ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)601
Vol.1979/0206

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(79)601final
Brussels,7November1979
FOROFFICIAL USEONLYV
REQUEST FORAGLOBALLOANONBEHALFOFINVESTMENTS
ININDUSTRY ANDSERVICEACTIVITYINLORRAINE(FRANCE)/
PURSUANT TOARTICLE56OFTHEECSCTREATY-N°268:
SOCIETELORRAINE DEDEVELOPPEMENT ETD'EXPANSION-LORDEX(FRANCE).
(Communication fromtheCommission totheCouncil)
C0M(79)601final

/
COMMISSION
OFTHE
EUROPEAN COMMUNITIES
INTERNAL DOCUMENT
COMMUNICATION TOTHECOUNCIL
Subject:Requestforagloballoanonbehalfofinvestmentsinindustryand
serviceactivityinLorraine(France),pursuanttoArticle56ofthe
ECSCTreaty-N°268:SociétéLorrainededéveloppement etd'expansion
-LORDEX(France).
I.BASICINFORMATION
Applicant
Finalbeneficiaries
Project
Location
Globalamountofinvestments
Globalloanrequested
Interestrebate
Jobs,,created:SociétéLorrainededéveloppement et
d'expansion-LORDEX
:Variousconcerns
:Thecreationandextensionofsmalland
mediumsizeconcerns
:Lorraine
:FF60millionminimum
(j*10.8millionEUA)
:FF30million(+5.4millionEUA)
:162,000EUAayearforthefirst5years
:300jobsminimumareintendedbywayof
priorityforformerECSCworkersinLorraine.
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
TheLorraineregion(2.33millionpopulationin1975)hassome71,300jobs
inthesteelindustryandlessthan10yearsagoproduced2/3ofFrench
steel.Itsproportionofnationalproduction wassome54%in1973(13.8
milliontonnes);thefigurefellto40%in1978with9.6million.tonnes.
Thesameyeartheregionmined32milliontonnesofironorecomparedwith
52milliontonnesin1973.
Inparallelfashion,asystematicpolicyofproductivity increaseand
modernisation hasbeencarriedoutoverthelastfifteenyearsincluding
modernising andrestructuring thecompaniesthemselves.Inthefirstplace
thesemeasuresconcernthemainindustrialgroups,whichareSACIL0R-S0LLAC
(35,238employedin1978),USIN0R(8,450employed),LACHIERSNEUVES-MAISONS
(3,028),C0CKERILL (3,404).Thefiguresquotedrefertopersonsemployedin
steelinLorrainein1976.
.../.
Ruede!oLoi200,D–1040Brucsels-Tclcplione350040-358040-Tclcoraphiradd'osr .-CÛMErURBrut
Telex :-COMITIJRBRIJ218/7■

-2-
Between1968and1975,68,730personsLeftLorraine(residents).This
populationdrainisdueessentially toeconomicstagnationwithintheregion;
now,thiseconomicsituationisitselfverydependent ontherecessioninthe
steelindustry,whichremainsthemaindrivingforceforactivityinLorraine.
WorkersemployedinsteelinLorrainereachedtheirpeakin1964with98,800.
Todaythefigureislessthan71,000.Thisreduction hasbeencarriedout
throughthefollowingclosures :
MICHEVILLE nearLongwy(-3,480)
H0MEC0URT and.JOEUFintheOrnevalleyupstreamnearBriey
andtheBatillyarea(-2,566).
KNUTANGEnearHayange;
alsobywayofvariousmeasuresofrationalisation withingroupsandby
companymergers:example,theCHIERS/NEUVES-MAISONS mergerin1977followed
bythemergerofthisnewgroupwithUSIN0R.
Thefollowingredundancies havebeenplannedbetween1977and1980:
SACIL0RS0LLAC 17,200
CHATILL0N LONGWY 2,868
USIN0RTHIONvILLE 2,444
USIN0RLONGWY 4,753
TOTAL 27,265
tobeaddedtothe10,000redundancies inpreviousyears.
Lorrainehasbeenclassified bytheGovernment asapriorityaidareafor
industrialisation .Diversification measuresundertaken overtenyearshave
enabledessentially apartialsolutiontotheproblemofconverting thecoal
miningbasin(Saint-Avold/Forbach)andthissolution,takingaccountofthe
economicsituationincoalmining,hasshownitselftobeprovisionally just
sufficient .Butsteelreconversion hasbeenslower:onlysmallandmediumsize
concernscouldbesettledandjobscreatedmainlyabsorbedredundancies due
toclosuresofothersmallormediumsizebusinessalsoworkingforthesteel
industry.
TheSAVIEMsettlement atBatilly,ofPEUGEOTCITROENatEnneryandVillers-la-
Montagne,ofRENAULTatThionvillewillpartlycontributetocompensating for
theredundancies above-mentioned .Butthesejobcreationswillnotoccurat
thesamerythmastheredundancies ;henceagapwhichmustbefilledasfast
aspossiblebyassistingthemaximumprojectstobenefittheregion.

-3-
III.THEPROJECT
TheCommissionwillmakeFF30million(+5.40millionEUA)availableto
LORDEXfortwoyears.PaymentswillbemadetoLORDEXinseveralinstalments
inproportiontothegrantofindividualloanstobegrantedbythelatter
toconcerns,whichmaybenefittherefrom.LORDEXwillsubmiteachgrantto
theCommissionforpriorapproval.Thedecisiononindividualsubsidiary
loanswillbetakeninaccordancewiththeaimsandcriteriapublishedby
theCommission (O.J.C178/2of27July1977)takingparticularaccountofthe
numberofjobscreatedandreservedonbehalfofformerECSCworkersin
proportiontothesizeoftheloanenvisagedandtheamounttobeinvested
infixedcapital.Therateofinterestfixedforeachinstalmentofthe
globalloantobepaidtoLORDEXwillbeappliedtoeachsubsidiaryloan;
itwillbeentitledtorebate.
TheCommission'scontribution willnormallynotexceed40%offixedinvestment;
however,theCommissionreservestherighttoraisethisceilingto50%in
justifiable cases.Thiscontribution willtakeaccountofthespecialcredit
requirements ofsmallandmediumsizeconcerns,whichhaveoftenfewer
possibilities ofaccesstocapitalmarketsthanotherundertakings andin
whichinvestment,calculatedinvolumeperjobcreated,isoftenlessthan
inotherlargerundertakings .
LORDEXwillreporttotheCommissioneverysixmonthsonthemannerinwhich
thegloballoanhasbeenused;areportwillbeattachedpreparedbythe
Frenchauthorities responsible foremployment on.there-employment offormer
ECSCworkersinindustrialconcernsfinancedbywayofthegloballoan.
IV.INFLUENCE OFTHELOANONTHERE-EMPLOYMENT OFWORKERS
Itisforecastthatindividualprojectsreceivingaidbetween1979and1980
willcreateaminimumof300newjobsintendedforformerECSCworkers,which
mayseemfairlymodestwhencomparedwiththeoverallneedsoftheregion.
Still,itisimportanttoencourageinvestmentoutsideECSCsectorsin
Lorraine,especiallythroughsmallandmediumsizeconcerns.Shouldthe
presentdecisionproveinadequate,furtherinstalments couldbeenvisaged.
V.CONCLUSIONS
a)TheCommissionconsidersthattherequestcomplieswithArticle56(2a)of
theECSCTreaty.Inconsequence,ithasauthorisedthegranttoLORDEX
ofagloballoanofFF30million(+5.4millionEUA)orequivalent
amount.Interestrebateof162,000EUAayearwillbegrantedforthe
firstfiveyearsfollowingpayment/paymentsoftheloan.
b)TheCommissionaskstheCounciltoagreewiththisdecisionandwith
itsextensionbyanidenticalamountifnecessaryinthenearfuture.