ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(78)290
Vol.1978/0106

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenne etdelaCommunauté européenne del'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiés conformément àl'article5dudit
règlement.
Inaccordance withCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
Community andtheEuropeanAtomicEnergyCommunity (OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocuments inthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung (EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeit zugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(78)290final.
Brussels,21June1978.
Stateofadvanceofworkinrespectofthe
GeneralObjectivesSteelandtherestructuring ofthe
Communitysteelindustry-Information forthepreparation of
theCouncilof27June1978
CC;.I(78)290final.

State ofAdvance ofWork
inrespect oftheGeneral Objectives Steel andtherestructuring ofthe
Community steel industry .
TheCommission attaches great importance tothedefinition ofthe
newGeneral Objectives Steel 1980 ,1985 and1990 insofarasthey ought
toconstitute ,asspecified attheCouncil of22December 1977 »thegen­
eral framework within which therestructuring oftheCommunity steel
industry will bedelineated .
Afirst draft ofthese Objectives wasprepared during April ;it
primarily covers thedetermination ofthe steel demand andtheadaptation
ofproduction plant tothelatter inquantity terms .Theother chapters –
namely those onrestructuring ,theimprovement ofcompetitiveness ,the
labour requirements andtheproblem offinance –cannot bevalidly treated
until after the discussion ofthe basic orientations .
TheCommission ispresently consulting thevarious interested
parties onthis draft .Todate theGovernment experts andthe steel
industry representatives have been requested togive their opinions onit.
Thetrade unionists ,consumers andmerchants will beconsulted before the
end ofJune .
Thediscussions which have taJcen place uptonowhave resulted in
asubstantial degree ofagreement onthemedium-term development ofthe
demand for steel products .TheCommission andthe steel industry ,conscious
oftheinauspicious outcome onthemarket oftheexistence ofexcessive
stocks inrelation totheforecast level ofeconomic activity ,areofthe
opinion that theevaluation ofdemand forsteel products should correspond
tonormal market requirements .Inother words theCommunity steel industry
should avoid theintroduction initsforecasts ofproduction capacity the
coverage ofpeak demands ofshort duration which essentially result from
thebuild-up ofspeculative stocks .
Thus the internal demand for steel has been determined onthebasis
oftwopossible scenarios ontheaverage development insteel consumption
–namely anassumption ofmoderate economic growth corresponding tothe
lower limit andanassumption ofamore favourable economic growth which
canbedistinguished from theformer byahigher rate ofdevelopment of

nationalproductandastructureofthelatterwhichistetteradaptedto
ensureasteadygrowthinsteelconsumption (largershareofgrossfixed
capitalformationandoftheconsumption ofconsumerdurablesinthe
nationalproduct).
The"balanceofCommunityexternaltradefortheforthcomingyears
takesintoaccountabetteradaptionoftheCommunitysteelindustryto
theconditionsofinternational competition.
Thefirstresultsindicatethattherecordlevelofproductionin
1974willonlyhereached(inthecaseoffavourableeconomicdevelopment)
formostproductsin1935*
Promtheseestimates,eventhoughtheyareprovisional ,wecan
disengagetheorderofmagnitudeoftherationalization measures.On
thissubjectitisimportanttonotethattheCommissionandthesteel
industryareconsciousthatasufficientprofitability ofthecompanies
demandsarigorousadaptationofsupplytodemand.However,theproblem
remainsinduecoursetodefinethemodalitiestoachievethisaim.
Thaisforcrudesteelandonthebasisofafavourable economic
development ,theproductioncapacityexistingin1978exceedsbymorethan
25millionthecapacitynecessarytocovertherequirementsin1983(an
excessofcapacityofaround13%).
Atthelevelofrolledproducts,thecomparisonofcapacities
existingin1978andestimatedrequirementsfor1983showsuptothe
presenttimesignificantexcessesofcapacitiesforalmostallofthelong
productsand,amongtheflatproducts,mjaorovercapacities inheavyand
mediumplate.Fortherollingmillsintotal,thesurplusisabout25
milliontonnesorabout15%ofcapacity.
Thustheproblemoftherestructuring policytobefollowedbythe
Communitysteelindustryisonlyoneofthereadaptation ofplanttothe
conditionsofinternational competitiveness .Itdemandsalsoamajor
efforttobalancesupplyanddemand,anecessaryconditionforthe
re-establishment ofasatisfactoryprofitability oftheCommunityproducers.

3
The steel industry hasalready made anumber ofadjustments
inthelast fewyears which have meant that actual capacity
in1978 works out 10million tonnes lower (202million tonnes
asagainst 212million )than forecasts three years agohad
indicated .Inview ofthe foregoing ,afurther cutback ofsome
25million tonnes ofcrude steel appears tobeneeded right away .
Howthis istobeeffected (shutdowns without replacement ,
putting plant onice ,&c.)will need tobedetermined after
discussion among all parties concerned .
With this inprospect ,theCommission inmid-May embarked
onaseries ofbilateral discussions with all the steel enterprises
inthe Community ,inorder toestablish from their medium-term
programmes the impact ofintended closures and investments on
thedevelopment ofproduction capacity ,ontheproductivity ofthe
Community steel industry and onlevels ofpersonnel employed .
The Commission 'smain object inthese talks ,which will be
continuing intheweeks ahead ,istoensure consistency between
thevarious individual intetions and theGeneral Objectives for
Steel .
Butalthough several expressions ofintention tocutback
capacity were voiced atthe talks ,the trends that emerged were
still highly disquieting ,notwithstanding the substantial
rationalizations contemplated ordecided oninsome major
Community steel-producing areas .
Thus excess capacity inlongs isinsome cases meaning
theswitching ofinvestment programmes totherationalization
and expansion offlats and special-steels capacity ,likely to
result inmerely shifting theproblems ofovercapacity .
•••/•••

V*4.
Moreover,enterprises areforthemostpartlinkingtheir
rationalization drivetotheprincipleofcounterbalancing ,
whichdoesoftenmakeitpossible 3toprunesomesurplus
capacitythroughmoreefficientutilization ofplant,but
intnefinalanalysisyieldsadecidedlyinsufficient cutback
overall.
Drasticcutbackswithoutreplacement ,andthescrapping
ofexpansionschemescurrentlyplannedbytheenterprises ,
therefore remainessential.
Onthebasisofthecorpusofmaterialithasassembled
todateandofitsongoingdiscussions withtheenterprises ,
theCommissionwillfirstendeavourtoconsiderwiththeMember
States*Governments ,productcomplementarities betweenCommunity
enterprises ,withaviewtoachievingbyappropriate means,including
exchangesofschedules,indueobservanceoftheECSCTreatyrules,the
mostcompetitive production fromthehighest-performance plant.
Therestructuring policy,involvingasitbasicallydoescutbacks
incrude-steelcapacity,musttakeaccountofregionalandnational •
socialsituations ,andnotjeopardizetheoperationofthemost
competitiveplant.Forthesystemtowork,ilwillbenecessarythat
allconcerned,theGovernments andMemberStatesandthesteelenterprises ,
shouldadheretoitandthattheworkers *representatives shouldbe
consulted.TheCommissionforitspartwilldeploythearmouryatits
disposal,namelyitsopinionsoninvestmentprojects,theregulation -
ofaidandtheECSCinvestmentassistancepolicy.
TheCommissionisespeciallyalivetothefactthat
forarestructuring policytosucceedtherewillneedtobe
launchedatthesametimeareconversion policyofcreatingall
possiblealternative employment.Itcanhardly,
however,giveanysufficiently clearindication nowasto
thenumberofjobswhichwillbeaffected:notuntilthe
mainlineofapproachoftherestructuring processareknown.
InthisconnectionitwilldrawupforthetwosidesofECSCindustiy
ananalysisofthesooialrepercussions ofthesteelorisisandtlie
Communityfacilitiesavailablefortacklingthem.