ARCHIVESHISTORIQUES
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DOCUMENTS "COM"
COM(81)652
Vol.1981/0195

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COMMISSION OFTHE EUROPEAN COMMUNITIES
COM(81 )652final
Brussels .10November 1981
AIDE-MEMOIRE
>, ON THE FIXING OP THE ECSC LEVY RATE
\ AND ONTHE DRAWING UPOFTHE
ECSC OPERATING BUDGET FOR 1981
COM(81)652final

-2-
1 .
Contents
I. GENERAL INTRODUCTION 5
A. ECONOMIC CONTEXT , 5
1.The economic outlook for 1981 and 1982 5
2.Outlook inthe coal industry 7
3.Prospects intheiron andsteel industry 8
B. FOLICY CONTEXT 10
' 1.Coal policy guidelines , 10
2.Steel policy guidelines 12
3.Social policy guidelines 15
4.Financial activities 18
 
C. FINANCIAL C0NÏEXT ' 20
i
II.ANALYSIS OFREQUIREMENTS REPORTED AND RESOURCES
A V AILABLE FOR THE FINANCIAL TEAR 1982 22
A. REQUIREMENTS REPORTED FOR 1982 ' 23
1.Ordinary requirements .' 23
2.Requirements not entered inthe budget :'''■••
loans forfinancing subsidized housing 37
3.Summary ofrequirements reported 39

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Page
B. ORDINAffi RESOURCES AVAILABLE 39
1«Resources for thefinancial year 39
2.Covering ofrequirements not entered inthe 43
budget
3.Summary ofpossible ordinary resources available 43
for 1982
III .DRAFT EC3C OPERATING BUDGET FOR 1982 44
A. COMMISSION APPROACH 44
B.FINANCING PROPOSALS 45
C. DRAFT BUDGET 47
ANNEXES
A.IMPLEMENTATION OFTHEECSC OPERATING BUDGET FOR 198O 48
B.FORECAST OUTTURN OFTHEECSC OPERATHTG BUDGET FOR 1981 49
C.ECSC BALANCE SHEET AT31DECEMBER 1980 51
D.DRAFT ECSC OPERATING BUDGET FOR 1982 52

-Δ­
Ι
AIDE -MEMOIRE
onthefixing oftheECSOlevy rate andonthe
establishment oftheECSC operating budget for1982
Itiscustomary fortheviews ofParliament tohesought "before
theCommission takes adecision onthelevy rate andtheECSC
operating budget forthefinancial year 1982 ,
This aide-memoire forms thebasis for the consultation of
Parliament *Itisdivided into thefollowing ohapters :
1 - -N '
I. General introduction *
II*Analysis ofrequirements reported andresources available
for1982 *
III*Draft operating budget *
Specific factors affecting thecovering ofbudgetary requirements
for1982 aredescribed inChapter III* .
*
* 'm
The aide-mémoire is
for information *also being sent totheECSC Consultative Committee

I. GENERAL IFORMATION-5-
This Chapter summarizes theinformation needed tosetthedraft ECSC
operating "budget for1982 initseconomic ,political andfinancial context ,
A. ECONOMIC CONTEXT
1•The economic outlook for 1981and1982
Thecyclical downswing intheCommunity economies ,which started atthe
"beginning of1980 ,continued until thefirst quarter of1981 .Since
then ,thedeterioration inthe "business situation hashalted ,asthe
results ofindustrial surveys have shown .However ,anumber of
constraints ,inparticular thecontinuing high level ofinterest rates
resulting from themonetary policies pursued intheUnited States ,
have continued toaffect "business inthe Menber Statea .Asamoderate
recovery isnot expected until theautumn ,theCommunity 'sgross
domestic product inreal terms isexpected todrop "byaround 0.5%
"between 1980 and1981,compared with growth of1.1% in1980 (seetable
overleaf ).
The sharp deterioration inthelabour mai tobserved throughout last
year hascontinued in1981eWhereas unercpi nent was just over the
six-million mark attheendof1979 »itpassed 7million inthesummer
ofI98O toreach 9million ayear latsr (seasonally adjusted figures ).
Therise inimport prices -caused bytheappreciation ofthedollar –
anatheupward thrust ofwags costs ,largely theresult ofdiminishing
product ivitygains ,combined toprodnce anexcessive rc'.te of'inflation
inthe Goiiiw.in.ity .Despite th<sslowdown excisoted i^thesecond half
oftheyear ,thecosnmer price deflator is15k-?ly toriseby11.5$ in
1981 ,against 11.9$ in1980 .Wide divargeccifi-3 arestill observed
between the Member States *,
Thedeterioration inthebalance ofpaynents oncvxrent account which
began attheendof19*78 wasreversed ,atthebeginning of1981 ,following
amore favourable trend inVaavolume ~ftrc.de .However ,thedepreciation
oftheCommunity currencies h&Econtinued toproduce such anadverse
movement inthe tanas oftrade Ihat the cta -rant -sccciint deficit for the
Community asawhole ,which wasalready rsn.uir.it at28.3 billion ECUin
1980 ,islikely toincrease still further#

-ó-
The outlook for 19°2 isunpredictable inthe extreme .Ifthe
international climate improves and there isanappreciable drop in
therate ofinflation ,the recovery indemand and production which
looks setto "begin towards the end of1981 oould continue and even
gather alittle momentum over the next year .However ,current
forecasts show that the expected recovery will "belimited .Real GDP
growth will remain below thepotential rate ofgrowth (estimated at
around 2.5% ),anddisparities will persist between Member
States ,Lasting economic recovery and animprovement inthe labour
situation depend onseveral factors ,foremost amongst which isa
more rapid readjustment ofeconomic structures .
The following table shows the growth ingross domestic product in
real terms inthe Community from 1979 "to1981#
GROSS DOMESTIC PRODUCT IN REAL TERMS
{"jochange over previous year )
1979 1980 19811
Denmark 3 -0,2 io
Federal Republic of
3ermany +.4 1.9 -O.25
Greece 4.0 1.7 0.5
Prance 3.2 1.3 0.5
Ireland 1.9 0.9 1.75
ftaly 5.0 4.0 -O.25
1Netherlands 2.2 0.5 -1
¡Belgium 2.4 2.4 -1
(Luxembourg 3.6 0.4 -3.25
lLic.it edKingdom
10,9 -3.0 -2 !
!
Community 3.4 1.1 -0.5
Rounded figures .
Scure e:1979 *Eurostat ,1980 and 19°1 :Commission estimates .

2.Outlook for the coal mdn.stry
Demand for ccal inthe Community islikely tofall slightly in1981
incomparison with 19So.This drop will ,however ,besmaller than
1for other primary ensr gysources .
This ismost noticeab ]einthe use ofcoal inpower stations .Inthe
United Kingdom ,cone-umption ofother primary energy sources isalready
ataminimum ,sotnat any reduction inelecxricity generation leads
toacorresponding reduction incoal consumption .InPrance ,the
growth inthe use ofnuclear energy iseating into the share enjoyed
bycoal .
Inthe steel industry ,demand for coke has peaked ,leading toa
slight fall inthe demand for coal bycoking plants .
Inother industries ,the effects -asyet limited –ofthe moves to
convert heating installations tocoal-firing have been offset bythe
general reaction ineconomic activity over recent months .
However ,industrial production sse&s tohave b^t /orasd oat inthe
first half of19^1 ,after falling steadily for 35aoiiths ,and some
Eigne ofrecovery arestarting toappear *Ifthis co&tinues ,itcould
lead todemand for coal picking upa^air.1:119<i2 .
Onthe supply aia .3,the inves -ro^ra /aaes which coal producers
ti insome years ago .higher praducrivity andtheasintenance of
national subsidies tocollier *oshave K<sde itpo-srihle since 1979 "to
reverse theearlier decline inCc«ifiUJUi''y nation ,thelevel isnow
around 245aiiliori tonnes ,tot.iueh ui-.s't \>eo.dcf.ea acertain volume of
coal recovered from^p-hsAps .*laiic onsatpresent arethat
Gormifanixy production got ,Idreach a >.larlevel in1982.
Over the saice period ,iaipoi-tt ,froir non-fa anber countiu.es shot upfrom
59million tonnes in1979to74-mi11aon +■orgies in "9^0 ;this isnot
likely to "beexceeded in1531 .,maLv' -.-j'because ofdifficulties
experienced byseveral e.rportiiv -"ccivntries .

-8-
With the supply ofcoal increasing ,and overall demand inthe
Community levelling off over thelast two years the stocks of
coal and coke held byCommunity producers have risen from
39million tonnes atthe end of1979 "to$6million tonnes atthe
ei;dofMay 1981,anall–time record forthe Community .
Prices ofConauunity coals are continuing torise ,inline with
prodtiction costs and inparallel with the nominal rise inworld
energy prices .Since world coal prices areusually expressed in
USdollars ,the strong appreciation ofthedollar against European
ooz-rencies since thebeginning of1981 has meant that Community coals
Ijave been distinctly more competitive inrelation toimported coals .
3*Prospects inthe iron and steel industry
In1980 total Community crude steel output was 127*7 million tonnes ,
12*5 million tonnes (9^)down on1979t giving acapacity utilization
rate of63%,asagainst nearly 69%in1979 *Demand started tofall
o'fhalfway through the year and declined more rapidly inthe fourth
quarter ,when production was 19$below thelevel inthefourth
craai'ter of1979 »this was due toasevere recession insteel-consuming
industries coupled with heavy destocking .Steel exports tonon-member
countries also fell in1980.
lathe early months ofthis year ,activity insteel-consuming
industries continued toslow down ,but therate ofdestocking slackened ,
<r..dthen the situation levelled offinmost Community countries around
the middle oftheyear .This ,coupled with adrop insteel imports
fr-CKi non-member countries and the normal seasonal fluctuations ,led
toaslight expansion ofoutput from the lowbase atthe endof1980 .

Nevertheless ,output inthefirst nine months of1981 wasonly
93million tonnes ,distinctly less than forthecorresponding period in198O
(99million tonnes ).Demand forsteel isexpected topick upslightly in
the last quarter ,except inthe construction industry ,andtotal steel
production in1981 isestimated ataround 125million tonnes ,adrop of2%
on1980 andalmost 11%on1979 "Sodespite thecutback incapacity from
202.5 million tonnes in1980 to197*9 million tonnes in1981 ,there isno
improvement inthe utilization rate .
Toensure comparability ,all thefigures just quoted are fortheCommunity
ofNine .FortheTen ,output in1981 will beoftheorder of
126million tonnes .
Steel prices ontheCommunity market fell sharply around themiddle of1980 ,
butthis movement washalted bythe quota system which the Commission 1
introduced inOctober ofthat year .BySeptember 1981 ,prices hadbeen
restored tothesame level asinspring 1980 ,butthey remain well below
prices charged onthedomesxic markets intheUnited States andJapan ,and
further quarterly increases will bsneeded tooffaet theunremitting rise
incosts and toenable steel firms tostart operating ataprofit again .
Theeconomic outlook for 1982 isuncei^tain ,but itispossible that the
Community will seeaslight recovery .However ,themain steel-consuming
sector -fixed capital investments inequipment ,nacainery ,buildings and
vehicles -looks scarcely setforrapid orsubstantial recovery ,save in
thearea cfinvestments linked toenergy production .Growth indemand for
steel will therefore beLioderat'e ,perhaps intheorder of3or4%over the
1981 figure .Anyimprovement intheerterml trade balance forsteel
products will beslight andtotal steel prcclv.crion fortheCommunity ofTen
in1932 could be131million tonnes .

- 10-
B. POLICY COMTEXT
Tbs general objectives ofthe ECSC are determined ,forall time byArticles 1
to 5ofthe Traaty ofParis .
For both coal andsteel ,the Commission atintervals presents general
obji.-r.tives orguidelines bearing onthe future development ofthe ECSC
industries .Coal isalso one oftheparticular items covered bygeneral
papers put .out bythe Commission onthe subject ofCommunity energy policy .
The medium-term guidelines for both coal and steel also cover manpower
cpiestiotis ,thus indicating the context surrounding the various social
policy activities inwhich the Commission /High Authority engages pursuant
tothe Treaty .Intwo annual reports -the Report onthe Results ofthe
Survey onInvestment inthe Community Coal and Steel Industry and the
Piaroial Report onECSC Financial Activity -the ECSC publishes facts
ard figures onthe recent and foreseeable trend ofinvestments and what the
Gomunity isdoing tofinance them .
The following remarks are not intended totake the place ofthe data in
xhoc-e reports ,but are simply concerned with certain key points orrecent
developments which the Commission wants tohighlight inestablishing its
draft ECSC operating budget for 1981 .The industries themselves ,the
ECSC*s social policy and financial activity inthe budgetary year are dealt
;;iu >inturn .
'* policy guidelines
CcKiiission measures under the energy policy are predicated asalways on
the need toreduce dependence onimported oil.In1980 ,the Council set
the Community 'senergy policy objectives for 1990 asfollows :
-share ofoilinprimary energy consumption tobecutto40% (from 52%
in1980);

-share ofcoal and .nuclear energy inelectricity generation tobe
raised to70or75%(from 60%in1980);
-theratio between growth ofenergy needs and economic growth tobe
brought down toatleast 7:"I0»
-renewable energy sources tobedeveloped ;
-consumer -prices toreflect the situation onworld markets and' the cost
ofdeveloping new energy sources .
The success ofthe Community inpursuing these objectives depends largely
ontheplausibility ofthe assumptions underlying national energy programmes
asregards future nuclear capacity and thefeasibility ofthe changeover
from oiltocoal inpower stations and industry ingeneral andall the other
necessary investments .
The main investment projects incoal mines are concerned with maintaining
extraction capacities ,boosting productivity and cutting operating costs .
Investment isindispensable throughout the cop.1ch?.in -ininfrastructure
(transport andhandling facilities ,including port facilities ,preparation
ofcoal ,etc.),coal consumption capacity inelectricity generation andm
"other industries "where there isanenormous potential for substituting
coal for oil .
The Commission will continue totake action under Article 54ofthe ECSC
Treaty byproviding credit forindustrial projects incoal mines and under
Article 55 "bysupplying proper support for technical research .
Asfor Community production ofcoking coal ,+haCommunity scheme ofsupport
forintra-Oommunity trade setup "byConor ,ssionDecision 73/287/ECSC on
15July 1973 ,expiring on 31December 1981 ,isto "beextended with minor

- \y
changes to31Deceraber 1983(Commission proposai in(C0M(8l)424 final ,
28July 1981).Extending "thecurrent system forabrief two-year period
would give time towork out aCommunity coal strategy under acoherent
energy policy ,with measures relating tosupply ofcoking coal and coke
for the steel industry .
Through the general budget the Commission isalso helping toreinforce
Community action regarding demonstration projects onthegasification and
liquefaction ofcoal .
2.Steel policy guidelines
Commi_s£ion_mea£ure£ £n_the_ste£l_marke;t
The sharp drop indemand andprices inthe second half of1980 and the
failure ofvoluntary restraint agreements toremedy the situation meant
that Article 58ECSC hadtobebrought into play .Accordingly ,the
Commission ,with the assent ofthe Council ,imposed amandatory production
quota system onsteel firms fortheperiod from October 1980 toJune 1981 .
Quotas were fixed insuch away astomatch supply and demand more closely .
Theinitial effect ofthe quota system was tostabilize the market ,halt
the collapse ofprices and even help prices tostart rising again .Steel
demand has remained low and the Commission took account ofthis when fixing
production quotas forthefirst and second quarters of1981 .
Atthe beginning ofJuly this year itwas found possible tointroduce some
flexibility into thequota scheme forcertain products (quarto sheets ,
heavy sections andwire rod),where the scheme nowapplies onavoluntary
basis .For other products (those based onwide strip ,reinforcing bars and
rolled merchant products )producers have notentered into voluntary restraint
agreements ;with the assent ofthe Council the Commission has accordingly
established new mandatory schemes forthese products .These schemes apply
until June 1982 .

-13-
Atthe same time ,two measures have been ta*cen onprices -stricter
enforcement ofthepricing i-ules (Article 60ECSC )andapplication
ofthese rules tostockholders byCommission Decision approved by
the Council under Article 95»
These measures ,inconjunction with the quotas ,seek ;toestablish
asound basis for improving steel price levels yet further ,which
should make iteasier for producers torestructure and pave the
way for amore orderly development ofthe employment situation .
Steel .in_external _re_lat_i£ri£
Byway ofaddition tothecrisis measures under Article 5^and as
ameans ofseeing that they apply coherently ,the Commission established
external measures for 19S1 toensure that massive imports from non-member
countries donot compromise the Community 'sinternal effort torevitalize
the steel market .The Commission has entered into bilateral arrangements
with fourteen non-member countries providing pordiscipline onvolumes
and prices soastoavoid disrupting the Community market and hence to
support Community prices .Itshould benoted that anaresult ofthe
low prices still charged inthe Community and ofthe fall inconsumption
observed throughout the year ,the aggregate volun.e ofimports from the
fourteen countries inquestion in1°^1 wis well below the 1980 level .
The Commission has continued its practice ofpublishing basic prices
for imports ,and ,working cLose 7with the Member States ,has kept
the import prices ofsteel products from countries subject tothe
basic prices system under surveillance .

-14-
Aggregate exports from theCommunity totherest oftheworld in19°1
were well below their 1980 level .
In1982 ,external measures ,while reflecting theneed foreffective
cooperation with non-member countries ,will continue tobepredicated
oninternal measures asbefore .
Community _sol.ut_i£ns _to_st_ructura_1£roblems _
Thedeterioration ofthesteel crisis inthesecond half of1980 and
in1981 ,andtheimpact this hashadonthefinancial position ofproducer
firms ,have heightened theurgency ofreducing capacity andrestoring
competitiveness .
TheMember States have been under growing pressure tohelp their firms ,
often tosurvive ,andthis has further intensified therisk that subsidies
would depress prices orpreserve them atnon-profitable levels ;with
theCouncil 'sunanimous agreement ,theCommission accordingly established
1general rules onaids .They have the same major objectives asthe decision
2onspecific aids taken on 1February 1980 ,butthey also pursue the
objective ofseeing that the application ofstricter rules will help
restructuring toproceed with all the speed that the current situation
demands .Thenew system uniformly covers allaids that canbegiven to
the steel industry .
A
Commission Decision No2320/8l/ECSC of7August 1981 establishing
Community rules foraids tothesteel industry (OJL228 ,13August 1981 ,p.1/\).
Λ
Decision No257/8o/ECSC (OJL29,6February 1980 .p.5)*

-15-
Atits 26ard 27March meeting the Council determined its objectives
and laid down measures for dealing with xhe situation inthe steel
industry ,with aparticular view torestoring normal market conditions
inthe medium term .Itemphasized the following points :
-aids tosteel firms must begradually discontinued over aspecified
period ;
-aggregate production capacity inthe Community must becut back ;
-noincreases must beallowed inproduction capacity for certain
categories ;
-aids may begiven tofirms orgroups only ifthey are restructuring
andifthe general result isareduction incapacity .
Restructuring isstill the primary objective wh:ohthecrisis measures
must aim for ,especially asthe latest survey oninvestment ,carried out
inJanuary 1981 arid covering investment plans ofall firms ,reveals that
between 1990 and 1983there will beanaggregate increase incapacity for
finished products .
3.Social policy guidelines
The main features ofthe Commission 'ssocial policy under the ECSC Treaty
are :
(i)aidgranted under Article 5°tohelp redeploy :.orkers ;
(ii)thefinancing ofresearch projects oncccupa /tional safety under Article 55;
(iii)thegranting oflow-interest loans from ownfunds under Article 54
topromote workers' housing *

-16-
Itshould also berecalled that for several years theECSC hasbeen
giving assistance intheform ofinterest relief topromote the
creation ofjobs forredundant workers from ECSC industries .
Apart from these more traditional aids ,there arethenewtemporary
social measures (1981 "to1984)(agreed bytheCouncil on24June 1981 )
toback upcurrent restructuring efforts .
Action planned for1982 inconnection with social
research andhousing will continue onthebasis oftheprinciples
previously applied bytheCommission andoutlined inChapter II.
Consequently thedevelopments described below cover only the social
aidconnected with therestructuring policy .
The economic situation grew very much worse inthe second half of
1980 andthefirst fewmonths of1981 ,andtheemployment situation
followed the same pattern .Substantial job losses inthe steel
industry in1980 (72000jobs lost ,or10.7% ofallemployment ,atan
average rate of6000jobs permonth )continued in1981 ,though ata
less rapid rate .Inthe first seven months oftheyear 29000further
jobs were lost ,sothemonthly average isstill inexcess of4000 .
Inthese circumstances itisclearly essential tohelp redundant
steel workers adapt tonew jobs .
Even ifthey qualify forallreadaptation aids ,former steel andcoal
workers have the greatest difficulty infinding jobs .Steel isnot
really avery special case ;finding ajobanywhere isextremely
difficult inview ofthevery high level ofunemployment

-17-
inall sectors ofthe Community economy . The annual average of
6million unemployed in1978 and 1979 rose to6.8million in1980 ,
and the8.5million mark was passed intheearly months of1981 .
Between June 1980 andJune 1981unemployment rose by34%inthe
Community asawhole . Hence the emphasis placed "bythe Commission
onthe need topromote job creation policies and programmes togo
hand –in–hand with the appropriate readaptation measures .
The ECSC 'straditional readaptation aids have been -andstill are-
animportant means ofeasing the situation ofredundant coal and
steel workers . But special measures have had tobetaken inview
ofthe extremely difficult situation ofthe steel industry . In
May 1979 "the Commission accordingly made proposals for the
establishment ofspecial temporary allowances tohelp steel workers ,
inconnection with the Community restructuring plan ,andinJune 1981
the Council approved these proposals inamodified form ,introducing
aids for early retirement and aids for workers onshort time .Itis
felt that these aids fall within abroad interpretation ofArticle 56
ECSC .
Tnis Council Decision ,establishing anaid programme expected tocost
atotal of212million ECU (ofwhich 112million ECU must becommitted
in1981),will putthe Community inabetter position tomeet its
obligations towards workers inthis key industry .
Onthe job creation front the Commission isconsidering thepossibility
ofi.ntrod\icing anew series ofspecific support measures tocomplement
lasting aid inthe forai ofinterest relief . Useful inspiration can
befound inthe scheme ofassistance for the employment ofyoung
people under tho Social Fund . Asitisnot possible toquantify the
budgetary implications atthe present time ,this paper does not take
them into account .

-18-
4.Financial activities
ECSC Financial Report No26,summarizing theCommunity 'sborrowing and
lending in1980 andsetting outstatistics analysing andcomparing
activities since 1954 ,will bepublished some time inOctober 1981 .
Borrowings contracted in1980 totalled 1004million ECU ,compared with
837million ECU in1979 an<i1069million ECU in1978 .Loans paid
outinthesame periods totalled 1031million ECU ,compared with
676million ECUand798million ECU .
1Industrial loans amounted to757million ECU in1980 .compared with
2595million ECUin1979 and667million ECU ,conversion loans to
266million ECU ,compared with 59million and 113million ECU ,and
subsidized housing loans ^to8million ECU ,compared with22million
aryl18million ECU .
Total borrowing andlending since theinception oftheECSC isthus
brought to7411million ECU and 7241million ECUrespectively
(including 227million ECUinloans from ownfunds ).Thebalance
outstanding at31December 1980 was 5406million ECU ofwhich
2205million ECUfall dueforredemption between 1981 and1984 ,
andtotal servicing costs forthedebt ,including interest ,are
3782million ECU for the saine period .
In1980 ECSC financial activity continued tosatisfy thestrong demand
from undertakings wishing tomodernize orrestructure ,notonly inthe
steel industry butalso toalarge extent inthe coal industry ,which
received loans totalling 234million ECU ,compared with 238million ECU
in1979 and263million ECU in1978 .
In1981 loans raised by15July amounted toonly 226million ECUand
loans paid outwere correspondingly lower .
^Article 54ECSC .
^Lrticle 56ECSC .
•fcCSC special reserve funds andpart oftheformer ECSC pension fund .

-19-
Inspite oftherise ininterest rates the ECSC has continued ,toobtain
relatively favourable terras onthe capital market and has successfully
developed apolicy ofprivate loans when conditions onthe open market
were unfavourable .ECSC issues are also favourably quoted onthe
secondary bond market .
The prospects for arevival ofactivity over the coming months will
depend onwhether investments planned bysteel firms are brought into
line with Community policy and ontheavailability offunds forinterest
subsidies forpriority investments ,particularly conversion projects .
The same will apply in1982 ,when the ECSC will have topursue anactive
policy ofaidfor investments inthese priority sectors and ,asfar as
possible ,inthe developnent ofcoal production .
Atthe end ofJuly 19*31 ,total loan applications approved bythe Commission
but awaiting settlement amounted to2949million ECU for the ECSC industries
(Article 54)and 556million ECUforconversion (Article 56).Applications
being processed amount to3185million ECU forthe ECSC industries and
160million ECU for conversion .The repayment period concerned bysome
ofthe applications received extends over several years .
However ,ageneral estimate ofthe likely trend ,inloan applications
may beinferred from the planned investments iithe Conmunity coal industry :
1540million ECU in1982 asagainst investments of 1''67million ECUin
1981 ,1655million ECUin1980 and 1167million ECUin1979 «
»
>
Investment inthesteel industry ,which dro;pea to2050million ECU in
1978 and 1979 fpicked upin1980 tostand at2375million ECU,andis
estimated at2762 mil ?ion ECU in1981 .
Ifthe active policies envisaged above can beimplemented ,borrowings
made bythe ECSC could again amount toaround JOGmillion ECUin1982 ,
provided that market conditions worK tothe advantage ofthe undertakings
concerned .

-20-
C. FINANCIAL CONTEXT
Pursuant toCommission Decision No3334/80ECSC of20December 1980 ,
from 1981 onwards all the ECSC budget figures are expressed inECUs ,
and the claims and commitments under the budget and the relevant
contracts are denominated and settled inthe same units ofaccount .
'Htti regard tothe assessment ofthedraft 1982budget ,therise in
prices between 1981 and 1982which hastobetaken into account in
thefinal comparison between the two financial years isexpected to
je10^.
The main financial problem involved indrawing upthe ECSC budget for
198?remains the problem ofbalancing the budget atatime when industry ,
notaily the Community iron andsteel industry ,isencountering serious
uifficulties .Onthe social side these difficulties are reflected in
the budget byamarked rise inforeseeable commitments for aids for
resettlement and bytheintroduction in 1981ofthe new temporary
social measures (aidforearly retirement andforshort-time working )
which theCouncil adopted for 1981–84under the Community steel policy .
Itwas recognized that the financing ofthesteel industry social
measures could not becovered bytraditional ECSC resources .The
Council decided that Member States would make an ad.hoc contribution
toprovide aninitial tranche of50million ECU towards the 112million ECU
tcbecommitted foraidin1981 .The Commission ,inpreliminary draft
supplementary and amending budget No2,proposed tothe budgetary
authority that the remaining 62million ECU should becovered bya
transfer from the general budget tothe ECSC .
.This procedure would neutralize the financial impact ofthe new measures
onthe balance between requirements and traditional ECSC resources .

Initsletter ofamendment tothepreliminary draft 198?general
"budget ,drawn upon23October ,the Commission proposed atransfer
in19°?of50million ECUtotheECSC tofinance planned commitments
forsocial measures inthesteel industry in198?.
Asthe decisions onthe financing ofthenew social measures will
"betaken under thegeneral budget procedure onthebasis ofthe
proposals already submitted ,this aide-memoire concentrates
mainly ontheproblems posed bythebalance between requirements
and traditional resources .
With regard tothefinancing ofcommitments forresettlement aids ,
theoriginal figure fortotal commitments entered inthebudget
(75million ECU )will have toberevised steeply upwards in1931 .
Even allowing for the f.-ict that some commitments extend into the
I982 financial year ,theincrease intherate atwhich redundancies
areoccurring inthe steel industry has made itnecessary toraise
the original forecast to124million ECU .
Thetable inAnnex Bindicates themeasures taken "bytheCommission
tomeet theincrease inrequirements from resources .
The Commission isanxious toprevent thepressure ontheECSC 's
traditional resources due tctheexceptional volume cfdemand
forresettlement aidfrom producing excessive distortion inthe
operating budget .This isalso amajor factor inthe fin-uncial
background tothedr :ft1382 budget .
Theapproach adopted bytheCommission inrelation tothebalance
oftheoperating budget for1982 anditsproposals aresetout
inChapter III ofthis aide-memoire .

-22-
II.ANALYSIS OFREQUTREUBNTS REPORTED AM )RESOURCES A V AILABLE FOR THE
FINANCIAL YEAR 1982
This chapter first ofall gives adetailed account ofthe two factors
traditionally taken into account bythe Commission indetermining the
levy rate onwhich tobase thedraft budget forthe next financial
year ,namely expected requirements andthe estimated yield from resources .
Article 49ofthe ECSC Treaty empowers the Commission toprocure the
funds needed topursue theactivities set out inthat Treaty byimposing
levies onthe production ofcoal andsteel .These levies are assessed
annually onthe various products according totheir average value ,but ,
pursuant toArticle 50»"therate thereof maynotexceed ^founless
previously authorized bythe Council .
Tofixthis rate itisfirst ofall necessary toestimate requirements ,
then toconsider how far these may becovered from budgetary resources
other than the levies ,namely theinterest oninvestments and onloans
financed out ofown funds and cancellations ofprovisions .The amount
which will have tobecovered bythe levies can then bedetermined .
Next ,the likely yield from the levies iscalculated onthe basis ofa
preliminary -and thus sometimes unavoidably inaccurate -estimate ofthe
average values ofthe various products ,and inthelight ofthe estimates
(also somewhat tentative )ofthe volume ofoutput during theyear .The
probable levy yield isfirst expressed asthe estimated yield from arate
of0.01$ .
These are the two main elements described inthis chapter .

-23-
The next stage istodetermine theextent towhich theCommunity must
forego satisfying therequirements which exceed theresources ,provided'
bythepresent raxe ,or,conversely ,how fartherate must beeither
raised orlowered# This question isdiscussed inChapter III .
Thefollowing presentation ofrequirements reported andforeseeable
resources ismodelled onthe systematic analysis ofthedata for the
various budget head.ings inthegeneral budget ,setoutinPart IIofthe
general introduction tothepreliminary draft budget .Aswith the
general "budget ,this presentation lists separately themain features of
each heading (legal basis anddescription oftheoperation ,type and
breakdown ofexpenditure ,explanation ).Three categories ofexpenditure
are -unavoidable ,inthat they derive from decisions already taken
(administrative expenditure ,aidtocoking coal andcoke forthesteel
industry )orfrom framework agreements with theMember States (onaids to
resettlement )•Togive aclear picture ,theexplanation forexpenditure 1
which isnotunavoidable (research andinterest relief grants )ismore
detailed than fcr the other chapters .
1»
A.REQUIREMENTS REPORTED FOR 1982
Thetraditional terms will beused here :"3"signifies requirements ,while
"R",which will appear later ,signifies resources .Tnese terms areintentionally
different from those used inthegeneral budget ("expenditure "and "revenue ").
1.Ordinary requirements
CHAPTER 31:ADMI ÎTCSTRATIVEEXPEtiDTTURE
1.Legal basis anddescription ofoperati on
Legal basis :
–Article 50of "theECSC Treaty ;
–Article 20oftheMerger Treaty ;
–Council Decision of21November 1977 (0JL306 ,3^November 1977 »P«28);
–ECSC contribution tothe Commission ^administrative expenditure .
2.Type andbreakdwon ofexpenditure
Annual lump–sumpayment infour equal cniarterly instalments .
3.Explanation
TheCouncil has settheannual amount ofthe lamp– payment at
5million ECU .

-24-
CHAPTER B2:SOCIAL MEASURES
B2.1.Aids toresettlement (Article 56ECSC ) t
1. Legal basis and description ofoperation
Legal basis :
–Articles 50and 56ofthe ECSC Treaty ;
-Bilateral agreements concluded between theHigh Authority /Commission and
the Governments ofthe Member States .
TheHigh Authority /Commission provides non-repayable aidtowards :
.(i)the payment oftideover allowances toworkers ;
((ii)the payment ofresettlement allowances toworkers ;
(iii)thefinancing ofvocational retraining forworkers having to
change their employment .
Insome cases ,the tideover allowance isreplaced byacontribution
corresponding tothe cost ofabridgings-pension scheme .
The grant ofthe aidisconditional upon payment bythe State
concerned ofaspecial contribution ofnot less than the amount ofthat
aid,unless anexception isauthorized bythe Council ,acting bya
two-thirds majority .
2.Tfype and breakdown ofexpenditure
Creation ofaprovision tosubsidize ,bymeans ofa50?® reimbursement ,
expenditure incurred bythe Governments within the scope ofthe
agreements signed . ,

-25-
The breakdown byindustry and bycountry ofthe requirements asestimated
from the data provided bythe Governments isasfollows :
mECU
Country Coal Steel and iron - Total
ore mines per country
Belgium– 4-5 4.5
Denmark - - -
Germany 1.5 16.0 17.5
Greece'- 1.0 1.0
France 2.0 8.0 10.0
Ireland - - -
Italy- 1.0 1.0
Luxembourg- 1.5 1.5
Netherlands - 1.5 1.5
United Kingdom 11.0 69.0 80.0
Total per industry 14.5 102.5 117.0
The social repercussions ofthe present situation remain difficult to
predict ,ofcourse ,and the forward figures can therefore benomore than
tentative .Thetotal figure of117million ECU should beconsidered s.s
aminimum rather than amaximum estimate .
3.Explanation
The coal industry 'srecruirements are lower than those estimated for
1981 ,mainly asaresult oftheprogress being made inreorganizing the
industry .
Onthe other hand ,recruirements inthe iron andsteel industry continue
toceatahigh level ,owing tothe gradual rationalizing andrestructuring
ofthe industry .Itisestimated that tens ofthousands ofjobs will be
lost inthe iron andsteel industry .

-26-
Article B.2.2 Social measures inconnection with the restructuring
ofthe iron and steel industry
1.Legal "basis and description ofoperation
Lefe-al "basis :Conclusions ofthe 717"th Council meeting of24June 1981 ,
introducing twotemporary social measures under Article 56(2)("b )
BCSC ,ona "broad interpretation ofthat provision#
The measures involve contributions "bythe ECSC towards the financing
ofspecial allowances for early retirement and short –time working to
"bepaid toworkers iniron andsteel undertakings tinder the Community
restructuring programme .These measures will supplement the aids for
resettlement already authorized under Article 56ECSC *Like the
latter ,the new measures will "bethe subject of "bilateral agreements
"between the Commission and the Member States ooncerned .
2.Type and "breakdown ofexpenditure
Aids inthe form ofpartial reimbursement ofjthe expenditure incurred
"bythe Governments within the scope ofthe agreements signed .
3.Explanation
The iron and steel industry 'sfinancial requirements remain high
"because ofthe gradual restructuring ofthe industry .Tens of
thousands ofjobs are expected tobelost intheindustry in1982.
The funds requested intheletter ofamendment tothe preliminary draft
general budget total 50million ECU.

-27-
CHAPTER B3:AID TO RESEARCH
1•Legal basis and description ofoperation
liegal "basis :Articles 50and 55ofthe ECSC Treaty
The High Authority /Commission isrequired toencourage technical and
economic research into the production and increased use ofcoal and .
steel and occupational safety inthe coal andsteel industries .To
this enditgrants aid tofinance research after receiving the
Council 'sassent .
2.'Type and breakdown ofexpenditure
Creation ofprovisions tocover part –subsidies which take the form of
the repayment ofaproportion ofthe actual costs ofresearch projects
approved bythe High Authority /Commission inaccordance with the
procedures provided for ■inthe Treaty ;these cover ,inparticular ,
the consultation ofthe ECSC Consultative Commttee and the receipt
ofthe Council 'sassent .Inmost cases ,the aid granted amounts to
6ofo oftheestimated aridsubstantiated costs .
The applications can bebroken down asfollows :
mECU
–
Heading Sector 1 Aidrequested
Β3.1 Steel
1 69
Β3.2 Cosi1 40 '
Β3*3 Social and medical1
I 12
TOTALi
I
121

-28-
3.Ground £
Steel research
Thecrisis currently affecting thesteel industry intheCommunity
has demonstrated the need for sustained and coherent action to
restructure and modernize this sebtor .
This action must "beaccompanied byR&D ,which isvital fordeveloping
newtechnologies forre-equipment andmodernization programmes which
will lead tolower costs and improved international competitiveness .
Research will also make aconsiderable contribution tomarketing by
improving thequality andsophistication oftheproducts ofthe
steel industry .
With regard tointernational competitiveness ,itshould benoted that
thegapbetween theCommunity steel industry and itsmain rival ,
Japan ,hasreached such proportions inrecent years that theCommunity
now hastoimport advanced Japanese technology inanumber ofkey
sectors .This development isaresult ofmuch higher expenditure on
research inJapan -estimated atthree times theCommunity level in
anindustry whose production ofcrude steel isslightly lower .The
Community must step upitsresearch effort inorder tocompete with
this more progressive attitude towards R&D .
«

-29-
Asaresult ofdevelopments inthe steel industry and the accompanying
new scientific and technological needs ,anew ECSG medium-term
orientation forsteel research was published earlier this year
(OJ G99of2May 1981).Thi3 research has two main aims :
(i)toreduce production ,processing andfabrication costs inview
ofthe increases inthe costs ofraw materials and energy ;
(ii)tomake semi–finished andfinished products which better meet
the needs ofconsumers andusers (particularly asregards cost
andquality ).
The main topics covered byproposals for ECSC aid in1982 range from
greater productivity andbetter energy conservation during production
and processing toimprovements inproduct specification and performance .
The particularly high levels offinancial support required bythese
applications show the interest ofthe industry –both producers and
consumers -inthis cooperative R&D programme while their technical
content reflects the possibility offurther progress inimproving
the competitiveness ofCommunity steel production .
Coal research
Prices for petroleum producxs have been rising steadily and there are
noimmediate prospects ofthis stopping *

-30-
Inresponse tothis situation ,the European Council ,meeting in -
Strasbourg in 1979 *decided toaimatreducing Community dependence
onoilto50$ofenergy needs by 1985 andinMarch 1981energy
ministers agreed toreduce this figure to40$ "by1990 .There isadefinite
political will toreduce theoilbill and the share ofoil by
concentrating itincreasingly onspecialist sectors .
Thefirst step istoreduce overall demand for energy ,without damaging
economic growth ,and implement arigorous energy –saving policy . >
•I. /
' ' - ■ .
Atthe same time increasing attention needs tobepaid toalternative
sources ofenergy ,the most important ofthese being coal .
Thereturn tocoal entails improving the productivity and position
ofthe coal industry inanumber ofways .One ofthese isincreasing
technical research andthis isallthe more important because ,despite
progress already made ,the Community coal industry continues to
encounter grave difficulties due tolabour problems ,thediversification
ofseams and the increasing depth ofworkings . ''
The Commission produced medium-term (1981-85 )guidelines forcoal
1research and alarge number oftechnical research projects have
been submitted tothe Commission for financial aid under .
Article 55ECSC .
10JC94,17April 1980

-31-
Most research projects are concerned vzith mining engineering and m
particular coal winning (including upstream and .downstream processes )
andthefight against mining hazards (firedamp androck pressure ).
Modern techniques toimprove the management ofcoal workings are also
beginning tobecome more important .
New coal winning techniques supply the preparation plants with a
raw material ofever decreasing quality .Joint research isnecessary
toovercome this difficulty and improve product quality .
Most research into coking isconcerned with improving theyield and
capacity ofcarbonization and producing better quality coke while at
the same time respecting environmental considerations .
Increasingly ,the present energy situation requires improved products -
from the coal industry and new methods ,especially asregards the
conversion ofcoal into hydrocarbons .
The 1982 coal research programme will cover the following topics :
Minin gengineering
-Development work
–Firedamp ,ventilation and rock pressure
-Winning and working
–Outbye operations underground
–Codera maragettent technicru.es ,
Upgrading ofcoal
–Preparation ofcoal :
-Coking
–Combustion 01coal
–Physical and chemical upgrading ard new methods *

Social research
The 1982 social research programme will cover the following ,bynow
traditional ,topics :
-theeffect onworkers ?health ofoccupational hazards and physical
conditions attheir place ofwork :occupational medicine programme
-ergonomics ,
-mine safety ''
-industrial heaïth incoal mines
-technical measures tocombat pollution atthe place ofwork and near
tosteelworks
-safety inthesteel industry .
Research will continue tohecarried out inclose collaboration with
the industry bymeans ofprior consultation ofemployers ,workers and
government experts .
•I
Two items inthe programme call forspecial comment : ,
The "Mines safety II"programme was prepared in1981 incollaboration
with the appropriate industrial associations and should belaunched
in1982 .Asaninstrument for promoting research itiseagerly awaited
bythe mining industry andwill complement the work ofthe Mines Safety
and Health Commission .The programme will deal chiefly with the
traditional risks ofmining operations butconsiderable attention will
also bedevoted toresearch into the human element and thesociological
and psychological causes ofaccidents .N
\ :'
Thefirst topic tobeinvestigated inthearea ofsafety inthesteel
industry will betheprevention ofaccidents incontinuous casting
plants ,into which Community research will beconducted in1982.

-33-
GilAPTRR B4:AIDS ITT TI1E FORM 0*' INTEREST RELIEF GRAM 'S
1.Legal basis and description ofthe operation
Legal basis :Articles 54(investment ),and 56(conversion )ofthe
ECSC Treaty ,and .Decisions ofthe High Authority /Commission .
The ECSC may useits own resources toprovide interest relief on
certain types ofloan .Therelief iscalculated inECU atarate and
for aterm fixed bythe Commission .Itcurrently stands at3','over
five years .
2«Type and breakdovm ofrequirements
Provision foroffsetting part ofthe interest clue onloans disbursed
bythe ECSC ,inaccordance with the contracts drawn upbetween the
Commission and the beneficiaries .
The estimates asregards applications break down asfollows :
mECU
Heading Sec+or ."ids applied
for
3ή.Ί
E4.2i
Investment j 25
Conver lion i 50
τυΤΛ' ,! 75
..... 1 . . . ....
PJ>:planat-i on
£jC3Cloans with interest relief ire theprincipal financial
instruments for promoting priority investments ,particularly those
connected with meeting the requirements for tne coal ardsteel
industries and with creating .jobs for former ECIC workers .

-34-
Investments
Inthe investment field ,the aimofinterest relief istoencourage
certain "types ofinvestment inthe ECSC industries .The Commission 's
current criteria forgranting relief are asfollows :
(i)research andtraining centres ,andthpelimination of
"bottlenecks (OJC73>.18June 1970);
(ii)stabilization ofcoal production :relief islimited to
investment inshafts ,underground workings and haulage
andwinding equipment '(OJ C"79f 2?March 1980).
The Commission reserves theright toapply and adapt these criteria
inthelight both ofits assessment ofcurrent priorities and of
the appropriations available# Among other things itisenvisaging
thepossibility ofencouraging priority investment inooal ,notably
for energy-saving .Onthe .other hand ,apart from certain cases where
interest subsidies are already being given forsteel restructuring ,
itconfirms that itisnot planning togive this forjn ofsupport .
The requirements recorded for 1982 amount to25million ECU.

-35-
Convorsion
Conversion loans with interest reflief are granted tofirms orpublic
"bodies which encourage investments creating new .jobs inregions hit by
declining economic activity inthe coal andsteel industries .
The guidelines drawn up.bythe Commission for granting conversion loans
arepublished inOJ C178,27July 19X7 *They have since been changed
slightly (OJC82,29March 1979»P»8)totighten uptherules for /
global loans ,which have proved avery effective instrument forcreating
£lewjobs insmall and medium-sized undertakings .
The maximum loan eligible forinterest relief attherate of ..3$for 5years
atthe moment is20000 ECU per new job ,equivalent tomaximum non­
returnable aid of3000 ECU per job,although the Commission reserves the
right torevise this rate .When recruiting ,therecipients undertake to
give priority toformer ECSC workers .
This programme isthus designed tohelp provide jobs for workers formerly
mgr-ged .inthe' Community 'siron and .steel orcoal industries and thereby
neet ,inthis specific field ,samp ofthe -Coaunission 'sbasic
obligations under .Article 56(2a)ofthe ECSC Treaty .'
Tue Commission isworking along the same lines asthe central and
regional authorities inthe .Member Stater .Ithas vr.stiy increased the
number ofconversion loans granted frc.n nine (eight direct and oneglobal )
in1977 to34(twenty tnree direct ?ndeleven global )in1980 .This has
resulted inthe creation ofsome 10000 new jobs peryear .
In1982 ,asinthepast ,thestress islikely tobeplaced onconversion
requirements inthe iron and steal inclu /vtry .Itisself-evident that .

rationalization andrestructuring plans forthe industry in1982 and 1983 will
involve farther substantial redundancies ,and thought must flow begiven to
ways ofcompensating forthis .Asregards thetotal amotait tobeallocated to
this type ofaidin1982 ,50million ECU would allow thecreation ofatleast
15000 new jobs ,providing sufficient valid applications for aid are received .
CHAPTER B5:– AIDS UNIER ARTICLE 95OPTHE ECSC TREATY (COKING COAL
MP COKE FOR THE STEEL BTflUgTHY
(1)Legal basis anddescription oftheoperation
Legal basis :
(i)Article 95ofthe ECSC Treaty
(ii)High Authority /Commission Decision 73/287/ECSC of15July 1973
(OJL259,15September 1973),aslast amended by
Decision 3058/79/ECSC of19December 1979 (OJL344,
31December 1979 );sihce this Decision will expire on
31December 1981 ,the Commission hasproposed anextension (and
slight amendment )until 31December 1983 (C0M(81)424 final ,
28July 1981).
The ECSC makes alumpsum contribution tothe special fund for easing .
intrar-Community trade ,therest ofthe finance being provided bythe
Member States and the steel industry .
(2)Type and breakdown ofrequirements ,
Provision for alump-sum contribution of6million ECUtothe fund
(the ECSC annual contribution ).
Community aid may begranted inrespect ofamaximum amount of
47million ECU,corresponding to14million toijnes ofcoking coal per
annum .Iftrade drops below these limits ,the reduced subsidies wil]
bedrawn first from the Community 'scontribution (6million ECU)and
the 17million ECU contributed bythesteel industry andthen from the
24million ECU paid inbythe Member States .

(3)Expiana 4:ion
The aim cfthe special system ofaid .tocoking coal and coke istohelp
maintain production ofblast –furnace boal for the Community 'siron and
steel industry ,and also toenable the coal andthe coke derived
therefrom tobesold atprices reflecting w6rld market prices .
Apart from Community aid the system lays down pricing rules for the
prciuc+.s concerned and authorizes the producing countries togrant
production and sales aid totheir collieries .
-*Requirem entsnot entered inthe budget :loans for financing
subsid jzed hous ing
Inadd!tio:v tothe requireraents tobefinanced qynow-repay ablegrants
from s-/ear'sresources ,there isthe ECSC housing subsidy scheme ,
whjrh ,has beoninoperation since 1?55 «forecasts forthis programme
are included inthis aido-^n&noire tocomplete the picture ofall ECSC
interventions for Parliament and the Consultative Committee . For
ease cfunderstanding ,thepresentation follows the same analytical
fc m.-.asfor the requirements already described .
(1)v~.l bas:sard d-~script loroftheoperation
legal basis :Article 54andDecisions -ofthe High Authority /Commission
aEk.'.gning tothe'housing •programmes the funds from the "special reserve "
constituted byinterest from investments and from loans against own
funds «
ECSC intervention takes tfcs form ofredu6ed-interest loans ,and eases
the CGst offinancing iicuiing !$*adding the funds Ifent bythe Community
toresources provided nationally .

-38-
(2)Type and breakdown ofrequirements
Grant oflong-term loans at1$interest totheresponsible national
bodies orother financial institutions .
The Commission intends toallooate 30million ECU,averaging out a1
15million ECUayear ,tothesecond phase (1982-83 )oftheninth
subsidized housing programme .
(3)Explanation
This scheme has the twin aim of:
(i)complementing Community policy inthecoal andsteel industries ;and
(ii)improving living conditions forworkers inthese industries .
Thecriteria for ^hegranting oftheloans aredescribed indetail on
pages 2and 3of0J C299 «30November 1979 * . *
m
The scheme isboth' intheinterest ofworkers ,since italleviates the
effects ofprice increases and high interest rates ,and ofbenefit tothe
industry ,since itfacilitates reorganization .
The number ofdwellings subsidized bymeans ofECSC loans at 1January 1981
stood at167 517.

-39-
3.Surer ary ofrequirements reported
'Total requirements reported therefore amount to374million ECUtobe
financed under the operating budget ,plus 15million ECUinthe form of
below -the-line loans atlowinterest rates forthe building ofsubsidized
housing .Thefigures forrequirements reported are summarized inAnnex D,
inthe "applications "column .
B„ORDINARY RESOURCES A V AILABLE
Tao ressarks onteralaolcgy made onpage 23apply here too.
1.Resources for the financial year
CHAPTER R 1:GEMERAL RESOURCES
TITLE R1.1 :Levy
1.Legal basis and description
Legal basis s
–Articles 49 5^ofthe ECSC Treaty
–Decisions 2/52and 3/52of23December 195?«
The levies are calculated cnthe basis ofafixed scale per tonne which is
decided each financial year bythe High Authority /Commission andpublished
inthe Official Journal .
2•Type and brp.ajk.j otra %
Levy resources are the sums owing ,and duly established ,inthe form of
levies payable onoutput inthe 19^2 financial year andcalculated onthe
basis ofthe production declarations made bythe undertakings .
3•*Explanation
Thelatest estia&teH cTthe average values which sw/ntasthe basis for
calculating thelevies suggest that thefigesree frrthe 1981 financial year ,
which relate tothereference period from 1July 19SO to30June 1981 ,will
besome 2.0$higher inthe oaE© ofcoal androughly forsteel than the
figures for 1981 .
Itshould bynoted t.iat thsre iss.r>ayprecif.hl© margin ofuncertainty in
these figures ,this isbecause the department oconcjrned are notyet in
pcssessioii ofalltnerequisite data ,andforecasting production inpresent
economic conditions isvery unosrts-ift .

-AO -
Tonnage subject tothelevy ,and .yield ,from arate oflevy of0.01 ^
ProductProduction forecasts
onwhich the levy iscalculated
million tonnesOne levy
"point "
inES1Uon
Brown coal briquettes and
semi –coke derived from brown
coal 4.4 0.02
Hard coal ofall categories 197.9 1.26
Coal -total 1.28
Pigiron other than that
used for making ingots 4.0 O.O5
Ν
Steel iningots 130.0 , 2.36
Finished products 100.1 Ο.83
Steel –total 3.24
GRAND TOTAL-4.52
TITLE R1.2:Inter est tother headings /
1.Legal "basis and description
Resources deriving from income oninvestments and onloans against
noi>-borrowed funds will bedetermined when the Commission adopts the
balance sheet at31December 1981 .Under itsDecision of30April 1975 ,
the Commission enters inthe budget theinterest available from the previous
financial year .
2.Type and breakdown
Abreakdown offorecast resources based onthelatest estimates isxriven belows

-41-
Titles Reading million ECU
R1.2 Interest oninvestments and loans
a~.inst non-corroved funds 75
R1,3 Pines and late payment surcharges token entry
R1.4 Miscellaneous revenue token entry
3.Explanation
The figure for interest revenue isbased onanestimate ofthe resources
which the Commission will beinaposition torelease ivhen itadopts
the balance sheet at31December 1981 .
CHAPTRR 3 CA.I'ICEL LATIOFS OF gOT.yiTMFJTS W'.ZY WILL PROBABLY WOT BE
1-Leg?,lb":1s;enl description
'Thf -previsions ursated inresponse toCommission aid decisions must be
given tangi 0I3 form withir .areasonable period' oftime bythe contracting
ofl6gal oyiBmitmeirt.B ,
Trie Corra)i ssion 9sInternal Rules forthedraving upand implementation of
the ECSO operating budget therefore provide that inthe exceptional event
of -cLiau ?delay at -this stage ths provisions will becan-jelled .
1'."sRules aico frovlda •'.hat one ?,allpirties have dxschi-rged their obligations
under the -le^a .coisw.aient ,anyremaining p&rf .oftheprovision will likewise
be c2s:.c<ol led .

-42-
The amounts "thus released become available again asresources forthe
current financial year .
2.N?„ture and breakdown
Save inthe exceptional cases where decisions onthe earmarking offunds
axe not followed upwithin areasonable period oftime bylegal commitments ,
anycancellation ofearmarked funds normally indicates complete discharge
ofthe contract ,agreed with the other contracting party .
The estimate of3million ECU shown inthis chapter relates ,inessence ,
1,ocancellations ofallocations for resettlement aid.Only atoken entry
would beneeded fortheother items which might beinvolved (cancellations
ofbalances remaining inrespect ofcontracts which have been performed
infull ,delayed legal commitments ,etc.).
3.Explanation
Itisdifficult toestimate therate ofcancellation inrespect of
resettlement programmes ,asitdepends onnegotiations with the governments
concerned .The estimated figure of3million ECUisbased onanaverage
rate for 1982 .
C'-"AFTER R3;REV ALUATION OF ASSETS AM)LIABILITIES
This chapter ,showing atoken entry ,isprovided torecord the net effect
ofchanges inexchange rates during the financial year .
CHAPTER R4:UNUSED RESOURCES FROM THE FINANCIAL YEAR 1980
This chapter ,showing atoken entry ,provides for anybalance regaining from
xhe funds ofthe previous financial year tobeentered asresources forthe
current financial year .
CIIA^EJ .R <5;EXTRAORDINARY INCOME
1.Lep-al basis
-A^reament of24June 1981 between therepresentatives ofthe Member States
(Luxembourg ,717"th Council meeting );
-Article 235ofthe EEC Treaty .

-43-
2,Nat -ure and .breakdown
This chapter contains theadditional resources intended solely forfinancing
aidinconnection with therestructuring ofthesteel industry (article B.2.2 ).
In1981 theMember States made national contributions amounting to
50million ECUtotheECSC forthis ;initspreliminary draft supplementary
andamending budget No2/81,theCommission proposed anadditional payment
of62million ECUfrom thegeneral budget (Chapter 54)«For1982 the
Commission 'sletter ofamendment tothe preliminary draft budget proposes
atransfer of50million ECUfrom Chapter 65(formerly Chapter 54)ofthe
general budget .
2.COVERING OFREQUIREMENTS MPT E?7TERED INTHE BUDGE T
Funds tocover requirements fortheconstruction ofsubsidized housing are
obtained from :
-theresources made available forthis inthe former ECSC pension fund ;
-the resources inthe special reserve .
1
These resources aremade upofthe interest paid onloans already made and
fresh appropriations allocated tothe special reserve .
Theallocation +0the special reserve ofthe additional resources required
will' bedecided when theCommission adopts thebalance sheet at31December 1981 .
3.SUMMARY OFPOSSIBL EORDINARY RESOURCES AVAILABLE FOR 1982
■M–I1UIPJ I– C–a–
The estimates oftraditional resources other than levies amount to78million ECU
(interest available =75million ECU ;cancellations =3million ECU).
Astheyield alav;-rate of0.01$ hasbeen estimated at4*52 million ECU ,
theyield obtained ,fr^m levies canbeestimated at140million ECU ,assuming
that thecurrent rate of0.31$ ismaintained .Thetotal ordinary resources
available for19^2 ,assuming that thelevy rate remains unchanged ,is
estimated atJ19million ^CU.The estimated resources are summarized in
Annex Dinthe section on"resources ".

-44-
III.DRAFT ECSC OPERATIVES BUDGET FOE 1982
A. COMMISSION APPROACH
The Commission 'sapproach ispredicated ,upon the following
considerations :
Tofinance the exceptional .social requirements tobecovered bythe
social measures for the steel industry ,special funds must continue to
beprovided . The Commission has already made proposals onthis inits
letter ofamendment tothe preliminary draft budget for 1982
(Chapter I§Cabove ),anditisnowforthebudgetary authority to
take appropriate action . The Commission would emphasize that ifthe
social operations concerned are tocontinue ,the necessary funds must
beavailable ingood time ,forthere isnoquestion ofthe ECSC 'sown
available funds being able tobear the new expenditure .
This last point isamply borne out trythe figures shown inthis paper ,
since ,ifthelevy rate remains at0.31$ ,applications foraidinterms
ofconventional requirements exceed all the ordinary resources available
tor58%.
For financing the requirements otner than those appertaining tosocial
measures ,the Commission recognizes that the very high level of
applications forreadaptation aid (atleast 117million ECU,and
proba.bly much more )raises avery difficult problem ,mainly because this
expenditure cannot beavoided .In 1982 the Commission will nevertheless
endeavour tocontinue financing the Community share ofaids for workers
under the agreements signed bythe High Authority and the governments .
With overall resources of218million ECU,assuming the levy iskept atits
present rate ,andtaking into account theother inevitable expenditure (administratis

-45-
expenditure fixed bythe Co-ancil under Article 20ofthe Merger Treaty
at5million ECU and aidfor coking coal fixed at6million ECU by
Commission decision under Article 95ofthe ECSC Treaty ),theremaining
funds available tomeet research andinterest subsidy requirements in
1982 would be218-(117 +5+6)=90million ECU.
Inthe present situation ,with the Community steel industry still
suffering from extraordinary difficulties ,the Commission considers thai
itwould bewrong toraise the levy rate above thepresent 0.31?S .
Amounts sot aside for research and for interest subsidies will therefore
have tobekept within the overall limit of90million ECU.
3.FZKA.N0I3TG PROPOSALS
The Commission 'sproposals forthe 1982 ECSC operating "budget are
tabulated inAnnex Dand are based onthe following factors :
–total funds of268million ECU ^including special funds of
50million under the social measures forstael ;
–unavoidable exper.iiiure of126million ECU tobecharged tothe
conventional renouro-B of218 million ECU ;
.5million ECïï asadministrative expendiiure ;
•V!7millioa EOussi-eadapta' /ìanaid ;
. 6aììlli^n EGU anaid tocckir ,?co:-.i ;
–90million HCTJtobeallocated toresearch expsndituxe andinterest
aubsiOi.es *
Asregards division ofthe -)Qmillion between the two Chapters concerned ,
the Commission considers that interest subsidies clearly deserve priority ,
especially inconnection with conversion ,given thedirect link with
the creation ofnew jobs ™Ittherefore proposes that this Chapter be

-46-
given 51million ECU,ofwhich 40million for conversion aids .
The amount left for research support thus shrinks to39million ECU
(from 44million in1981). Itisproposed that 17million bedevoted
tosteel ,13million tocoal and 9million tosocial research .
Given thepresent circumstances pfboth the coal andthe iron andsteel
industry the Commission iswell aware how regrettable itisthat the funds
allocated toresearch inthe ECSC Budget must bereduced rather than in­
creased ./ \
The cutback isdue tothe exceptional budgetary constraints resulting from
the Commission 'sobligations inthe social sector .
Although this cutback isquite the opposite ofwhat isreally needed ,the
Commission has been forced toaccept itfor 1982 ;butitregards itasmerely
temporary . ;
The Commission recently sent two communications tothe Council ,one ona
global strategy for Community scientific and technical research and the
Ν.
other onanenergy strategy .
Coal and steel research occupies avery important place irithese strategies •
and should ,inthe Commission 'sview,bereviewed inthis general context .
The Commission therefore intends tore-examine coal and steel research soas
toadapt itmore closely tothe requirements ofthe two industries .
1
Byway ofconclusion ,the Commission proposes toadopt the 1982 ECSC
operating budget atatotal amount of268 million ECU,broken down as
shown inthe Table inAnnex D.
» •[
- 1 ' j
Ittherefore proposes that the levy rate beset at0.31 /i.

C. DKAJ'TBUDGET
Thedraft budget established ,bytheCommission ,andamounting to
289million ECU ispresented inAnnex D.

-IMPLEMENTATION OFTHB ECSC OPERATIONAL BUDGET FOR 1980 -
REQUIREMENTS-BUDGET
FIGURESFINAL
FIGURESRESOURCES\in
BUDGET
FIGURESmEUA )
FINAL
FIGURES
OPERATIONS TO BEFINANCED FROM CURRENT
RESOURCES (NON-REPAYABLE )
1.Administrative expenditure
2.Aid toresettlement ,
(Article 56)
3· Aid toresearch
(Article 55)
3.1 Steel
3.2 Coal
3·3Social
4· Interest relief grants
4.1Article 54-Investment
4.2Article 56–Redevelopment
5· Aidtocoking coal -andmetallurgical
ooke (Article 95)
6.Surplus5
67
44
19
16
9
61.5
33
28.5
6,5
67
43.8
19
16
8.8
50.8
22.3
28.5
6
11.4RESOURCES OF THE FINANCIAL YEAR
1.Current resources
1.1 Levy yield (at0.31$ )
1.2 Interest oninvestments and on _
loans from non-borrowed funds
'1.3 Fines and surcharges for delayed
payment
I.4Miscellaneous 1
2.Cancellation ofcommitments which will
not now beimplemented *
3«Revaluation ofassets andliabilities
4»Unused resources carried over from
the financial year 1979
5.Drawing oncontingency reserve
6.Exceptional revenue (Decision ofthe
Member States of18September I980 )116.5
23
0.9
0.1
5
ì
10
.28
'II4.8 2
23 .
1.1
6.2
0.9
10
Γ 28 ' !
! !
183.5 184 183.5 184 ]
OPERATIONS FINANCED WITH LOANS
FROM NON-BORROWED FUNDS
7.Social housing 1 * 1--u' ! 10 · 10ORIGIN OF NON-BORROWED FUNDS
7»Special reserve and part ofthe
former ECSC Pension Fund
'10-
j
1
JCommission 'sbudget estimates at30October 1980.
661 000 EUA deducted ,for bankruptcies .

Α5ΓΜΞΧ Β
FORECAST 0UTT11L'.N OF THE
Rnrr :opkr /itYonai ,budget for 198 1
REOII TRravraiTTS
OPiiRATIO 1®TO ES FT¥ANCTCD F;'0M CURáEOT
RESOURCES íi-iCg-fíEPAYABLÍ": )
1.Admisnecrative oxnenôiture
2.Social expenditure
2,,].Aidtoresettlement (Article 56)
2.2 Social measures ii
connection with steel
resiruetuxinij-
3»Aid toresearch
(Article 'l1"))
3*1 Steel
3.2Coal
V^Snr-.i al
4«Interest relief grants
4.1 p.tmAnh
A.2Ci -,r:vp-ra i,-iri
5«Aid tocoking coal and
metallurgical coke(Article ^A]
(Article $6)
(Article 9^)
OPERATIONS I'INANCED WITH LOAUS FROM
WO?J-Rf)i?}Vf)WWT >MTWTK
6.Social housinafiud^t
Fi^ore
7^
A4
6
16?
11•7t.
19
16
q
7
2'5Estimat ed
rate of
imple -
m«v' +.a/t,irri
5
2^6
àâ
\2
Xt~ ^
1■i124
71?
19
16
9
7
25(inmEUA )
kESOURCESBudget
fisure
RESOURCES FOR THE FINANCIAL YEAR
.
3.
A.
5.
6.Current resources
1.1 Levy yield at0.31$
1.2 Interest oninvestments and onloans
from non-borrowed funds
1.3Fines and surcharges forlate payment
1.4 Miscellaneous
Cancellation ofcommitments which will
probably not beimplemented
Revaluation ofassets and liabilities
Unused resources carried over from the
1980 financial year
4*1 Interest subsidies
4 Other
Exceptional revenue
Drawing oncontingency reserve
ORIGIN OF NON-BORROWED FUNDS
7.Special reserve and part ofthe former
ECSC Pension Fund120
40
token
entrytoken
entry
2
token
entry
tokenentry
162
11Estimated
race of
impie –
mentation
127
40
25
10.7
0.7
112
7.6
323
11

-50-
Information relating tolevies
The latest available information onproduction and thelevy yield
forthecurrent financial year isgiven below :
Levy yield fortheperiod from January toJune 1981 (provisional estimate )
Product * (Production serving
asabasis for the
calculation ofthe
levy
inmillion tonnesLevy yield
,inmEUA
Brown-coal briquettes and
semi-coke 2.2
i,0.2
Alltypes ofhard coal 99.2 ■16.3
;Total for coal16.5
• ) '
Pigiron other than that required
forthemanufacture ofingots 2.0I
I
I
0.7
Steel ingots 63.2 34.1
Finished products 48.7 - 12.1 . -
Total for steel , 46.9
GRAND TOTAL 63.4

TT.rsin niT.m® RWRRT AT V DttCRMTiRT }IQftf )
ASSETS
1.Cash inhsndf balances with
central banks 5.8
2., Loans and advances tocredit institutions 548.2
-repayable ondemand 24.8
-with agreed maturity dates orperioda
ofnotice 523.4
3»Deb*securities held inportfolio 264.2
4«ü'¡-umrseä leans 5514.7
5»Ee^jo vprable isvilii a·cos -*sard
redemption premunì 72.7
ó.Bani· :deposits fer «".onda and coupons due
but not yet prAbciitsd for payment 55.4
7· Land andbuildings 0.3
8.Other assets 25.2
9· Accruals and deferred income 155.6
6642.1
The complete version ofthebalance sheet (with explanatory notes
Enrrniflan Hnrnmnvi -;+-iATOEX C
T.TA-RTT.TTTRK
1.Bonds and coupons due but not yet
presented for payment
2.Lone >-and medium-term debts
3.Other liabilities
4.Accruals and deferred income
5.Commitments for ECSC operating budgei
-Financial aid
-Other
6.Reserves
A. diiPTari+.Ge fiind
B. Snecial reserve
C. Former pension fund
7.Unallocated balance(in mEIJA )
55.5
5405.7
14.£
224.6
496.c
445.4376.1
119.:
260.c
143.5
41.9
0.]
6642.]
.11shortly bepublished inthe Official Journal ofth <

ArrKTmv T
■npiw opeir attotjat ,■Rrmrcrcr PGR 1Q82
A/1UM A V* A y(in n
REQUIREMENTS APPLICATIONS PROPOSALS RESOURCES PROPOSALS
OPERATIONS TO BE FINANCED PROM RESOURCES FOR THE FINANCIAL YEAR
RESOURCES POR THE FINANCIAL YEAR
(NON-REPAYABLE )- ·
1.Administrative expenditure 5 5 ν1.Current resour oes
2.Social expenditure '167 167 1.1Levy yield at0.31$ 140
2.1Aidtoresettlement (Article 56) 117 117 1.2 Interest oninvestments and
on 1nan ftfrom non-borrowed2.2 Social measures inV AA J·VUl&lw *AWlU A4V AA MV A AvnwV .
funds 75connection with
steel restructuring 50 50 1.3 Fines and surcharges forlate
3.Aidtoresearch (Article 55)121v w
39payment token entry
69I.4Miscellaneous token entry3.1 Steel 17
2.Cancellation ofcommitments which3·2Coal 40 13will probably not beimplemented 3
3.3 Social 12 .93.Revaluation ofassets and
4*Interest relief grants 75 51 liabilities token eniry
4.IInvestment (Article 54) 25 11 4.Unused resources carried over
4.2 Conversion (Article 56) 50 40from I98I token entry
5· Exceptional revenue5.Aidtocoking coal and
metallurgical coke (Article 95) 6 6 \
374 268 268
OPERATIONS FINANCED WITH LOANS " ORIGIN OF NON–BORROWED RJNDS
6.Social housing 15 15 6.Special reserve andpart of
former ECSC Pension Fund