ARCHIVES HISTORIQUES
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COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(82)706
Vol.1982/0219

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)706 final
October1982AV^v:A
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s=3, t'.i
ΧΆ5οπ7 Λν'
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AIDE-MEMOIRE
ONTHEFIXING OPTHEECSCLEVYRATE
ANDONTHEDRAWING UPOPTHE
ECSCOPERATING BUDGETFOR1983
COM(82)706final

-2-
Preamble
I.GENERAL INTRODUCTION 5
A.ECONOMIC CONTEXT 5
1.Theeconomicoutlookfor1982and1983 5
2.Outlookforthecoalindnstry 8
3*Outlookfortheironandsteelindustry 8
B.POLICY CONTEXT 11
1.Coalpolicyguidelines 11
2.Steelpolicygaidelines 13
3»Socialpolicyguidelines 16
4<Financial activities 19
II.ANALYSIS OPREQUIREMENTS REPORTED ANDRESOURCES
AVAILABLE FORTHEFINANCIAL TEAR1983 21
A.REQUIREMENTS REPORTED FOR1983 22
1*Ordinary requirements 22
2.Requirements notenteredinthe"budget:
loansforfinancing subsidized housing 36

-3-
Pa*e
B.RESOURCES AVAILABLE 37
1*Resources forthefinancial year 37
2*Covering ofreqnireaents notenteredin
thebudget 41
3.Stusmaryofresources available for1983 42
III".DRAFTECSCOPERATING BUDGETFOR1983 43
A.COMMISSION APPROACH 43
B.FINANCING PROPOSALS 45
C.DRAFTBUDGET 45
AlfNEXiiiS
A.OUTTURN OFTHEECSCOPERATING BUDGETFOR1981
B.FORECAST OUTTURN OFTHEECSCOPERATING BUDGETFOR1982
C.ECSCBALANCE SHEETAT30JUNE1982
D.DRAFTECSCOPERATING BUDGETFOR1983

-4-
AIDE-MEMOIRE
onthefixingoftheECSClevyrateanaon
theestablishment oftheBCSCoperating budgetfor1983
Asusual,theviewsofParliament willhesoughtbeforethe
Cannission takesadecision onthelevyrateandtheECSCoperating
budgetforthefinancial year1983*
Thisaide-m6moire formsthebasisfortheconsultation of
Parliament .Itisdividedintothefollowing chapters :
I.Generalintroduction .
II.Analysis ofrequirements reported andresources available
for1983.
III.Draftoperating budget.
Specificfactorsaffecting thecovering ofbudgetary requirements
for1983aredescribed inChapterIII.
ζ
X X
Theaide-memoire willalsobesenttotheECSCConsultative Committee
forinformation .

-5-
I.GEÊT3EAL INTKOIKJCTIQff
ThisChapterseaa&rizes theinformation neededtosattfcadraftECSC
operating "budgetfor1983initseconomic andpolitical ocntaxt.
A.IjEOSOHIC CG^.IT
x.Theeccnsaic outlookfor198gand1933
Thelon^-awaited upturnineconomicactivity intheC«amu.aity hadstill
notmaterialized attheendofthefirsthalfof1?62,oneoftheaajor
obstacles beingthehighlevelofinterestratas.
Thechancesofactivitystartingtopickupinthesacondhalfofthe
yeardependonstablegrowthintheConumnity'sexportmarketsand,
inparticular ,onanendtotherecession intheUnitedStatesanda
fall,howeverslight,ininterestratesthere,lea-dingtoasimilar
reduction intheCommunity .
Inthesecircuastances ,aslewrecovery inCoaMranity production in
theoeccndhalfoftheyearcouldbefollowed bycontinued growth,
albeitstillmoderate ,in1983#OnanannualbasisstheConsgunity's
GDPinrealtanascouldincreasebyabout0,3%inIpG?ar«,dbyaround1.1$
in1983.Thehalf-yearly growthcurvesuggests acqj;tiiroalupturn
frosuthesecondhalfof1982untiltheendof19-3}.
Theprospects forthevarious components ofdeiaaadsaybespumedup
asfollows :
-Withearnedincomerisingonlymoderately ,privateconsumption
willnotoffermuchstimulus toeconomic growth.Privateconsumption
willgrowatafarlowerratethanGDPinboth1982and1983.
-Grossfixedcapitalformation andstockformation weretheaain
demandfactorsbehindtherecession affecting theEuropean Caaasunity
inI98O-8I.Grossfixedcapitalformation willcontinue todrop
in1982,butisexpectedtoincrease nextyaarinlinewithoverall
GDP.Stockformation playeda®ajorroleinsustaining activity in
thefirstpartof1982.
-InI98Ithesteadyincreaseinexportsandtheartoomi:stayingdrop
inimportsprevented amajorreduction inGDPeImportsareexpected
toincreasenorerapidlyin1982and1983»sothatthecontribution
offoreigntradetoGDPgrowthwillfallneaartozero,eventhough
asharpriseinexportsisforecast.

-6-
Thegrowth ofoutput in1982 will notbesufficient toprevent a
further drop inemployment ,which will probably fall forthethird
year running .Total employment intheCommunity will be2$lower
this year than in1979 ,corresponding toaloss of2.2million jobs
during therecession .Aslight increase inemployment cannot b®
expected until next year .Thedrop inemployment in1982 coincides
with asharp increase inavailable manpower ,resulting inavery
large increase inunemployment .Anadditional 1500000persons
will beoutofwork in1932 ,bringing thejobless total to
10.5 million (9-2$ ofthecivilian labour force ). Another 300000
will beoutofwork in 1983 »when unemployment will total
10.8 million (9*4% )»
Theresults achieved byseveral years ofanti-inflationary policies
arestill notimpressive .Theaverage increase intherate of
inflation intheCommunity in1983 (theconsumer price deflator )is
likely tobeonly some 1.5 "to2%below thehigh 1980 level ,with a
rate ofaround 9*5 For1982 itwill probably beabout 10$.
Progress could bemade in1982 and1983 »however ,intheconvergence
oftherates ofinflation ,atleast incomparison with thepoor
record ofthe twoprevious years .
Amajor improvement hasbeen recorded intheCommunity 'sexternal
trade balance since 1980 .That year thecurrent account deficit ,
forced upbytheincrease inoilprices ,was$38000million .This
year thedeficit should be$10000million andin1983 "theCommunity 's
current balance could bepractically inequilibrium .However ,thr
improvement isduemainly totwocountries ,Germany andthe
Netherlands .The other countries arestill recording large deficits .
Thefollowing table shows thegrowth ingross domestic product in
real terms intheCommunity from 1981 to1983 »according tothe
Commission 'sforecasts ofMay1982 .

GROSSDOMESTIC PROHJCT ATCONSTANT PRICES
changeoverpreviousyear)
1981 I9821 I9831
Denmark .-0.2 2.0 1.6
Germany 0.1 -0.5 1.0
Greece -0.7 0.7 1.9
France 0.3 1.1 1.0
Ireland 1.1 2.0 2.4
Italy - -0.2 0.8 1.0
Netherlands -1.1 -0.5 -0.3
Belgium -1.7 -0.5 O.5
Luxembourg -2.4 -0.3 1.0
UnitedKingdom -1.9 -0.6 1.7
Community -0.6 0.3 1.1
Forecasts .
Source:Commission oftheEuropean Communities ,
Directorate-General forEconomic andFinancial Affairs,
Economicforecasts 1982-83# September-October 1982#

-8-
2.Outlookforthecoalindustry
In1982theCommunity coalindustryisstillaffected bytheeconomic
recession ,whilethesupplyconditions inthemainexporting countries
outsidetheCommunity haveeased.
Asaresult,demandforcoal,including exportstonon-Community
countries ,shouldhearound314milliontonnes,aboutthesameasin1981*
Thissituation mainlyconcerns powerstations ,cokingplantsandthe
steelindustry.Thereplacement ofoilbycoalinindustry and
district heatingisstillprovingaslowprocess.
Onthesupplyside,Community
production lookssettodropby1.5$"to244milliontonnes
andimportsby1»5$to68.5milliontonnes,althoughstocks
arecontinuing torisedespitethefactthatbothconsumers and
producers considerthattheyarealreadytoohigh.Thiswillcancel
outsomeofthefinancial benefits expected fromanimprovement in
productivity inanumberofcountries ;onthewhole,thelistprices
intheCommunity arecontinuing toincrease.Thedollarpriceof
importedcoalhasdroppedslightly fromtheautumn1981peak,butthe
dollarappreciated ontheforeignexchange marketsinthesecondquarter
of1982.
3.Outlookfortheironandsteelindustry
In1981totalcrudesteelproduction intheCommunity amountedto
125.2milliontonnes-adeclineof2.5milliontonnes(2%)against
1980.Capacityutilization fellbyapproximately 1$(62.6%against
63.9%)*Demandwasstagnantthroughout 1981owingtothecontinuing
economicrecession intheCommunity ,whichinhibited anyrecovery
fromthealreadydepressed conditions of1980.

-9-
However,inthefirstquarterof1982therewassomeimprovement in
demandandacautiousoptimismdevelopedintheindustry.Hopewas
expressedthat1982wouldshowincreasedlevelsofconsumption and
production ofsteelresulting fromagradualexpansion ofgeneral
industrial activityintheCommunity andinnon–Communitycountries.
Asaresulttherewasconsiderable stockbuilding(2milliontonnes)
andproduction roseslightly,comparedwiththefourthquarterof1981,
to32million tonnes.
Unfortunately ,thisoptimism provedunfounded :industrial activity
slackened inthespringandearlysummerandsteelproduction hasfollowed
thisdownward trendwith31milliontonnesinthesecondquarter and
24»6milliontonnes(estimate )inthethirdquarter.Forthefirst
ninemonthsof1982production at87»6milliontonnesshowedareduction
comparedwith1981of6.3$(9months1981-93*6milliontonnes).Ifthe
forecastforthefourthquarterof1982isadded(25*6milliontonnes)then
theestimated annualtotalfor1982standsat113*2milliontonnes,
comparedwiththe1981totalof125•2milliontonnes,afurtherannual
reduction ofnearly12milliontonnesor9»5%*Theseglobalfigures
excludeGreece.Exportsdeclined sharplyin1982-thefirstquarterfigure
was5.18milliontonnescompared with8.3milliontonnesand7.3milliontonnes
forthethirdandfourthquartersrespectively in1981,whileimportsin1982
havebeensubstantial ,3•15milliontonnesforthefirstquarter and
3.05milliontonnesforthesecondquarteragainst 1.77milliontonnesand
2.39milliontonnesrespectively forthethirdandfourthquarterof1981,when
exportswerealso,admittedly ,exceptionally low.

-10-
Steelpricesincreased earlyin1982especially forflatproducts and,whilst
therecoveryinlongproductpriceswasnotsomarked,producers lookedforward
toaperiodofstableandslowlyimproving pricelevelstocompensate forthe
damagecausedbythelowlevelsof1980andthefirsthalfof1981.This
improvedsituation wasnotmaintained aspricesformostproducts declinedin
theearlysummerof1982andintheautumnthisdeterioration accelerated and
producers wereoncemoreconcerned abouttheirfutureviability resulting from
theconsequent lossofrevenue *Reinforcement barandwirerodpriceswere
particularly seriously affected.
Theeconomio outlookfor1983isnotencouraging .Pallinginterestratesand
insomeMemberStatesreducedlevelsofinflation havefailedtostimulate
currentconsumption orinvestment insteelintensive goods.Stableorfalling
energycostsareanotherfavourable factorthathasnothadthepositiveeffect
onindustry thatmighthavebeenexpected .Withthegrowthinthenational
economies predicted tobe atmost,steeldemandisnotlikelytoexceed
115/116milliontonnesgiventhatprospective growthareasaremainlyin
theserviceandlightindustries ,whosesteelconsumption isnegligible .
Exportsarenotlikelytobebuoyant,asprospects intheUSAsurecloudedby
thecurrenttariffproblem andtrendsinotherexportmarketsreflectthe
stagnation andrecession thatprevailsintheCommunity .

B.POLICY CONTEXT
Thegeneralobjectives of"theECSCaredetermined foralltimebyArticles 1
to5of"theTreatyofParis.
Forbothcoalandsteel,theCommission atintervals initiates proposals and
presents generalobjectives orguidelines bearing onthefuturedevelopment
oftheECSCindustries .Coalisalsooneoftheparticular itemscovered by
generalpapersputoutbytheCommission onthesubjectofCommunity snergy
policy.Thesedocuments alsocovermanpower questions ,indicating thatthe
socialdimension formsanintegral partoftheCommunity policies conducted
bytheCommission/HighAuthority pursuanttotheTreaxy.Intwoannual
reports–theReportontheResultsoftheSurveyonInvestment inthe
Community CoalandSteelIndustry andtheFinancial ReportonECSCFinancial
Activity –theECSCpublishes factsandfigures ontherecentandforeseeable
trendofinvestments andwhattheCommunity isdoingtofinance them.
Thefollowing remarksarenotintended totaketheplaceofthedatain
thosereports,butaresimplyconcerned withcertainkeypointsorrecent
developments whichtheCommission wantstohighlight inestablishing its
draftECSCoperating budgetfor1983•Theindustries themselves ,the
ECSC'ssocialpolicyandtheCommunity 'sfinancial activity aredealtwith
inturn.
1.Coalpolicyguidelines
Initscommunication totheCouncilof1October 1981onthedevelopment
ofanenergystrategy fortheCommunity ,theCommission setoutthe
framework inwhichtheCommunity couldmosteffectively meetthechallenge
facingitintheenergysector.On10February 1982theCoiT^sission than
presented totheCouncilacommunication ontheroleforcoalinCoaucuiury
1energystrategy .Itdrawsattention totheneedforincreasing coal
consumption inordertoreducedependence onoil.
COM(82)31 of10.2.1982 (OJC105,26.4.1982).

-12-
Toovercome theobstacles whicharerestraining thedemandforcoaland
tosafeguard economic andsecuresupplyttheCommission proposes the
following measures :
-improvement ofpricetransparency inordertogainabetter
understanding ofpricetrendsforallsourcesofenergy,including
coal|inthecommonmarket;
-Councilrecommendations toMemberStatesaimedatencouraging the
conversion ofoil-fired installations tocoalingeneralindustry ,
indistrict heating schemes arxlinpublicbuildings ;
-anR&Dprogramme andademonstration programme forsolidfuelcombustion
andtheuseofwastetoincrease coalconsumption ,tobefinanced by
thegeneralbudget.
Large-scale domestic coalproduction isthebestguarantee forthe
security ofsupplyandprotection againstunfavourable pricetrends
ontheworldmarket.Theminingindustryisalsoimportant fromthe
pointofviewofemployment .Theproblemistomaintain mining
capacityinsatisfactory economic conditions .Thereareseveral
possibilities openandtheyoanbesummedupbytwokeywords-
rationalization andmodernization .
Theuseofnewtechnologies ortheimprovement ofexisting technologies
shouldbegivenspecialattention whenconsidering aidforR&Dfromthe
ECSCbudget.Inaddition,thereistheprogramme ofdemonstration
projectsfortheliquefaction andgasification ofsolidfuels,whichis
financed bythegeneralbudget. v
TheCommission isplanning tocontinueitspolicyofproviding funds
forinvestment inthecoalindustry ,inparticular ineconomic orat
presentmarginally unprofitable miningcapacity ar>Hforprojectsfor
usingCommunity coal(powerstations,cokingplants,boilers,etc.),
undertheECSCTreatyandwiththesupportofotherCommunity financial
instruments .

-13-
TheCommunity financial instruments willalsoplayausefulrolein
aidinginfrastructure investment .Thecreation ofadequatetransport ,
handling andprocessing capacityisoftenaprerequisite forincreased
useandsalesofcoal.
1... _ 2Parliament andotherCommunity institutions haveapproved thisplan
ofaction,buttheCouncilhasstillnottakenadefinitive decision .
2.Steelpolicyguidelines
Commission measure£ onthesteelmarke
Theprincipal actiontakenbytheCommission inthisfieldin19S2has
beentheextension oftheanti-crisis measures (originally introduced in
October1980andrenewedinJuly1981)underArticle58oftheTreatyfor
afurther12-monthperiodfrom1July1982to30June1983.Thisstep
wastaken,withtheapproval oftheCouncil ,owingtothedeterioration
inthemarketinthesecondquarterof1982,theneedtomaintain a
balancebetweensupply/demandinsuchcircumstances andaboveallto
avoidfurthererosionofpricesthatwerealready showingsignsof
pressurebyMay/June.Mandatory quotaswereimposedformostflatand
longproducts exceptforheavyplateandsections ,whereproducers agreed
onestablishing avoluntary quotasystem.However ,owingtosevere
disruption inthemarketforwirerod,thisproduct wasaddedtothe
groupofmandatory products .Owingtoafurtherdeterioration inthe
marketforsteelandpoorprospects forthefourthquarterof1982,very
severeabatement ratesforallproducts ,withtheexception ofcertain
coatedsheet,haveprovednecessary forthethirdandfourthquarters of
1982.TheCommission reinforced itsmonitoring andsurveillance of
producers' pricestoimplement theprovisions ofArticle 60oftheTreaty.
Meanwhile ,toallowMemberStatestosetuptheirownsystemsof
surveillance ,thehandover ofresponsibility formerchants *priceswas
deferreduntil1.1.83.AfterthatdatetheMemberStates'own
administrations willhavetheresponsibility forensuringthatsteel
merchants adheretothepricerulesofArticle 60.
Resolution of14.5.1982 ,£)JC149,14.6.1982,p.134).
OpinionoftheEconomicandSocialCommittee ,sessionof26.5.
(OJc205,9.8.1982).

-14-
Steelinexternal relations
TheCommission hasrenewedfor1982thesteelarrangements concluded in
1981withthefourteencountries whicharetheCommunity'smainsteel
suppliers andmaintained thesystemofbasicexternalpricesfor
non-Community countries withoutsucharrangements .
Thepricediscipline provided forinthearrangements hasbeentightened
inthelightofthepolicyofstrengthening internalpricesintroduced
inlate1981.
Thesurveillance ofimportpricesofsteelproduots imported from
countries subjecttothebasicprices,maintained inclosecollaboration
withtheMemberStates,hasledtotheintroduction ofprovisional
anti-dumping duties*
Theprovisional resultsforthefirsthalfoftheyearandtheforecasts
forthesecondhalfsuggestthattotalCommunity exportswillprobably
dropconsiderably .Imports,whichweremuchhigherinthefirsthalfof
theyearthaninthecorresponding periodsof1980and1981,will
probably dropinthesecondhalfoftheyear.
Conununit^r solutions £o_struc;tural >£roblems
Sincethedifficulties facingthesteelmarketsarecontinuing -oreven
worsening-thesuccessofCommunity policies dependsfirstandforemost
ontheconsistency andefficiency ofthespecificanti-crisis instruments ,
thequotasystemandthecodeofaids,whichshouldservetherestructuring
objective for1985*
Thisobjective isconditional onseveralfactors :
-Themaintenance anddevelopment ofCommunity solidarity .Theunityof
theinternal marketmustbepreserved asaprecondition fortheadjustment
processandCommunity cohesion shouldbeusedoffensively andnolonger
defensively intradenegotiations .
-Reinforcement ofeffortstoadjusttheproduction apparatus todemandboth
quantitatively andqualitatively .Thestageofshort-term assessment must
becompleted anddecisions madefromamedium-term structural angle.

-15-
-Choiceofsuitable reference parameters forcompetitiveness .An
accurate assessment mustbemadeoftheleewaytob®madeupon
competitors ,whichisamajorfactorforensuringtheviability of
theindustry.
-Establishment oflinksbetweensteelstrategy andgeneralindustrial
strategy.Thesteelindustry mustnotbeviewedinisolation ,but
itsfuturemustbeseentogether withthatofallleveleofthemetal
industry andmanufacturing industry asawhole.
-Extension ofaccompanying ms&sxires ,inparticular asregardsconversion .
Aneffective industrial redeployment guideline shouldbaadopted,
combining theneedforalternative employment andthepromotion of
growthindustries .
Halfwayintotheperiodsetforcorapletin ^thestructural adjustments ,
theCommunity measures havealreadyhadsomepositiveresults.However,
workinpreparing theGeneralSteelObjectives for1925showthatthe
over-capacity problemwillgrowworseasmarketprospects deteriorate .
Efforts musttherefore beredoubled andanewcoordinated attacklaunched
byfirms,governments andtheCommission ,
Theexamination ofalltherestructuring plansinthelightofthe
prospects andguidelines oftheGeneralObjectives forSteelwillbethe
crucialstageintheCommunity planforimproving theproduction structure
ofthesteelindustry .

-16-
3.Socialpolicyguidelines
Thesocialpolicyconducted bytheHighAuthority/Commission usesa
numberoffinancial instruments providedforbyArtioles 54to$6of
theECSCTreaty.Inthecaseofthecoalandsteelindustries ,the
Commission can
-grantlow-interest loansfromownfundstopromoteworkers *housing
underArticle 54ECSC;
-financeresearchprojects onoccupational safetyunderArticle 55ECSC.
Thesemeasures willcontinue onthebasisoftheprinciples outlinedin
ChapterIIofthisaide-m&noire .
WhereastheseaidsenabletheCommission tohelpimprovetheworkingand
livingconditions ofworkersemployedintheECSCsector,Article$6of
theTreatyenablesittohelpworkers whohavelosttheirjobs,are
forcedtochangejobsorarethreatened byunemployment asaresultof
technological changeorfundamental changesinmarketconditions inthe
coalorsteelindustries .
TheCommissions operations inthissectorarebasedonArticle5^(2)
andhavebeenconsiderably steppedupinrecentyearsbecauseofthe
structural andcyolicalcrisisaffecting thesteelindustryinparticular .
TheaidsgrantedbytheCommission underthissecondparagraph taketwo
forms: '
-Underpoint(a)loansmaybegrantedtohelporeatejobslikelyto
reabsorbsteelandcoalworkersintothelabourmarket.Theseloans
carryaninterestsubsidy.Althoughthisaidcomesprimarily under
theheadingofregionalpolicy,itisalsoofmajorimportance for
thesocialsector.

-17-
–Under point (b)non-repayabl eaidfortheredeployment ofworkers is
granted intheform oftideover allowances aiidcontributions tothe
resettlement orvocational retraining ofworxers inaccordance with
conventions oragreements reached with theGovernments oftheMember
States ,
The importance ofthese twotypea ofaid from theHigh Authority can be
gauged when itisconsidered that ,between January 1978andJuly 1982 ,
theCommunity steel industry ,not cottatiiig Greece ,lost 32»7'$ ofits
1978 labour force as260000workers were mt.de redundant .ThenumbBr of
jobs lost in1980 and 1P81 alone was 7'\000and49000respectively®
Because ofthesimultaneous decline ofmost other branches ofindustry ,
redundant steelworkers whohave been aided bythe redeployment measures
have found itincreasingly difficult since 1979 "tofind ajob ;new
industries are notbeing setupnowasthey were inthepast a:nd existing
industries cannot bedeveloped fast enough toabsorb both school-leavers
and workers who have been made redundant#
Theaids intheform ofconversion loans accompanied byaninterest
subsidy make asubstantial contribution totbecreation ofjobs ,for
which steelworkers have first option .Despite increases inpast years
inthevolume ofappropriations available andthecapacity ofnew ,
economically viable undertakings toabsorb aid ,itisstill possible to
grant aidforonly afew jobs lostmcomparison with thenumber of
redundancies over the past two years .
Theincreased difficulties theCommission isencountering inhelping
steelworkers tofind new jobs aremainly d-ue tothegrowth inunemployment
since 1978 .Average annual unemployment rose froin 6million in978and
1979 6®8million in1980 and9*0million in19SI®

-18-
In1982therewillbe10.5millionunemployed .
Conscious ofthisdeterioration ,theCommission haslongteenstressing
theneedfordeveloping policies andmeasurestocreatenewjobs.
However,thesepolicies andmeasures donotmakeitanythelessnecessary
tocontinueappropriate redeployment measures.
TheECSC'straditional redeployment aidshavebeen-andstillare-an
important meansofeasingthesituation ofredundant coalandsteel
workers.Butspeoialmeasures havehadtobetakeninviewofthe
extremely difficult situation ofthesteelindustry.InMay1979"the
Commission accordingly madeproposals fortheestablishment ofspeoial
temporary allowances tohelpsteelworkersundertheCommunity restructuring
plan.
TheCommission produced anaidprogramme uptotheendof1984atan
estimated costof212million ECU.Bytakingabroadinterpretation of
Article56ECSC,theCouncilapproved Community aidforearlyretirement
andshort-timeworkinginJune1981^.Thisprogramme,financedinitially
byadhocnationalcontributions andthenbycontributions fromthegeneral
budgettotheECSC,willputtheCommunity inabetterpositiontomeet
itsobligations towardsworkersinthiskeyindustry.However,new
requestsforaidotherthantheexistingtraditional aidsmayincrease
futurebudgetrequirements underArtiole56(2)(b).
Conclusions ofthe717"thCouncilmeetingof24June1981.

-19-
4.Financial activities
ECSGFinancial ReportNo27,summarizing theCommunity'sborrowing and
lendingandfinancial aidin1981waspublished atthebeginning of
July1982.
Borrowings contracted in1981totalled 325*4million ECU,compared with
1004million ECUin1f80and837million ECUin1979°Withtheexception
ofloanspaidoutfortheconstruction ofsubsidized housing ,paymentsin
allthesectorsfinanced bytheECSCdroppedsharplyduringtheyear.
Industrialloans' *amountedto287millionECUin1981,comparedwith
757millionECUin1980and595millionECUin1979,conversion loans^
to86million ECU,comparedwith266million ECUand59million ECU,and
■>subsidized housingloansto15million ECU,comparedwith8million ECU
and22million ECU.
Totalborrowing andlendingsincetheinception oftheECSCisthus
broughtto8574million ECUand84*8million ECUrespectively (including
240million ECUinloansfromownfunds).Thebalanceoutstanding at
31December 1981was5884million ECU.
In1982loansraisedat30Augustamountedto466million ECUandloans
paidoutwereatacorresponding level.
Theprospects forarevivalofactivity overthecomingmonthswilldepend
onwhetherinvestments planned bysteelfirmsarebroughtintolinewith
Community restructuring policyandontheavailability offundsfor
interest subsidies forpriority investments ,particularly conversion
projects.
Thssamewillapplyfor1983,whentheECSCwillhavetopursueamactive
policyofaidforinvestments inthesepriority sectorsand,asfaras
possible ,forincreased productivity inthecoalsector.
Article 54ECSC.
^Article56ECSC.\oansunderArticle54ECSCpaidfromECSCspecialreservefundsandpart
oftheformer ECSCpension fund.

-20
Ageneralestimate ofthelikelytrendinloanapplications maybe
inferred ,fromasurveyconducted inearly1932ontheplannedinvestments
intheCommunity coalindustry :1800million ECUin1982and1600
million ECUin1983compared with1751million ECUin1981,1655million
ECUin1980and1167million ECUin1979-
Investment inthesteelindustry ,whichdroppedto2050million ECUin
1973and1979,pickedupto2375million ECUin1980and2762million ECU
in1981.Itisexpectedtodropto1800million ECUin1982andpickup
in1983.
Iftheactivepolicies envisaged abovecanbeimplemented ,theHigh
Authority proposes borrowings bytheECSCwhichcouldagainamountto
around 1000million ECUin1983,providedthatmarketconditions workto
theadvantage oftheundertakings concerned .

-21-
II.ANALYSIS OFREQUIREMENTS REPORTED ANDRESOURCES AVAILABLE FORTHE
FINANCIAL YEAR1983
Article49oftheECSCTreatyempowers theCommission toprocurethe
fundsneededtopursuetheactivities setoutinthatTreatybyimposing
leviesontheproduction ofcoalandsteel.Theseleviesareassessed
annually onthevariousproducts according totheiraveragevalue,but,
pursuant toArticle 50»"theratemaynotexceed unlesspreviously
authorized bytheCouncil.
Tofixthisrateitisfirstofallnecessary toestimate requirements ,
thentoconsider howfarthesemaybecoveredfrombudgetary resources
otherthanthelevies,namelytheinterest oninvestments andonloans
financed outofownfundsandcancellations ofprovisions .Theamount
whichwillhavetobecoveredbytheleviescanthenbedetermined .
Next,thelikelyyieldfromtheleviesiscalculated onthebasisofa
preliminary -andthussometimes unavoidably inaccurate -estimate ofthe
averagevaluesofthevariousproducts ,andinthelightoftheestimates
(alsosomewhattentative )ofthevolumeofoutputduringtheyear.The
probable levyyieldisfirstexpressed astheestimated yieldfroma
rateof0.01%.Therequirements andresources arethetwomainelements
described inthischapter.
Thefollowing presentation ofrequirements reported andforeseeable
resources ismodelled onthesystematic analysis ofthedataforthe
variousbudgetheadingsinthegeneralbudget,setoutinPartIIofthe
generalintroduction tothepreliminary draftbudget.Aswiththe

-22-
generalbudget,thispresentation listsseparately themainfeatures of
eachheading (legalbasisanddescription oftheoperation ,typeand
breakdown ofexpenditure ,explanation ).Threecategories ofexpenditure
areunavoidable ,inthattheyderivefromdecisions alreadytaken
(administrative expenditure ,aidtocokingcoalandcokeforthesteel
industry )orfromframework agreements withtheMemberStates(onaids
forredeployment ).Togiveaclearpicture,theexplanation for
expenditure whichisnotunavoidable (research andinterestrelief
grants)ismoredetailedthanfortheotherchapters.
A.REQUIREMENTS REPORTED FOR1983
Thetraditional termswillbeusedhere:"B"signifies requirements ,
while"R",whichwillappearlater,signifies resources .Theseterms
areintentionally different fromthoseusedinthegeneralbudget
("expenditure "and"revenue").
1.ORDINARY REQUIREMENTS
CHAPTER B1:ADMINISTRATIVE EXPENDITURE
(million ECU)
1982-Appropriations authorized
1983-Appropriations requested5
5
Percentage change-
1.Legalbasisanddescription ofoperation
Legalbasis:
-Article 50oftheEGSCTreaty;
-Article 20oftheMergerTreaty;
-CouncilDecisionof21November 1977(0JL306,30November 1977»P«28);
-ECSCcontribution totheCommission 'sadministrative expenditure .
2.Typeandbreakdown ofexpenditure
Annualpaymentinfourequalquarterly instalments .
3.Explanation
TheCouncilhassettheannualamountofthepaymentat5million ECU.

-23-
CHAPTER B2:SOCIAL MEASURES
B.2.1Aidsforredeployment (Article56ECSC)
(million ECU)
1982-Appropriations authorized
1983–Appropriations requested117
100
Percentage change -15/°
1.Legal "basisanddescription ofoperation
Legalbasis;
-Articles 50and56oftheECSCTreaty;
-Bilateral agreements concluded betweentheHighAuthority/Commission
andtheGovernments oftheMemberStates.
TheHighAuthority/Commission providesnon-repayableaidtowards:
(i)thepaymentoftideoverallowances toworkers ;
(ii)thepaymentofresettlement allowances toworkers;
(iii)thefinancing ofvocational retraining forworkershavingto
changetheiremployment .
Insomecases,thetideover allowance isreplaced byacontribution
corresponding tothecostofabridging-pension scheme.
Thegrantoftheaidisconditional uponpaymentbytheState
concerned ofaspecialcontribution ofnotlessthantheamountofthat
aid,unlessanexception isauthorized bytheCouncil,actingbya
two–thirdsmajority .
2.Typeandbreakdown ofexpenditure
Creationofaprovision tosubsidize theexpenditure onredeployment
incurred bytheMemberStatesaccording totheprocedure setoutin
theagreements signed.

-24-
Totalrequirements couldamounttoaround100million ECU,
35million ECUforthecoalindustry and65million ECUforsteel.
3«Explanation
Thecoalindustry'srequirements in1982wereconsiderably underestimated ,
especially intheUnitedKingdom.Thegradualrationalization ofthe
industry throughtheclosureofuneconomic pitssuggeststhatexpenditure
in1983willbeashighasin1982,atleastintheUnitedKingdom.
Requirements intheironandsteelsectorcontinue tobehigh.
Marketdevelopments obviously makeitverydifficult toforecast
production andemployment levelsandmayupsettherestructuring
programmes whicharealreadydifficult todrawup.
Theestimated requirements cannotbebrokendownbysector,asinpast
years,onthebasisofinformation supplied bythegovernments .Since
thesteelindustryrestructuring programmes arestillbeingdiscussed at
national level,theCommission wasunabletobaseitsforecasts onprecise
dataexceptinthecoalsectorwhererequirements areestimated atsome
38million ECU.Intheabsenceofdetailedinformation for1933,the
Commission baseditsestimates forthesteelindustry oncurrenttrends.

B2.2-SOCIAL MEASURES INCONNECTION WITH THERESTRUCTURING OFTHEIRON
AND STEEL INDUSTRY
(million ECU )
1982 -Appropriations authorized50
1983 -Appropriations requested50
-Percentage change–
1.Legal basis anddescription ofoperation
Legal basis :Conclusions ofthe717th Council meeting of24June 1981,
introducing twotemporary social measures under Article 56(2 )(b)ECSC ,ona
broad interpretation ofthat provision .
Themeasures involve contributions bytheECSC towards thefinancing ofspecial
allowances forearly retirement andshort-time working tobepaid toworkers
iniron andsteel undertakings under theCommunity restructuring programme .
These measures supplement thetraditional aids forredeployment authorized under
Article 5^(2 )(b)ECSC .
Theappropriations will hecommitted instages asthenecessary funds become
available *
2.Type andbreakdown ofexpenditure
Aids intheform ofpartial reimbursement oftheexpenditure incurred bythe
Member States .Theprocedure forthese aids islaid foreach Member States in
accordance with thecommon aidcriteria drawn upfortheCommunity asawhole .
3.Explanation
The 50million ECUearmarked for 1983 will make itpossible tocontinue
financing theprogrammes fortheearly retirement andshort-time working
adopted inprevious years .Thefunds forthetemporary special measures have
to "bestaggered over anumber offinancial years because the cost ofearly
retirement iscovered forthree years foreach worker .Allowance isalso
made forthefact that theprovision ofthenecessary funds hasfallen
behind theschedule forimplementing "themeasures being financed .

-26-
CHAPTER B3-AIDFORRESEARCH
(millionECU)
Heading Sector1982
Appropriations
authorized *1983
Appropriations
proposedPercentage
change
B.3.1 Steel 19 23 +21
B.3.2 Coal 14 19.5 +39
B.3.3 Social 10 11.5 +15
TOTALAIDFORRESEARCH 43 54 +25
*Notincluding supplementary appropriations of7million ECU(seeAnnexB).
1.Legalbasisanddescription ofoperation
Legalbasis:Articles 50and55oftheECSCTreaty
TheHighAuthority /Commission isrequiredtoencourage technical andeconomic
researchintotheproduction andincreased useofcoalandsteelandoccupational
safetyinthecoalandsteelindustries .Tothisenditgrantsaidtofinance
researchafterreceiving theCouncil'sassent.
2.Typeandbreakdown ofexpenditure
Creation ofprovisions tocoverpart-subsidies whichtaketheformofthe
repayment ofaproportion oftheactualcostsofresearchprojects approved by
theHighAuthority/Commission inaccordance withtheprocedures providedfor
intheTreaty(consultation oftheECSCConsultative Committee andthereceipt
oftheCouncil'sassent).Inmostcases,theaidgrantedamountsto60%of
theestimated andsubstantiated costs.,
3.Explanation
Theinitialbudgetfor1982wouldhavemadeitpossible tocover35%ofthe
requests made.Theincrease infundsmadeavailable for1982increased this
figuretoaround41%andtheamountearmarked for1983shouldenablethis
leveltobemaintained .

-27-
B.3.1-STEELRESEARCH
Slowereconomic growth,thecontinuing imbalance betweensupplyanddemand,
increased costsandthelackofprofitability haveallfuelledthecrisisstill
affecting mostoftheCommunity steelindustry .
Although progress hasbeenmadeasregardsproductivity ,modernization ,restructuring
andredeployment ,theinternational competitiveness oftheEuropean steelindustry
needstobeimproved asamatterofurgency andagooddealremainstobedone
onthisfront.Toimproveoverallperformance ,moresophisticated products with
ahighervalueaddedmustbemanufactured fordomestic andexportmarkets.
Thedeclining competitiveness intheCommunity isreflected infactors suchas
thelevelsofproductivity ,thegrowingadvantages enjoyed byforeignproducers
withregardtotechnical facilities andoperating costsandtheshareofthe
worldsteelmarket.Toreversethisdownward trend,itiswidelyaccepted that
research hasanimportant partytoplay;thisisunderlined intheframework
programme forCommunity scientific andtechnical activities drawnupbythe
..1Commission .
However,thecreation andadoption ofnewtechnologies areobstructed bya
numberoffactors,including insufficient R&D.Recentestimates showthatresearch
expenditure onsteelinEuropeaverages 2.2ECUpertonneofsteelproduced
compared with4ECUpertonneinJapanand2.7.ECUpertonneintheUnitedStates.
Itcannotbedisputed thatthetechnological supremacy ofJapanese manufacturers
inseveralsteelproduction sectorsispartlylinkedtothehigherlevelof
research expenditure .Oneimportant outcomeofthistrendisthatCommunity steel
Framework programmeforCommunityscientific andtechnicalactivities
1984-87:firstoutline",SEC(82)896 final.

-28-
producers haveboughtJapanese Licences andexpertise intheireffortstoimprove
efficiency andregainprofitability .However,although adoption offoreign
technology mayenabletheCommunity steelindustry tocompete onequalterms,
itdoesnotgiveitanyadvantage .Itisevidently necessary ,especially inthe
presentfinancial climateinthesector,tostepupCommunity aidtosteel
research withemphasis beingplacedonmedium-term objectives .
Tomeettheindustry'snewtechnological andeconomic objectives ,newguidelines
1wererecently laiddownforECSCresearch intheperiod1981-85 ;theprogramme
hastwomainobjectives :
(i)toreduceproduction ,processing andfabrication costs;
(ii)tomakesemi-finished andfinished products whichbettermeettheneeds
ofconsumers andusers(particularly asregardscostandquality).
Prioritywillstillbegiventoconserving rawmaterials andenergy,toenergy
substitution ,toincreasing theproductivity ofplantsandtoimproving quality
andqualitycontrolatallstagesofproduction ,processing andfabrication .
The1983programme willcoverthefollowing technical sectors :
-blastfurnacetechnology ;
-steelproduction ;
-continuous casting;
-rolling miIls;
-steelproperties andutilization .
10JC99,2.5.1981.

-29-
Inaddition totheexisting ECSC programme ofsteel research /
itisproposed in1983 tofinance aparallel programme ofpilot plant
projects fortheiron andsteel industry .Theinitiative ,which will
represent alogical extension ofthepresent collaborative research
effort /will give amuch needed stimulus totheevaluation andultimate
commercial exploitation ofnewtechnology inEuropean steelmaking .
Theproposed programme will cover thetesting andthevalidation
oftechnologies /arising from research /applied both tonewprocesses
andproduct routes onapilot-scale aswell astothemodification of
existing production methods inworks trials where major capital
expenditure isrequired .
Theoverall objectives andtechnical scope oftheprogramme
will bethe same asthose referred toabove inconnection with the
existing research activities .
Ofthetotal appropriation of23million ECUproposed forsteel research
in1983 /thefollowing breakdown isenvisaged :
existing programme 14million ECU ,
pilot-scale research programme 9million ECU .
B.3.2 -COAL RESEARCH
On9June 198(rthe Council laid down thenewCommunity energy policy objectives
for1990 which canbesummed upasanincreased effort toreduce dependence on
oil;oilconsumption istobereduced to40% ofgross primary energy consumption
andsupplies aretobemore widely diversified .The return tocoal intheshape
ofapolicy for replacing oil bycoal will help tomeet these objectives .The
Commission for itspart hasdeveloped anewenergy strategy fortheCommunity
Resolution of9June 1980 (OJC149.18.6»80 ).

-30-
1andreaffirmed therolewhichmustbeplayedbycoalinthisstrategy .In
thisdocument,theCommission emphasized R&D,inparticular asregardsmethods
forproducing,cokingandusingcoal,andtheneedtoincrease R&Dexpenditure
inordertoraisethelevelofproductivity intheCommunity coalindustry .
Severalconclusions madeinthedocument-"RoleforcoalinCommunity energy
strategy "-suggestthatthestillseriousdifficulties inCommunity minescan
beovercome bystepping upR&Dinthecoaltechnology sector.
2
Themedium-term guidelines forcoalresearch (1981to1985)drawnupbythe
Commission aremorerelevant thaneverandalargenumberoftechnical research
projects havebeensubmitted totheCommission forfinancial aidunderArticle 55
oftheECSCTreaty.
Mostoftheprojects putforwardarealreadyjointresearch programmes orwill
fitintoexisting programmes .Jointimplementation incollaboration withthe
coalminesandresearchinstitutes intheCommunity leadsmorequicklytoresults
whichcanbeusedinpractice .
Research inminingengineering isnowconcentrating onmodernmanagement techniques
inviewoftheincreasingly highunderground investment .Themainitems,in
decreasing orderofimportance ,areworking andwinning,outbyeoperations and
preparatory work.
Research intofiredamp,climate androckpressure isstillimportant becauseof
theconstant increase inminingdepth.
Increasing priority isbeinggiventosurfacecoalpreparation becauseofthe
needtoprovidecustomers withproducts satisfyihg theirspecifications .
JojC105,24.4.1982.
0JC94,17.4.1980 .

-31-
Betterutilization andbeneficiation ofmineproducts/inparticular asregards
combustion andconversion ofcoalintohydrocarbons (secondgeneration of
processes )^fitsinperfectly withthecurrent Community energystrategy.
Carbonization isstillthefocalpointofresearchintocoking;theaimisto
improvecokequalityatthesametimeasincreasing outputandcapacity.
The1983coalresearch programme willcoverthefollowing topics:
Miningengineering
-Preparatory work
-Firedamp -ventilation andclimate
-Rockpressure andsupport
-Winning andworking
-Outbyeoperations underground
-Modemmanagement techniques
Utilization andbeneficiation
-Preparation ofcoal
-Coking
-Combustion ofcoal
-Beneficiation andnewproducts
B.3.3-SOCIAL RESEARCH
Thesuccessofprevious programmes justifies thecontinuation anddevelopment
oftheprogrammes inprogress .
Thevarioussectorsoftheindustries involved/management andworkersandthe
researchinstitutes canallbenefit fromthedevelopment ofvariousresearch
projects toimproveworkingconditions .
Itisclearlynecessary toidentify themostimportant topics,whichwillbe
selected forcoordination atCommunity level/andtoavoidanyduplication of
research atnational level.
Community researchtherefore benefitsallsectorsinvolved inhealthandsafety
atwork;sinceECSCsocialresearchisstilltheonlyresearchatCommunity
leveldealingwithworkers *healthandsafety/thesectorschosentobecovered

-32-
"bymultiannual researchprogrammes areasfollows:
theeffectonworkers'healthofoccupational hazardsandphysical
conditions attheirplaceofwork
ergonomics
minesafety:thesecondprogramme wasadoptedbytheCommission in
July1982
industrial healthincoalmines(measuresagainstdustandharmfulgases
inmines)
technical measurestocombatpollution attheplaceofworkandnear
tosteelworks
safetyinthesteelindustry .
CHAPTER B4:AIDSINTHEFORMOFINTEREST SUBSIDIES
(million ECU)
Heading 1982
Appropriations
authorized*1
1983
Appropriations
proposedPercentage
change
B.4.IInvestment
B.4.2Conversion7
40(*)9
44+29$
+lOfo
TOTALAIDINTHEFORM(
INTEREST SUBSIDIES)F
47 53 +131°
Notincluding supplementary appropriations of3million ECU(seeAnnexB).
1.Legalbasisanddescription oftheoperation
Legalbasis:Articles 54(investment )and56(conversion )ofthe
ECSCTreaty,andDecisions oftheHighAuthority/Commission .
TheECSCmayuseitsownresources toprovideinterestreliefoncertaintypes
ofloan.Thesubsidyiscalculated inECUatarateandforatermfixedby
theCommission .Itcurrently standsat3$forfiveyears.
2.Typeandbreakdown ofrequirements
Provision foroffsetting partoftheinterest dueonloansdisbursed bythe
ECSC,inaccordance withthecontracts drawnupbetweentheCommission andthe
beneficiaries .
3.Explanation
ECSCloanswithinterestsubsidies aretheprincipalfinancial instruments for
promotingpriorityinvestments tomeettherequirements forthecoalandsteel
industries andtocreatejobsforformerECSCworkers.

-33-
B.4.1-Investment b
Intheinvestment field,theaimofinterestsubsidiesistoencourage
certaintypesofinvestment intheECSCindustries .TheCommission's
currentcriteriaforgrantingsubsidies areasfollows:
–research andtrainingcentres,andtheelimination ofbottlenecks
(OJC73,18June1970);
-stabilization ofcoalproduction :subsidies arelimitedtoinvestment
inshafts,underground workings andhaulageandwindingequipment
(0JC79,29March1980).
TheCommission reserves therighttoapplyandadaptthesecriteria
inthelightbothofitsassessment ofcurrentpriorities andof
theappropriations available .Itisenvisaging thepossibility of
encouraging priority investment incoal,notablyforenergy–saving
(COM(82)357 )»Cta"theotherhand,apart
fromcertaincaseswhereinterest subsidies arealreadybeinggiven,
itconfirms thatitisnotplanning togivethisformofsupport
forsteelrestructuring .
B.4.2-Conversion
Conversion loanswithinterest subsidies aregrantedtofirmsorpublic
bodieswhichencourage investments creating newjobsinregionshit
bydeclining economicactivity inthecoalandsteelindustries .
Theguidelines drawnupbytheCommission forgranting conversion
loansarepublished inOJC178,27July1977.Theyhavesincebeen
changedslightly (OJC82,29March1979»pi8)toimproveand
clarifythetermsofgloballoans,whichhaveprovedaveryeffective
instrument forcreating newjobsinsmallandmedium-sized undertakings .

-34-
Themaximumloaneligibleforinterestreliefattherateof3$for
5yearsatthemomentis20000ECUpernewjob,equivalent tomaximum
non-repayable aidof3000ECUperjob.Whenrecruiting ,therecipients
undertake togiveprioritytoformerECSCworkers.
Thisprogrammeisthusdesignedtohelpprovidejobsforworkers
formerly engagedintheCommunity'sironandsteelorcoalindustries
andtherebytomeet,inthisspecificfield,someoftheCommission's
basicobligations underArticle$6oftheECSCTreaty.
Inthefirsthalfof1982theCommission authorized nineconversion
loanstotalling 116million ECU(fivedirectloanstotalling
24million ECUandfourgloballoanstotalling 92million ECU)to
create 5500newjobs.
In19^3,asinthepast,thestressislikelytobeplacedonthe
continuing conversion requirements oftheironandsteelindustry .
Itisself-evident thatrationalization andrestructuring plansfor
theindustryin1983willinvolvefurtherredundancies ,andthought
mustnowbegiventowaysofcompensating forthis.
Anallocation of44million ECUwouldhelptopromotethecreation
ofatleast14000newjobsin1983.
Itshouldalsobenotedthatboththenon-quota*andquotasectionsofthe
European Regional Development Fundhelptocreatejobsinregions
hitbythesteelcrisis.
OJL271,15.10.1980 ,p.9.

-35-
CHAPTER Β5:-AIDSUNDERARTICLE95OFTHEECSCTREATY(COKINGCOAL
ANDCOKEFORTHESTEELINIXJSTRY )
(million ECU)
I982-Appropriations authorized 6
1983-Appropriations requested 6
Percentage change-
1.Legalbasisanddescription of"theoperation
Legalbasis:
-Article 95oftheECSCTreaty
-HighAuthority/Commission Decision73/787/ECSCof15July1973
(OJL259t15September 1973),aslastamendedby
Decision896/82/ECSCof20Aprii1982(OJL106,21Aprii1982).
TheECSCmakesalump-sumcontribution tothespecialfundforeasing
intra–Community trade,therestofthefinancebeingprovided bythe
MemberStatesandthesteelindustry .Thisschemewillbereviewed
after1January1984*.
2.Typeandbreakdown ofrequirements
Provision foralump-sum contribution of6million ECUtothefund
(theECSCannualcontribution ).
Communityaidmaybegrantedinrespectofamaximumamountof47millionECU,
corresponding to14milliontonnesofcokingcoalperyear.If
tradedropsbelowtheselimits,thereducedsubsidies willbedrawn
firstfromtheCommunity'scontribution (6millionECU)andthe17millionECU
contributed bythesteelindustry andthenfromthe24million ECU
paidinbytheMemberStates.
3.Explanation
Theaimofthespecialsystemofaidtocokingcoalandcokeistohelp
maintainproduction ofblast–furnacecoalfortheCommunity'sironand
steelindustry,andpermitthesaleofthiscoalandthecokederivedfrom
it.
ApartfromCommunityaidthesystemauthorizes theproducingcountries
tograntproduction andsalesaidtotheircollieries .
SeeParliamentResolutionof19February1982(0JCc*
C66'15.3.1982,p.104).

-36-
Italsolaysdownpricingrulesenabling coalundertakings whichsupply
thesteelindustrytograntrebatesontheirlistpricesprovidedthat
theserebates donotcausethedelivered pricestoworkoutlowerthan
thosederivedfromtheguidepriceforimportedcoal,whichtheCommission
publishes regularly .
2.REQUIREMENTS NOTENTERED INTHEBUDGET:LOANSFORFINANCING
SUBSIDIZED HOUSING
Inadditiontotherequirements tobefinanced bynon-repayable grants
fromtheyear'sresources ,thereistheECSChousingsubsidyscheme,
whichhasbeeninoperation since1955*Forecasts forthisprogramme
areincluded inthisaide-memoire tocomplete thepictureofallECSC
interventions forParliament andtheConsultative Committee .For
easeofunderstanding ,thepresentation followsthesameanalytical
formatasfortherequirements alreadydescribed .
1.Legalbasisanddescription oftheoperation
Legalbasis;Article54andDecisions oftheHighAuthority/Commission
assigning tothehousingprogrammes thefundsfrom"specialreserve"
constituted byinterest frominvestments andfromloansagainst own
funds.
ECSCintervention takestheformofreduced-interest loans,andeases
thecostoffinancing housingbyaddingthefundslentbytheCommunity
toresources providednationally .
2.Typeandbreakdown ofrequirements
Grantoflong-term loansatlfointeresttotheresponsible national
bodiesorotherfinancial institutions .
V
TheCommission intendstoallocate 30million ECU,averaging outat
15million ECUayear,tothesecondphase(1982-83)oftheninth
subsidized housingprogramme .

-37-
3.Explanation
'Thisschemehasthetwinaimof:
–complementing Community policyinthecoalandsteelindustries ;and
-improving livingconditions forworkersintheseindustries .
Thecriteriaforthegranting oftheloansaredescribed indetailon
pages2and3ofOJC299130November 1979•
Theschemeisbothintheinterest ofworkers,sinceitalleviates the
effectsofpriceincreases andhighinterestrates,andofbenefit
totheindustry ,sinceitfacilitates reorganization .
Thenumberofdwellings subsidized bymeansofECSCloansat1JanuaryI98I
stoodat171035.
B'.RESOURCES AVAILABLE
Theremarksonterminology madeonpage//applyheretoo.
1.Resources forthefinancial year
CHAPTER R1:GENERAL RESOURCES
TITLER1.1:Levy
1.Legalbasisanddescription
Legalbasis:
-Articles 49and50oftheECSCTreaty
Decisions 2/52and3/52of23December1952.
Theleviesarecalculated onthebasisofafixedscalepertonnewhichis
decidedeachfinancialyearbytheHighAuthority/Commission andpublished
intheOfficial Journal.

-38-
2.Typeandbreakdown
Levyresources surethesumsowing,anddulyestablished ,intheformof
leviespayableonoutputinthe1983financial yearandcalculated onthe
basisoftheproduction declarations madetytheundertakings .
3.Explanation
Thelatestestimates oftheaveragevalueswhichserveasthebasisfor
calculating theleviessuggestthatthefiguresforthe1983financial
year,whichrelatetothereference periodfrom1July1981to30June1982,
willbesome20%higherinthecaseofcoalandroughly 12%forsteelthan
thefiguresfor1982.
Itshouldbenotedthatthereissunappreciable marginofuncertainty in
thesefigures ;thisisbecausethedepartments concerned arenotyetin
possession ofalltherequisite data,andforecasting production inpresent
economic conditions isveryuncertain .
Tonnagesubjecttothelevy,andyieldfromarateoflevyof0.01%.
ProductProduction forecasts
onwhichthelevyis
calculated
(milliontonnes)Yieldfromlevyrate
of0.01%
(million ECU)
Browncoalbriquettes and
semi-coke derived frombrown
coal 4.1 0.02
Hardcoalofallcategories 197.7 1.39
Coal-total
4T1.41
Pigironotherthanthat
usedformakingingots 3.2 0.04
Steeliningots 106.0(*) I.98
Finished products 81.3 0.71
Steel–total
I2.73
I
GRANDTOTAL 4.14
*Cautiousestimateinviewoftheuncertainty currently surrounding thesteelindustry .

-39-
TITLE R1.2:Interest :otherheadings
1.Legalbasisanddescription
Resources deriving fromincomeoninvestments andonloansagainst
non-borrowed fundswillbedetermined whentheCommission adoptsthe
balancesheetat31December 1982.UnderitsDecisionof30April 1975»
theCommission entersinthebudgettheinterestavailable fromthe
previous financial year.
Fines:Articles 47,58and60oftheECSCTreaty(mainly).
Abreakdown offorecast resources basedonthelatestestimates isgiven
below:
Titles Heading million ECU
R1.2
R1.3
R1.4Interest oninvestments andloans
againstnon-borrowed funds
Finesandsurcharges forlatepayment
Miscellaneous revenue80
5
tokenentry
. ....
3.Explanation
Thefigureforinterest revenueisbasedonanestimate oftheresources
whichtheCommission willbeinaposition torelease whenitadoptsth®
balancesheetat31December 1982.
Promanaccounting pointofview,revenuefromthefinesimposed by
theCommission underArticle 58oftheECSCTreatyshouldberegarded to
acertainextentasdeferred resources ,inviewoftheappeals madeto
theCourtofJustice .Itisvarydifficult toforecast theamountwhich
willbecollected in1983,especially sincethelegalproceedings indisputed
oasesarelikelytogoonforoneortwoyears.Itisproposedthatonly
thosecaseswhererecoveryisinprogress shouldbetakenintoconsideration .
Onthebasisoftheinformation currently available ,itisproposedthat
5million ECUbeenteredunderthisheading.

-40
CHAPTER R2:CANCELLATIONS OFCOMMITMENTS WHICH WILL PROBABLY NOT BE
IMPLEMENTED
1.Legal basis and description
Theprovisions created inresponse toCommission aiddecisions must be
given tangible form within areasonable period oftime bythecontracting
oflegal commitments .
TheCommission 'sInternal Rules forthedrawing upandimplementation of
theECSC operating budget therefore provide that intheexceptional event
ofundue delay atthis stage theprovisions will becancelled .
TheRules also provide that once allparties have disoharged their
obligations under thelegal commitment ,anyremaining part oftheprovision
will likewise becancelled .
Theamounts thus released become available again asresources forthe
current financial year .
2.Nature and breakdown
Save intheexceptional cases where decisions ontheearmarking offunds
arenotfollowed upwithin areasonable period oftime bylegal commitments ,
anycancellation ofearmarked funds normally indicates complete discharge
ofthecontract ,agreed with theother contracting party .
Theestimate of5million ECU shown inthis chapter relates ,inessence ,
tocancellations ofallocations for conversion and resettlement aid .
Only atoken entry would beneeded fortheother items which might be
involved (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 onseveral factors such asnegotiations
with thegovernments concerned .Theestimated figure of5million ECUfor
1983 isbased onanaverage rate .

-41-
CHAPTER R3;REVALUATION OFASSETS ASPLIABILITIES
Thischapter,carrying atokenentry,istorecordtheneteffectof
changesinexchangeratesduringthefinancial year.
CHAPTERR4;UNUSEDRESOURCES FROMTHEFIXlffClAL YEAR1982
Thischapter,carrying atokenentry,recordsanybalanceremaining from
theprevious financial yearELSresources forthecurrentfinancial year.
CHAPTER R*5:EXCEPTIONAL REVENUE
1Legalbasis
–Conclusions ofthe717thCouncilmeetingof24June1981,
–Article 235oftheEECTreaty,
–Article 49of'theECSCTreaty.
2,Natureandbreakdown
Thischapterrecordstheadditional resources intendedsolelyforfinancing
socialmeasures inconnection withtherestructuring ofthesteelindustry
(articleB.2.2).In1981theMemberStatesmadenationalcontributions
amounting to50million ECUtotheECSCforthis.
In1982,another62million ECUcarriedoverfrom1981wastransferred
fromChapter 65oftheGeneralBudgettotheECSC.Asecondtransfer of
50million ECUinrespectof1982isexpectedbeforetheendoftheyear.
Initspreliminary draftbudgetfor1983theCossmission hasproposed a
transfer of50million ECUfromChapter 65oftheGeneralBudget.
2.COVERING OFREQUIREMENTS NOTENTERED INTEEBIIK^T
Fundstocoverrequirements fortheconstruction ofsubsidized housingare
obtained from:
–theresources madeavailable forthisintheformerECSCpensionfund;
–theresources inthespecialreserve.
Theseresources aremadeupoftherepayments ofloansalready madeand
freshappropriations allocated tothespecialreserve .
Theallocation tothespecialreserveoftheadditional resources required
willbedecidedwhentheCorns)issionadoptsthebalancesheetat31December 19-32.

3.SUMMARY OPRESOURCES AVAILABLE FOR1983
Theestimates oftraditional resources otherthanleviesamountto
90millionECU(interestavailable :80million ECU;fines:5million
cancellations :5millionECU).Astheyieldfromalevyrateof0.01$
hasbeenestimated at4*14million ECU,theyieldobiained fromlevies
canbeestimated at128million ECU,assumingthatthecurrentrateof
0.31$ismaintained .Thetotalordinaryresources available for1983t
assumingthatthelevyrateremainsunchanged ,isthusestimated at
218million ECU.

43
III.DRAFTECSCOPERATING BUDGET FOR1983
A.COMMISSION APPROACH
Forthepurposes ofevaluating thedraftbudgetfor1983/theCommission
considers thatapriceincrease of8.8Xshouldbetakenintoaccountto
comparethefiguresfor1982andthosefor1983.
Therevisedforecast implementation oftheoperating budget
for1982(AnnexA)shouldalsobetakenintoconsideration .TheCommission
hasusedthecontingency reserveof30million ECUenteredinthebalance
sheetat31December 1981 tocoverareduction inthelikelyyieldfrom
levies (19million ECU)andtoincrease theamounts earmarked forconversion
(from40to43million ECU)andforresearch (from43to50million ECU).
This16.2Xincrease intheResearch chapter wastheCommission 's
response totheconcernexpressed initsaide-memoire onthedraftbudget
2 .... 3for1982 andunderlined inParliament 'sresolution of15December 1981.
Themainfinancial problemfacedwhenpreparing theECSCbudgetfor
1983wasagainthatofbalancing thebudgetinviewoftheseriousdifficulties
currently affecting theindustries ,inparticular theCommunity steelindustry.
Inthesocialsector,thesedifficulties arereflected intheneedtoenter
largeamountsforthecommitment ofredeployment aidandfornewtemporary
socialmeasures (aidforearlyretirement andaidforshort-time working)
approved bytheCouncil on24June1981fortheperiod1981-84 asthe
socialsideoftheCommunity 'ssteelpolicy.
Published inJuly1982inECSC'Financial ReportN°27.
2C0M(81)652,10.11.1981,page46.
30JC11,18.1.1982,page27.

-44-
Ithasbeenacceptedthatthesesocialmeasuresforthesteelindustry
cannotbefinanced fromtheECSC'straditional resources .Tofinance the
aidof50million ECUtobecommitted in1983,theCommission therefore
proposed tothebudgetauthority initspreliminary draftbudgetfor1983
that50million ECUbeenteredinChapter 65(Contribution totheECSCfor
socialmeasures inconnection withtherestructuring ofthesteelindustry).
Thenewmeasureswillthushavenoeffectonthebalance betweentheECSC's
traditional requirements andresources .
Sincedecisions onfinancing thenewsocialaidsaretobetakenunder
theprocedure forthegeneralbudget/thefollowing remarksdiscussonlythe
problemraisedbythebalance betweentraditional requirements and
resources .
Withoverallresources of218million ECU/assuming thelevyiskept
atitspresentrate,andtakingintoaccounttheotherunavoidable expenditure
(redeployment aidestimated at100million ECU/administrative expenditure
fixedbytheCouncilunderArticle 20oftheMergerTreatyat5million ECU
andaidforcokingcoalfixedat6million ECUbyCommission decision under
Article 95oftheECSCTreaty)/theremaining fundsavailable tomeetresearch
andinterest subsidyrequirements wouldbe107million ECU(218-(100+5+6)=107)i
Additional resources couldbeobtained byraisingthelevyrate
(4.14million ECUforeachincrease of0.01X).However/thecrisisaffecting
thesteelindustryforthepastfewyearswillcontinue in1983andcould
becomeevenmoreserious.Inthecoalindustry/therearestillproblems in
sellingthecoalproduced andstocksareexpected toincreasefurther.
Underthesecircumstances theCommission therefore considers thatitwould
bewrongtoraisethelevyrateabovethepresent0.31X.

-45-
B.FINANCING PROPOSALS
TheCommission 'sproposals forthe1983ECSCoperating budgetare
tabulated inAnnexDandarebasedonthefollowing factors :
-totalresources of268million ECU/including specialresources of
50million ECUinaidofthespecialsocialmeasuresforsteel;
-unavoidable expenditure' of111million ECUtobechargedtothetraditional
resources of218million ECU:
é5million ECUinadministrative expenditure ;
•-
.100million ECUinredeployment aid;
6million ECUinaidtocokingcoal/andsteelplantcoke;
-107million ECUtobeallocated toresearch expenditure andinterest
subsidies .
Asregardsthedivision ofthe107million ECUbetweenthetwochapters
concerned ,theCommission considers thatinterest subsidies shouldbe
sustained inthepresentsituation especially inconnection withconversion /
giventhedirectlinkwiththecreation ofnewjobs.Ittherefore proposes
thatthischapter begiven53million ECU/ofwhich44million ECUwill
beforconversion aid.
Theamountleftforaidtoresearch isthus54million ECU.Itis
proposed that23million ECUbedevoted tosteel/19.5million ECUto
coaland11.5million ECUtosocialresearch .Thisamountisabout25X
higherthantheoriginalallocation forthecurrentfinancial year.
Bywayofconclusion ,theCommission proposes thatthe1983ECSCoperating
budgetbeadoptedatatotalamountof268million ECU/brokendownas
showninAnnexD.
Ittherefore proposes thatthelevyratebesetat0.31%.
\
C.DRAFTBUDGET
Thedraftbudgetestablished bytheCommission andamounting to268million
ECUispresented inAnnexD.
I

ANNEX A
OUTTURN OPTHEECSGOPERATING BUDGET FOR1981
(million ECU)
REQUIREMENTSBUDGET 1
FIGURESOUTTURN RESOURCESBUDGET
FIGURESOUTTURN
OPERATIONS TOBEFINANCED PROM
CURRENT RESOURCES (NON-REPAYABLE )
1.Administrative expenditure
2.Sooialexpenditure
2.1Aidforredeployment (Art.56)
2.2Socialmeasures connected
withrestructuring ofsteel
industry
3·Aidforresearch (Article55)
3*1Steel
3.2Coal
3*3Social
4·Interest subsidies
4·1Investment (Art.54)
4.2Conversion (Art.56) ,
5«Aidforcokingcoaland
metallurgical coke(Article95)
6.Revaluation ofassetsand
liabilities
Sub-total
Surplus
TOTAL-BUDGET
OPERATIONS FINANCED BYLOANS
FROMNON-BORROWED RJNDS
7·Subsidized housing5
236
124
112
44
19
16
9
32
7
25
65
172.6
124
48.6
44
19
16
9
33.2
7
26.2
6
1.7RESOURCES OPTHEFINANCIAL YEAR
1.Current resources
1.1Yieldfromlevyat0.31#
1.2Interest oninvestments and
onloansfromnon-borrowed
funds
1.3Pinesandsurcharges for
delayed payment
1.4Miscellaneous
2.Cancellation ofcommitments whioh
willnotbeimplemented
3·Unusedresouroes carriedover
fromthefinancial yearI98O
3.1Interest subsidies
3.2Miscellaneous
4.Exceptional revenue
5·Drawings oncontingency
reserve
Sub-total
Deficit
TOTAL-BUDGET
ORIGIN OFNON-BORROWED FUNDS
6.Specialreserveandformer
ECSCPension Fund167
127
40
25
11.4
10.7
0.7
112
7.6168.5
126.6
40
1.9
27.7
11.4
IO.7
0.7
48.6
7.6
323 262.5
1.3323 263.8
323
11263.8
11323
11263.8
11
Commission 'sbudgetestimates at10November 1981.

ANNEX 3
FORECAST OUTTURN OFTHE ECSC OPERATING BUDGET FOR 1982
(million ECU )
REQUIREMENTSBudget
figureForecast
outturnRESOURCESBudget
figureForecast
outturn
OPERATIONS TOBEFINANCED FROM CURRENT RESOURCES FOR THE FINANCIAL YEAR.
RESOURCES (NON-REPAYABLE )
1.Administrative expenditure 5 5 1.Current resources
2.Social expenditure 167 230.4 1.1 Yield from levy at0.31 X 140 121
2.1Aidforredeployment (Art .56) 117 117
113.4'1.2 Interest oninvestments and on 75 75
2.2 Social measures connected with 50 loans from non-borrowed funds
restructuring ofsteel industry 1.3Fines andsurcharges for late token-
3.Aid forresearch (Art .55)
3.1 Steel >
3.?Cerst
3.3 Social
4.Interest subsidies
4.1 Investment (Art .54)
4.2Conversion (Art .56)43
19
14
10
47
7
4050
22
17
11
50
7
43payment
1.4 Miscellaneous
2.Cancellation ofcommitments which will
notbeimplemented
3.Revaluation ofassets and liabilities
4.Unused resources carried over fromentry
token
entry
3
token
entry
token5.5
63.4
5.Aidforcoking coal and
metallurgical coke (Art .95)6 61981
5.Exceptional revenue
6.Drawings oncontingency reserveentry
50 50
26.5
268 341.4 268 341.4
RESERVE RESERVE
Any other aid 25- Customs duties 25-
Research 21
Interest subsidies 4 -
293 341.4 293 341 .4
OPERATIONS FINANCED BYLOANS FROM
NON-BORROWED FUNDSORIGIN OFNON-BORROWED FUNDS
6.Subsidized housing 15 15 Special reserve and former ECSC
Pension Fund 15 15 I
113.4 =63.4 million ECUcarried over from 1981 plus 50million ECUfor1982 .

Information relating tolevies
Thelatestavailable information onproduction and.thelevyyield
forthecurrentfinancial yearisgivenbelow:
LevyyieldfortheperiodfromJanuarytoJune1982(provisional estimate )
ProductProduction
servingasa
basisforthe
calculation of
thelevyin
million tonnesYield
pertonne
at0.31%
levyrateLevyyield
million ECU
Brown-coal briquettes and
semi-coke(1) (2) (3)
2.0 0.11625 0.2
Alltypesofhardcoal 98-1 0.19725 19.3
Totalforcoal 19.5
Pigironotherthanthat
requiredforthe
manufacture ofingots 1.8 0.36820 0.7
Steelingots 62.7 0.51594 32.3
Finished products 48.0 0.24191 11.6
Totalforsteel 44.6
GRANDTOTAL 64.1
3-(1)χ(2)

ECSCBALANCE SHEETAT30JUNE1982ANNEX C
ASSETS...
LIABILITIES.million ECU)
1.Cashinhand,balances withcentral
banks23.01.Bondsandcouponsduebutnotyet
presented forpayment 245.9
2.Claimsoncreditinstitutions
-repayable ondemand
-withagreedmaturity datesor
periodsofnotice656.9
19.9
637.02.Long-term andmedium-term debts 6185.3
3.Debtsecurities heldinportfolio 384.4 3.Otherliabilities 0.3
4.Loansoutstanding 6321.6 4.Accruals anddeferred income 259.0
5.Recoverable issuingcostsand
redemption premiums 56.95.Commitments forECSCoperating
budget 742.8
6.Bankdepositsforbondsandcoupons
duebutnotyetpresentedforpayment 245.96.Reserves
A.Guarantee fund
B.Special reserve
C.Formerpensionfund492.9
300.0
150.0
42.9
7.Landandbuildings 0.4 7.Unallocated balance 76.6
8.Otherassets134.1
9.Accruals anddeferred income 179.6
8002.88002.8

ANNEX D
DRAFTECSCOPERATING BUDGET FOR1983
(millionECU)
REQUIREMENTS PROPOSALS RESOURCES PROPOSALS
OPERATIONS TOBEFINANCED FROMCURRENT RESOURCES FORTHEFINANCIAL YEAR
RESOURCES (NON-REPAYABLE )
1.Administrative expenditure 5 1.Currentresources
2.Socialexpenditure 150 1.1Yieldfromlevyat0.31% 128
2.1Aidforredeployment (Art.56) 100 1.2Interest oninvestments and
2.2Socialmeasures connected with onloansfromnon-borrowed
restructuring ofsteelindustry 50 funds 80
3.Aidforresearch (Art.55) 54 1.3Finesandsurcharges for
3.1Steel 23 latepayment 5
3.2Coal 19.5 1.4Miscellaneous tokenentry
3.3Social 11.5 2.Cancellation ofcommitments
4.Interest subsidies 53 unlikely tobeimplemented 5
4.1Investment (Art.54) 9 3.Revaluation ofassetsand
4.2Conversion (Art.56) ! 44 liabilities tokenentry
5.Aidforcokingcoaland 4.Unusedresources carried over
metallurgical coke(Art.95) 6 from1981 tokenentry
5.Exceptional revenue 50
268 268
OPERATIONS FINANCED BYLOANSFROM ORIGIN OFNON-BORROWED FUNDS
NON-BORROWED FUNDS
6.Subsidized housing 15 6.Specialreserve andformer
3– –ECSCPension Fund 15
Intheeventofresources exceeding requirements ,thesurpluswillbeallocated tointerestsubsidies for
conversion (ItemB-4-2).
V