy.
/
*«
Theaide-memoire iealsosenttotheECSCConsultative Committeefor
information .

T. GENERAL INTRODUCTION
This chapter summarizes theinformation necessary forappreciating the
draft operational budget oftheECSC forI98O initseconomic ,political
and financial context .
A. ECONOMIC CONTEXT
1.Theeconomic outlook for1979 and 19&Q
Economic activity intheCommunity continued topick upslowly in1979 -
Theprospect which emerged ayear ago ofacertain upturn indemand
andproduction trends didnotmaterialize .Thesharp rise inoilprices
and itsrepercussions "both inside andoutside theCommunity will probably
have prevented any improvement greater than therather mediocre results
of1978 .Inaddition ,theemployment situation isstill unfavourable
and thelabour market position will probably have considerably
deteriorated .
Internal expansion factors lost momentum inthecourse oftheyear .
The increase inthereal disposable income ofhouseholds waschecked
trythefaster rise inprices ;thedrop inthelevel ofsavings ,
Bometimes theresult ofpre-emptive buying ,didnotalways offset
theeffects ofthis slowdown onprivate consumption .Although capital
investment onindustry expanded alittle faster than in1978 ,the
investment situation intheother sectors didnotimprove ,oreven
deteriorated .

-6-
ThenetexternalstimulusontheCommunityeconomyintheshorttermwill
havebeenslightlynegativein1979*Admittedly,thevolumeofexports
roseconsiderably ,despitetherepercussions ofthecrisisinIranandthe
weakeningoftheNorthAmericaneconomicsituation*However,thevolume
ofimportsalsoincreasedsubstantially inseveralMemberStates,in
responsetotheimprovementinfinaldemandand,atleastinsomecases,
therebuildingofstocksofrawmaterialsoranimprovedrateofexchange.
Overall,takingintoaccountthedeterioration inthetermsoftrade,the
Community'stradebalancehasworsenedovertheyear.
Thepricessituationhasdeteriorated considerably in1979*Consumer
pricesareexpectedtohaverisenby9%tagainst7*1%in1978.In
conjunctionwiththeincreasedcostofoilandotherimportedrawmaterials,
•thisrisealsoreflectstheeffectsofseasonalfactorsand,insome
countries,higherrentsandheavierindirecttaxation*
Industrialproductionin1979continuedtoexpand,thoughlessstrongly
thaninthesecondhalfof1978*Asfinaldemandoutstrippedproduction,
stocksoffinishedproductsweresteadilyreduced*Theslightimprovement
intheimmediateeconomicsituationhardlyaffectedthetrendonthelabour
market*Sincethebeginningoftheyear,thenumberoffull-timeunemployed,
seasonallyadjusted,stillexceededsixmillionintheCommunityasawhole*
Theunemploymentratefluctuatedaround5*5$*However,thisoverallrate
masksaslightdeclineinmaleunemployment andthereversetendencyas
regardsfemaleunemployment *
ThelatestindicatorssuggestthattheCommunity'seconomicgrowthoverthe
yearwillreachonly3*1$,comparabletothatin1978(estimatedat2*6$a
yearago,butgraduallyincreasedto3.1$)•Communitydemandandproduction
maybeexpectedtoslackconsiderablyin1980,asaresultoftheoilprice
riseandalsotheeffectofcyclicalfactors*

ThefollowingtableshowsthetrendintheCommunity'sGDPbyvolume
duringtheperiod1977to1979:
GROSSDOMESTICPRODUCTISVQUflBTERMS
(.%changeoverthepreviousyear)
1977 1978 1979
Denoark 1.8 0.-9 1,8
FederalRepublioofGermany .2,8 3.2 4.3
France
42,8 3.3 2.9
Ireland 5,5 6.1 2.8
Italy .2,0 2.6 4.3*
Netherlands2,2 2.4 2.6
Belgium1,2 2.5S3.α
Luxembourg3.2- 2.5-
unitedKingdom1,2 3.7r»0.3
Community 2,3 3,1' 3,1
Souroe:Commissiondepartments *

-8-
2*Prospects inthe eoal Bector
Oilmarket trends inthefirst sixmonths of1979 were very favourable to
theCommunity coal industry .Anxiety over thegrowth ofstocks and
pressure onprices gave waytoconcern about supplies ,particularly in
theUnited Kingdom *Thecoal industry inGermany increased production
after twoyears ofdecline ,while continuing itspolicy ofreducing stocks
intrading conditions which were generally more favourable than last year .
Inaddition tothecompetitive advantages accruing toalltypes ofcoal
from therapid increase inoilprices ,thepressure exerted ontheprices
ofCommunity coal bycoal imports from non-member countries wascushioned
bytheincrease infreight charges forheavy drycargo *This hada
particularly marked effect onprices ofsteam coal ,asfreight charges
represent ahigher proportion ofthedelivery costs than they dofor
coking coal andthedistance itiscarried isgenerally feu *greater *
However ,theincrease inCommunity coal prices hasattenuated these
advantages toacertain extent *
Coal production isexpeoted toreach some 240million tonnes in1979 *a,
.nazginal increase on197& *This figure corresponds tosome 212million
tonnes ofcoal equivalent at7000kcal/kg*
/
Theprogramme forclosing uneconomic pits iscontinuing *Itwill probably
affect aproduction capacity ofsome 2*5million tonnes ,about 60$ofit
inFrance *

After remaining stable fortwoyears ,Community coal consumption in1979
will probably increase by10million ttoreach 297million t.Ofthis
total some 167-168 million twill beused forelectricity generation and
some 86million tforcoke production -inboth cases asubstantial
increase over 1978 -while theamount ofcoal used forother purposes ,
44million t,isslightly smaller than last year .
Despite thepersistent difficulties ofthe ironandsteel industries ,
coke consumption inthis sector isincreasing andwill probably reach
55-56 million tin1979 *Because oftheunsatisfactory prices obtained
forthelarge sales ofGerman coke totheUnited States in1978 ,these
sales will probably beatalower level in1979 *
Thevolume ofcoal and coke traded intheCommunity in1979 will probably
reach some 24million t,i.e. very close tolast year 'sfigure .Coal
imports from non-member countries in1979 areexpected toincrease by
5million ttoreach 50million t.
Total Community coal production in1980 will once again probably be
around 240million tywith slight shifts from oneMember State toanother .
Thedrops inFrench andBelgian production of3*5$ and4»5 /°respectively
areexpected tobeoffset byfurther increases ofaround 0.8% inBritish
andGerman production .However ,ifsatisfactory outlets areavailable ,
tfreGerman coal industry could further increase itsownproduction and
thus total Community production .

-10-
In1980 Bome 177-178 million tofcoal will probably beused for
electricity generation .This further increase will bedueboth to
theadditional 7CWofcoal-fired capacity coming onstream in1979
and 1980 -mainly asaresult ofconversions -andtomore intensive
useofexisting coal-fired capacity .
Accordingly ,taking into account the85million tneeded forcoke
production ifcoke consumption isatthesame level asin1979 and
the45million twhich will probably beused forother purposes ,
total consumption ofcoal intheCommunity in1980 could bearound
300-310 million t,thehighest level since 1973 when itreached
310million t.
e
Astotal output will probably bearound 240million t,theshortfall
of60-70 million tmust becovered byimports andwithdrawals from
stocks . Asnomore than 10million tofcoal suitable for use in
power stations islikely tobeobtained from stocks ,imports from
non-member countries areexpected tocontinue toincrease .
nevertheless ,inview oftheuncertainty surrounding world economic
prospects ,theforecasts for1980 must beregarded asvery tentative .

-11-
3. •Prospects inthe iron and Bteel sector
Theincrease inproduction which began ,albeit slowly ,in1978 ,
gathered momentum in1979 *Most ofthis increase isdue totherise
indemand forcapital goods andabuilding boom insome Community
countries .
*
TheriBe indemand ontheworld market also contributed greatly to
improving thesituation .Net exports will probably amount toat
least 21million tequivalent ofcrude steel .During thefirst
eight months of1979 crude steel production wasA%above that for
the Bame period last year .Iftheprogramme for thefourth quarter
isfollowed ,total output in1979 will bearound 140million t.For
anestimated production capacity of203 .5million t,this means a
utilization rate of68.8^compared with 65.5$in1978 .
In1979 there was afurther improvement inboth export anddomestic
prices ,although there were wide differences from oneproduct to
another .Forinstance ,asinprevious years ,prices forflat rolled
products remained extremely unsatisfactory .Because oftheincrease
inproduction ,rising prices andfurther restructuring ,anumber of
steel undertakings areagain working ataslight profit ,although the
financial results fortheCommunity iron andsieel industry asa
whole will still beunsatisfactory .
Itisdifficult atpresent tomake anypredictions for1980 ,asthe
situation isdeveloping very differently inthevarious Community
countries anditistooearly toassess theeffects ofapossible
recession intheUnited States onexport markets .Nevertheless ,
itshould prove possible toequal the1979 production level .

Β POLICY CONTEXT
Thegeneral objectives oftheECSC arepermanently laid down in
Articles 1to5oftheTreaty ofParis .
I '
TheCommission periodically formulates objectives orgeneral guidelines
forthefuture development oftheECSC industries ,inboth thecoal and
steel sectors .Thecoal sector isaspecial case ,asitisalso
covered bygeneral documents prepared bytheCommission onCommunity
energy policy . ;Themedium-term guidelines forthese twosectors also
include aBection onmanpower problems inthese industries ;this provides
thesetting forthevarious social policy functions discharged bythe
High Authority /CommiBsion under theTreaty .Detailed information on
past andfuture investment trends andontheCommunity 'sfinancial
activities tofinance investment ispublished bytheECSC inits two
yearly reports ,oneontheresults oftheinvestment survey inthe
Community coal and steel industries andtheother thefinancial report '
dealing with ECSC borrowing andlending activity .
Theremarks which follow arenotintended toreplace thepolicy
information given inthedocuments referred toabove . ,Itshould be
noted that in1978 ,after consulting theparties concerned ,the
Commission drew upnewgeneral objectives fortheiron and steel
industry fortheperiod 1?80-90 (SEC(78)3205 final of20July 1978).
Theensuing remarks will thus beconfined tocertain keypoints or
recent events that theCommission feels should behighlighted in
drawing upthedraft operational budget oftheECSC for 1980 .They
deal inturn with theindustries ,thesocial policy oftheECSC and
theborrowing andlending activities ofthecurrent year .

-13-
1.Coalpolicy
Theeventswhichaffectedtheworldenergymarketinthefirstsixmonthsof
1979confirmedthesoundnessoftheCommission'scoalpolicysince1974.
ThentheCouncilmeetingonenergyof27March1979stressedthestrategic •
importanceofcoal,andtheEuropeanCouncilof21and22June1979came
outclearlyinfavourofincreasingtheuseofcoalinelectricitygeneration
andinotherindustrialsectors,andsteppingupthetechnological programme
fordistillingliquidandgaseoushydrocarbons fromcoal.
Initsbasicdocumententitled"EnergyobjectivesoftheCommunityfor1990
andconvergenceofpoliciesofMemberStates"(C0M(79)316final,14June1979),
theCommissionhasredefineditscoalpolicyconceptionsinviewofthe
instabilityofenergysuppliesinthefuture.TheCommissionregardsitas
essentialtoincreasetheuseofsolidfuelsandnuclearenergysothatthese
twosourcescoveratleastJOto75$°fenergysupplies.Toachievethis
result,eachMemberStatemustcontributeinthefollowingareas:
-regainingthe1973levelfortheamountofcoalextracted(270milliont),
andthatundereconomically acceptableconditions ;
-doublingcoeilimports;
-creatingnewsolid-fuel-firedcapacitiesintheelectricity andother
industrialsectors;
-steppingupMDinthefieldofcoalgasification andliquefaction .
Theseguidelinesandalltheotherprovisionsconcerningenergyadoptedby
theCommissionstemfromthetargetwhichisofparamountimportancefor
all,namelytoreduceourdependenceonimportedenergyto50$and,in

-H*
particular ,tomaintain netoilimports atthe1978 level (470million t).
Oftheobjectives listed above ,thecreation ofnewcoal-fired capacities
should "beregarded asthemost important ,asthis isasine quanonfor
achieving thetargets forincreasing thesupply .
Over thelast three years ,theCommission hasputupanumber ofproposals
primarily directed toachieving the1974 targets ,which were tomaintain
theCommunity 'scoalmining industry atthe1973 production level .The
proposals covered :
(a)financial measures topromote themining ofcoal forelectricity
production (1976 );
(b)thepart-financing ofcoal producers' "buffer stocks (1977 )?
(o)financial aidforintrar-Community trade inpower-station coal (1978 );
(d)improving thesystem introduced in1967 oncoking coal andcoke for
theiron andsteel industry (1978 ).
 
TheCommission 'sefforts toobtain theCouncil 'sagreement onthese
proposals have sofarbeen invain .Thedegree ofinterest inthefuture
ofEuropean coal shown indiscussions varied widely ;sothat allattempts to
forge acompromise andachieve ameasure ofCommunity solidarity have failed .
Nevertheless ,stiffened initsresolve bytheconclusions oftheEuropean
Council ,theCommission intends tostand byitsproposals after making
anynecessary charges .

-15-
TheCommissionalsoproposestogranttheCommunity'scoalmining
undertakings Loansonadvantageous termstoenablethemtomakecertain
urgentlyneededinvestments (firstparagraphofArticle54oftheECSC
Treaty).
Finally,inveiwofthegrowingimportanceofthetechnologyfor
obtainingliquidandgaseoushydrocarbons formsolidfuels,theCommission
planstostepupthemeasuresadoptedbytheCommunity,following a
Commissionproposal,topromotedemonstration projectsinthisfield,
whichwillbefinancedoutoftheGeneralBudgetundertheCommunity's
energypolicy.Asumof50millionEUAhasbeenearmarkedforafive-year
programme (cf.regulation 729/79oftheCouncildated9.4.1979).
2.Ironandsteelpolicy
TheCommission ssteelmarketmeasures
ThemeasuresadoptedbytheCommissionin1978tomitigatethe
effectsofthesteelcrisisontheprofitability ofundertakings and
tolimitthepressurecausedbyimportswereretainedandimprovedin
1979.

16
Asaresult ,undertakings' earnings have continued torise ,and
inaddition thebrighter production outlook for thevarious
Ν
undertakings andgroups ofundertakings has fac.i litiesmore balanced
utilization ofcapacity inthedifferent Community undertakings
m
andCommunity regions (burden -sharing ),which initsturn hasmeant
more balanced employment .Attheendofthis year theCommission
will bereviewing these measures for1980 bearing inmind the
lessons of1979 and thechanges inthestate o<fthemarket .
Steel :external side
Asin197o «themeasures relating totheCommunity steel market
were supplemented byunderstandings with theCommunity 's17
-major supplier countries ,designed tosecure pricing bythem
compatible with theCommunity 'sinternal action while atthe
same time preserving traditional trade flows .
Theresults obtained bythis policy have again helped toimprove
theinternal price level and thereby been conducive tbgraduation
restoration ofundertakings' profitability .
Continuance ofthis -external policy in1980 will bedependent
onwhat internal measures are taken andhow much cooperation
with non-member countries proves desirable andnecessary in
support ofthose measures .

-17-
Community solution tostructural problems
TheCouncil isexpected toadopt theCode ofPractice forcoordinating State
aids totheiron andsteel industry "before theendof1979 .
Farther progress hasbeen made inrestructuring .The 1979 investment
survey showed that ,forthefirst time tthere hadbeen noaddition to
capacity ;nevertheless ,notenough hasyetbeen done toeliminate excess
capacity .
Itisregrettable that thedifficult financial position oftheundertakings
hasmeant afurther decline incapital expenditure onmodernization ,which
*ominously suggests that thetechnological gapbetween theCommunity 'siron
andsteel industiy andthat ofitsbiggest competitors maygrow even wider .
TheCommission must therefore doeverything initspower toencourage the
industry tomodernize andrestructure ,whether bygranting interest relief
oninvestments which serve thegeneral objectives forsteel ,orby
providing aid-intheform /ofloans atareduced rate ofinterest for
investments which will create new jobs forformer steel workers -tofacilitate
theredeployment ofworkers made redundant after modernization .
This means that,in budgetary term $/theform ofCommunity intervention which
would most effectively promote thecommon steel policy would beinterest
relief grants onloans forinvestments torestructure andredevelop the
iron andsteel industry .

-18-
3.Socialponey
ThemainfeaturesoftheCommission'spresentsocialpolicyprogramme
undertheECSCTreatyare:
(a)tofinanceoccupational safetyresearchprojectsunderArticle55of
theECSCTreaty;
(b)tograntreducedinterestloansfromownfundsunderArticle54ofthe
ECSCTreatytohelpworkersinECSCindustriesfindhousing;
(c)toprovideaidunderArticle56oftheECSCTreatytohelpresettle
workersinthissector.TheCommissionafterconsultingtheECSC
Consultative CommitteeandtheEuropeanParliament,hasrequestedthe
Council'sassenttoaproposaltoextendthesystemofaidstemporarily
underArticle56andsotoadaptittothepresentstateofthelabour
market. -
Thesocialresearchandsubsidizedhousingaidprogrammefor1980will
followtheprinciplesandpoliciesalreadylaiddownbytheCommissionand
outlinedinChapterII.Thedevelopments describedbelowconsequently relate
onlytotheCommission'sECSCresettlement policyguidelinesandproposed
policymeasurestotackletheproblemscausedbythepresentcrisisinthe
ironandsteelindustry.
ThemeasurestakenbytheECSCinthesocialfieldtohelpresettle
workersinthissectorwhohavebeenmaderedundantaresimilartothose
takenbytheEuropeanEconomicCommunityundertheSocialFund.Incontrast

-19-
toredevelopment aidwhosepurposeistopromoteinvestmentinthecreation
ofnewjobsinECSCregions,ECSCresettlementaidprovidestheworkers
inthissectorwithasystemofindividualaid,underbilateralagreements
cofinancedbytheCommunitybetweentheCommunityandnationalGovernments
whichaimatfacilitating irneirproductive re-employment
(tideoverallowances,resettlementcostsandfinancingofvocationalretrai-
ning)onabasisagreedbetweenthetwopartiesinthelightofcertain
Communitycriteria *,
Theeffectofthelegaldifferences betweentheECSCandEEC
Treaties-andespeciallythefactthatECSCaidisfinancedbytheindustries
themselves–meansthattheaidprovidedisbetter.TheECSCresettlemen.t.scheme
has.evolvedunderthepressureofdifficulties experiencedinthepastby
thissector,itismorefullydevelopedandmorecomprehensive thanthe
comparableSocialFundoparations.TheEighAuthorityandtheSpecial
CouncilofMinistersagreedintinderArticle95"theECSCTreaty,
to.addnew,provisions „toArticle56oftheECSCTreatywhichisthe
basisofthepresentresettlement scheme,soenablingtheCommunitytotackle
themostpressingsocialproblemsinthecoalindustryatthattime.
In"S98OSimilareffortswillhavetobemadeintheironandsteelindustry.
Stepswillne&dtobetakentocushiontheharshereffectsofthepresent
crisisontheworkforcebyfacilitating thepreservation ofjobswhichare
threatenedortryingasfaraspossibletoensurethatthecircumstances in
whichunavoidable jobcutsaremadearetolerable.

-20-
Theeffects ofthecrisis caused some Member States tointroduce vast
restructuring programmes in1978 which have hadandwill continue tohave ,
even after 1980 ,veygrave consequences forworkers intheiron andsteel
industry *Consequently theECSC must extend itsassistance tomany more
workers than ithasinthepast *
Anymeasures toresettle redundant workers will beimpeded bythepresent
problems onthelabour market *"Current orplanned restructuring programmes ,
ofwhich most areinareas with only oneindustry fwill find itvery difficult
toresettle theworkers concerned intheBame geographical area *
According toinformation obtained ,andinthelight oftherestructuring
programmes announced andofthebroad policy lines oftheGeneral Objectives
forSteel ,some 50 jobs weretobelost in1979 a™*30000in1980 *-
Ithas,however ,become apparent inreoent months that thereductions in
manpower levels in1979 andprobably in1980 will notbeashigh asexpected ,
because there hasbeen animprovement insteel production andsome ofthe
restructuring programmes have been staggered over aperiod oftime .

-21-
Althoughthesetwonewfactorswillnot–inthemediumterm–alter
theminimumforeseeable mruipowerlevelinthesteelindustry,theymayreduce
thenumberofredundancies inthisindustryin1979and198O;this
numberwill,evenso,behigherthantheaveragelevelofprevious
years.Accordingtothelatestestimates,alloftheresettlement
appropriations inthe1979budgetwill,however,becommitted.
Thenewmeasuresdescribedabovewillbeintroducedin1980to
supplementaidgrantedunderthepresentprovisionsofArtiole$6.
InspiteoftheplansadoptedbysomeMemberStates,andmeasures
toencoutragealargenumberofworkersaffectedbyreductionsin
manpowerlevelstotakeearlyretirement ,totalredundancies will
farexceedthenumberofpossibletemporaryorpermanentnewjobs
whichcanbefound.
TheCommissionhastherefore–withthesupportofthe
EuropeanParliamentandtheECSCConsultative Committee-presented
totheCouncilforitsapproval,underArtiole95ofthe
ECSCTreaty,adraftdecisiononECSCfinancingofspecialtemporary
measurestoassistthesteelindustry(COM(79)436final).These
measureswillsupplementtheclassicaidmeasuresandwillbe
takenonanindividualbasisunderArticle56(2)oftheECSCTreaty.

-22 -
TheCommission *Bproposal makes itclear that these newforms ofaid
mayonly begranted oncondition that they donotencroach upon
management 'sandlabour 'sindependence ofdecision-making ,andthat the
measures have apositive effect onemployment without prejudicing the
competitiveness offirms .
These newmeasureSjto befinalized_after theunanimous assent ofthe .Council
(Art .95/ECSC ),will bestictly limited toparticular areas andperiods of
time ;their practical implementation willbe agreed upon bytheMember States
and the Community
Provided the operations which benefit from this newaid arecarried
outunder therestructuring plans whose aims coincide with those ofthe
General Objectives for Steel ,thefollowing measures maybefinanced
bytheECSC :
(a)early retirement ofworkers ofatleast 55years ofagewhoarenot
yetentitled tothelegal retirement pension when they lose their
jobs ,provided threatened jobs aretherebywsafeguarded orthe
improvement inproductivity required byrestructuring isthereby ensured
(b)early retirement ofworkers whohave notreached theageof55
buthave been inparticularly arduous jobs orarehandicapped ;
(c)financing ofsome oftheloss ofwageB suffered byworkers asa
result ofmeasures tostagger manpower reductions caused by
partial orcomplete closure ofaworks : •

,23 _
(d)financing ofsome oftheloss ofwages suffered bylower-paid
workers asaresult ofaban onovertime ;
(e)payment ofspecial allowances tocover some oftheadditional
wage costs offirms which modify work cycles ,provided these
adjustments have apositive effect onemployment .
Given thespecial nature ofthis aidandthegeneral economic importance
oftheproblems inquestion ,theCommission hasproposed totheCouncil
that acontribution betransferred from theGeneral Budget tothe ECSC
tofinance this aid (seeChapter 54ofthePreliminary Draft General Budget
oftheCommunities for1980 ).
4.Borrowing andlending activity since 31December 1978
ECSC Finanoial Report Ifo24summarizes theCommunity 'sborrowing and
lending activity inthefinancial year 1978 andpresents analytical
andcumulative statistics forthe whole ofthis activity since 1954 .
TheCommunity ^balance sheet asat31December 1978 appears in
Annex Dtothe present aide-memoire .
The 51loans contracted in1978 totalled 1069mEUA ,compared with
729mEUAin1977 ,956mEUAin1976 and731mEUAin1975 .On
loans paid outinthesame periods totalled 798mEUAcompared with
742mEUAand 1064mEUAand805mEUA.Some sums (inSwiss francs )
borrowed were not for on–lending buttorepay previous sums borrowed
athigher rates ,thebenefit being passed ontothefirms which had
received loans from these funds borrowed .

-24-
Industrialloansamountedto667®EUAcomparedwith713mEUAin1977,
resettlement loansto113mEUAcomparedwith16mEUAandsubsidized
housingloansto18mEUAcomparedwith12aEUA.
Total'borrowingandlendingsincetheinceptionoftheECSCisthusbrought
upto3669mEUAand5374*EUArespectively (including210mEUAin
loansfromownfunds).Thebalanceoutstandingat31December1978was
4416mEUAofwhich2846mEUAcanbeamortizedbetween1979andI984.
In1979ECSCfinancialactivitycontinuedtosatisfythestrongdemand
fromfirms-notonlyinthesteelindustrybutalsotoalargeextent
inthecoalindustrywhichreceivedloanstotalling263mEUAin1978
comparedwith217in1977a»d180in1976-wishingtomodernizeor
restructuretheirplant.Inthefirsthalfoftheyear,borrowings
totalled441mEUAandloansdisbursed297®EUA.Thebalance
outstandingat30June1979exceeded4600mEUA.
TheECSChascontinuedtoobtainfavourabletermsonthecapitalmarket
andhassuccessively developedapolicyofprivateloans(totalling
663mEUA)whenconditionsentheopenmarketwereunfavourable.
ThetableinAnnexCtothisaide-memoire analysestheloansdisbursed
inthefirsthalfofthefinancialyear1979*
AstatementoftheprovisionalsituationoftheEuropeanCoalandSteel
Communityasat30June1979IsgiveninAnnexD.
Itisclearfromapplications forresettlement andrestructuring loans
inhandthatECSCborrowingandlendingactivityislikelytocontinue
atahighlevelintheoomingmonths.

-25-
Asfaras1980isconcerned,itisdifficultatpresenttogivean
exactestimatesinceborrowingoperationsarecarriedoutsolelyinresponse
toloanapplications whicharenotalwayssubmittedveryfarahead.Also,
someapplications occasionally arelonginawaitingsettlementasaresult
ofparticularconditionsimposedbyfirmsinrespectofcurrencyorexchange
rates.
At15October1979,totalloanapplications approvedbytheCommission,
butawaitingsettlement,amountedto1239mEUAofwhich231mEUAarefor
redevelopment .Applications incourseofbeingprocessedamountto2385mEUA
ofwhich506mEUAareforredevelopment .Applications receivedthustotalled
3624mEUAofwhich761mEUAhavebeenrequestedforafter'1980.Applications
forsubstantial loans,inparticularforrestructuring andredevelopment
projects,havealsobeenannouncedforthecomingmonths.
Inbroadterms,however,itmaybesaidthattheplannedinvestment
inECSCindustries,merelyforprojectsalreadyapprovedbyundertakings
before1January1979,was2298mEUAfor1980(thefinalfigurewillclearly
behigher),comparedwith3167mEUAfor1979and3287mEUAfor1978.
Itcanthusbeenvisagedthatborrowings madebytheECSCcouldamount
tobetween1000and1500mEUAin1980,ifmarketconditionsaretothe
advantageoffirmsandprovidedthereisnofurtherincreaseinapplications .

™doo.
c•pzî^SCIALCO^TF
Allthebudgetaryti^;reaiathispaperareinEuropee.nUnitsof
Account(SJA)jbecausesince1976theECSCoperationalbudgethas"been
expresseda&diispleventedisE;.IASandthemassdueandcommitments
tmdgetedforaasdthecontractsrelatingtheretohavebeenexpressed
andpaidinSUA®
However,theCo:m:\«&ionfevilsthat,asaresultoftheentryintoforce
thisyearoftheEuropeanKcrne'savy .System "bassdontheECU(whichis
determined "bya"basketofC^-xmir^cs^rrerioiesidenticaltothatused
asthe"basisfortheEui),thetsnitofaccountto"beusedforECSC
purposesshould "bechangedfree.E'"LtotheECU®AdraftDecisionon
thismattervriilbeprecenciitotheappropriateauthoritiesshortly,
and,shuJi-X/..-?"thatitisadapted "beforetheendoftheyear,theECSC
operational Jyad&ot<:.•:!?u-a"'„soflevieswouldthen"beadoptedinECUs,
Sincethetwot^itaofs'.ocw.i:aredt^,svrd'icd "bythesame"basketof
Coumwitycurr^.sie *"!.,itporr--Idhe thetitwould "beunnecessary
toalteranyoftheit^rmivth-'.sp-3.;eera
Asregardstheaases^OTtoffh«*o;<raft&;•>.&r©tfor1980,theriseinprices
isstillakeyfactorxa therelationship betweenthe
financialyears1979twui19B0-,J.ta-.r"be&,sensed,inthisrespect;that
theincreaseincostsfro>a1979to1980■will"bearo;znd9%®
ThemainfinancialproblemwhicharisesconcerningtheECSCdraftBudget
for1980isagaintheproblemofbalancingthe"budget,inthelightofthe
considerabledifficulties nowencountered "byindustry,inparticularthe
ironandsteelindustry,intheCosarmity®
LastyearandtheyearbeforetheOosraissionjudgeditinadvisabletomake
useofthemechanismfor"hale-aciw?the'budget,providedforintheTreatyof
Paris,i®e»aaappropriate adjus-uiaentoftherateoflevy,becauseofthe
financialdifficulties ofthefirias®Consequently ,in1978andagainin
19791thebudgetwasbalanced(a)byareductionintheestimatesof
expenditurewhichhadbeenreg&rdeda3neoeasaryinprincipleand(b)by
asxjeoialcontribution frcatheJibberStates®

TheCommission would recall that itsproposals hitherto forthe
future balancing oftheECSC Budget have been fortheCommunity to
beprovided with additional OwnResources bythetransfer toit
oftheproceeds ofcustoms duties onECSC products –anidea
supported bytheParliament .
Allthat theCouncil deliberations onthese proposals hasproduced in
1978 and1979 .however ,hasbeen aspecial contribution of28million
EUA ,inface ofareasoned application for1979 for60million .
TheCommission isobliged torecord that thecourse ofbalancing the .
ECSC Budget bytransferring thecustoms duties isstrongly objected
tobyseveral Member States ,onboth legal andbudgetary grounds .
Itsconclusion isthat /from apractical point ofview ,unless theMember
States concerned alter their views ,theadditional means needed togoon
sustaining thelevel oftraditional ECSC assistance without increasing the
levy must besought elsewhere .
Toreturn totheproblem posed for thefunding of1979 assistance
from theBudget bytheMember States' granting 28million bywayof
special contribution instead ofthe60million applied for ,this
hascompelled theCommission tocut from 55million EUA to27million
theappropriation forinterest subsidies infavour more particularly
ofinvestment projects relating totherestructuring andredevelop­
ment ofthesteel sector .Alive totheall-importance ofthese aids
i
» \inthecontext ofCommunity steel policy ,ithascontrived ,by
r
several exceptional measures detailed inAnnex Btobring thefunds
foraids intheform ofinterest subsidies uptok7million EOA
(instead ofthe55million originally planned ).Thefact remains
that bysodoing ithas-been obliged toputoniceeminently
worth-while application ^foraidtoa'total of18million EUA,
which thua remain tobemetfroa the1980 appropriations .

- 28
This isanimportant feature inthebackground tothedraft 1980
1
Budget *
«r
Mention should also bemade ofthe Commission 'smove for a
transfer from theGeneral totheECSC Budget topayforthenew
social measures described above (seeB.3above ,andChapter
ofthepreliminary draft 1980 Budget ). 'Itrecently proposed
(Doc.COM(79)3*f5 )that theBudgeting Authority approve another
measure toincrease theECSC Budget availabilities ,viz .a
transfer from theGeneral Budget oftheCommunities ,for the
funding ofnew expenditure tobeauthorized byaDecision under
Article 95ECSC tocover temporary social measures inconnection
with therestructuring ofthesteel industry .Recourse tothe
General Budget was felt tobejustified inthis instance inview
ofthegeneral economic interest ofthese measures . .
This newsystem oftemporary ECSC aids ,which iscurrently
under examination intheCouncil machinery ,will when finally
approved necessitate correcting theECSC Budget provisions
with respect toresettlement aids and totherevenues referred to
1 •
above . .
There remains ,then ,forthefinancial year .1980 theproblem
ofbalancing theECSC Budget asconcerns thefunding ofother
assistance .This is'discussed inChapter -IIIabove .

-29 ~
II.ANALYSIS OFREQLTIRIMENTS REPORTED AND RESOURCES AVAILABLE FOR THE
FINANCIAL YEAR 1980
This chapter first ofallgives adetailed account ofthetwofactors
traditionally taken into account "bytheCommission indetermining the
levy rate onwhich to "base theDraft Budget forthenext financial year ,
namely expected requirements andtheestimated yield from resources .
Article 49oftheECSC Treaty empowers theCommission toprocure the
funds needed topursue theactivities setoutinthat Treaty "byimposing
levies ontheproduction ofcoal and steel .These levies areassessed
annually onthevarious products according totheir average value ,"but ,
pursuant toArticle 50,therate thereof maynotexceed lfounless
previously authorized bytheCouncil .
TofixtMs rate itisfirst ofallnecessary toestimate requirements ,
then toconsider howfarthese maybecovered from "budgetary resources
other than thelevies ,namely theinterest ininvestments andonloans
financed outofownfunds and cancellations ofprovisions .Theamount
which will have tobecovered bythelevies canthen bedetermined .
Next ,thelikely yield from thelevies iscalculated onthebasis ofa
preliminary –andthus sometimes unavoidably inaccurate –estimate of
theaverage valuers ofthevarious products ,andinthelight ofthe
estimates (also somewhat tentative )ofthevolume ofoutput during the
year .Theprobable levy yield isfirst expressed astheestimated yield
from arate of0.01$ .
These arethe twomain elements described inthis chapter .

ThenextstageistodeterminetheextenttowhichtheCommunitymust
foregosatisfyingtherequirements ,whichfarexceedtheresources
provided "bythepresentrate;or,conversely,howfartheratemust
"beeitherraisedorlowered*ThisquestionisdiscussedinChapterIII*.
ι
Thefollowingpresentation ofrequirements reportedandforeseeable
resourcesismodelledonthesystematicanalysisofthedatafor'the
variousbudgetheadingsintheGeneralBudget,setoutinPartIIof
theGeneralIntroduction tothePreliminaryDraftBudget*Aswiththe
GeneralBudget,thispresentationlistsseparatelythemainfeaturesof
eachheading(legalbasisanddescriptionoftheoperation,typeand
breakdownofexpenditure,explanation)*Threecategoriesofexpenditure ,
areunavoidable,inthattheyderivefromdecisionsalreadytaken
(administrative expenditure,aidtocokingcoalandcokeforthesteel
industry)orfromframeworkagreementswiththeMemberStat-es(onaids
toresettlement)*Togiveaclearpicture,theexplanationsfor
expenditurewhiohisnotunavoidable (researchandinterestreliefgrants)
aremoredetailedthanfortheotherchapters*
A*REQUIREMENTS REPORTEDFOR1980
1*Ordinaryrequirements
CHAPTERB1:AIMNISTRA.TIVEEXPENDITORE
1*Legalbasisanddescription ofoperation
Legalbasis:
–Article "50oftheECSCTreaty;
–Article20oftheMergerTreaty;
–CouncilDecisionof21November1977(OJNoL306,30November1977»P»28)
–ECSCcontribution totheCommission'sadministrative expenditure *
2*T^peandbreakdownofexpenditure
Annuallump-sumpaymentinfourequalquarterlyinstalments *
3*Explanation
TheCouncilhassettheannualamountofthelump-sumpaymentat5nEUA*

CHAPTER B2i AIDS TORESETTLEMENT
"l. 'ixigui baaar ;amueEcriptaou oï""opération
Legal basis :
-Articles 50and56oftheECSC Treaty ;
-Bilateral agreements concluded between theHighAuthority /
Commission and the Governments ofthe Member States .
TheHigh Authority /Commission provides non-repayable aidtowards :
(i)thepayment oftideover allowances toworkers ;
(ii)thepayment ofresettlement allowances toworkers ;
(iii)thefinancing ofvocational retraining forworkers having
tochange their employment .
Insome cases ,thetideover allowance isreplaced byacontribution
corresponding tothe cost ofabridging-pension scheme .
The grant oftheaid isconditional upon payment bythe State concerned
ofaspecial contribution ofnotless than theamount ofthat aid ,
unless anexception isauthorized bytheCouncil ,acting byatwo-thirds
majority .
2.Type and "breakdown ofexpenditure
Creation ofaprovision tosubsidize ,bymeans ofa50%reimbursement ,
expenditure incurred bytheGovernments within thescope ofthe
agreements signed .

!niebreakdownbyindustryandbycountryoftherequirements asestimated
fromthedataprovidedbytheGovernmentsisasfollows:
mEUA
ICountry . CoalSteeland
iron–oreminesTotalpercountry
Germany 1
Ià
ι1.5 7.5
Belgium 5 5 10
Denmark/
France A 23. 27
Ireland
Italy tokenentry ■tokenentry
-•
Luxembourg 1*
Netherlands .tokenentry token-entry•I
UnitedKingdon 7.5 η
i21.5
TotalperinduBtry 22.5 4V.5 67
Thesocialrepercussions ofthepresentsituationremaindifficultto
predict,ofcourse,andtheforwardfigures,whichareinprinciple
basedonthepolicynowinforce,arethereforenomorethantentative.
3.Explanation -
Thecoalindustry'srequirements areonaparwiththoseestimatedfor
1979,mainlyasaresultoftheprogressbeingmadeinreorganizing
theindustry.Ontheotherhand,requirements intheironandsteel
industrycontinuetobeatahighlevel,owingtothegradual
rationalizing andrestructuring oftheindustry.Thereductionin
employmentintheironandsteelindustryisestimatedatseveral
tensofthousandsofworkers.

-33-
CHAPTER 33:AID TORESEARCH
1.Lega -£bas -isanddescription ofoperation
Legal basis ;Articles 50and55 "theECSG Treaty .
TheHigh Authority /Commission isrequired toencourage technical and
economic research into theproduction andincreased use ofcoal and
steel andoccupational s&fety inthecoal andsteel industries ,,To
this enditgrants aidtofinance research after receiving theCouncil 's
assent .
2. arai brsàkdown or
Creation ofprovisions tocover 1part-subsidies which take theform of
therepayment ofaproportion oftheactual costs ofresearch projects
approved bytheHigh Author !ty/Comraission inaccordance with the
procedures provided forintheTreaty ;these cover ,inparticular ,the
consultation oftheECSC Consultative Committee and thereceipt ofthe
Council 'sassent® Inmost cases ,theaidgranted amounts to60$of
the estimated and substantiated costs®
Theapplications can bebroken down asfollows ;
mEUÀ
Heading
j '• Sector • • J!
jAidrequested
ΐ ί
t83.1 I
^" .. Ii : :
i
s Steel
i1 '48a5..
j83.2
i•Coal - ••»
I ••25'
(Β 3.3
s *• •■Social and medical ¡•10'.*
L.
TOTAL83.5

3.ExDla.nai.ion-34-
Steel research
Inassessing theappropriations needed tofinance theECSC steel research
programme for1980 account nrust betaken ofthepersistent crisis
situation intheCommunity iron andsteel industry ,theCommission 's
current strategy toaiditsrecovery andensure itsfuture viability
andofthecontribution which ajoint research anddevelopment effort
canmake tothis strategy *
The economic recession andtheworldwide restructuring ofthe steel
industry arefactors which continue tohave profound repercussions on
theECSC .They ajrethefundamental cause ofacrisis which hasracked
this industry since the end of1975 andwhich hasrevealed major structural
weaknesses resulting from overcapacity andthedeterioration ininternational
competitivity .There isevidence that ,inanumber ofsectors ,techological
progress hasnotbeen asrapid asamong ourmain competitors ,notably
Japan ;this situation isreflected inthelarge number ofnewtechnologies
nowbeing imported under licence into theCommunity with theobvious
consequences fortheindustry and itsfuture development .
Itisclear that therecoveiyand future economic prosperity ofthesteel
industry will depend onitsability toattain thehighest levels of
international competitivity through aprogramme ofrestructuring and
reorganization .Technology will play adecisive role inthis effort ,
which aims toincrease the efficiency andflexibility ofthe steel
companies' production activities andoftheir equipment ,todevise measures
torationalize theproductive investments andtocontinue toachieve major '
energy savings .InJapan forexample ,thesteelmakers –having cuttheir
energy consumption by7%over thelast five years –have setthemselves a
target ofafurther 5"to7fcreduction inthenext fewyears andthereafter
asubstantial reduction intheir production costs (energy costs account
fornearly 30^>oftotal steel production costs ).Intheequally important
product sector ,thecompetitive challenge from foreign suppliers on
domestic markets must betaken upinrespect ofthe entire range ofsteel
products ;onthe export side emphasis should beplaced onspecialized
andsophisticated high–technology products .
Toachieve these objectives ,theECSC steel programme nrust make amajor
contribution tothe joint research objectives byplacing greater emphasis
onshort –and medium –term needs .This collaborative effort will thus
continue toprovide techological information andknow–howforthebenefit
ofall steel producers andusers throughout theCommunity ;concurrently ,
this cooperative effort will provide acommon core around which individual
steelmakers canorganize their ownresearch anddevelopment programmes ,
andwhich will enable them tofree resources totackle problems ofa
more specific and commercial nature .

-35-
Thechanges taking place intheindustry mean that newguidelines must
"beworked outforthis field ofECSC activity ;these guidelines are
nowbeing drawn upfollowing discussions which have taken place "between
producers andusers *Onthe "basis ofthis analysis ofrequirements ,
themain objectives oftheprc^amme will bes
(a)toreduce production costs ;improvedproductivity inthemanufacture
andprocessing ofsteel ;more efficient useofrawmaterials ,
especially energy ;
(b)toimprove product quality ?this improvement covers nearly all
aspects ofsteel production ,iee»process control ,quality
assessment andreproducibility ?•
(°)toimprove thetechnical characteristics ofthesteel products and
broaden therange ofapplications ;ensuring abetter understanding
oftheproperties ofsteels with aview tomore effective utilization
ofBteel andsteel products bearing inmind that new ,more sophisticated
products canbedeveloped tomeet existing requirements andnew
applications .
Theprojeots under consideration forthefinancial year 1980maybegrouped
into two categories ,i«e*those concerning processes (productivity ,cost
reduction ,energy problems )which ,make up73$ofapplications foraidandthose
relating toproducts (product quality andsophistication ,steel utilization )
which make up24$ofapplications 0Gftheprojects inthefirst category
almost half sureresearch –orieat andaimed atachieving energy savings
orfinding alternative sources 6fenergy * . .<
Thecontinuing high level offunds required for1980 reflects notonly
theincreased effort needed tocounter thegrowing technological challenge
from non-member countries ,but also the ccxamitment ofasteel industry
which isaware of .thevalue ofcooperation inresearch anddevelopment#
Although theECSC budget represents ICffooftotal expenditure onsteel
research intheCommunity ,itmust beremembered that thetotal amount of
aidgiven toresearch anddevelopment intheJapanese industry isthree
times ashigh (lo5$ ofturnover)®
Inthis general climate ,itisobvious that much greatfer importance must
beattached tothedevelopment andexploitation ofnewtechnologies in
the steel sector and that more resources must bereleased for this
purpose .Although ECSC spending onresearch isalready asubstantial
contribution totheCommunity effort ,this sector will require even more
support iffull benefit istobeobtained from these advantages of
restructuring# ,

-36-
Coalresearch
Coalisdestined ,toplayanincreasingly importantpartinthenewenergy/
orderofthe1980*s,giventheprospectofsteadily-rising pricesfor–
andtheshortageof–petroleumproducts*
TheEuropeanCouncil,meetinginStrasbourgon21and22June1979»stressed
thevitalneedforanenergystrategygearedprincipallytothepursuitoJF
aneconomicgrowthwhichnolongerdependsonincreasedoilconsumptionbut
whichwasbasedonthedevelopmentofotherenergysources.
TheEuropeanCouncilalsomadeclearitsviewsoncoal*Withtheprospect
ofnecessaryreductionofoilimports,theuseofcoalinconventional power
stationsmustbesteppedupimmediately anditsusebyindustrypromoted#
Thenewresearchprogrammesaimedatdeveloping newprocessesofcoal
production)transportandconversionmustbeintensified#
TheCommission,too,hasfrequently madeitsviewpointclear,particularly
inits1975-85medium-termguidelinesforcoalwhichwerepublishedinthe
OfficialJournalNoC22of30January 19755theseguidelineslaydown
outputandproductivity targets.Intensification ofresearchisonewayof
achievingtheseobjectives.Theproposedaidtocoalresearchofbetween15
and20mEUAperyearisintendedtoencourageresearchprojectsunder
the1975-80medium-termcoalresearchprogramme(0JNoC60of25May1975)*
TheCommunitycoalindustrycontinuestoencountermanygravedifficulties
foranumberofmajorreasonssuchasthediversityofcoalseams,the.
increasingdepthoftheworkings,labourproblemsandlabourskills,the
dangersinherentinminingetc.,
Thewinningofcoal,roadwaydrivage,transport,outbyeservicesandmining
hazardssuchasfiredamp,mineclimateandstratapressurearethemajor-
subjectsforresearchonwhicheffortsshouldbeconcentrated.Ofparticular
importancearetheproblemsofoperationscontrolandradiocommunication .

-37-
Coke isstill akeyoutlet forthecoal industry ,since itisthebasic
element inthemanufacture ofiron end steel products .For "both thecoal
andsteel industry itisvital tocontinue andstep upresearch to
improve thequality ofCommunity coke ,increase theyield andcapacity of
coking plants andextend therange ofcoals which canbeused forcoke
productions Improved coal preparation andproduct treatment techniques ,
themodernization endautomation ofpreparation plants will help increase
productivity and reduce costs *
Product upgrading andbasic research ©nco&l–to-hydro carbon conversion aimed
atimproving thecost-effect ivenesR ofexisting processes oratfinding less
costly ones ishighly relevant iv,thepresent energy situation .
The1980 ECSC ooal research programs® will cover thefollowing topics :
«
Mining techniques
–Preparatory work
–Firedamp ,mine climate andstrata pressure
-Winning andworking
–General services underground .
Upgrading
–Preparation ofcoal
–Coking
–Upgrading processes .

-38-
ι
Social research ■ . .~
"Social Research "covers ,research designed toimprove working conditions ,
occupational safety andindustrial health intheECSC industries .
Thework ofsocial research in1979 may besummarized asfollows :
Inthemining sector ,theprogrammes relating tohealth andoccupational
safety will continue .
t' - " ' *
Inthesteel industry ,afourth research programme waslaunched bythe
Commission ontheteohnical control ofpollution attheplace ofwork
andintheenvironment ofiron andsteel works (22May1979)* Atotal
of15million EUAhasbeen earmarked forthis programme over afive-year
period .This programme follows onfrom earlier programmes concerned
with pollution control inthesteel industry .Thepriorities ofthis
programme are : '
–campaign against airpollution ,
–campaign against water pollution ,
–waste treatment ,
-noise and vibrations .
Special importance hasbeen attached totheproblems ofnuisances at
theworkplace .
ECSC medical research iscentred onthe ,biological effects ofdusts and
suspended particulates ontherespiratory tract andspecifically on
methods fortheearly detection ofdeterioration ofthebronchopulmonary
parenchyma .This research will lead tothedevelopment ofpreventive
medical treatment andtoanimprovement inthetechniques ofinvestigating
therespiratory functions andits links with thecardiovascular system .
In1980 ,themajority oftheresearch projects inprogress will near
completion an4thefindings will bepublished andscrutinized byscientific
committees andgroups andbytheappropriate Commission departments .A
newprogramme isnow inpreparation .Themain topics will bedecided in
the light oftheresults ofthe current work . .

-39-
Kithaviewtoimprovingworkingconditions,anev:programmeofbasic
andappliedresearchistobelaunchedinresearchinstitutes andthe
ECSCindustries.Themaintopicsv?illbethenoiseenvironment and
itseffectsonthehumanbody,thephysicalandmental,strainresulting
frommultiplestressjobsandthegeneralworkingenvironment .
Thecostofthisprogrammeisestimatedat4millionEUAfor1980.
Workwillcontinueoverfouryearsandwillhelpintheframingof
standardstoreducestress,prioritybeinggiventonoiseandtothe
mentalstrainattheworkplace o
Tosumup,theprojectstobefinancedin1980concernthefollowing
fields:
(i)Industrialhealthandminesafety
(ii)PollutioncontrolintheBteelindustry*
(iii)Chroniorespiratorydiseases
(iv)Improvementofworkingconditions.
*

-4Q_
CHAPTER B4:AIDS INTHE FORM OFINTEREST RELIEF GRANTS
1.Legal basis anddescription ofthe operation
Legal basis :Articles 54(investment )and56(redevelopment )oftheECSG
Treaty ,andDecisions oftheHigh Authority /Commission .
TheECSC mayuse itsownresources toprovide interest relief oncertain
i I
types ofloan .Therelief iscalculated inEUAatarate andforaterm
fixed bytheCommission .Itcurrently stands at3$over five years .
2.Type andbreakdown ofrequirements
Provision foroffsetting part oftheinterest dueonloans disbursed bythe
ECSC ,inaccordance with thecontracts drawn upbetween theCommission and
the beneficiaries .
The following isthe .breakdown ofapplications forinterest relief grants
already registered : ./ >
mEUA
Heading SectorAids applied
for
B.4.1
B.4.2 'InveBtment
Conversion64
52
TOTAL 116
Erplanation
ECSC loans with interest relief aretheprincipal financial instruments
forpromoting priority investments ,particularly those connected with
that part ofCommunity energy policy Which relates tocoal aswell as
.theCommunity policies forrestructuring and .converting the' coal and steel
•industries setout inChapter I,Bofthis paper .Thetechnical information
given below supplements thepolicy reasons forthese requi rements ,setout
inthat Chapter .

-41-
Investments
Intheinvestment field ,thechief aimofloans with interest relief is
thestructural improvement andrationalization oftheECSC industries .
Thecriteria forgranting relief are asfollows :
(i)environment :interest relief only forexceptionally heavy
capital expenditure onexisting plant ,andforpilot schemes
innewplant (OJNoC146,25November 1974 );
(ii)research andtraining centres ,andtheelimination of
"bottlenecks :relief inthe latter sector has "been limited
toinvestment toremedy theshortage ofcoking coal
(OJNoC73,18June 1970 )5
(iii)stabilization ofcoal production :this isanewcategory of
aidandallocation criteria will beannounced shortly .Relief
islimited toinvestment inshafts ,underground workings
andhaulage andwinding equipment .When assessing themerits
ofsuch investment ,theCommission pays particular attention
tothesize oftheproject (lead time ),itslocation (importance
ofthecoalfield concerned ),itspurpose anditseffect on
employment ;
(iv)restructurings interest relief maybegranted forthose
investments that areofgreatest value forrestructuring the
Community iron andsteel industry andre-establishing its
'long-term competitiveness (OJNoC174 ,22July 1977)*The
Community attaches special importance tothis category of
intervention initsiron andsteel policy .

Redevelopment
Redevelopment Loans aregranted tofirms orpublic bodies which encourage
investments creating newjobs inregions hit "faydeclining employment
inthecoal andsteel industries .Theguidelines drawn upbythe -/
Commission forgranting these loans arepublished inOJNoC178 ,
27July 1977 ,They have since been .changed slightly (seepage 8of
OJNoC82,29March 1979 )totighten uptherules forglobal loans ,
which have proved avery effective jobcreation instrument .
Themaximum size ofloan eligible forinterest relief atthemoment
is20000EUApernewjob.When recruiting ,therecipients give
priority toformer ECSC workers .
Forobvious reasons ,in1980 priority will still have tobegiven
totheredevelopment needs ofthesteel industry .Nevertheless ,
applications relating toprojects inmining areas will still be
considered ,onthegrounds oftheadvantages they offer atthetime
ofsubmission .
Joblosses intheCommunity steel industry arestill high .This
trend islikely tocontinue forseveral more years .Asaresult ,
butsubject tothelimited effectiveness intheshort term of
reconversion ,itispossible ,where jobcreation isconcerned ,to
arrive atorders ofmagnitude suggested bythescale oftheproblem :
iftheECSC were touse its redevelopoent policy in1980 tohelp create
employment toreplace allthe25000jobs likely tobelost inthe^
steel industry alone ,then loans with interest relief totalling
500mEUAwould have tobegranted ,together with non-repayable
interest relief amounting to75mEUA .

_A3
However ,thecontinuing paucity ofprojects which areeligible for
ECSC financing ,notwithstanding aconsiderable increase in1979 »
suggests that the 198O budgetary requirements for redevelopment aid
correspond tosome 17.000 jobs ,or52mEUA ininterest relief .
Itshould besaid that ,inthemost optimistic view ,these jobs
will becreated over thenext three tofour years andwill not
therefore beimmediately available toreplace joblosses in1980 .
CHAPTER B-AXIS UNDER ARTICLE 95OFTHEECSC TREATY (COKING COAL
AM )COKE FORTHESTEEL INDUSTRY )
1)Legal basis anddescription oftheoperation .
Legal basis :
(i)Article 95oftheECSC Treaty ;
(ii)High Authority /Commission Decision 73/287/ECSC of15July 1973
(OJNoL259 »15September 1973 ),aslast amended by
Decision 1613/77/ECSC of15July 1977 (OJNoL180 ,20July 1977).
TheECSC makes alump-sum contribution toaspecial fund ,administered
bytheCommission ,forsubsidizing intra-Community sales ofCommunity
coking coal intended for theiron and steel industry .Under
Decision 73/187/ECSC of15July 1973 ,"^hefund isfinanced bythe
Community ,theMember States and theiron and steel industry .
2)Type andbreakdown ofrequirements
Provision foralump-sum contribution tothefund ,estimated at6mEUA .
Thesubsidies duearedetermined inrelation tothetonnages delivered ,
andaidmaybegranted forupto15000000 tperannum ..Asitstands ,
however ,theDecision provides foraidonly upto1979 *Nevertheless ,
theCommission proposal for renewing thefund (andincreasing total
resources ),nowbeing examined bytheCouncil (C0M(78)516 final of
19October 1978 )andwhich Parliament hasalready approved inits
Resolution of25April 1979 »provides forthecontinuation in190O
oftheECSC annual contribution of6aEUA .This figure should therefore
beretained for thepurposes ofthedraft Budget .

-44-
3)Explanation
Theaimofthespecial system ofaidtocoking coal andcoke ,setup
pursuant toDecision 73/287/ECSC of15July 1973 fistohelp maintain
production of "blast-furnace coal fortheComm'-nity 'siron endsteel
industry ,andalso toenable thecoal andthecoke derived therefrom
tobesold atprices reflecting world market prices ..
TheCommission feels that certain production capacities should be
maintained inthis Bector ,aswell astherequisite labour force to
work them asefficiently aspossible ,andthat itistherefore necessary
tohave anaidsystem which takes account ofthefact that thequestion
ofCommunity coking coal production concerns ,alltheMember States .
Under theaidsystem ,aids toproduction andsales intheproducer
country arefinanced bythat country ;aids tointra-Community sales
arefinanced atCommunity level ,thecost being shared bythesteel
industry ,theMember States andtheECSC .
2.Requirements not entered inthebudget :loans for financing
subsidized housing
Inaddition totherequirements tobefinanced bynon-repayable grants
from theyear 'sresources ,there istheECSC housing subsidy scheme ,
financed 'below theline' ,which hasbeen inoperation since 1955 *
Forecasts forthis programme areincluded inthis aide-memoire tocomplete
thepicture ofallECSC interventions forParliament andtheConsultative
Committee .Forease ofunderstanding ,thepresentation follows the
same analytical format asfortherequirements already described .
1)Legal basis anddescription oftheoperation
Legal basis :Article 54andDecisions oftheHigh Authority /Commission
assigning tothehousing programmes thefunds from the "special
reserve "constituted byinterest from investments andfrom loans
Vagainst ownfunds . .
ECSC intervention takes theform ofreduced-interest loans ,and
eases the .cost offinancing housing byadding thefunds lent bythe
Community toresources provided nationally .

2)Typeandbreakdownofrequirements
Grantoflong-term 1/^>interest–rateloanstotheresponsiblenational
bodies.
TheCommissionDecisionof29June1979on'theninthsubsidized ,
housingprogramme(1979-1983)allocatesthebudof30mEUAfor
thefirstphaseoftheprogramme(1979–19®0)«whichaveragesoutat
10mEUAayear,againstthe15mEUAallocatedpreviously.This
isduetothefactthattheCommission wasobligedtocutbackits
contributions inthisareabecauseofpressingfinancialcommitments
inrespectofintervention directlyrelatedtotacklingthesteelcrisis.
3)Explanation
Thisschemeisintendedtosubsidizethefollowingprojects:
(i)housinglinkedwithindustrialrestructuring inthetraditional
steelcentresandinthosecoalfieldswhereproductionis
tobeincreased;
(ii)housingforlabourtransferredtothenewcoastalsteelworks ;
(iii)specificsolutionsformigrantworkers,employeeswithspecial
skillsandpersonsemployedinarduoustasks;
(iv)housingtobemodernizedaspartofurbanrenewalinsteel
andminingdistricts.
Theschemeisbothintheinterestofworkers,sinceitalleviates
theeffectsofpriceincreasesandhighinterestrates,andof
benefittotheindustry,sinceitfacilitatesrestructuring .
ThenumberofdwellingssubsidizedbymeansofECSCloansat
1January1979was160177*

-46-
3.Summary ofrequirements reported
Total requirements reported therefore amount to246*5 mEUAto "befinanced ,
under theoperational "budget tplus <mEUAintheform of"below -the-line
loans atlowinterest rates forthe "building ofsubsidized housing .The
figures forrequirements reported aresummarized inAnnex E,inthe
"applications "column#
s
m m
B. ORDINARY RESOURCES AVAILABLE
1.Resources for the financial year
CHAPTER R1:GENERAL RESOURCES
TITLE R1.1 ;Levy
1,Legal "basis and description
Legal "basis ;
-Articles 49and50oftheECSC Treaty
/
–Decisions 2/52and3/52of23December 1952 * -
Thelevies arecalculated onthe "basis ofafixed scale pertonne which is
/
decided each financial year "bytheHigh Authority /Commission andpublished
inthe Official Journal#
2.Type and "breakdown
Levy resources arethesums owing ,andduly established ,intheform of
levies payable onoutput inthe1980 financial year andcalculated onthe
"basis oftheproduction declarations made "bytheundertakings .
3.Explanation '-
Thelatest estimates oftheaverage values which Berve asthe "basis for
calculating thelevies suggest that thefigures forthe1980 financial year ,
which relate tothereference period from 1July 1978 to30June 1979 »will
"besome 9$higher inthecase ofcoal androughly 10$forsteel them the
figures for1979 *
Itshould "benoted that there isanappreciable margin ofuncertainty in
these figures ;this is "because thedepartments concerned arenotyetin
possession ofalltherequisite data ,andforecasting production in .
present economic conditions isvery uncertain *

Tor *-•,*.3subject tothelevy ,s:ad
Γ_'
Br -r'x.i r~-:-luettes and
b^-co.' /ederived frosn "brom
i
Icoal
H^rd cutil ofallcategories
Coal –total
Pigiron other than that used
fornaV "•b-j?iwgots
IJ?im .sshndprfso.act s
!
j Steel total
! G'MED TCT'ilL
!yie'Mfrora arate oflevy of0,01%
Prftfucsion onwhich IOnelevy I
•;f]slevy iscalculated "point "
rcillion tonnes inmEOA
3.7 0.01
197.4 10.3.9 I
0*9
4*4 0.05
140 2.19
107i
0.76 1
3.9
TI riiTi p7 • Jr.* "o*th0T
1»L-vml .-.i.cxs and description
B©6ew:«s*«3 dorivittg from income oni.^vtse-'Gaents andonloans against
norr :La.'/.'u-?ad f\maa will fcadeiereixed vhen theCoaraisaion adopts the
"balance sLietat31December 1$79® Under itsDecision of30April 1975 »
the enters inthe "budget theinterest available fro© theprevious
year .
2#Tr,~peasi "breakdown
A ■breakdmm offorecast resources "based onthe latest estimates is
given lsej.ovj !
%

-48-
Titles Heading
«mEUA
R1.2
R1.3
R1.4Interest oninvestments and loans
against non–'borrowed funds
Fines andlate payment surcharges
Miscellaneous revenue23
token entry
token entry
3.Explanation
Thefigure forinterest revenue is "based onanestimate ofthe
resources which theCommission will beinaposition torelease when
itadopts thebalance sheet at31December 1979 *
'i
CHAPTER R2:CANCELLATIONS OFCOMMITMENTS WHICH WILL PROBABLY NOT
BEIMPLEMENTED
1.Légal basis and description
Theprovisions created inresponse toCommission aiddecisions must be
given tangible form within areasonable period oftime bythecontracting
oflegal commitments .
TheCommission 'sInternal Rules forthedrawing upandimplementation
oftheECSC operational budget therefore provide that intheexceptional
event ofundue delay atthis stage theprovisions will becancelled .
TheRules also provide that once allparties have discharged their
obligations tinder thelegal commitment ,anyremaining part oftheprovision
will likewise becancelled .

-49-
Theamountsthusreleasedbecomeavailableagainasresourcesforthe
^vis.,rentfir-uncialyears
j,iNa"^i;r'■-:•»«ndbreaMova
Saveintheexceptionalcaseswheredecisionsontheear-markingoffunds
arenotfollowedv.pwithinareasonableperiodoftime"bylegal
ooaimitHi^ritSj e&ycancellation ofearmarkedfundsnormallyindicates
completedischargeofthecontract,agreedwiththecontractingparty
concerned®
'lieestimateof5®E3JAshowninthischapterrelates,inessence,to
cancellations ofallocationsforresettlement aid.Onlyatokenentry
vjouldheae'de-dfortheotheritemswhichmightheinvolved(cancellations
of"balancesremaininginrespectofcontractswhichhave"beenperformedin
full,delayedlegalcommitments ,,etc®)®
3®Explanation
Itisdifficulttoestimatetherateofcancellation inrespectof
resettlement programmes,asitdm>endsonthenegotiations toteheld.
,/iththegovernments concerned# Theestimatedfigureof5®E0Ais"based
inanaverageratefor1980®
CHAPTERR3'-REVALUATION CfflASSETSANDLIABILITIES
Thischapterjshowinga"tokenentry",isprovidedtorecordthenet
effectofchangesinratesofconversionduringthefinancialyear*
CHAPTERftUMTSEDRESOURCES FRCMTHEFINANCIAL YEAR1979
.^hischapter,showinga"tokenentry",providesforany"balance
.■remainingfromthefund8of$hepreviousfinancialyearto"beenteredas
resourcesforthecurrentfinancialyear*

-50-
2mCoveringofrequirements notenteredinthebudget
Provisionhas"beenmadeforthefollowingresourcestocover
requirementsfortheconstruction ofsubsidizedhousing:
–repaymentsonearlierloans(7mEUA);
-apartofthespecialreserveandoftheformerECSCpensionfund
(3mEUA).
Themakingavailableoftheresourcesofthespecialreserveremains
tobeconfirmedwhentheCommissionadoptsthebalancesheeton
31December1979*
1
3»Summaryofpossibleordinaryresourcesavailablefor1980
Theestimatesoftraditional resourcesotherthanleviesamountto
28mEUA(interestavailable–23mEUA;cancellations –5mEUA).
Astheyieldfromalevyrateof0,01fohasbeenestimatedat3*9mEUA,
theyieldobtainedfromleviescanbeestimatedat113mEUAon"the
basisofthecurrentrateof0.29$»Thetotalordinaryresources
availablefor1980,assumingthatthelevyrateremainsunchanged,
isestimatedat141mEUA*
Theestimated
"resources"•resourcesaresummarisedinAnnexEintheBectionon

I11.DRAFT 1980 OPERATIONAL BUDGET
Once again ,forreasons already gone into ,thedraft 1980 ECSC
operational Budget shows apersisting J^balance between requirements
and normal availabilities .
Asthis isdue inlarge part totheexceptionally high-level
ofcommitments called forbyCommunity assistance towards the
reconstruction ofthesteel industry ,theCommission would stress
that inprinciple theimbalance ioatemporary oneonly .
However ,asexplained inthis paper ,since thestructural crisis
that developed in1975 hit theCommunity "steel industry theCommission
has judged itnecessary -–inwhich itissupported byall concerned –-
toevolve newassistance arrangements tocope with theexceptional
restructuring ,redevelopment and social problems there .
Inaddition ,under theheading ofenergy policy ,itplans in
1980 tolaunch anewschema ofaidforinvestment inthecoal industry
Itisthe cost ofthese new policies that has ledtoanimbalance in
the Budget .
Adistinction must bedrawn here between financing requirements
inconnection with assistance onthe social side and financing
requirements inconnection with investment (intheform ofinterest
subsidies ).
Inthe case ofthe social assistance (resettlement aid )the
requirements are ,byreason ofthebilateral agreements between the
Community and theMember States ,"automatic ,"and sotobemet
first and foremost from resources available .

52
Consequently ,itisinparticular aidintheform ofinterest
subsidies that hastobecovered from non-regular funds ,such as
have been supplied inthelast twoyears bytheMember States .
4
There isthus adirect connection between these Community
requirements forinterest subsidisation andthecase forseeking
iextraordinary receipts for1980 .However ,tokeep anoverall
;picture oftheECSC Budget ,itisnecessary to'view asawhole
the sums toberegarded astheirreducible minimum forall the
'Budget chapters together . *
».
«
A.IRREDUCIBLE REQUIREMENTS •<
The Commission would recall that for 1979 itset the total
itconsidered theminimum needed tocarry onthevarious ECSC-
financed policies at180million EUA.For1980 itconsiders the
figure forirreducible requirements should be211 million EUA.
, N . • ...
' ' /
This figure ,abreakdown ofwhich isgiven inAnnex IS,has
been arrived atasfollows :
(i)thecommitments inrespect ofadminiatratlve expenditure .
(five million EUA),resettlement -•aid^(67million )and
aidforcoking coal (sixmillion ,given ,asweareassuming ,
anewDecision onthis )must berated asinescapable ,and
amount to?8million EUA 5
(ii)aidforresearch isinthecase ofsteel research closely
-bound upwith theCommunity steel modernization drive and in
thecase ofcoal research with energy policy ,while the
' (limited )assistance given forsocial research isaCommunity
operation greatly appreciated bythetwosides ofindustry
( 1andbacked upbytheexperts 'concerned inthefields of
industrial health' andsafety .

53
» ....
Notwithstanding ,theCommission feels itshould propose some
.pruning offunds here ,andisaccordingly proposing ,despite
theexpected inflation between thetwofinancial years ,that
theappropriation forthis chapter should remain atthe1979
level of million EUA.This would only beenough to.meet
56%ofvalid applications received ;
(ill)asforaidintheform ofinterest subsidies ,applications *
already inworkoutontheredevelopment sideat52million |
EUA (toresult ,according tocurrent criteria ,inthe
creation of17,000 jobs ),andontheinvestment side atC »
million ,i.e.116 million EUA1nall.Byapplying very strict
'selection criteria theCommission proposes tobring down the
figure forinclusion inthedraft Budget toaminimum 26million
EUA -<43million EUAforcoal AnditeelInvestment and45million EUAfor
redevelopment investments .
B.BALANCING THE BUDGET
Asappears from theforegoing ,there remains agapof70millidn
EUAbetween theaggregate requirements regarded bytheCommission as
theabsolute minimum (211million EUA)andtheexpected regular
revenue for1980 (1*»1million ).
TheCommission therefore deems theprovision ofextraordinary receipts
of70million EUA tobeindispensable .Itmaybenoted inthis
• , * ■ •
connection that were theCommission tomake useofthetraditional
Budget-balancing machinery "this would mean ,toraise 211million
EUAin1980 ,putting upthelevy from 0.29$ to0.47% . ■ ■
I • .- - - » ••

-54-
TheCommissionwillveryshortlyadvisethoseconcernedofits
proposalswithregardtothemethodtobeadoptedforprovidingthe
extraordinary receiptsforwhichtheneedhasbeendemonstrated .
Ontheassumptionthatprovisionofthesereceiptscanbeassured
bythenecessarydate,theCommissionproposesthatthelevyshould
remainat0/29%. .
C.DRAFTBUDGET
TheCommission'sdraft1980Budgetof211millionEUAisset
outinAnnexE.
' /
\'

H'PirVfNTATIO.'l CFTHEECSCOPCRATIONAL BUDGETFCR1978 (Ini.EUA)
REQUIREMENTSBUDGET
FIGURES–rm
FIGURESRESOURCESBUDGET
FIGURESFINAL
FIGURES
OPERATIONS TOBEFINANCEDFROM
CURRENTRESOURCES(NON-REPAYABLE)
1,Administrative expenditure5
/5RESOURCES OFTHEFINANCIAL YEAR
1.Currentresource»
1.1Levyyield(at0.2!#)
1.2InterestonInvestments andon
loansfromnon-borrowed funds
1.3Finesandsurchargesfordelayed
payment
1.4Miscellaneous100
18
token
entry
tokenentry100.78
18
0.H
I2.Aidtoresettleaent 12.Cancellation ofcommitments whichwill
(Article56)
3.Aidtoresearch
(Article55)
3.1steel
3.2coal
3.3social
4.Interestreliefgrants
4.1Article54-Investsent60
«
(16
(16
(9
40
(1560
40.34
(16
(16
(8.34
36
(15(2)
-#/-AnotnowbeImplemented
3.Revaluationofassetsandliabilities .
4.Unusedrefturcescarriedoverfrot
thefinancialyear19762
token
entry
token
entry2.88
4.2Article56-Redevelopment s
5.Aidtocokingcoalandnetallurglcal
coke(Article95)
6.EffectInEUAofthechangesIn
currencyexchangeratesonlegal
conmltmentstobecarriedoutIn(25(1)
6
token
entryUH3J
6
1.095.Drawingoncontingencyreserve
6.Specialcontribution
(DecisionsoftheHemberStatesof
21December1977and30October1978)-token.
entry
32m
*
28
7currencies'•Surplus QJ15
152 149.8 152'149.8
OPERATIONS FINANCEDWITHLOANS ORIGINOFNON-BORROWED FUNDS
FROMNON-BORROWED FUfDS'
8.Socialhouslng15 5 7.Repaymentsonloansforsocialhousing
8.Specialreserveandpartofthe
formerECSCPensionFund7.5
7.57.5
7.5
0)Reducedto21nEUAfollowingtheMemberStates1Decisiontoreducethespecialcontributionfrom32to28aEUA.
(2)2.82mEUAofthisamounttobedecidedIn1979(appropriationcarriedover).
(3)2.94nEUAofthisamounttobedecidedIn1979(appropriationcarriedover).

FORECAST OUTTURNOFTHE
:ECSCOPERATIONAL' BUDGETFOR1979 ■ANNEXB
ESTIMATEDREQUIREMENTS (inmEUA)
REQUIREMENTSBudget
figureEstimated
raieof
implementation■RESOURCESBudget
flgure...■■ igM■
Estimated
rateof
Implementation
OPERATIONS TOBEFINANCEDFROMCURRENT
RESOURCES(NON-REPAYABLE )
1.Administrative expenditure
2.Aidtoresettlement (Article56)
3.Aidtoresearch
(Article55)
3.1steel
3.2coal
3.3social
4.Interestreliefgrants
4.1Investment(Article54)
4.2redevelopment (Article56)
5.Aidtocokingcoalandmetallurgical
coke(Article95)'
OPERATIONS FINANCEDWITHLOANSFROM
NON-BORROWED FUNDS'
6.Socialhousing5
67
47
(20
(17
(10
27
(12
(15
65
67.
46.5
(20
(17
(9.5
47
(20
<27
6RESOURCES FORTHEFINANCIAL YEAR
1.Currentresources
1.1Levyyieldat0.29%
(0.01%-3,9mEUA)
1.2InterestonInvestmentsandonloans
fromnon-borrowed funds
1.3Finesandsurchargesfordelayedpayment
1.4Miscellaneous
2.Cancellation ofcommitments whichwill
probablynotbeimplemented
3.Revaluationofassetsandliabilities
4.Unusedresourcescarriedoverfromthe
1978financialyear
5.Specialcontribution undertheDecisionof
theMemberStatesof9April1979
6.Drawingoncontingencyreserve_
7.Déficit98
18
ti
ti
4
token
entry
32103
18;
3kenentry
jkenentry
'8.7'
okenentry
5.8
28
4
4
152171.5
ORIGINOFNON-BORROWED FUNDS
8.Repaymentsonloansforsocialhousing
9.Specialreserveandpartoftheformer
ECSCPensionFund152
17.5 10
7.5
107
3ι
o
I

-57-
Informationrelatingtolevies
Thelatestavailableinformation onproductionandthelevyyieldfor
thecurrentfinancialyearisgivenbelow:
LewyieldfortheperiodfromJanuarytoJune1979
ProdùotProductionserving
asabasisforthe
calculation ofthe
levy
inmilliontonnesLevyyield
inmEUA
Brown-ocalbriquettes
andsemi–coke 2.2 0.2
Ailtypesofhardcoal 97.7 11.8
Totalforcoal12.0
Pigironotherthanthatrequired
forthemanufacture ofingots ■2.2 0.7
Steelingots 68.9 28.7
Finishedproducts 53.1 10.1
Totalforstael 39-5
GRANDTOTAL51-5

ANNEX C
BREAKDOWN OFLOANS FORTHEFIRST SIXMONTHS OF1979
(inmEUA)
SeotorFédéral
Republic
or
GernarnrBelgiumDenmarkFrance ItalyNether­
landsLuxem­
bourgJnitttd
KingdonIrelandjCommunity
!I.Co&lindustrr-; •' i54.23 54.23
I."Ironor«. j
III»•IronaodrteelIzxiuBtrT39.25 41.6941.63 15.1610.99 14".72.
4.89 a» 18.821.98 3.0416.30 45.03
!»•Social housing
V#Thermal power stations .2.28
12.210.19 '0.111.22
28.453.39 0.05 O.96 8.20 ■
40.66
58.630.190.1190.1847.0 18.2582.48 296.84 •

PROVISIONAL SITUATION OFTHEEC3CAT30JUNE1979 ANNEXD
ASSETS LIABILITIES (inmEUA)
I77Disbursed .loans 4689.9 I.A.Borrowings 4600.8
II.CashandbanksB.Outstanding redemption premiums 1.0
II.Short-term loans 8.4
III.Short-andmedium-term invests*rft77.1III.Reserves
120.4A.Guaranteefund 200.0
IV.PortfolioB.Otherfunds 138.5
V.Realestate 0.3 C.Formerpensionfund 41.1
76.9IV.Provisions ■,
VI.Recoverableissuingcosts A.Financialassistance 264.3
VII.Miscellaneous 98.6 B.Otherprovisions 81.4
113.7 |V.Miscellaneous 84.4
VIII.Accruedincome iVI.Accruedliabilities 147.8
VII.Unallocated balance 47.2
5614.9 5614.9
Suspenseaccount: Suspenseaccount!
Enterprises'liabilitiesECSC'8liabilities
5.5underguarantee 5-5 underguaranteeι
VI
<©
I

.DRAFTECSCOFERATIONALBUDGETFOR1900
(inmEUA)
REQUIREMENTS APPLICATIONS PROPOSALS RESOURCES
1'PROPOSALS
OPERATIONS TOBEFINANCED FROM
RESOURCES FORTHEFINANCIAL YEAR
(NON-REPAYABLE )
1.Administrative expenditure
2.Aidtoresettlement (Article56)
3«Aidtoresearch(Article55)
3*1steel
3*2coal
3»3social
4*Interestreliefgrants
4.1Investment (Article54)
4.2Redevelopment (Article56)
5.Aidtocokingcoaland
metallurgical coke(Article95)5
67
83.5
(48.5
(25
(10"
116
(64
(52
65
67
47
(20
(17
–(10
86
(43
(43RESOURCES FORTHEFINANCIAL
YEAR ^
1.Currentresources
1.1Levyyieldat0.29$
(0.01$-3.9mEUA)
1.2Interestoninvestments
..andonloansfrom
non-borrowed funds
1.3Finesandlatepayment
surcharges
1.4Miscellaneous
2.Cancellation ofcommitments
whichwillprobablynotbe
implemented
3*Revaluation ofassetsand
liabilities
4*extraordinary receipts113
23
tokenentry
tokenentry
5
tokenentry
70
I277,5 |211 -211
OPERATIONS FINANCED WITHLOANS ORIGINOFNON-BORROWED FUNDS
6*Socialhousing 10 10 5.'Repayments onloansfor
socialhousing
6.Specialreserveandpart
offormerECSCPension
Fund7
3