Proposal for a Council Regulation (EC) on aid to certain shipyards under restructuring and amending Council Regulation (EC) No 3094/95 (97/C 153/03) (Text with EEA relevance) COM(97) 132 final - 97/0113(ACC)

(Submitted by the Commission on 21 March 1997)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 92 (3) (e) and 113 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

Whereas by virtue of Council Regulation (EC) No 3094/95 (1), as last amended by Council Regulation (EC) No 1904/96 (2) the provisions of Council Directive 90/684/EEC (3), amended by Council Directive 92/68/EEC (4) are applicable to aid to shipbuilding until either the OECD Agreement respecting normal competitive conditions in the commercial shipbuilding and repair industry (5) enters into force, or at the latest until 31 December 1997;

Whereas the shipbuilding industry is important for the mitigation of structural problems in a number of regions of the Community;

Whereas the direct application of the common maximum ceiling does not allow for the comprehensive restructuring measures necessary in a number of shipyards in these regions and a special transitional arrangement should therefore be introduced;

Whereas it was acknowledged in Directive 92/68/EEC that the shipbuilding industry in the territories of the former German Democratic Republic required urgent and comprehensive restructuring in order to become competitive, a target which has not been fully achieved for two shipyards in the envisaged restructuring period due to unforeseeable circumstances beyond control of these shipyards;

Whereas in the case of the two shipyards located in the former German Democratic Republic a further transitional arrangement is needed, in order to enable completion of their restructuring, which shall allow them to comply subsequently with the aid rules applicable to the Community as a whole;

Whereas the shipbuilding capacity in the territories of the former German Democratic Republic was reduced to 327 000 cgt by 31 December 1995 and whereas the German Government made the commitment to ensure that this capacity limitation is fully respected at least until the end of the year 2000, and to extend this limitation until the end of 2005 unless the Commission authorizes an earlier termination of the capacity limitations;

Whereas a further reduction of shipbuilding capacity in Germany will occur as a result of the closure of the Bremer Vulkan Werft in Bremen-Vegesack for rebuilding before the end of 1997;

Whereas, in spite of the efforts made by the Greek Government to privatize all its public yards by March 1993, the Hellenic shipyard was only sold in September 1995, to a cooperative of its workers, the State having kept a majority holding of 51 % for defence interests;

Whereas the financial viability of the restructuring of Greek shipyards necessitates the provisions of aid which allows the company to write off debts accumulated before its delayed privatization;

Whereas a further restructuring of the publicly owned yards in Spain is necessary so that each of these yards, being established as individual profit centres at full cost basis, will achieve financial viability by 31 December 1998;

Whereas under this restructuring plan there will be a capacity reduction in these yards from 240 000 cgrt to 210 000 cgrt, complemented by the non-reopening to shipbuilding of the public yard at Astano (135 000 cgrt capacity) and by additional capacity reductions elsewhere in Spain amounting to a further 17 500 cgrt;

Whereas no further aid for restructuring purposes (including loss compensations, loss guarantees and rescue aid) will be made available to the shipyards covered by this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

1. Notwithstanding the provisions of Council Regulation (EC) No 3094/95, for the yards under restructuring specified in paragraphs (2), (3) and (4) the Commission may declare additional operating aid compatible for the specific purposes and up to the amounts specified therein.

2. In the territory of the former German Democratic Republic, operating aid for the period from 1 March 1996 until 31 December 1998 in favour of MTV-Schiffswerft and Volkswerft Stralsund may be considered compatible with the common market up to a total of DM 333 million and DM 395 million respectively. The said amounts comprise the aid to facilitate the further operation of the yards, social aid, contract-related aid under the 'Wettbewerbshilfe` scheme and the aid equivalent of guarantees. For these yards the provisions of Chapter II of Directive 90/684/EEC shall not be applicable during the restructuring period with the exception of Article 4 (6) and (7), and no other operating aid may be paid for works on contracts or losses in the relevant period. For contracts signed during the restructuring period but carried out after it, the Community rules on contract-related aid valid on the day of contract signature shall apply.

3. Aid in the the form of a waiver of debts for Greek shipyards, up to Dr 54,525 billion, corresponding to debts related to civil work at the yard, as of 31 December 1991 and accrued by interest rates and penalties until 31 January 1996 may be regarded as compatible with the Treaty. Apart from Article 5, all provisions of Directive 90/684/EEC shall apply to this yard.

4. Aid for the restructuring of the publicity-owned yards in Spain may be considered compatible with the common market up to Pta 135,028 billion in the following forms:

- interest payments of up to Pta 62,028 billion in 1988 to 1994 on loans taken on to cover unpaid previously approved aid,

- tax credits in the period 1995-1999 of up to Pta 58 000 million,

- capital injection in 1997 of up to Pta 15 000 million,

All other provisions of Directive 90/684/EEC shall apply to these yards.

Article 2

For the restructuring programmes benefiting from aid as provided for in Article 1, the notification shall be complemented by a programme for the monitoring of the actual use of the investment and operating aid, compliance with the restructuring plan and enforcement of capacity limitations which is acceptable to the Commission.

Article 3

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

It shall apply until 31 December 1998.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

(1) OJ No L 332, 30. 12. 1995, p. 1.

(2) OJ No L 251, 3. 10. 1996, p. 5.

(3) OJ No L 380, 31. 12. 1990, p. 27.

(4) OJ No L 219, 4. 8. 1992, p. 54.

(5) COM(94) 460 final, of 3 November 1994.