No C 272/16 Official Journal of the European Communities 10.10.87 
Programme for the conversion of steel areas 
Proposal for a Council Regulation instituting a Community programme to assist the conversion 
of steel areas (Resider programme) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, 
Having regard to Council Regulation (EEC) No 
1787/84 of 19 June 1984 on the European Regional 
Development Fund (x), as last amended by Regulation 
(EEC) No 3641/85(2), and in particular Article 7(4) 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas Article 7 of Regulation (EEC) No 1787/84, 
hereinafter referred to as the Fund Regulation, provides 
for participation by the fund in Community programmes, 
the purpose of which is to help in solving serious 
problems affecting the socio-economic situation in one 
or more regions and which are designed to provide a 
better link between the Community's objectives for the 
structural development or conversion of regions and the 
objectives of other Community policies; 
Whereas the Commission has determined, pursuant to 
Article 46 of the ECSC Treaty, the general objectives for 
steel in the Community for 1990; whereas, despite the 
considerable effort that has been made in recent years 
and that has led to sizeable reductions in production 
capacity, the steel industry in the Community is still 
faced with problems of over-capacity; 
Whereas a number of areas in the Community which are 
highly dependent on steel making and which have 
already suffered major job losses as a result of the 
decline in the steel industry are likely to see a worsening 
of these adverse consequences; 
Whereas, on 7 October 1980, the Council adopted Regu­
lation (EEC) No 2616/80 (3), as amended by Regulation 
(EEC) No 216/84 ("), which instituted a specific 
Community regional development measure contributing 
to overcoming constraints on the development of new 
economic activities in certain zones adversely affected by 
restructuring of the steel industry; whereas the areas in the new Member States adversely affected by steel 
restructuring should be allowed to benefit, in the form of 
a Community programme, from measures analogous to 
those introduced by the said Regulation; 
Whereas, on account of the worsening difficulties in the 
steel industry, it will also be necessary to introduce in 
other areas of the Community, in the form of a 
Community programme, measures analogous to those 
already taken in certain areas of the Community under 
Regulation (EEC) No 2616/80 and, where appropriate, 
to reinforce as part of the same programme the existing 
measures in those areas, in view of the considerable job 
losses which have occurred in the steel industry since 31 
December 1985, the date of expiry of Commission 
Decision No 2320/81 /ECSC (5); 
Whereas the Member States concerned have provided 
the Commission with the necessary information and 
whereas, pursuant to Commission Decision No 1566/ 
86/ECSC (6), steel undertakings must supply the 
Commission with iron and steel statistics at regular 
intervals; 
Whereas, by assisting with the conversion of the 
declining industrial regions affected by restructuring of 
the steel industry, the Community programme 
contributes to the furtherance of both regional 
development objectives and the Community's objectives 
with regard to steel; whereas the level of Community 
participation must therefore be the maximum permissible 
under the Fund Regulation and whereas, at the same 
time, the programme is to be given priority in the 
management of fund resources; 
Whereas it is necessary to avoid combining aid granted 
under the specific Community measures instituted 
pursuant to former Council Regulation (EEC) No 
724/75 O or (EEC) No 3634/84 (8) with aid granted 
under this Community programme; 
Whereas Community assistance must be provided in the 
form of multiannual programmes drawn up by the 
competent authorities in the Member States concerned; 
whereas, to ensure sound financial management of the 
fund, Member States must transmit those aid 
programmes to the Commission within a certain period 
after the areas to be covered by the Community 
programme have been determined; whereas it is for the 
Commission, in adopting those programmes, to ensure 
that the operations proposed therein are in keeping with 
this Regulation; 
O OJ No L 169, 28. 6. 1984, p. 1. 
(2) OJ No L 350, 27. 12. 1985, p. 40. 
(») OJ No L 271, 15. 10. 1980, p. 9. 
(4) OJNoL27, 31. 1. 1984, p. 9. O OJ No L 228, 13. 8. 1981, p. 14. 
(6) OJNoL 141,28. 5. 1986, p. 1. 
O OJNoL73,21. 3. 1975, p. 1. 
(8) OJ No L 350, 27. 12. 1985, p. 6. 
10.10.87 Official Journal of the European Communities No C 272/17 
Whereas, in view of the coming reform of the structural 
funds under Article 130D of the EEC Treaty, the choice 
of regions in the present Community programme and the 
criteria on which this choice is based should be 
consistent with the approach to be followed in the 
abovementioned reform, 
HAS ADOPTED THIS REGULATION: 
Article 1 
A Community programme within the meaning of 
Article 7 of the Fund Regulation that contributes to the 
conversion of certain declining industrial regions in the 
Community adversely affected by restructuring of the 
steel industry is hereby established. 
Article 2 
The purpose of the Community programme shall be to 
contribute, in the areas concerned, to the removal of 
obstacles to the development of new, job-creating 
economic activities. To this end, the programme shall 
provide for the implementation of a series of consistent, 
multiannual measures aimed at improving the infra­
structure arid the physical and social environment in the 
areas concerned, as well as the establishment of new 
activities, the growth of small and medium-sized 
enterprises and the development of innovation. 
The Community programme shall thereby seek to 
provide a better link between the Community's objectives 
for the conversion of regions and the objectives of the 
Community's policy for the steel industry. 
Article 3 
1. The Community programme shall apply to areas 
satisfying the following criteria: 
(a) minimum number of jobs in the steel industry; 
(b) industrial employment dependent in large measure 
on the steel industry; 
(c) major job losses in the steel industry; 
(d) socio-economic situation in the region in which the 
area concerned is located characterized by par­
ticularly marked employment difficulties. 
2. As soon as this Regulation has entered into force, 
the Community programme shall apply to the areas in 
Spain which satisfy the criteria specified in paragraph 1, 
namely: 
— the region of Asturias and the areas covered by a 
national regional aid scheme in the provinces of 
Alava and Vizcaya. 
3. The Community programme shall apply, subject to 
a decision by the Commission, to areas in all Member 
States which satisfy the criteria specified in paragraph 1 
and in which restructuring of the steel industry carried 
out within the framework of the Community's general 
objectives for steel between the date of expiry of Commission Decision No 2320/81/ECSC and the end 
of 1989 entails major job losses in the industry. 
The Commission shall take its decision within three 
months of the date on which the Member State 
concerned submits an application in respect of the areas 
eligible for the Community programme. Applications 
shall be seht to the Commission by 30 April 1990 and 
shall be supported by the requisite information, notably 
concerning job losses in the steel industry; such infor­
mation shall be consistent with that provided under 
Decision No 1566/86/ECSC 
Article 4 
The fund may participate, under the Community 
programme, in operations such as those defined in 
Article 4 of Regulation (EEC) No 2616/80, with the 
exception of point 2. For the purposes of this Regulation, 
this latter provision shall read as follows: 
'Infrastructure contributing to the creation, the 
development and the adaptation of job-creating 
productive activities.' 
Article 5 
1. The Community programme shall be financed 
jointly by the Member State concerned and the 
Community. Assistance from the fund, which may not 
exceed 55 % of the total public expenditure taken into 
account in the programme, shall be provided from the 
appropriations entered for this purpose in the general 
budget of the European Communities. The Community 
contribution, by type of operation, may not exceed the 
rates fixed in Article 5 (1) of Regulation (EEC) No 
2616/80, with the exception of points (b) and (k). 
For the purposes of this Regulation the provision in the 
said Article 5 (1) (b) shall read as follows: 'for infra­
structure operations provided for in Article 4 (2): 50 % 
of public expenditure.' 
In the case of operations relating to interest subsidies on 
Community global loans, the cost shall be borne by the 
Community. The rate and the period of subsidy applied 
shall correspond to those fixed by the Commission for 
global loans as part of the procedures and conditions for 
granting conversion loans pursuant to Article 56 of the 
ECSC Treaty. 
2. Where the Community programme concerns areas 
in Portugal, the level of the Community contribution 
provided for in paragraph 1, with the exception of the 
last indent, shall be increased until 31 December 1990 by 
20 percentage points, subject to a ceiling of 70 %. 
No C 272/18 Official Journal of the European Communities 10.10.87 
Article 6 
1. All or part of the aid may be in the form of a 
capital grant or an interest subsidy. 
2. The fund contribution to interest subsidies on 
Community global loans may not be less than 20 % of 
the total contribution to the programme. The budget 
commitments in respect of such subsidies shall not be 
made in annual instalments but shall be determined by 
the Commission for each loan, subject to its being 
granted, when adopting the decision to make a global 
loan under the ECSC budget. 
3. The following shall be eligible for fund assistance in 
respect of operations referred to in Article 4: public 
authorities, local and regional authorities, other bodies, 
businesses, cooperatives or self-employed persons 
carrying on a productive activity. 
4. (a) Aid granted under the Community programme 
shall not be combined with aid granted for the 
same project under specific Community measures 
introduced pursuant to former Fund Regulation 
(EEC) No 724/75 or to Regulation (EEC) No 
3634/85; 
(b) In addition, the aid referred to in Article 5 (1) (c) 
and (e) of Regulation (EEC) No 2616/80 and, 
where it benefits businesses directly, the aid 
referred to in Article 5 (1) (g) of the said Regu­
lation may not have the effect of reducing the 
share of expenditure met by recipient businesses 
to less than 20 °/o of total expenditure. 
Article 7 
1. The programme of assistance drawn up by the 
competent authorities in the Member State concerned 
shall be sent to the Commission: (a) in respect of the areas referred to in Article 3 (2), 
within six months of the date of entry into force of 
this Regulation; 
(b) in respect of the areas referred to in Article 3 (3), 
within six months of the date of the Commission 
decision to be adopted pursuant to the said 
paragraph 3. 
Where the Commission's decision relates to an area 
referred to in Article 3 (2) or covered by a 
Commission decision within the meaning of Article 3 
(3), the programme of assistance shall be adapted 
accordingly. 
2. The duration of the programme of assistance may 
not extend beyond 31 December 1992. 
Article 8 
The amount of fund assistance may not exceed the 
amount laid down by the Commission when adopting 
the programme agreement referred to in Article 13 (1) of 
the Fund Regulation. 
Article 9 
This Regulation shall be re-examined and if necessary 
amended to accord with the revision of Regulation 
(EEC) No 1787/84 provided for in Article BOD of the 
-EEC Treaty. 
Article 10 
This Regulation shall enter into force on the day 
following its publication in the Official Journal of the 
European Communities. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States. 
10.10. 87 Off icial Journal of the European Communities No C 272/19 
ANNEX III 
Information memo on the ECSC budget and the ECSC reserves 
1. INTRODUCTION 
The legal base for the ECSC's financial and budgetary activity is provided in the second indent of 
Article 5 and in Articles 49 to 56 of the Treaty of Paris under which the ECSC is empowered to 
borrow on the capital markets in order to place financial resources at the disposal of undertakings and 
to impose levies on the production of coal and steel in order to finance specific non-repayable aids. 
All the ECSC's financial and budgetary operations are covered by the financial statements which the 
High Authority approves every year. 
At 31 December 1986 the balance sheet totalled 9 189 million ECU and the borrowings outstanding 
amounted to around 7 000 million ECU. The total of loans raised in 1986 was 1 517 million ECU and 
the out-turn of the 1986 budget 329 million ECU. 
The two types of ECSC financial operations — non-repayable aids and loans to finance investments 
— are backed by two key elements: the ECSC budget and the ECSC reserves. 
2. THE BUDGET SYSTEM 
2.1. In the ECSC budget the year's resources finance the legal commitments entered into that year. The 
funds held to cover commitments awaiting payment and the counterpart to the ECSC reserves are 
invested to yield revenues, most of which (after deduction of amounts allocated to reserves to 
maintain the ECSC's international credit rating (triple A)) is used under the guise of the disposable 
balance of the annual profit and loss account to provide extra ECSC budget revenue for the following 
year. Maintaining this approach makes it possible to provide additional resources and to safeguard the 
Community's financial base at a time when the industries are facing severe problems. 
It should be stressed that the level of this revenue depends on market interest rates and on the ECU 
rate for the various currencies. The ECSC cannot do much to anticipate movements in market rates 
since it is not entitled to engage in currency arbitrage operations. 
This budget system was endorsed by Parliament's Committee on Budgetary Control in the context of 
the latest grant of discharge to the ECSC. 
2.2. The ECSC budget's main resources are: 
(a) the levy on coal and steel production 
Since 1980 the levy rate has been 0,31 %, and, if this rate remains unchanged, the levy yield for 
the next five years should be somewhere between 140 and 180 million ECU, with the real value 
probably declining. 
On the basis of preliminary estimates for 1988, the extra revenue for each increase of 0,01 % in 
the levy rate would be rather less than 5 million ECU. 
(b) the disposable balance from the annual profit and loss account 
As already noted, the disposable balance from the annual profit and loss account is made available 
for the following year's budget. Most of it is entered directly into the budget ('), but a small 
amount is normally placed at the start of the year in a reserve for budgetary contingencies to be 
drawn on to meet resources shortfalls or extra demands for aid. 
For the next five years, the estimate of this contribution may be between 120 and 140 million 
ECU, although an estimate of this type is of course heavily dependent on the behaviour of the 
markets. 
(') Net prior-year balance. 
No C 272/20 Official Journal of the European Communities 10.10.87 
(c) additional resources, usually of modest amounts, are provided by the cancellation of legal 
commitments already entered into, revenue from fines and other minor items (miscellaneous). 
From the above, it may be estimated that from 1988 onwards the ECSC budget's total ordinary 
resources will be between 250 and 300 million ECU, well below the 1986 figure of 329 million 
ECU (l), unless the Commission decides to increase the levy rate. 
2.3. Apart from the contribution of 5 million ECU to the general budget for the ECSC's administrative 
expenditure, ECSC budget expenditure is limited to three types of non-repayable aid: 
(a) Social aids to coal and steel workers made redundant (redeployment aid). 
Until 1984 the ECSC financed additional special social programmes connected with the re­
structuring of the coal and steel industry by means of a transfer from the general budget to the 
ECSC budget. 
(b) Aid for research projects, the results of which are made available within the Community. 
(c) Interest subsidies on ECSC loans in priority areas, mainly for loans to create jobs in areas affected 
by the restructuring of the coal and steel industries (conversion loans under Article 56 of the 
ECSC Treaty). 
2.4. As regards resource allocation, in recent years over half the annual ECSC budget has been allocated 
to social expenditure (1985: 63 °/o; 1986: 52 %; 1987: 61 °/o) expenditure on research aids and interest 
subsidies being more or less equally balanced. 
The ECSC does not practice a 'fair shares' approach, but it will be noted that coal undertakings now 
pay just over a quarter of the levy, while the coal sector at present receives about 60 % of traditional 
redeployment aids, 50 % of interest subsidies and 40 % of research aids. 
3. ECSC RESERVES 
3.1. The purpose of the ECSC reserves is to guarantee its borrowings on the capital markets. ECSC 
borrowing operations are not backed by any special security and are guaranteed in the final instance 
by the Member States as the founders of the ECSC in accordance with the general principles of 
international law (2). 
A description of the ECSC reserves and policy guidelines for the annual allocation of the net surplus 
are contained in SEC(86) 1532 final which the Commission approved on 8 October 1986 and which 
was sent to Parliament, the Council and the Court of Auditors in January 1987. 
As set out in this document, the Commission's policy is, both on budgetary grounds (to take account 
of the difficulties connected with the state of crisis in the steel sector) and for financial and legal 
reasons (to safeguard the market finance instrument of ECSC undertakings), to allocate as much of 
the annual net surplus as possible to the ECSC budget. With regard to the financial statements and 
hence the level of reserves, the aim is simply to keep the main financial ratios at a level close to that of 
the balance sheet at 31 December 1984. 
(') Exceptional non-recurring items, as listed in document COM(87) 289, will probably bring the 1987 budget total to 
around 400 million ECU. 
(2) For EEC and Euratom borrowings, on the other hand, the Member States offer a guarantee on a first demand basis. 
10.10. 87 Official Journal of the European Communities No C 272/21 
The need to maintain the financial ratios was set out in the detailed analysis conducted on the 
Commission's behalf by the international consultants Deloitte, Haskins and Sells (SEC(86) 780) which 
clearly shows that the ECSC reserves are not excessive and that they are at the lower end of the scale 
compared with similar institutions (for example, the ratio of reserves to total assets is 8 °/o for the 
ECSC and 12 % for the EIB). 
This view was accepted by Parliament's Committee on Budgetary Control in the context of the latest 
grant of discharge to the ECSC. 
3.2. The statistics in the Annex illustrate the Commission's new policy. An analysis of these figures shows 
that at the closure at 31 December 1986: 
— the amounts allocated to the guarantee fund dropped to a merely symbolic level of 5 million ECU 
in 1986, 
— the absolute value of reserves remained roughly stable, 
— the amounts transferred to the ECSC budget as disposable balance increased considerably to the 
exceptional level of 211 million ECU in 1986. This cannot happen again in future on the same 
scale and was achieved only by mobilizing all the funds available. 
4. CONCLUSIONS 
In conclusion, the ECSC budget is a simple instrument with a stable structure and a fixed pattern of 
resources and expenditure which has proved capable, within the given financial limits, of making a 
useful contribution to the life of the ECSC. 
The ECSC reserves and the current policy for allocating the net annual surplus will make it possible to 
channel loans to investment by ECSC undertakings while at the same time increasing the annual 
budget funds for financing non-repayable aids. 
Particular care must therefore be taken not to damage these time-tested systems (the ECSC budget 
and reserves) and thus jeopardize our future effectiveness. 
Any increase in ECSC resources in relation to the above estimate could be financed only through an 
increase in the levy or by taking in resources from outside the ECSC. 
No C 272/22 Official Journal of the European Comunities 10. 10. 87 
Annex 
Main statistics on the allocation of the ECSC's annual net surplus 
Allocation to the guarantee fund (million ECU) 
Total allocation to reserve (2) (million ECU) 
Contribution to budget as investment interest 
and contingency reserve 
Total free reserves after allocation (million 
ECU) 
Total reserves after allocation (3) (million ECU) 
Free reserves 
Borrowings outstanding (%) 
Free reserves 
Total assets (°/o) 
Reserves 
Borrowings outstanding (%) 
Reserves 
Total assets (%) 1983 
40 
97 
113,2 
490 
697,74 
7,49 
5,8 
10,67 
8,25 1984 
40 
43 
100 
530 
740,64 
7,45 
5,73 
10,40 
8,00 1985 
20 
18 
149,4 
538 
758,53 
7,64 
5,86 
10,78 
8,27 1986 O 
5 
-11,5 
211 
526,5 
754,5 
7,55 
5,76 
10,80 
8,25 
(') Including exceptional contribution by Spain and Portugal. 
(') Including allocation to Guarantee Fund. 
(J) Including total free reserves.