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COM (84) 142 
 
 
 
Vol. 1984/0 054 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Economic 
Community and the European Atomic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation. 
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen 
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003 
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit 
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5 
der genannten Verordnung freigegeben. 
COMMISSION OF THE EUROPEAN COMMUNITIES
CO M (84) 142 f in a l 
B russels, 8 March 1984
FIFTH REPORT O N  THE APPLICATION O F  THE RULES 
F O R  AIDS TO  THE STEEL INDUSTRY
COM(84) 142 f in a l

FIFTH REPO RT O N  THE APPLICATION O F THE RULES F O R  AIDS TO  THE STEEL INDUSTRY
1. In tro d u c tio n
1.1. A r tic le  10 o f Decision 2320/81/ECSC (the aids code) provides th a t the
Commission is  to prepare re g u la r reports on im plem entation of the code
fo r  the Council and fo r  the in fo rm a tio n  o f the European P arliam ent.
These reports are also  tra n s m itte d  to  the C o n su lta tive  Committee.
1.2. The fo u rth  report, fo r  the perio d up to  31 January 1983, was made in  A p ril 
1983. I t  described in  d e ta il the c r it e r ia  and procedures e stablishe d by 
the aids code and the way in  which the Commission has in te rp re te d  and 
app lied them. That d e s c rip tio n  remains a v a lid  statement o f the Commis­
s io n 's  p o lic y  during 1983. The present re p o rt which covers the period up 
to 31 December 1983 th e re fo re  deals w ith developments p e c u lia r to 1983.
2. The Tim etable
2.1. As the year progressed the c o n s tra in ts  re s u ltin g  from the tim e ta b le  es­
ta b lis h e d  by the code became in c re a s in g ly  severe. This was already 
evident to a minor degree in  la te  1982 when a number o f Member States had 
d i f f i c u l t y  in  meeting the n o t if ic a tio n  deadline on 30th September 1982 
and one merely subm itted d e ta ils  o f a id  a p p lic a tio n s  made by undertakings, 
which the Commission agreed to  tre a t as a n o t if ie r . .  ion of aid plans.
E a rly in  1983 i t  became c le a r th a t o th e r Member States had been oblig ed to 
n o t if y  a id  plans which were not in  th e ir  f in a l form . A cco rd in g ly, in 
February, the Commission in v ite d  the Member States ra p id ly  to ad ju st th e ir  
a id  n o tific a tio n s  in  order to  take account o f developments since the date 
of n o t if ic a tio n  and o f the views expressed by the Commission on the aid 
plans in  q ue stion.
At the end o f May the Commission again reminded the Member States th a t, in  
accordance w ith the aids code, i t  would give it s  f in a l decisio n  before 
1  Ju ly 1983, and i t  requested th a t they send i t  im m ediately a l l the in fo r ­
mation s t ill  m issing in  respect o f th e ir  proposals.

-  2 -
In the la s t few day# before the 1  Ju ly deadline Member States informed the
f  ' - ip
Commission o f th e ir  | in a l a id  plans which in  some cases involved 
increases in  the amount o f.<  a id . They were, however, unable to  supply th e ir  
f in a l d e ta ile d  re s tru c tu rin g  plans which were e s s e n tia l fo r the 
Commission's ap p ra isa l o f the c o m p a tib ility  o f the aids w ith  the c r it e r ia  
e sta b lish e d  by the aids code. In these circum stances the Commission 
decided th a t i t  would have to  make it s  d ecisio ns to  a u th o rise  aid 
c o n d itio n a l upon s u ffic ie n t fu rth e r re s tru c tu rin g  being c a rrie d  out to  
secure the v i a b i l i t y  o f undertakings by the end o f 1985.
2 .2 . The aids code provides th a t aids to  continued o pe ra tion may only be paid fo r 
a maximum perio d o f two years unles% a fte r  having sought the opin io n  of 
the Member States w ith in  the C o uncil, the Commission grants a derogation 
from th is  p e rio d . Six Member States app lie d  to  the Commission fo r 
such a derogation to  be granted: Belgium ( fo r  C o ckerill-S am bre) ,  the 
Federal Republic o f Germany ( fo r  Arbed S a a rs ta h l), France ( fo r  S a c ilo r 
and U s in o r), Ire la n d  ( fo r  I r is h  S teel L * d .) , I t a ly  ( fo r  F in s id e r) and 
the U nited Kingdom ( fo r  the B r it is h  S teel C o rp o ra tio n ). The Commission 
inform ed the Council o f these a p p lic a tio n s  and the la t t e r  gave a 
favourable opin io n  at it s  meeting on 25 Ju ly 1983. This derogation 
does not a ffe c t the f in a l date o f payment o f a id  to  continued o p e ra tio n , 
which, as la id  down by the aids code, remains fix e d  at 31 December 1984.
3. Commission de cisio n s o f 29 June 1 9 8 3 *^
3 ^  O n 29 June the Commission adopted nine d e cisio n s on s te e l a id s , one
fo r each Member State w ith  aids su b je ct to  exam ination. (The exception 
is  Denmark, which had n o t if ie d  no new aids since the Commission's approval 
o f a fin a n c ia l re c o n s tru c tio n  in  1981.)
(1) O J L228 o f 19.8.1983

3
3 .2 . Most o f these d e c is io n s  c o n ta in  c o n d itio n a l a u th o r iz a tio n s  o f th e  a id s  
th e y  c o n ce rn . The tw o m a jo r c o n d itio n s  a re  th a t f u r t h e r  n e t c a p a c ity  
re d u c tio n s  o f a t le a s t a s p e c ifie d  amount must be c a r r ie d  o u t and th a t 
th e  f in a n c ia l v i a b i l i t y  by th e  end o f 1985 o f th e  a,ided u n d e rta k in g  
must be d e m o n s tra te d . The minimum a d d itio n a l c a p a c ity  re d u c tio n s  re q u ire d  
by th e  Commission a re  shown in  T a b le  1  and amount to  8 .3  
m illio n  to n n e s  . I t  w i l l  be seen th a t th e  t o t a l c a p a c ity  re d u c tio n  
th u s  a c h ie v e d  o v e rft'fle  pferjod 1980 -  85 w i l l  be a t le a s t 2 6 .7 r a illio n  
tonnes o f h o t - r o lle d  jsrodOc^s and th e  Commission is  c o n fid e n t th a t 
re d u c tio n s  in  a numbed o f Member S ta te s  w i l l  be g re a te r th a n  those 
re q u ire d  by i t ,  s in c e  many u n d e rta k in g s  w i l l  f in d  them selves o b lig e d , 
in  o rd e r to  re s to re  t h e ir  v i a b i l i t y
to  c a r ry  o u t f u r t h e r  r a t io n a liz a t io n .  I t  th u s  appears 
th a t th e  o b je c tiv e  c it e d  in  th e  la s t  R eport o f a 30 to  35 m illio n  tonnes 
re d u c tio n  s h o u ld  be a t ta in a b le .  In  th e  c u rre n t d i f f i c u l t  econom ic and 
s o c ia l c irc u m s ta n c e s  t h is  w ould be a s u b s ta n tia l a ch ie ve m e n t.
The d e c is io n s  p ro v id e  th a t th e  Member S ta te s  must s u p p ly  t h e ir  f in a l 
r e s tr u c t u r in g  p la n s  by 31 Janu ary 1984 so th a t th e  Commission can 
judge w hether th e se  c o n d itio n s  a re  m et. A id  w hich is  a b s o lu te ly  nece ssary 
to  e na ble u n d e rta k in g s  to  s u rv iv e  up to  th a t d a te  may be p a id  i f  a 
c a p a c ity  re d u c tio n  s u f f ic ie n t  to  j u s t i f y  such a id  is  o ffe re d .* ^ A fte r  
th a t d a te  i t  w i l l  no lo n g e r be p o s s ib le  f o r  a Member S ta te  to  pay a id  
to  an u n d e rta k in g  u n le s s  th e  Commission is  s a t is f ie d  th a t th e  u n d e rta k in g  
can become v ia b le  by th e  end o f 1985 and th e  a id  is  ju s t if ie d  by th e  
amount o f th e  n e t c a p a c ity  re d u c tio n  o ffe r e d .
The d e c is io n s  a ls o  c o n ta in  a number o f p r o v is io n s  designed to  ensure 
th a t a id  is  used o n ly  f o r  th e  purpose f o r  w hich i t  was a u th o riz e d  
and th a t u n w a rra n te d  d is t o r t io n s  o f c o m p e titio n  do n o t r e s u lt  from  th e  ,•  
a id . Thus, f o r  in v e s tm e n t a id ,  paym ents may o n ly  be made as and when 
in v e s tm e n t e x p e n d itu re  is  In c u rre d  and q u a r te r ly  re p o rts  a re  to  be 
s u b m itte d  in  advance to  th e  Commission show ing e x p e n d itu re  e xpe cted

■  4
to  be in curred and aid to be disbursed. In  th is  way the Commission can 
ensure th a t sums authorized as investm ent a id are not used to  cover 
an u n d e rta kin g 's losses or fo r  o th e r unauthorized purposes. In  order 
to ensure th a t aid to  continued o p e ra tio n , fo r  instance to  cover an 
u n d e rta kin g 's o pe ra ting losses, is  not used to  undercut p ric e s , the 
decisions provide th a t the Commission may order the suspension o f 
aid payments i f  i t  fin d s  th a t the aided undertaking has breached it s  
o b lig a tio n s  under the E C S C  Treaty p a r tic u la r ly  those concerning produ ction 
quotas and p ric in g .
The decisions also provid e fo r  the Commission to  m onitor the payment of 
aids and the progress o f re s tru c tu rin g  and to  take a c tio n  to  suspend a id  
payments i f  the c o n d itio n s  attached to  the decisions are not respected 
or to impose a d d itio n a l c o n d itio n s  r e la tin g  to  the re s tru c tu rin g  o f 
an undertaking i f  i t  appears th a t the la t t e r 's  re tu rn  to  fin a n c ia l 
v ia b il it y  by the end o f 1985 is  in  doubt.
3.3. In some cases the Commission found i t s e l f  unable to  s p e c ify  in  advance 
the c o n d itio n s  th a t would have to  be met in  order to  enable i t  to  
a u th o rize  the a id . I t  th e re fo re  found these aids to  be incom patible w ith 
the o rd e rly  fu n c tio n in g  o f the common market unless an adequate 
ju s t if ic a t io n  fo r them could be o ffe re d  by the Member State (Joncerned 
by 31 .  January 1984. The oth e r c o n d itio n s  o f these d ecisio ns are the 
same as those described above.. These negative decisio ns concern the 
fo llo w in g  und ertakings: Usines Gustave B oel, Fabrique de Fer de C h a rle ro i, 
Sid mar and ALZ (B elgium ), M e ta llo u rg ik i Halyps and Sidenor (G reece),
Ir is h  Steel Lim ite d  (Ire la n d ) and Sheerness S teel (U nited Kingdom, 
subsequently w ithdraw n).
3 4 Some o f these d e cisio n s have been challenged in  the Court o f J u s tic e .
The German Government has brought an a c tio n  against the d e cisio n s concerning
Belgium , France, I t a ly  and the U nited Kingdom.
Five lo c a l a u th o ritie s  in  Luxembourg

5
f '»■ N  .r
are challenging the Luxembourg decisio n  and the Netherlands undertaking, 
Hoogovens, is  co n te stin g  Ihe I ta lia n  and the Netherlands de cisio n s.
4. Infringem ents o f procedural requirements
4 .1 . in  November and December 1981 the Commission in it ia t e d  infringem ent 
procedures under A r tic le  88 E C S C  against France and I t a ly  and under 
A r tic le  169 E E C  against Belgium* These procedures were in it ia t e d  
when the commission learned th a t the Member States in  question had 
granted aid e ith e r p r io r  to  or w ith out n o tify in g  i t  to  the Commission 
or a fte r  the Commission had in it ia t e d  an exam ination procedure, whose 
legal e ffe c t is  to  suspend the payment o f aid u n t il the Commission has 
given it s  f in a l d e c is io n .
4 .2 . Subsequently fu rth e r infringem ents o f the same character came to  the 
Commission's n o tic e  and in  A p ril 1983 the Commission th e re fo re  in itia te d  
a d d itio n a l infringem ent procedures against Belgium, the Federal Republic 
of Germany, France, I t a l y ,  Luxembourg and the United Kingdom.
5. Release o f aid tranches
5.1. In the f i r s t  h a lf o f the year the Commission continued to  authorise
the payment o f tranches o f aid in  re tu rn  fo r tranches of re s tru c tu rin g  
as described in  the la s t re p o rt. In the second h a lf o f the y e a r .it 
has released fo r  payment aids necessary fo r the continued operation of 
undertakings up to  31 January 1984 again in  re tu rn  fo r s p e c ifie d  capacity 
re d u ctio n s.

-  6 -
5 .2 . Tables 2 to  5 summarize the Commission's p o s itio n s  on aids to the s te e l 
in d u s try  up to  the end o f 1983. Table 2 shows the amounts of a id  whose 
payment was a u thorized up to 29.6.1983 (and thus includes c e rta in  aids 
authorized u n c o n d itio n a lly  on th a t d a te ). Table 3 gives the amounts o f 
a id  c o n d itio n a lly  a u thorized in  the d e cisio n s adopted by the Commission 
on 29.6.1983 and Table 4 gives the amounts o f these aids which have since 
been released fo r  payment. F in a lly , Table 5 shows the aids found by the 
Commission to  be incom patible w ith  the common market on 29.6.1983.

TABLE 1
Capacity reductions in  the ste e l in d u s try  1980 -  1985
Net reductions made 
since 1980
and reduction commitments 
by Member States
('000 tonnes)Further net reductions
H o t-ro lle d  products capacity in  1980 required in  Commission T otal net reductions 1980-85
Member
S tate : G0C bonnes %  of E U R  9decisions of 29.6.1983 
('000 tonnes) '000 tonnes ·X  of 1980 
Capacity  
Belgium 16028 9.5 1705 1400 3105 19.4
D&nmark 941 0.6 66 - 66 7.0
fedTrep.
o f Germany53117 31.6 4810 1200(1)6010(1) 11.3
Greece p.m. p.m. p.m. - p.m. p.m.
France 26869 15.9 4681 630 5311 19.7
Ire la n d (57)3 - p . n i · p.m. p.m. p.m.
I t a ly 36294 21.5 2374 3460 5834 16.1
Luxembourg 5215 3.1 550 410 960 18.4
N etherlands 7297 4.3 250 700 950 13.0 -
U nited
Kingdom22840 13.5 4000 500 4500 19.7
E U R  9 168601 100.0 18436 8300 26736 15.9
(1) W ithout ta k in g  in to  account the p a rtic u la r  case of one company
(2) No fig u re s  a v a ila b le  since Greece was not a Member of the Community in  1980
(3) The in fo rm a tio n  on which the Commission based it s  decision is  not s u ffic ie n t to provide precise fig u re s .

T a b le  2
AID PAYMENTS TO THE COMMUNITY STEEL INDUSTRY AUTHORIZED BY THE COMMISSION UP TO 2 9 .0 6 .1 9 8 3  IN APPLICATION OF THE FIRST AND 
SECOND AIDS CODES ( in  m illio n s  o f ECU’ s)
C o untry G ra n ts /
in te r e s t  r e l i e f  
g ra n tsC a p ita l/
p a r t ic ip a t o r y
loansC onversion 
o f d e b ts  
in t o  c a p ita lReduced 
in te r e s t  
r a te  loansG uarantees/ 
m arket ra te  
loansO thers
BELGIUM
C o c k e ri1l- S — nbre - 493 548 77 270—
O th e r com panies 33 - - - 136 -
DENMARK
— 39 “  -« r “ 42
FEDERAL REPUBLIC OF GERMANY 
A rbed S a a rs ta h l 442^  * 
“  7 1 89 29
Hoesch 40 . - 52- -
K IS c k n e r/M a x h u tte 31 - - - -
O th e r com panies 10 - 4 2 -
FRANCE
S a c ilo r 2 1,455 - - 340-
U s in o r 2 • 1,518 — — 353 -
IRELAND
44 — — — 32 -
ITALY
F in s id e r 123 265-  .307
O th e r com panies 912 — — 54 " - -
LUXEMBOURG
A rbed 70 2 — 26 44 2
NETHERLANDS
Hoogovens 15 - - - 79 -
UNITED KINGDOM
B r i t i s h  S te e l C o rp o ra tio n - 3,055- - - -
O th e r com panies 33 • • 1 •
TOTAL EEC 1,757 6,827 548 522 1,345
_ _ 2 _ l
N o te : C o nversion s have been made a t th e  exchange ra te s  a p p ly in g  on 3 0 .9 .1 9 8 2 .

Table 3
AM O UNT O F AID TO  THE COM M UNITY STEEL INDUSTRY CONDITIONALLY AUTHORIZED O N  29.06.1983 (in  m illio n s  of* ECU's)
Country G rants/ C a p ita l/ Conversion Reduced Guarantees/
in te re s t r e lie f p a rtic ip a to ry of debts in te re s t market ra te
grants loans In to  c a p ita l ra te  loans loans
BELGIUM
C ockerill-S am bre 38 493 1,122 - 608
Other companies 5 30 33 1
FEDERAL REPUBLIC O F  G E R M A N Y
Arbed Saarstahl 484 - - -
Other companies 2,205 - *  8
z____________917
F
RANCE
S a c ilo r/U s in o r — 3,943 —T . •
ITALY
F in s id e r 2,156 4,488 - 1,512 -
Other companies 416 37 — —
LUXEM BOURG
Arbed 154 59 - 1 182
NETHERLANDS
Hoogovens 74 272 - 8 58
Nedstaal 8 - • •
UNITED KINGDOM
B r it is h  S teel C orporation 200 2,474 - —
TOTAL E E C 5,740 11,796 1,155 1,529 1,766
Note: Conversions have been made at the*exchange rates applying on 30.9.1982.

T able 4
A id payments to the Community s te e l in d u s try  released by the Commission between 30.6.83 and 3.2.84 in c lu s iv e .
li n  m illio n s  of ECUs)
Country G ra n ts /In te re s t 
r e lie f  grantsC a p ita l/
p a rtic ip a to ry
loansConversion 
of debts 
in to  c a p ita lReduced 
in te re s t 
rate loansGuaranteed market 
rate loans
B elgium
C ockeri l l-Sambre 
Forges de Clabecq- 229
18
é- -
F ederal Republic of Germany
Arbed S aarstahl
Hoesch
Krupp
O ther companies200
17
- -33
15
France
S a c ilo r  and Usinor — 1,831 - •  - -
Ire la n d  
I r i s h  S teel— , - - - 20
N etherlands
Hoogovens 10 - - 221 -
U n ite d  Kingdom 
BSC
Sheerness S teel 14646 - - -
TOTAL EEC 225 2,724 - 221 68
N ote: 1) Conversions have been made at the exchange rates applying on 30.9.1982.
2) The aids in  th is  ta b le  are also included in  ta b le  3 or 5 except in the case of aids fo r  unforeseen closures.

Table 5
AID TO THE COM M UNITY STEEL INDUSTRY CONSIDERED O N  29.06.1983 TO  BE INCOMPATIBLE WITH THE C O M M O N  MARKET UNLESS CERTAIN 
CONDITIONS ARE M ET ( in  m illio n s  of ECU's)
Country G rants/
in te re s t r e lie f  
grantsC a p ita l/
p a r tic ip a to ry
loansConversion 
of debts 
in to  c a p ita lReduced 
in te re s t 
ra te  loansGuarantees/ 
market rate 
loans
BELGIUM
Sidmar
Other companies 3677 
   31245
25- -
GREECE
M e ta llo u rg ik i Halyps 
Sidenor4
2- - - -
IRELAND
I r is h  S teel Ltd. 129 26
UNITED KINGDOM  
Sheerness Steel 9
TOTAL E E C 51 237 270 - 26
Note: Conversions have been made at the exchange rates applying on 30.9.1982.