31.12.90 Official]oumal of the European Communities l^oC332B131 
Opinion on d^ep^op^sa^fo^aCouucil^i^cnve on a^d to shipbu^d^^) 
(90BC332B3^ 
On^August 1990 the Council, acting in accordance with Article 92(3)(d) and Article 113 of 
the Treaty establishing the European Economic Community,asked the Economic and Social 
Committee for an Opinion on the abovementioned proposal. 
The Committee asked its Section for Industry, Commerce, Crafts and Services to prepare its 
work on the matter.The Section based its Opinion on the introductory report drawn up by 
the kapporteur,^lr Arena, on eo September 1990. 
At its279th plenary session (meetingof 19September 1990), theEconomicandSocial 
Committee adopted the following Opinion, with^votes against and^abstentions. 
1. Introduction 2. General comments 
1.1. The Committee agrees with the Commission 
that the main objectives of the si^th L^irectivehave 
largely been achieved.Cenerally speaking, merchant 
navy shipyards in the Community havemanaged to 
consolidate their position, which was under serious 
threat in the mid 19^0s. (Between 20 and 22^of new 
orders worldwide are currently placed with ECyards 
the figure having earlier dropped to 1^.) 
1.2. The directive has had a major impact. The 
ceiling for national aid was, in practice, rightly frozen 
for a threeyearperiodand subsequently reducedby 
30^ in 1990.This reduction was, in part,aunilateral 
goodwill gesture in the drive to restore the market toa 
sound footing. 
1.3. ^ajorreductionshave been made inthesubD 
sector^sworkforce^ however overthethreeyear period 
19^19^9 some 20000 jobs were lost (a 20^ decline 
in the workforce) and this figure rises to approximately 
30 000 jobs if cutbacks in repair yards are taken into 
account.The situation was undoubtedly rendered more 
serious by the failure to reach agreement on the pro^ 
gramme of social measures,which, together with the 
REr^AVAL programme was to havegonehandinhand 
with the restructuring process. It should be noted that 
the production capacity of EC shipyard now stands at 
barely ^O^on the figure for the mid^Os (major cut 
backs have also been made to the workforce). The level 
now archieved is regarded by both sides of industry as 
the minimum necessary for viability, both from the 
point of view of the economic management of the 
industry—including ancillary activities—and from the 
point of view of the maritime trade requirements of the 
Community. 2.1. The si^th directive has served asadeterrent to 
unfair competition from the major world shipbuilding 
nations. The Commission deservescredit for having 
established—with the support of the shipbuilding 
industry—a dialogue with ]apan and South l^orea with 
aview to restoringnormal terms of competition, despite 
the fact that the results obtained so far have been very 
modest. 
The difficulties encountered must not lessen the resolve 
to achieve this goal at a stage in the market cycle 
characterised, on the one hand, byacontinuation of 
theuptum in demand which began in 19^9 (prices have, 
however, remained at the level which appliedinthe 
early 19^0s) and, on the other hand, by concern overa 
possible expansion of supply. 
2.2. The return toabalanced market—which is not 
expected to beachievedbeforethemidl990s—could be 
jeopardized or postponed if new shipbuilding capacity 
were to come on stream. Attention is drawn inthis 
content in particular to^ (a) the reactivation of capacity 
by shipbuildersin]apan (which in 19^9 partly asa 
resultof adepreciation of theyen,captured almost 
^eo^ofworldordersh(b) the changes taking place in 
a number of shipyards in Eastern Europe^ and (c) the 
likelihood that both in the East and the ^est, capacity 
used hitherto for the construction of naval vessels will 
be switched over to the production of commercial vesD 
sels. 
2.3. Againstabackgroundwhichissofullofuncer^ 
tainty thenewfoirectivemustcontinuetoserveasa 
deterrent inthe face of the aggressive policy pursued 
byAsianshipbuilders.The directive will in fact rep^ 
resent the only barrier to imports into the Community, 
in place of import duties or quotas. 
(^OI^DOT^^r^D^ 3. Eor the abovementioned reasons, the Committee 
is unabletosupporttheproposedincreased emphasis on 
the principle that aid should be progressively reduced. 
No C 332/132 Official Journal of the European Communities 31. 12. 90 
Reductions in public support should be dependent upon 
market trends, bearing in mind all the aspects involved, 
and subject to the proviso that shipbuilding adjustments 
are not to entail sudden economic and social conse­
quences. 
3.1. The Commission's desire to strengthen degres-
sivity also manifests itself in the proposed reduction of 
shipbuilding aid for vessels completed more than three 
years after the signing of the contract. Apart from the 
technical issues involved—and it should be borne in 
mind that the Commission itself is pressing for a switch­
over to more sophisticated vessels—the proposed 
reduction would represent a further disadvantage for 
EC shipyards. 
4. The duration of the new Directive (which it is 
proposed should be in force for just 2 years) should 
logically depend on the state of the market. Market 
developments are, however, still uncertain and con­
ditions are far from being profitable. Furthermore, 
account must be taken of the factr that the shipbuilding 
industry has a long business cycle and is still undergoing 
restructuring. There is also the question of the likely 
industrial implications of major events in the political 
sphere. The setting of ceilings for aid would also appear 
to be an adequate de facto means of regulating the 
duration of the Directive. 
5. Specific comments 
In the Committee's view, the following amendments 
should be made: 
— Replace the two paragraphs of Article 4(3) by 
Article 4(3) of the sixth Directive which states that: 
Done at Brussels, 19 September 1990. 'the ceiling shall be reviewed every 12 months, or 
sooner if warranted by exceptional circumstances, 
with the aim of progressively reducing the ceiling. 
In its review ...' (rest unchanged). 
— Extend the duration of the Directive to 4 years. 
5.1. The Committee also urges that the following 
measures be taken: 
— The EC should continue to pursue its own strategy 
in international negotiations on abolishing aid for 
shipbuilding, such as the negotiations within the 
framework of the Organization for Economic Co­
operation and Development (OECD). The aim of 
bringing about the removal of obstacles to normal 
terms of competition must also lead to real balance 
in the commitments entered into by all the countries 
involved, and there must be full transparency as 
regards national schemes of direct and indirect aid. 
An appropriate period must also be allowed for 
adjustment to the new rules. 
— The procedures for implementing the new Directive 
should be simplified in view of the real and wide­
spread difficulties encountered in monitoring the 
sixth Directive. 
— The programme of social measures (submitted by 
the Commission in 1986) should be reviewed and 
approved without delay in order not only to cushion 
the effects of the loss of jobs but also to enable the 
workforce to be retrained as part of the process of 
modernizing the shipbuilding and shiprepair sector. 
— Effective measures should be drawn up in the very 
near future to protect EC fleets since it is on these 
fleets that the fate of shipbuilding in the Community 
depends to a large extent. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE