ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (77)570
Vol.1977/0185

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)570 final
Brussels ,15November 1977
Λ
C^A• A
Ar.''-R\. -;-5\ .:I -–A
MEMORANDUM .
.on
thefinancial aidawardedbythe
MemberStatestothecoalindustry
in1977
CQM(77)570final

ISTOFCONTENTS
Page
CHAPTER 1
Introduction
CHAPTERII
Thesituation onthecommonmarketincoalin
1977andthetrendsinfinancial aidtothe
coalindustry 3
1.Thesituation onthecommonmarketincoal 3
2.Thefinancial situation oftheundertakings 6
3.Thetrendsinaidsin1977 7
4.Thecompatibility oftheaidsenvisaged in1977
withtheproperworkingofthecommonmarket 9
CHAPTERIII
Conclusions 13
Annex
Description ofthemeasures envisaged for1977and
examination oftheircompatibility withtheprovisions
ofDecision No528/76.
I.Aidsnotconnected withcurrentproduction A/1
II.Aidstocurrentproduction A/8
Tables
3

CHAPTER I
INTRODUCTION
1.Thismemorandum examines thefinancial aidawardedtothecoal
industry bytheMemberStatesin1977fromthepointofviewof
itscompatibility withtheprovisions ofCommission decision N°523/76
1
ECSC andwiththeproperfunctioning ofthecommonmarket.
2.The1977memorandum follows adifferent patternfromthatofprevious
memoranda ;.Thischangewasmadenecessary bythefactthataidsper
tonnehaveincreased intheMemberStatesandproducers areholding
largestocks,whichmeansthattheremustbeaparticularly careful
examination ofthecompetitive situation,soastopreventaidsfrom
disturbing theproperfunctioning ofthecommonmarket.TheCommission
hasconsulted individual undertakings abouttheproblemstheyarefacing
Theinformation thusgainedhasbeenusedinevaluating aidsfromthe
viewpoint oftheireffectiveness inrespectofcompetition .Forthis
reasonthemainpartofthedocument isdevotedtotheeconomic and
financial problems oftheundertakings andthecompetitive situation
onthecoalmarket.Onthebasisofthesefactsthecompatibility
ofaidstocurrentproduction withtheproperfunctioning ofthecommon
marketassetoutinArticle 3(1)ofDecision N°528/76isexamined .
InanAnnextheindividual aidmeasures aredescribed,ashasbeen
customary,andtheircompatibility withtheotherprovisions ofDecision
N°528/76examined .
3.UnderArticle 2ofDecision N°528/76,theCommission received
information regarding aidmeasuresfor1977fromtheGovernments of
thefollowing MemberStates:
-theGermanGovernment ,'
inaletterdated6January 1977;
-theFrenchGovernment ,..
inaletterdated12January1977;
-theBritish Government ,
inlettersdated16January,
3March
1April1977.
1-, :T.._Official JournaloftheEuropean Communities N°L63of11.3.1976 ;p.1.

-thefatherlands Government ,
inaletterdated14January 1977
~théLuxembourg Government ,
inaletterdated13December 1976
-theDanishGovernment ,
inaletterdated26November 1976
-theIrishGovernment ,
inaLetterdated31January 1977
-theBelgian Government ,
in'lettersdated27Mayand8August1977
WheretheCommission obtained knowledge fromthereportsofMemberState
Government ofeconomicfactswhicharecoveredbytheobligationofpro­
fessional secrecyassetoutinArticle47oftheECSCTreaty,thesewere
notincluded inthismemorandum .
Incalculating theamountofaidpertonnefor1977,thefollowing output
wasusedasabasis(millions oftonnes,tonne-for-tonne):
Forconverting theaidamountsexpressed innational currencies into
Europeanunitsofaccount,thefollowing exchangerateswereused:Germany
France
Britain
Belgium94.5
21.0
122.0
7.0
Total 244.5
1EUA 2.68DM
5.57FF
0.65-L
41.00Bfrs
TheCommission 'sconclusions aresetoutinChapterIII.

-3-
CHAPTER II
Thesituation onthecommonmarketincoatin1977andthe
trendsinfinancial aidtothecoalindustry
1.Thesituation onthecommonmarketincoal
Thismemorandum dealsonlywiththemostsignificant detailsofcoalmarket
developments ,specifically thosewhichareofimportance forthegranting
ofaidsandthecompetitive situation .Thefiguresgivenrefertothecurrent
yearandaretherefore estimates .
Thetotal1977demandforcoalisnotexpectedtobesubstantially higher
thanthe1976demand.Somechangesaretobeexpected inthestructure of
thisdemand,sincethedemandforpowerstationcoalislikelytoincrease j
slightly,whilethecoke-oven requirements willremainunchanged andare­
ductioninthedomestic coalsectoristobeexpected.Consumption ofin­
dustrial coalwillpresumably increase somewhat.Changesindemandare
runningparallel inallCommunity countries and^erelatedtothedifficul-j
tiesexperienced bythesteelindustry (cokingcoal)andtherisingoverall
consumption ofelectricity ,tomeetwhichthereislikelytobeincreased
generation ofelectricity usingsteamcoal.
Itshouldbepointedoutthatthedemandforcoalisnottheresultoffree|
competition withotherenergycarriers.Energyconsumption expanding rela- •
tivelyweakly,thereareunusedrefinery capacities intheoilindustry,
coalproducers havelargestocksontheirhands,coalimportsfromnon-
Community countries arelikelytocontinueincreasing andmorenaturalgas '■
andnuclearenergyisbeingputontheenergymarket;allthesefactslead
onetoexpeetstrongercompetition whichtheCommunity coaIproducers cannot !
facewithnothingbuttheirownresources .Thismeansthataidsandprotec­
tivemeasureswillagainbeneededtostrengthen thecapacity ofCommunity
coaltocompetewithotherenergycarriers,ortomakeitpossibletosell
itatall.

p-y '.s"»ntneinterests c?theCommunity'sLon^-ter-'titr.srgy
plans,i,e.stabilization ofComiT/unityproduction .
Itisofimportance fortheproblems ofthecoalmarketin1977thatthe
overalldemandforcoal,whichisremaining stableascompared with1976,
canbemetfromthreesources :
-thecurrentproduction ofCommunity coal;
-thelargestocksofCommunity coal;
-importsfromnon-Community countries .
Forecasts bytheGovernments oftheMemberStatesshowthatcoalimports
fromnon-Community countries willincreasein1977,mainlybecauseofthe
increased useofsteamcoal.AsregardsCommunity coal,someincreases in
stocks-insofarasincreases aretechnically possible-and/oradecrease
inproduction aretobeexpected .
Underthesecircumstances itcanbeforeseenthotitisgoingtobevery
difficult toobtainacceptance ofhigherpricesforCommunity coalto
offsetrisingproduction costsin1977-withallthatthisimpliesforthe
financial situation (failuretocovercosts)oftheminingcompanies .How­
ever,therearetwoexceptions :
-British steamcoalisrelatively well-placed t.jcompetewithfueloil.
-Underthethirdelectricity-f rom-coaIlaw,Community steamcoalcanbe
soldtoGermanpowerstations atbreak-even prices.Theextracosts
incurred bythepowerstations inbuyingcoalinsteadofoilareoffset
fromafundmaintained bylevies.
Atthesametime,itmustbepointedoutthatpricesontheCommunity's
steamcoalmarketarenotsomuchinfluenced byfueloilascoming
increasingly underpressure fromimported steamcoal.

PolishandSouthAfrican steamcoalisbeingofferedatbetween £30and
i35cifEurope.Thesepricesarefarbelowthepric^offueloilornatural
gasandhavethrownthefuelmarketintoturmoil.TheCommunity'scoalin­
dustryisfacedin1977withtheproblemofholdingitsowninthemarket
byadjusting ftspricesinresponsetospecific circumstances soastomeet
dropsinpricescaused byimported coal.
Pricesarealsoonthemoveonthecokingcoalmarket.InOctober 1976the
Commission notedanaveragepriceof£63.80pertonneforcokingcoal
supplied byAustralia andtheUSAunderlong-term contracts ;inthemeantime
thepricehasgonedownto$62.00pertonne.Furthermore ,anumberofim­
portershavemanagedtoputcokingcoalonthemarketatapricecf&50per
tonne,havingobtaineditundershort-term contracts .Althoughthereisa
limitedamountofthischeapcokingcoal,ithasupsetthemarketinthe
samewayashappened withsteamcoalandcausesthewell-known difficulties
whichtheundertakings findindefending themarketagainstpricedrops.
Pricesfordomestic coalarealsoundersomepressure .ThesupplyofCommu­
nityanthracite isonthedecrease,becauseitisnolongerprofitable to
mineit,whileimportedanthracite -primarely fromRussia-issocheap,
particularly intheBeneluxstates,thatitisabletocompetewithlight
fueloilandnaturalgas.
Thereiseveryindication thatin1977excesssupplies ofCommunity coal'
willbeavailable ontheCommunity marketandthatpriceswillcomeunder
pressure notonlyasaresultofthissituation butalsobecausetherecould
bestronger competition fromotherenergycarriers .Asregardsoilandnon-
Community coal,itshouldbenotedthatnotonlypricesbutalsochangesin
currencyparities mayexertadecisive influence onthecompetitive situa­
tion,sincethepricesoftheseimported energycarriersarecalculated in
USdollars.

It;viewc-fthecompetitive situation ontheCommunity coalmaricetdes­
cribedabove,theminingundertakings willfind3:opeforpriceincreases
in1977onlyinsomecasesandunderspecialcircumstances .However,it
maysafelybeassumedthatproduction costswillcontinuetorisein1977 ™
Theincreasewillvaryinindividual countries depending ontheinflation
rate.However,itmaybeassumedthatforallminingundertakings inthe
Community thediscrepancy betweentheriseinoutputpermanshift andin
wageswillmeanincreased costs.The1977increase inoutputpermanshift
isunlikely toexceed aratewhichmayaverage 3%fortheCommunity .Wage
increases -however suchtheymayvaryfromcountrytocountry-willcer­
tainlyexceedtheincrease ino.m.s.and,inviewofthehighlabour-
cost-intensity ofcoalmining <60%ofthetotalproduction costsare
labourcosts),theincrease intotalproduction costswillprobably ex­
ceedthegeneralinflation rate,i.e.therewillbeincreases inreal
costs.
In1976thereturnsfromcoalsalesonlypartially coveredproduction
costs.
Table A ■
1 ,.Production costsandreturnsofCommunity coalminesin1976
EUA/t(tfort)
.i
IProduction costs Returns Difference
Germany 51.- 47.- -4.-
Belgium 72.- 43.- -29.-
France 56.- 38.- -18.-
IBritain30.- 29.-' I
1fullcosts,including capitalservice anddepreciations ;rounded-off
figures;
2.including opencast mining
Whatwithrisingcostsandsmallroomforpriceincreases,thefinancial
situation oftheminingundertakings isboundtodeteriorate in1977.
Thelogicalconsequence ofthisisthattheywillneedlargersubsidies .

-7-
3.Thetrendsinfinancial aidbytheMemberStatestothecoalindustry in
1977
AidsgrantedunderArticle4and5oftecision N°528/76arecompatible with
thecommonmarket,provided theydonotexceedcertainlimits.Aidsunder !
IArticle4areforsocialsecuritybenefits andthoseunderArticle 5to j
helpcoverinheritedliabilities .Therelevantexplanations aretobefound J
intheAnnexonpagesA1toA8.Suchmeasures aretherefore notincluded
intheexamination oftheproperfunctioning oftheCommonmarket.Thefi­
guresareinTable 1oftheAnnex.Theyshowthat,incocparison with1976,
aretheresomeconsiderable increases in1977.Asregardssocialmeasures within
themeaningofArticle 4,theincreases aremainlytheresultofthecon­
stantlydeteriorating ratiobetweenemployed andthosereceiving unemploy-
benefits.Theriseinthecostofcoveringinherited liabilities withinthe
meaningofArticle 5ispartlytheresultoffurtherpitclosurebecauseof
rationalization andpartlyofincreased pricesandcostsinsomecategories
ofinherited liabilities (costsforclosures,watersupplyanddisposal of
wastewater,freedelivery ofcoaltoworkers,etc.).
Aidstocurrentproduction arethosedirectandindirect measures whichare
definedinArticles 7to'12ofDecision No528/76andwhichprovidethe
criteria injudgingtheproperfunctioning ofthecommonmarket.Detailsof
thesemeasures andwhattheycostareavailable intheAnnex(pageA8onwards
orTable2. ' i
Comparing developments in1977withthosein1976,weseetheMemberStates
expectthefinancial situation oftheminingundertakings todeteriorate and
haveincreased aidsumsaccordingly (seeTableB).

Table3
Aidstocurrjr.;•?-eduction
I *"ot3Lsums jA-nounts De1çonne I
llien EAU cUA
_J 1976 1977 I'976 j1977
|Germany " I!223~5!S373.6 2-32 3.95
!Belgium 177.6 215.3 24.67 30.75
jFrancei312.2 415.0 14.26 19.77
IBritain !25.3 !59.1 !0.21 0.48
j CommunityI739.1 i
I i11063.0|2.98|4.35
ofthetotalsuns
thefollowing were
allocated to:
I-directmeasures 37.0 58.5 0.15 0.24
|-aidstocokingcoal j49.7 233.0 0.20 j0.95
I-indirect measures !652.4 771.5 2.63L_3.16
Ibreakdown :Art.7(Investments ) 110.8 !94.6 0.45Γ0.39
j Art.8(Personnel) j43.8•Ii46.9 0.17 0.18
i Art.9(Stocks) 29.2 !I*6.6 0.12 0.07
i Art.10(Strategicreserves) j27,6 Ii44.8 0.11 0.18
j Art.11(Powerstationcoal)i10.89
i"0.04
jArt,12(Losscoverage)441.0 |i557.8 i1.78
iL2.28
Thesefigures showthatitismainlythecokingcoalaidsandtheaidsfor
covering operating losseswhichhaveincreased .Theyalsoshowthatthedifference
betweentheproducing countries asregardstheamountof?idpertonnegranted
haveincreased .Belgian andFrenchaidsareunusually highincomparison with
thoseinGermany andBritain.Thesumof3.96E'JApertonneforGermanyinthis
international comparison following theprovisions ofDecision No528/76is
correctstatistically andaccording tothedefinition ,,butithasonlyalimited
vailidity forasubstantial comparison withtheotherCommunity countries .This
isduetothethirdelectricity -from-coollaw,which'.aysdownthatGermanpower
stations «ustbuysteamcoalfromthecoalindustry atbreak-even prices.

-9-
Theadditional cost,incurred bytheelectricity companies byusingcoal
insteadofoilisoffsetbyincreasing electricity ppices.In1976thisoffset
amount wassomeDM1.5thousand million (=5.37EAU/tcoaloutput).Thissumis
notincluded inthelistofaids,sinceitisnotastateaid.
Theinformation contained inChapterIIoftheAnnex(seepageA/8)showsthat
thefinancial measures planned bytheMemberStatesfor1977arecompatible
withthecriteria setoutinArticles 7to12ofDecision No528/76.However,
itisnecessary thatallaidsbeexaminedforcompatibility withtheproper
functioning ofthecommonmarketassetoutinArticle3(1)ofDecision No528/76
4.Compatibility ofthefinancial measures plannedfor1977withtheproper
functioning ofthecommonmarket
(a)Generalpointsofview
(a.1>Theaidamountspertonnefor1977citedinTableBonpage8show
thattheGermanandBritish amountsarerelatively smallandthat
thereisaconsiderable gapbetweenthemandthosegranted byBelgium
andFrance.Thisdifference inamountisnottoberegarded asindi­
catingadistortion ofthecompetition betweenthecoalproducers .
Essentially ,thecommonmarketincoalconsists ofgeographically
separatedsub-markets whicharenotsubjecttocompetition fromseveral
Community producers .Thereareonlyafew"contested "areasinwhich
severalproducers offertheirproducts atthesametimeandthe
quantities ofcoalsoldintheseareasarerelatively small,accoun­
tingforonlyabout 2%ofoutput.Alignment byCommunity producers
onthepricesofotherCommunity producers appliesonlyto2.7million
t,1.1%ofCommunity output,in1976.Inviewofthis,itcannotbe
stated ,thatcompetition isbeingdisrupted becausetherearesuch
differences intheamountofaidgranted.Thereare,however,problems
inindividual cases,aschecksbytheCommission showed;remarks on
thistopicfollowunder(b).

~·η·■<■
<*.,-r :'■-'I toI:5'.^f^nuji-nt/in197?'~,c:bs; c-s
?:s.' ;•.'■;v'«•-&^'T.: 1977as-parto'\r.w-o.k-;[/\zbtz;o<-
k111f\>vc,•;-wfi'luiencttensupplies.TheUrgepithead s-.ccksandcu."r°sat
proJucs/ionprovideabsolute security ofsupply.Thoughproduction will
bereducedInswecasesbyintroducing short-time working ,.thisisbeing
doneonlytoslowdownthegrowthofstockpiles .Itmaytherefore besaid
thataidswillnotaffectsupplyin1977.
(a.3)According totheforecasts therewillbenonoticeable changeinthe
volumeandstructure ofcoaltradewithintheCommunity in1977.Thetotal
volumein1977-asin1976-willamounttosome15milliontonnes.The
largestshareofthiswillbeaccounted forbyGermancokingcoaldelive­
riestootherCommunity countries .
Table C
Coaldeliveries tootherCommunity countries 1000t
I
Germany Belgium France Britain TotaI
1976 12585 310 550 1555 15000
1977 12540 300 475 1730 15045
Deliveries ofGermancokingcoaltootherCommunity countries arecloselyre­
latedtothesituation inthesteelindustry .Becauseofthespecificsuitabili­
tyofthiscoaltherealcompetitive problems arenetbetween Community produ-
vers.butinrelationtocokingcoalimported intotheCommunity .
BelgiansteamandhomecoalissoldinFranceandGermany.Theamountsaresmall
andhavetocompetewithcoalimported fromnon-Community countries .

-11-
Franceexportsmainlysteamcoal,predominantly fromLorrainetoSouthern
Germany.TheCommission foundthatthereweresomepriceproblems inconnection
withthesedeliveries in1976,whichweresettledin1977(see(b.4)).
Britainexportssteamcoal,mainlytoGermany,Belgium,FranceandtheNether­
lands.InthelightofoverallBritishproduction ,theseexportsarerelatively
smalland,inviewoftherisingimportsofsteamcoalfromnon-Community coun­
tries,itmightwellbeaskedwhythisrelatively cheapcoalhasnotbecomemore
firmlyestablished onthecontinental market.Thisquestion cannotbeanswered
bypointingtodistortions ofcompetition withotherCommunity producers .In
GermanythesaleofBritishsteamcoaltopowerstations nearthecoastdepends
onthepressure ofcompetition fromnon-Community coal.Asregardstheconclu­
sionoflong-term supplycontracts andtheapplication ofthethirdelectricity -
from-coal law,itmustbepointedoutthatthislawappliesnotonlytoGerman
coalbutalsotocoalfromotherCommunity countries .IntheotherCommunity
countries Britishcoalissubjectexclusively tothestrongcompetition of
imported non-Community coal.PricesforSouthAfrican,Australian andUSsteam
coal,cifEurope,are33-34S/t.Powerstations inFrance,Belgiumandthe
Netherlands demandthatBritishpricesbebrought downtothatlevel,butthe
Britishproducer isnotalwayspreparedtodothis.Contracts orsalesare
therefore relatively rare.
Generally speaking,theconclusion cantherefore bedrawnthataidmeasures
havelittleinfluence onintra-Community trade.'
a.4)Rationalisation ofoutputistobeachieved in1977bytwoformsofaid:a
numberofnon-viable pitsaretobeclosedinFrance'sNord/PasdeCalaisand
Centre-Midi coalfields ,thepaceoftheclosures beingsoarrangedthatregional

and p:„''M.bs applies -toclosure ?,mSo;;1';-.-
Eels"y:;u In arebeinggrsntedtoenaivUjnc^Tt^r^.-
tomodernize thepits.ALLthesemeasures servetorationalize Community co&i.
output,freetheCommunity fromtheburdenofunprofitable pitsandmaintain
inacompetitive condition thosepitswhichhavebeenchosentoprovidefuture
supplies.
(b)Particular aspectsaffecting thetrendincoalprices
(b.1)Changesincoalpricesinanumberofselected Community coalfields can
beseeninthefollowing table.
Table D
Trendincoalpricesinnational currency perTonne
r Date Steamcoal CokingcoalL_1.9.76 1.3.77 1.9.76 1.3.77
Germany
RAG
Saarbergwerke
AachenDM
DM
DM157.50
173.00
157.00157.50
173.00
157.00165.50
180.00
167.50165.50
180.00
167.50
Belgium Bfrs2450.00 2450.00 1.6.76
1.7.76
1.1.772350.
2150.-f
2050.-
France Date 1.9.76 1.4.77 1.9.76 1.4.77
Nord/Pas-de-Calais
Lorraine Nuts2
Nuts5FF
FF
FF235.00
209.00250.CO
222.50320.00
338.00
I340.00
360.00
Britain Date 1.9.76 1.3.77 1.9.76 1.3.77
NorthYorkshire
Nuts2
Nuts5!
■t
j.fcj
22.05
19.9825.35
22.9825.10 28,85
1Long-flame coalnuts5
2Agreedpriceforsalestothesteelindustry

-13-
Asthetableshows,coalpricesremainedstableonlyinGermanybetweenthe
autumnof1976andtheearlypartof1977;theywentupinFranceandBritain,
whilethepriceofcokingcoalinBelgiumfell.
(b.2)Asprovidedforbythethirdelectricity-from-coaIlaw,Germansteamcoal
pricesarelinkedtotheproduction costsoftheminingindustry andare
higherthanthepricesforheavyfuel/oil.Therearenoindirect aidsto
industrial coalconsumers .
PricesforGermancokingcoalarethesameasthoseofimported cokingcoal,
sothattherearenoindirect aidstoindustrial consumers .
<b.3)Noproblemsareexpected in1977withthepricesofBritishsteamandcoking
coal;theyareunlikely tobringaboutindirect aidstoindustrial coalcon­
sumers.
(b.4)Frenchsteamcoalissoldatpricesaligned onacomposite priceformedfrom
therelatively lowpriceforimported non-Community steamcoalandtheprices
offueloil.Therearenoindirect aidstoindustrial coalconsumers .Thesame
appliestocokingcoalprices,whicharethesameasthoseforimported coking
coaI.
W6TGTheCommission foundthattheresomedifficulties in1976inconnection with
salesofFrenchsteamcoalontheSouthGermanmarket,whereLorraine coalis
incompetition withSaarcoal.InsomecasesthepriceofFrenchsteamcoalwas
slightly lessthanthatofGermanfueloil.Stepsweretakentoseetoitthat
in1977theundertakings inquestion wouldnotundercut fueloil.

1}'.£CO'Tii'iliS3\OHi"(33ciL30b-v-c^C0<^ :;'i0JViO<J6 \'>(O d'i<T1CUI1'1633f'>■■s1f"-c
fromthesaUsoffrsochindustrial cckefromtheCentre-Midi coalfield on
theItalianmarket.Thenegotiations withtheparties concerned werestill
goingonwhenthismemorandum waswritten.Shouldtheybeunsuccessful ,the
Commission reserves therighttotakeappropriate measures .
(b.5)AsprovidedforbyBelgium'senergypricepool,thepricesofBelgian steam
coalarebasedonthoseofrivalfuels.Thismeansthattherearenoindirect
aidstoindustrial coalconsumers .
Asfrom1January 1977thepriceofcokingcoalfromtheCampinefieldwent
downfromBfrs2150pertonnetoBfrs2050(seeTable D).ThepriceofBfrs
802050pertonneisBfrsbelowthecifpriceofUScokingcoalonthebasis
oflong-term contracts *Thissituation isthesubjectofnegociations between
theCommission andtheBelgian Government .Since&loss-covering subsidyof
Bfrs3100.2million wasgrantedfortheCampinefieldin1977onthebasis
ofDecision No528/76andacokingcoalsubsidy o."Bfrs2700.0wasrequested
inaccordance withDecision No73/287,theCommission takestheviewthat
theaidsrequested underDecision No528/76canbeapproved,butthatexamina­
tionofcokingcoalproblemsstillunderwaycaninnowaybeprojudiced .The
Commission therefore reserves therighttoreturntothematterofapproving
loss-covering subsidies fortheCampinefieldifnecessary .

(c)Conclusions abouttheproperfunctioning ofthecommonmarket
Onthebasisofthepreceding factstheCommission hascometo*thefollowing
conclusions :
-GermanandBritishcoalpricesarenotexpectedtodisturbtheproper
functioning ofthecommonmarketin1977.
-ThepricesofFrance'sNord/Pas-de-CalaisandLorrainecoalfields are
compatible withtheproperfunctioning ofthecommonmarket.Theprices
ofcokesupplied totheItalianmarketbytheCentre-Midi fieldrepresent
adisruptive factorwhichmaycausetheCommission totakeappropriate
measures . '' "i■
-Belgianpricesforsteamcoalarecompatible withtheproperfunctioning
ofthecommonmarket.TheCommission intendstocontinuenegotiations with
theBelgianGovernment onthecokingcoalpricesoftheCampinecoalfield .
TheCommission reserves therighttoreturntothematterofapproving loss-
coveringsubsidies fortheCampinefieldifnecessary .
CHAPTER III
Conclusions
1.Predictions regarding thesituation ontheCommunity coalmarketin1977
indicate adeterioration intheCommunity miningindustry'sfinancial re­
turns.Stagnating sales,littleincrease inproductivity ,largepithead
stocksandrisingproduction costswillmeanhigheroperating lossesthan
lastyear.Theresultisthattheamountofaidtobegrantedforcurrent
production intheCommunity hasrisenfrom739million EUAin1976to
1063,0million EUAin1977;theCommunity averageofaidpertonneof
production rosefrom2.98EUAto4.35EUA.

-16
Thedifferences betweentheaidsumsgranted bythecoal-producing Member
Stateshaveincreased .
2.TheCommission examined thecompatibility ofthemeasures envisaged for1977
withtheprovisions ofDecision No528/76ineachMemberState,comingtothe
following conclusions :
-Theaidsenvisaged forthe6ermanandBritishminingindustries 1current
production arecompatible bothwithArticles 7to12ofDecision No528/76
andwiththeproperfunctioning ofthecommonmarketassetoutinArticle 3
ofthatDecision .
-Theaidsenvisaged forthecurrentproduction oftheFrenchminingindustry
arecompatible withArticles 7to12oftheDecision,buttheproperfunc~
tioningofthecommonmarkethasbeendisrupted bydifficulties arising frcm
salesofFrenchindustrial cokeontheItalianmarket.Asregardsapproval
ofaidfortheCentre-Midi coalfield,theCommission reserves therightto
takeappropriate .measures.
-TheaidstotheBelgiancoalminingindustry arecompatible withArticles 7
to12oftheDecision,but-becauseoftheunsolved problemoftheCampine
coalfield'scokingcoalprices-theCommission reserves therighttoreturn
tothematterofapproval ofloss-covering subsidies fortheCampinefield,
ifnecessary .

ANNEX
Surveyoffinancial aidawarded bytheMemberStatestothe
coalindustry in1977
Examination ofthecompatibility ofthemeasures envisaged with
theprovisions ofDecision No528/76/ECSC
Tables

A/1
Aidsnotrelatedtocurrentproduction
Theseaidsarerelatedtosocialmeasures andthecovering ofinherited
liabilities deriving fromearlierpitclosures .
A.Description andassessment offinancial measures inthesocialsecurity
field
Article 4ofDecision No528/76/ECSCstatesthatcontributions byMember
Statestothefinancing ofsocialsecuritybenefitsshallbeconsidered
compatible withthecommonmarket,providedthat,forundertakings inthe
coal-mining industry,theybringtheratiobetweentheburdenperminer
inemployment andthebenefits perpersoninreceiptofbenefitintoline
withthecorresponding ratioinothersectors.
Thefollowing sectionisconcerned solelywiththeamountoffinancial aid
giveninthesocialsectorand,whereappropriate ,withcaseswherethe
limitssetoutinArticle 4ofDecision No528/76/ECSChavebeenexceeded .
A,,)GERMANY,FRANCE,BELGIUM
InGermany DM7160millionareenvisaged tocoverthedeficitin
thesurviving dependants pensionschemeoftheminingindustry asa
whole,some80%-DM5728million-ofwhichgoestothecoalindus­
try.
Information provided bytheFrenchGovernment showthatstateaid
totheFrenchcoalindustry inthesocialsectorin1977willamount
toFF5247million.Thefollowing tablegivesdetails.

A/2
SourceExpenditure
(inmiLLionFF)Purpose
State 2.422.0 Disability andold-agepensions insurance
Regularcontribution amounting to22%of
wagessubjecttocontribution ,andaddi­
tionalStateadjustment
General
system343.0
ilDisability andoldagepensions insurance
Regularcontribution tocoverpartof
I"exceptional expenditure "(amountfixed
jbylaw)
General
System823.0
IInsurance againstindustrial accidents
Iandoccupational diseases
Regular repayment ofinherited liabilities
General
System599.0
iSickness insurance
Treatment benefits
State I641.4 Disability andold-age pensions insurance
Exceptional expenditure "incoal-mining
industry withinthemeaningofArticle 4
ofDecision No528/76
General
System419.0 Supplementary schme:workers' retirement
pensions
Total 5247.4
Statecontributions tothefinancing ofsocialsecurity benefitsfortheBelgian
miningindustry maybeestimated atBfrs22558.0millionfor1977.
Thefollowing tablegivesdetails.
Source AmountofState
subsidies
(millionBfrs)Purpose
State
State
State
State9546.2
1748.9
I
4579.0
6683.9Old-agepension andinsurance ofsurviving
dependants
R^ularstatutory contribution
Old-agepension andinsurance ofsurviving
dependants
Contribution tocoverthedéficit
Pisabilitypensions insurance
Disability pensions
Occupational diseases
50%oftheexpenditure arisingfrom
miner'spneumoconiosis
J
TotaI 22558.0
I
1„Commission estimate

A/3
Calculations bytheCommission revealthatGermany/FranceandBelgiumhave
notexceeded thelimitssetinArticle 4ofDecision No528/76:
-InGermanytheundertakings' actualwelfareexpenditure isDM177million
(4.9%)higherthanthenormalexpenditure definedinArticle 4.
-InFrancetheStatesubsidytoCharbonnages deFrance(FF641.4million)
meansthatactualsocialexpenditure andnormalexpenditure coincide.
-InBelgiumtheundertakings' actualsocialexpenditure isBfrs265.3million
higherthanthenormalexpenditure definedinArticle 4.
(A^UNITEDKINGDOM
Apartfromthegeneralsocialsecurity system-intowhichthecoalindustry
isintegrated -theUnitedKingdompossesses aspecialfundforpayingaddi­
tionalbenefitstoformerminers.TheBritish Government willpayfc28.2mil­
lionintothefundinthe1977/78coalmarketing year.Thisistheamountby
whichpensionpaymentstoformerminersarehigherthantheexpenditure in­
curredbytheNational CoalBoardandthelimitssetinArticle 4ofDecision
No529/76areconsequently exceeded .
Article 68oftheECSCTreatystatesthatthemethodsusedforfixingsocial
securitybenefitsshallnotbeaffected bytheTreatyifachangeinthe
arrangements forthefinancing ofsocialsecurity doesnotproduceanyof
theeffectsmentioned inArticle67(2)or67(3),i.e.ifthechangeinthe
arrangements doesnotprovoke aseriousd'isequiLibrium.Inthesecircumstances ,
theeffectsofthefc28.2million onthecompetitive position ofBritishcoal
intheCommunity mustbesubjected toanexamination embracing allaids.The
examination conducted inPartIofthisdocument revealed thattheBritish
aidsdidnotdisturbtheproperfunctioning ofthecommonmarket.

A/4
Summaryoffinancial measures inthssocialsecuritv sectorJ '*1111111 ■i|"'!>■'I"«i–>»–"""''W'""l"! i«.|»ww«iwiii>wftwtmMW»iw www
A
AsTable 1intheAnnexreveals.Stateintervention ,inthesocialsecu­
ritysectorofthecoalindustrywillbe17.83,higherthanin1977and
willtotal3673EUA.
Description andassessment ofthefinancial measures tocoverinheritedliabilities * ~
PursuanttoArticle 5ofDecision No528/76measures takenbyMemberStates
toassisttheundertakings tocoverthecostsarisingfrompitclosures which
(arenotrelatedtocurrentproduction andthesaleofcoalshaUbecompati­
blewiththecommonmarketprovidedthattheamountsinvolved Insuchmeasu­
resdonotexceedtheamountofsuchcosts.i„e„theinherited liabilities .

A/5
Anysumsinexcessthereofrepresent directaidtocurrentproduction and
aretoberegarded asaidpursuant toArticles 7to12ofDecision No528/76.
(BJGERMANY
1
For1977theFederal Government hasplannedthefollowing measures to
coverinherited liabilities :
million DM
-Aktionsgemeinschaft sheme:
-Closurepremius 82.5
-Dispensation fromobligations arising under
theEqualization ofBurdens Law 22.5
Sub-total 105.0
-Aidforwater-cnntrcl casts 94.3
-Aidtocoverexpenditure resulting
fromcontraction 96.9
-Aidtocoverinherited liabilities 185.5
-AidtocoverRuhrkohle AG's'closurewrite-offs 48.0
Total 529.7
(=197,6million EUA)
Alltheaboveliabilities represent liabilities inherited bytheundertakings
i.e.thoseresulting fromtheclosureofpitsinprevious years,andthere­
foredonotrelatetocurrentproduction .
r
Thesemeasures constitute aidsalsograntedinprevious years.
ThroughtheAktionsgemeinschaft Deutscher Steinkoh lenbergbau (ActionAssocia­
tionofGermanCoal-Mining Undertakings ),theFederalGovernment paysthe
undertakings concerned apremiumofDM20/tofannualcapacityforallclo­
suresundertaken in1977.Theseclosures aremadetorationalize production .
Theaidcoversonlyasmallfraction oftheactualcoststhathavetobe
bornebytheundertakings inconnection withclosures .

A/6
Thepublicauthorities willpayDM22.5milliontotheequalization ofburdens
fundasaidtocovertheequalization ofburdenspayments,andtherebyrelease
closedpitsfromtheirobligations .Theleveloftheaidisequivalent tothe
costscharged.
ThesumofDM94.3millionforwatercontrolcostswillbepaidtotheRuhr
miningindustryspecifically tocoverthefinancial burdenarisingfromclo­
suressince31December 1966.Asaresultofpitclosures,theRuhrcoal-mi-
ningindustry boreaheavyburdenintheformofconstantly risingcontribu­
tionstowatercontrolassociations andthePumpgemeinschaft Ruhr(Ruhrpum­
pingassociation ).Theaiddoesnotexceedtheactualadditional coststobe
bornebytheundertakings .
ThesumofDM96.9milliontocoverexpenditure resulting fromcontraction
isadditional totheclosure premiums which(asmentioned above)donotcover
acitualcostsofclosures .Thismeasureconcernsliabilities arisingoutof
pitclosures since31December 1972.Theaidisspreadoveraperiodoffive
yearsintheformofaflat-rate paymentofDM30foreverytonnebywhich
annualcapacityisreduced,butnotexceeding actualcostsbornebytheunder­
takingsasaresultoftheclosures .
ThesumofDM185.5millionasaidforcovering inherited liabilities concerns
thoseinherited liabilities arising frompit'closures before 1January 1973.
Therelevant Germanlawsensurethattheaiddoesnotexceedactualliabili­
tiesbornebyundertakings .
ThesumofDM48.0millionasaidtowardsclosurewrite-offs onlyconcerns
Ruhrkohle AG.Inprevious yearstheRuhrkohle AGhashadtoincludedepre­
ciationforassetslostasaresultofpitclosures whichcouldnot,however,
beincluded intheprofitandlossaccountsincethiswouldhavebankrupted
theundertaking .Aspecialitemwastherefore introduced ontheassetsside
ofthebalance andon31December 1976thisamounted toDM670million.

A/7
Becauseoftheunfavourable economicsituation,theundertaking isnot
inapositiontowriteoffthisspecialiteminannualinstalments and
thepublicauthorities havetherefore agreedtotakeoverDM480million
ofthetotalsum-payablein10equalannualinstalments ofDM48million.
Alltheabovemeasures showthattherequirements ofArticle 5(1)ofDecision
No528/76aremet.Thetotalsuminvolved inthesemeasures in1976is197.6
million EUAandisincluded inTable 1oftheAnnex.
<B2>FRANCE,UNITEDKINGDOM,,BELGIUM
For1977,theFrenchGovernment hasallocated asumofFF321.0million
(57.6million EUA)asaidtowardscoveringinherited liabilities borneby
Charbonnages deFrance.Thissuminaidisintendedtocoverthefollowing
inherited liabilities :
Million FF
Contribution toearlyretirement pensions 16.0
Premiums,lumpsumsforretrained personnel,cost
ofhousingforthoseretiringearly 51.0
Financial liabilities inrespectofthoseretiring
early ' 242.0
Concessionary allowances forthoseretiring early 12.0
Total 321.0
Broken downbetweencoalfields asfollows :
Nord/Pas-de-Calais 207.0
Lorraine 29.0
Centre-Midi 85.Ô
TheCommission estimates thattheactualliabilities bornebytheCharbonna-
gesdeFrancearethesameasthesumgrantedinaid.
»
In1977theBritishGovernment planstointroduce thefollowing measures
underArticle 5ofDecision No528/76:
Millionh
Redundancy paymentstominersaffected bypit
closures 6.21
Earlyretirement payments 2.38
Aidinrespectofconcessionary coalforpensioners 3.59
Total 12.18
(18.7millionEUA)

A/8
TheUnitedKingdommeasures coverinherited liabilities arisingoutofpit
closures;theseliabilities arethesameasthesumgrantedinaid.
For1977,theBelgian Government hassetasideasumofBfrs44million
(1.1million EUA),asaidtowardscoveringinherited liabilities inits
Southern coalfield .OfthissumBfrs14millionistobeusedtocover
damagefromsubsidence andBfrs30milliontocoverwatercontrolcharges.
TheCommission estimates thatthecostsarisingoutofsubsidence andwater
controlfollowing pitclosuresforwhichundertakings intheSouthern coal­
fieldareresponsible ,arethesameasthesumgrantedinaid.
Tosummarize,itcanbesaidthattheBelgian,FrenchandUnitedKingdom
measures listedabovemeetthecriteria ofArticle 5(1)ofDecision No528/76
(Bj)Summaryofthemeasurestocoverinheritedliabilities
AscanbeseenfromTable 1oftheAnnex,theplannedstateaidstocover
inherited liabilities in1977willtotal275million EUAfortheCommunity
asawholeanincrease of26%over1976.
II.Financial aidrelating tocurrentproduction
Allaidsthatarenotsocialmeasures withinthemeaningofArticle 4ofDecision
No528/76,oraidstocoverinherited liabilities withinthemeaningofArticle 5,
areaidstocurrentproduction .
Aidtocurrentproduction maybegranteddirectly orindirectly toundertakings .
A.Indirect financial aidtocurrentproduction inthecoalminingindustry
Indirectfinancial aidcoversallmeasures whichMembergovernments announce
inaccordance withthefirstparagraph ofArticle 2(1)ofDecision No528/76
butwhichdonotcomeintothecategory ofthedirectmeasures definedinofArticle 4ofDecision
themeaningofArticle 5,

A/9
Articles 7to12oftheDecision .Indirect measures arereportedtotheCom­
missionunderDecision No528/76andassessed according totheprovisions
oftheECSCTreaty.
OnlyGermany,BelgiumandFrancehaveannounced indirectaidtothecoal
industry for1977.Nonewmeasures havebeentaken.
(A^)Description oftheGerman,BelgianandFrenchmeasures
Germanyproposesthe'following measurein1977:
Lawtopromotetheutilization ofcoalinpowerstations
(1stelectricity -from-coallaw).Probable reduction in
taxrevenue : DM100.0millior
(37.3million EUA)
Theindirectfinancial measures planned bythe
Belgiangovernment in1977inv6lvethefollowing
sectors •:
Expenditure onseasonticketsorcheapholiday
ticketsforminers,pneumoconiosis sufferers Bfrs5.0million
Subsidies totheMiners'Natdonal Pensions Fundto
compensate fornewexpenditure onwelfarearising
fromtheincrease intheminers'annualholiday
allowance,theintroduction ofnewsickness benefits
andlongerannualholiday (Article32.12and32.14
andArticle0104intileEconomicAffairsMinistry's
Budget) Bfrs625.0million
Totai Bfrs642.0million
(15.7million.EUA)
TheFrenchgovernmentplans3Strjiresubs'-c;/ofFF30,0million (5.4mil­
lionEUA)fortheresearch prog ,a/imeofth;-"Centre c<?'ttudesetRechar-
chesdesCharbondages deFra (CE'SCHAR)"-in1977.

A/10
(A?)Assessment ofindirectfinancialaidtothecoatindustry
TheCommission hasexamined theabovementioned measures whichhave
alreadybeeninforceforseveralyears,anddoesnotconsiderthat
theyviolatethebanonsubsidies setoutinArticle AoftheECSC
Treaty.
(A_)Summary ofindirect measures
5 4––
Table2ofthestatistical annexgivestherelevantfiguresunderA2.
In1977indirectaidtothecoalindustry roseto58.5million EUAas
comparedwith37.0million EUAin1976.
Directfinancia 1aidtocurrentproduction inthecoal-mining industry .
Inaccordance withtheprovisions ofDecision No528/76,directaidtocurrent
production includesallmeasuresbasedonArticles 7-12.
(B^)FederalRepublicofGermany
a)Theextenttowhichdirectfinancial aidtocurrentproduction in
theGermancoal-mining industryiscompatible withtheprovisions
ofArticles 7-12ofDecision No528/76.
TheFederalGovernment proposestocontinuein1977theaidsalready
grantedin1975/76.However,onemeasure:coverfortheRuhrkohle AG's
amortization instalments ,-whichcontinued in1976isbeingdiscontinued
in1977.

A/11
Légalbasis
under Dec.i
Amountofaid
Measures Total Pertonneofproduct .
No528/76 MilLion
DMMiLlion
EUADM EUA
Art.7(1)Investment aid 217.5 81.2 2.30 0.86
Art.7(3)
sub.s.3Promotion ofinnovation 36.0 13.4 0.38 0.1A
Art.8 Mineworkers 1bonuses
.115.0 42.9 1.22 0.45
Art.10 Aidtosecurity stocks 120.0 44.8 1.27 0.47
Total 488.5 182.3 5.171.92 |
Inaddition totheaidsmentioned abovetheFederal Government istogrant
acokingcoalaidtothevalueofDM446million,anaidtoproduction pur­
suanttoDecision No287/73.Theaidcoversfourquarters,threeofthemin
1977(DM334.5million )andonein1978(DM111.5million).
Theinvestment aidof81.2million EUAisintendedforinvestment projects in
pits,cokingplants,briquetting plantsandpithead powerstations .In1977,
totalinvestment intheGermancoal-mining industrywillcometoover350
million EUA.Investment aidwillrepresent about257.oftotalinvestments .
Inrelation totheCommunity 'snewpolicyforcoal,thisinvestment aidisto
beregarded asbeneficial sinceitwillpromotethelong-term stabilization
ofproduction intheGermancoalfields .Theaidcomplies withtheprovisions
ofArticle 7(1)ofDecision No528/76.
Thesumof13.4million EUAtopromoteinnovation isintended toensurethat
researchresultsareappliedtoproduction asquickly aspossible .Theaid
coversjustunderhalfofthecostsbornebytheundertakings andisgranted
inrespectofindividual projects which,whencompleted,arelikelytoprove
theireconomic worthtocoal-mining inthemediumterm.Thepurpose andamount
ofthisaidshowthatitiscompatible withArticle 7ofDecision Ko528/,76.

A/12
Mineworkero *bonuses,amounting to42.9million EUA,haveapplied since
1956.AbonusofDM5ispaidforeveryshiftworkedunderground ,thusensu­
ringthatthequalified mineworkers requiredfortheGermancoalindustry
toincreaseitsoutputstayincoal-mining .Themeasuretherefore meetsthe
provisions ofArticle 8ofDecision No528/76.
Thesunof44.8million EUAasaidtowardsbuilding uplong-term security
stocksisameasureintroduced bytheFederal Government inordertoincrease
thelong-term security ofenergysupllies .Forthispurpose,theNotgemein-
schaftDeutscher Steinkohlenbergbau (Emergency Association ofGermanCoal-
MiningUndertakings )boughtup10milliontonnesofcoalandcoke.TheFederal
Government coversonlypartoftheactualcurrentcostofmaintaining these
stocksin1977,bygranting anaidofDM120million.Theaimandsuminvolved
showthatthemeasuremeetstherequirements ofArticle 10ofDecision No
528/76.
Theforegoing remarks showthatthefinancial measures planned bytheFederal
Government for1977infavouroftheGermancoal-mining industry complywith
theprovisions ofArticles 7,8and10ofDecision No528/76.
(b)Theextenttowhichdirectmeasures infavourofcurrentproduction inthe
Ger.t.ancoal-mining industry arecompatible withtheproperfunctioning ofthe
commonmarket
Anassessment oftheextenttowhichGermanaidsarecompatible withthe
properfunctioning ofthecommonmarketrequires consideration ofalldirect
andindirect aidsforcurrentproduction in1977(Article3(2)ofDecision
No528/76).
Therelevantfiguresaregiveninasummarytable(seeStatistical Annex,
Table2).

A/13
Bythismethodofcalculation ,thetotalproposed aidundertheGerman
measures amountsto373.6million EUA,i.e.3.95EUA/t.
Asregardsthecompatibility ofGermanaidswiththeproperfunctioning
ofthecommonmarket,reference -ismadetothecomments inthemainbody
ofthisdocument (seep.9).
(B_)France
(a)Theextenttowhichdirectfinancial aidtocurrentproduction inthe
Frenchcoal-mining industry iscompatible withtheprovisions ofArticles
7-12ofDecision No528/76
TheFrenchGovernment didnotprovideforanynewmeasures in1977,but
continued withaidsinstituted inprevious years;thisinvolves only
loss-covering aid;
Légalbasis
underDec.
No528/76MeasureTotalPertonneof
production
million
FFmillion
EUA FF EUA
Article 12(a)Coverforthelosses
bythecentral admi­
nistration ofthe
Charbonnages de
France
(b)Coverforthe
coalfields' opera­
tinglosses196.0
I
j
2080.235.2
373.59.33
99.06'1.68
17.79
Total 2276.2 408.7 108.39 19.47

A/14
Inaddition intheabovq^entioned aids,anaidforcoking-coal ofFF4.4
millionistobegranted.
PartoftheFrenchaidtocoverLossesispaidtotheheadofficeofChar-
bonnages deFrance,whichkeepseparate accounts fromthoseofthecoalfields
andpartispaidtothecoalfields ,butthereasonsfor granting aidvary
sincethesituation variesfromcoalfield tocoalfield .
Forthepurposeofassessing aidtoheadoffice,Charbonnages deFrancehas
toberegarded asasinglecompany;i.e.theaidstoheadofficeandtothe
coalfields areconsolidated .According totheestimates andinterimresults
sofaravailable for1977,itisprobable thatthetotalsuminaid,namely
FF2276.2millionwillremainbelowtheanticipated totallossesofChar-
bonnages deFrance.
Thefollowing pointsarerelevant inconnection withaidtotheindividual
coaIfields;
-In1977,theNord/Pas-de-CalaisandCentre-Midi coalfields aretoreceive
aidtocoverlosses.Thisaidwillnotnearlycoverthelossesofthe
-coalfield;andeven^ifrhasbeenpaidsubstantial real-asset lossestothe
coalfield willremain.Theselossesofassetsaretheresultofpitclo­
sures.Inthesecoalfields ,sixcokingplants,briquetting plantsandpits
arelikelytobeclosedin1977,affecting approximately 2000employees .
Furthercontraction isincluded inthefutureproduction plansforthese
coalfields andthisistobecoordinated withmeasures tore-employ re­
dundantminers .inordertoavoidseriouseconomic andsocialproblems
inregionswherere-employment opportunities arestillinadequate .This
meansthattheaidtothesecoalfields fulfilstherequirements ofArticle
1
12(1),subsection and12(2)ofDecision No528/76.

A/15
-TheaidtocoverlossesintheLorraine coalfield willnotcoverall
anticipated operating lossesinthecoalfield,butwillgoalongway
towardsit.Nopitsaretobeclosed1nthiscoalfield in1977.Asfar
..aspossible,production thereistobemaintained sincethecokingcoal
isessential forsupplies tothesteelindustry .Thepurpose andamount
oftheaidtherefore complywithArticle 12(1),subsection 2,andArticle
12(3)ofDecision No528/76.
(b)Theextenttowhichdirectaidinfavourofcurrentproduction intheFrench
coal-mining industry arecompatible withtheproperfunctioning ofthecommon
market
Totaldirectandindirect aidtocurrentproduction intheFrenchcoal-mining
industry amountsto415.0million EUAfor1977(=19.77EUA/t;seeAnnex,
Table2).Incomparison with1976thismeansthattheaidishigherbyabout
33%.
Asregardsthecompatibility ofFrenchaidswiththeproperfunctioning of
thecommonmarket(Article3(1)ofOecision No528/76),reference ismade
tothecomments inthemainbodyofthisdocument (seep.9).
(Bj)UnitedKingdom
(a)Theextenttowhichdirectfinancial aidtocurrentproduction intheBritish
coal-raining industry iscompatible withtheprovisions ofArticles 7-12of
Decision No528/76
Forthecoalmarketing year1977/78,theBritish Government plansthe
following directaidstocurrentproduction .

A/16
LégalBasis
underDec.
No52S/76MeasureTotal pertonneoforoducticn
million
b■million
EUAt EUA
Art.8 Aidtoattract ski-bLed
workers2.6 4.0 0.02 0.03
Art.9 Aidtoproducers stocks 10.8 16.6 0.09 0.14
Art.11 Aidtostec',.coal 7.0 10.8 • 0.06 0.09
Art.12 Aidtocovi..pitlosses 10.0 15.4 0.08
ι0.13 •
Total 30.4 46.8 0.25 0.38
Particular attention isdrawntothefactthatthefiguresfortheaboveaids
areprovisional ;whenthismemorandum waswrittennegotiations betweenthe
British Government andtheNCBhadnotbeeencompleted ;
Theaidtocokingcoalisestimated att8.0millionfor1977.
Theaidforattracting andkeepingskilied-workers(t2.6million)isintended
tocovertheNCB'scosts arisingfromrationalization andthe'ransferofpro­
ductiontothebestpits.Thisresultsinoutg6ings onremovals,transport,
etc.Theaidiscompatible withArticle 8ofDecision No528/76.
coverWhenassessing theaidtocostsforproducers' stocksofcokingcoal(t25.4
million)itmustberemenbered thattotalpitheadstocksandadditional distri
butedstocksdirectly orindirectly financed bytheproducers totalabout18
milliontonnes.Givenamontlyproduction ofapproximately 10.0milliontonnes
thevolumeofpitheadstocksqualifying foraidis8.0milliontonnes.This
meansthattheper-tonne grantinaidist3.9.Theactualcostsofmaintai­
ningproducers' stocks(including depreciation andinterest )areconsiderably
higherthanthesumgranted.Theaidtherefore complieswiththeprovisions
ofArticle 9ofDecision No528/76.
1

A/17
Theaidgrantedtosteamcoal(b7.0million)-Basumfordeliveries ofsteam
coaltoScotland .Fromtheinformation provided bytheBritishGovernment ,the
amountandpurposeoftheaidgranted canberegarded ascompatible withAr­
ticle11ofDecision No528/76.
Theaidofb10.0milliontocoveroperating losseswillcovertheselosses
onlypartially inpitssituated incoalfieldswithlowfinancial returns.In
thecoalmarketing year1977/78moreuneconomic pitswillprobably closedown.
Theclosureofthelow-yield pitswillimprovetheNCB'sproductivity .The
NCBhastakenmeasurestoincrease capacity inthehigh-return coalfields and
todevelop newcoalfields .Thiswilloffsetthedropincapacity -'resulting
fromtheclosures andrenderpossible thelong-term stabilization ofproduction ,
Thismeansthattheaidfulfilstherequirements ofArticle 12(1),subsection 1
and12(2)ofDecision No528/76. ;
(b)Theextenttowhichdirectmeasures infavourofcurrentproduction inthe
Britishcoal-mining industry arecompatible withtheproperfunctioning of
thecommonmarket
Inthecoalmarketing year1977/78,aidtocurrentproduction intheUnited
Kingdomwilltotal59.1million EUA(=0.48EUA/t)or,ifthesurpluses refer-i
redtoinArticle4areincluded,102.5million EUA(=0.84EUA/t);see j
Annex,Table2).Incomparison with1976,thismeansthattheaidfor1977
ishigherbyabout33million EUA.' !

A/18
Asregardsthecompatibility ofBritishaidswiththeproperfunctioning of
thecommonmarket,reference ismadetothecomments inthemainbodyofthis
document (seep.9).
(B,)BelqiumA W
(a)Theextenttowhichdirectfinancial aidtocurrentproduction inthe
Belgiancoalminingindustryiscompatible withtheprovisions ofArticles
7-12ofDecision No528/76
In1977,theBelgianGovernment intendstoprovideaidtocoveroperating
losses.Italsointendstoprovide aninvestment aidofBfrs241.3million.
Thisaidhadalreadybeenprovided forin1976andhasbeenapproved bythe
Commission ;theaidwillnotbepaidoutuntil1977andisconsequently not
repeated here.
Légalbasis
underDec.
No528/76MeasureI Amountofaid 1
Total I1pertonneofprod.
million
Bfrsmillion
EUABfrs
jEUA
Art.12 Aidtocoverlosses
Coalfield :Campine
Southern
Total3100.2
2383.175.6
58.1508
264812.39
64.56
5483.3 133.7
I783 19.10
Inadditiontotheaboveaids,theBelgiangovernment intendstogranta
cokingcoalaid(Decision No287/75)ofBfrs2700.0million(=65.9million
EUA)fortheCampinecoalfield .
Aidtotalling Bfrs5483.3milliontocoveroperating lossesispaidto
thetwoBelgiancoalfields fordif-fe-entreasons.Theaidpaidtothe
Campinecoalfield willmakeupthedifference betweencostsandreturns.

A/19
Thedifference betweencostsandreturnshastobealmosttotallycovered
becauseitisintendedthatthiscoalfield shouldprovidecokingcoalsupplies
fortheBelgiansteelindustry andmusttherefore maintainitsoutput.The
purposeandamountofaidgrantedtocoverlossesinreSpectoftheCampine
coalfield therefore complywiththeconditions ofArticle 12(1),subsection 2,
andArticle 12(3)ofDecision No528/76.
TheSoutherncoalfield,however,receivesaidcovering onlyapproximately 80%
ofthedifference betweencostsandreturns.Heretheintention istoensure
thatonlyessentials aremaintained andthepitsremainviableintheshort
termonly,sothatthecoalfield canbecloseddownasplannedwithina
period (byabout1980)whichwillensurethatseriouseconomic andsocial
disturbances overthere-employment ofredundant minersareavoided.Twopits
intheSoutherncoalfield aredueforclosurein1977,affecting approximately
1500miners.Fromallthisitcanbeseenthattheaidtocoverlossesinthe
Southerncoalfield iscompatible withArticle 12(1),subsection 1,andArticle
12(2).
Theextenttowhichdirectmeasures infavourofcurrentproduction inthe
Belgiancoal-mining industry arecompatible withtheproperfunctioning ofthe
commonmarket
IntheBelgiancoal-mining industry,aidsforcurrentproduction total215.3
million-EUA (=30.75EUA/t)for1977(seeAnnex,Table2).
Asregardsthecompatibility ofBelgianaidswiththeproperfunctioning ofthe
commonmarket,reference ismadetothecomments inthemainbodyofthisdo­
cument(seepp9etseq.).

Table 1
Aidsnotrelatingtocurrentproduction
millionEUA
Socialsecurity measures pursuanttoArticle 4
ofDecision No528/76Aidstocoverinheritedliabilities pursuanttoI
Article 5ofDecision No528/76
Tota1 IInfringements of
Art.4(1977)Total Infringements of I
Article 5(1977) 1976 1977 1976 1977
FederalRepublic of
Germany
Belgium
France
UnitedKingdom
Totalforthe
Community1762.1
458.5
848.5
47.812137.3
550.2
942.1
43.4143.4149.6
0.9
51.3
16.3197.6
1.1
57.6
18.7
i
3116.9 3673.0 43.4 218.1 275.0
I
TheUnitedKingdomhasanintegrated socialsecurity system.Thefigureshwoninthiscolumn
miners'pensionfundwhichexistsside-by-sidewiththegeneralsocialsecuritysystem.coversonlythespecial

..Table2
1 :•Aidforcurrentproduction in1977 £UA>
jA„AidsunderDec'sionNo3/71
i
j1.infringe-e-t
! ofArticle
ofArticle >Unit FederalRepublic
ofGermanyFrance United
KingdomBelgium_____ s
Comtnunity-
millionEUA
millionEUA(A3.4)i(43.4)
jTotal
!pertonneo*productionmillion EUA
EUA(43.4)
(0,36)(43.4)
(0.18)
!2.Directmeasures
\pertonneofproductionmillionEUA
EUA37.3
0.395.5
0.261
15.7 |
2.24 i58.5
0"24
3■Indirect ireasures
iArticle 7
|Article8
jArticle9
|Article 10
|Article11
iArticle12
| Total
j pertonneofprod
! ■million EUA
million EUA
million EUA
million EUA
million EUA
million EUA94.6
42.9
44.8
408.74.0 1
16.6
10.8
15.4j
i
!
133.7 :94.6
46.9
16.6
•44.8
10.8 ..
■557.8'·:ν·'
million EUA
EUA182.3
1.93408.7
19.4746.8
0.3813'3.7 .
..19.10 -i771.5
ν':'4·"■3.16
1
i ..
\3.Cokingcoalaid(Decision No73/287)
;pertonnemillion EUA
EUA154.0
1,63l
0.8
0.0412.3
0.1065.9
9.41233.0'
•'•0.95 ,
jC.Total(A+C) ''' ■I
I
TotaIs million EUA 373.6 415.0 59.1 215.3 t063.0
(102-5)(4) (1106.4){4)
<pertonneofproduction EUA 3.95 19.77 0.48 30.75 4.35
L l (0.84)(4).I (4,53)q )[
(1)Planned figures
(2)Including aidforinterestreliefgrantforCharbonnages deFrance (0.1million EUA)
(3)Totalsalesaidsof29.2million EUAwhichtheGermancoal-mining industry wilprobably receive.TheGermanGovernment
istopayoutaproduction aidofDM334.5million (=124.8million EUA)forthreequarterof1977.
(4)Including infringements ofArticle 4.