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DOCUMENTS "COM"
COM(80)180
Vol.1980/0054

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(80)180final
Brussels,21thApril1980
FOROFFICIAL USEONLY
REQUEST FORTHEGRANTOFAGLOBALLOANONBEHALF
OFTHE"SOCIETENATIONALE DECREDITETD'INVESTISSEMENT "
OFTHEGRAND-DUCHY OFLUXEMBOURG,
PURSUANT TOARTICLE56OFTHEECSCTREATY
(Communication fromtheCommission totheCouncil)
COM(80)180final

COMMUNICATION TOTHECOUNCIL
Subject:Requestforthegrantofagloballoanonbehalfofthe
SocieteNationale deCreditetd1Investissementofthe
Grand-Duchy ofLuxembourg,pursuanttoArticle56ofthe
ECSCTreaty.
I.BASICINFORMATION
Applicant :SociétéNationale deCréditetd'Investissement
(S.N.C.I.)
Beneficiaries :Variousconcerns
Natureofprojects :Creatingandextendingsmallandmedium
sizeconcerns
Location :AreasoftheGrand-Duchy ofLuxembourg
affectedbydecliningactivityincoal
,andsteelindustries
Amountofinvestment :Flux400millionminimum
.(+10MEUA)
Globalloanrequested :Flux200million(+4.94MEUA)
Interestrebate :3percentagepointsannuallyforfiveyears
on4.94MEUA •
Jobstobecreated :250newjobsminimum
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
TheLuxembourgstellindustry,whichisanessentialsectoroftheLuxembourg
economy,•continuestosufferfromtheworldcrisis.Despiteeffortsalready "
made,thetwosteelconcernsofLuxembourg,namelyARBEDandMMRA,arefaced
withimportantrestructuring andrationalisation problems,whichinevitably
taketheformofredundancies .
Employmentinsteel,representing nearlyhalfindustrial jobsintheGrand-
Duchy(excludingbuildingandcivilengineering )continuedtofall.From
1974to1977itfellby25%(some6.000jobs).
Moreover,employment,whichbyendJanuary1978wassome19.800forARBED
alone,hasatpresentsome4.500considered assurplus;provisionally they
havebeenallocatedtoadivision knownas"anti-crises".
./.
Provisionoladdress :RuedelaLoi200,B–1040Brussels–Téléphoné350040-358040–Telegrophicaddress:«COMEURBrussels ■>–
Telex:«COMEURBRU 21877.

-2-
Lastly,theestimatedredundancyfigureforthesteelindustryissome3.000
inthemediumterm.Inthesecircumstances,thepriorityandcomplementary
aimsoftheeconomicpolicyoftheGrand-Duchyarethecreationofnewjobs
bysettlingnewactivities,particularly smallandmediumsizeconcerns,
andconsolidating anddevelopingexistingindustriesoutsidesteel.
AfirstgloballoanofFlux100millionwasgrantedtotheS.N.C.I.
bytheECSCpursuanttoArticle56oftheTreatyinOctober1978.
Thisloanwaspaidintwoinstalments in1979.Atpresent,this
firstgloballoanisalmostexhausted;ithasbeenusedtocreate
312jobsallottedbywayofprioritytoformerECSCworkers.
III.THEINTERMEDIARY COMPANY
TheS.N.C.I.,aninstitution governedbyLuxembourgpubliclaw,
becameoperational on1January1978;itisacreditinstitution
specialising infinancinginvestments andexports.Havingregard
particularly toinvestmentfinancing,theS.N.C.I.mayeitherprovide
creditsforequipmentorforthemediumorlongtermoritmaytake
sharesinanenterprise.
Itsowncapitaliscurrently1,340millionFlux.Capitalconsists
solelyofallocations fromtheLuxembourgstate,whichistheonly
shareholder oftheS.N.C.I.
TheS.N.C.I.istheonlyinstitutionintheGrand-Duchy ofLuxembourg
whichcombineswithallotherLuxembourgbankstofinancebusiness
investment andwhichhasthetaskofmakingpublicfinanceavailable
toconcernsatpreferential rates.Itisthereforeanintermediary
fullyindicatedtoplaceloansforreconversion pursuanttoArticle56
oftheECSCTreatyasithasshownthroughoutthelifeofthefirst
loangrantedbytheCommission. .
IV.THEGLOBALLOAN
TheCommissionwillmakeavailabletotheS.N.C.I.Flux200million
(+A.94MEUA).ThefundswillbepaidtotheS.N.C.I.inseveral
instalments asandwhenthelattergrantsindividualloanstofirms
abletoprofitthereby.TheS.N.C.I.willsubmiteachgrantfromthe
globalloantotheCommissionforpriorapproval.
\
Thedecisionwithregardtoindividualsubsidiaryloanswillbetaken
inconformitywiththeaimsandcriteriapublishedbytheCommission
(O.J.No.C178/2of27July1977andO.J.No.C82/8of29March1979)
takingaccountinparticularofthenumberofjobscreatedandreserved
forformerECSCworkersinrelationtothesizeoftheloancontemplated
andtheamounttobeinvestedinfixedcapital.Therateofinterest
fixedforaninstalmentofthegloballoanpaidtotheS.N.C.I.will
applytoeachsubsidiaryloanwithaninterestrebate.
./.

Thecontribution oftheCommissionwillnotnormallyexceed40%of
fixedinvestment;howevertheCommission mayraisethisceiling
to50%injustifiable cases.Thiscontribution willtakeaccount
ofthespecialrequirements increditfacilitiesofsmalland
mediumsizeconcerns,whichfrequentlyhavefewerpossibilities
ofaccesstocapitalmarketsthanotherconcernsandwhereinvest­
ments,calculatedininputperjobcreated,areoftenlessthanin
otherlargerconcerns.
TheS.N.C.I.willreporteverysixmonthstotheCommission onthe
usetowhichthegloballoanhasbeenput;itwillattachareport,
preparedbytheresponsible Luxembourgauthorities foremployment,
onthere-employment offormerECSCworkersinindustrialconcerns
financedthankstothegloballoan.
V.IMPACTOFTHELOANONTHERE-EMPLOYMENT OFREDUNDANT STEEL
WORKERS
Itisforecastthatindustrialprojectsbenefiting fromaidwill
enablethecreationofatleast250newjobs,whichmaybe
filledbyredundantsteelworkersandwhichwillbeofferedto
thembywayofpriority.Shouldthepresentdecisionbeinsufficient,
furtherinstalments maybeenvisaged.
VI.CONCLUSIONS
a)TheCommissionconsidersthattherequestcomplieswiththe
conditionsofArticle562a)oftheECSCTreaty.Incon­
sequence,ithasauthorisedthegranttotheSocieteNationale
deCreditetd'Investissement ofagloballoanofFlux200
million(+4.94MEUA)orofanequivalent amount.Therate
ofinterestwillbesubjecttoarebateofthreepercentage
pointsforthefirstfiveyearsfollowingthepaymentofeach
partialloan(namely:148,200EUAannually).
b)TheCommissionaskstheCounciltogiveitsassenttothe
foregoingdecision.