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DOCUMENTS "COM"
COM(81)71
Vol.1981/0021

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)71 final
Brussels ,23rd February 1981
FIRST REPORT ONTHE APPLICATION OFTHE RULES FOR AIDS
TOSTEEL INDUSTRY
(presented bythe Commission tothe Council )
\
COM (81)71final

Ck?W\-H
ι - · 1
First Report ontheapplication ofthe rules foraids
tothe steel industry
. 1
1.Part_0ne :Po^icy_on_aids_to_the_stee l_2ndust
1.1 .Bydeciding on 1February 1980 toapply aset ofcommon rules toall
aids granted tosteel undertakings -theCommission equipped itself with
.* s
one ofthe instruments which are essential both toits contribution to -
supporting andhastening aradical restructuring oftheCommunity steel
industry andtothemaintenance ofasingle Community steel market .
1.2 .Inattenuating for theperiod during which these rules will beinforce
theprinciples concerning theprohibition ofspecific aids tothe steel
industry under Article Aofthe ECSC Treaty ,but atthe same time ap­
plying the same rules also toaids granted tothe steel industry on
thebasis ofregional andgeneral aidschemes ,theCommission recogni­
zed theneed for State financial assistance torestore the competiti­
veness oftheCommunity steel industry andalso considered that prio­
rity should begiven tothe restructuring ofthe steel industry on
account ofthe seriousness ofits structural crisis .
TheCommission realizes that ithas thus directly assumed responsibi­
lities .Itwill continue tofulfil then )inthecommon interest ,and in
the convinction that subsidies must not beaimed purely atmaintaining
inoperation manufacturing plant which ,inview ofitsproducts ,costs
andprices ,isnolonger adapted tothenewmarket conditions .Itwill
continue toensure that aids aregranted only totheextent that they
contribute inthe long term tothemodernization andadaptation ofthe
Community steel industry ,enabling ittoface world-wide competition on
thebasis ofmodern plant ,manufacturing atcompetitive prices pro­
ducts forwhich there isademand ,without anyneed forconstant finan­
cial assistance from the State .

-2-
1.3 .Although thenew rules onaids tothe steel industry have been in
force only since early 1980 and arelatively small number ofcases
has since been notified totheCommission andexamined byit,certain
practical conclusions may bedrawn from theexperience gained ;also
some specific problems have arisen inconnection with their operation .
1.4 .TheCommission hasgiven itsagreement tothe aids notified toitonly
insofar asthey satisfied the criteria laid down inthe rules .The
Commission has notauthorized any aid notmaking anoverall contribution
tothe restructuring ofthe steel industry .
However ,ithasemerged that although theadjustments carried out by
undertakings with financial assistance from thepublic authorities
during this time represent astep inthe right direction ,the scope of
the restructuring process isstill not sufficiently extensive .Inthe
future ,therefore ,theCommission will even more than inthe past
scrutinize the aids' conformity with the rules inthe light ofthe
extent ofrestructuring ,and inparticular ofthe reduction incapa­
city indispensable tothe restoration ofanimproved balance between
supply anddemand .The Commission considers that the radical restruc­
turing ofthe Community steel industry must re-establish this balance
inarelatively short space oftime .When itisappraising aids to
t
the steel industry envisaged bynational authorities ,ittherefore
has toconsider ,first and foremost ,theeffects ofthese aids atin­
dustrial level .
Themaintenance ofuncompetitive surplus capacity inthe long term ,by
thegranting ofState assistance toanindustry like steel ,contribu­
tesneither togenuine regional development nor tothe secure and
lasting provision ofessential jobs .
1.4.1 .These considerations apply both toaid which could prove necessary
atany given time tomaintaining inoperation firms which are ba­
sically sound and which have adjusted orcould adjust tothenew
market conditions ,but are indifficulty onaccount oftheserious­
ness and length ofthecrisis ,and toaidaimed ataverting severe
social problems .

-3-
TheCommissiontakestheviewthatitisessentialtoensure
thatrescueaid,forinstancethegrantingofloansonspecial
termstoenableanundertaking tokeepminimumcashholdings,
shouldonlybegrantedwhentherearegenuinelyacutesocial
problemsandatthesametimethattheseaidsshouldremaintrue
totheirname,i.e.theyshouldbegrantedforastrictlylimited
period,shouldnotberepeatedandshouldenabletheundertaking
toimplementagenuinerestructuring plan.TheCommissionfeels
thatsuchrescueaidcouldweltloseitscharacterifrepeatedly
grantedbytheMemberStates;itsrealjustification having
beenabandoned,itcouldbecomepermanentaidtocontinuedope-
operation.Suchaid",however,doesnothingtoencourageunder­
takingstointroducethenecessarychangesintheirproduction
apparatusand"performance .Moreover,inthecrisissituation
prevailingintheindustry,itcansometimesleadtoprice
levelswhosecompetitiveness doesnotreflecttheundertakings'
competitive strengthandnotonlydistortsconditionsofcompe­
titionbuthampersariddelaystherestructuring intheindustry
asawhole.TheCommissioncanthereforeonlytoleratesuchaid
tocontinuedoperationunderstrictconditions,linkedtores­
tructuringmeasuresandreductions ,incapacity.
4.2.Similarly,inthecaseofinvestment .aid,theCommissionwill
rigorouslyensurethatinvestmentcomplieswithrestructuring
1aims.Suchaiddirectlyaffectstheproductiveapparatus.If
theCommissionistoagreetothegrantingofStateassistance
fornewinvestmentandinvestmentinmodernization ,whichoften
automatically increasescapacity,suchassistancemustcomply
inallrespectswithrestructuring needsandthegeneralobjec­
tivesforsteel.TheCommissionwillalsoscrutinizetheinten­
sityofsuchaidsmainlyinthelightoftheextenttowhich
investmentcontributestotheoverallreductionincapacity
whetherattheleveloftheindividualundertakingorwithin
thewiderframeworko,fadjustments betweendifferentunderta­
kings.TheCommissionfirmlytitendstomakesurethattherules
oninvestmentaidareobserved;theseruleswillbeallthe
moreeffectiveasthepracticalobjectivesofrestructuring are
definedonthebasisofajoi^*oftheCommission,the'
MemberStatesandtheundertakings menvielyes../.

Lookingbeyondthesequestionsofsubstance,however,theCommission
mustalsopointoutthatanumberofprocedural problemsaroseduring
thefirstyearthattheruleswereapplied.Itattachesgreatimpor­
tancetothesequestions,notongroundsofprinciple,butbecause
observance oftherulesthemselves isconditional onobservance of
therelevantprocedures .Inpractice,theCommission canonlyfulfil
itsresponsibilities inadministering therulesonaidsiftheMember
Statesscrupulously respect,willingly andingoodfaith,theproce­
durestheyhaveundertaken tofollowandthattheCommission hasde­
cidedtoapplywithoutexception.
1.5.1.Inthecourseoftheperiodduringwhichtheruleshavebeen
applied,aidshavenotalwaysbeennotifiedinsufficient time
andinsomecasestheCommission hashadtoremindcertain
MemberStatesoftheirobligationtonotify.Thisoccurredin
particular incasesinvolvingassistance grantedtosteelunder
takingsunderexistingregionalorgeneralschemes.Underthe
newrules,incontrasttopreviousprocedure,anyaidtothe
steelindustrymustbenotified,includingregionalandgeneral
aids;some^nationaladministrative practicestherefore hadto
bemodified.However,theCommission hastheimpressionthata
numberofMemberStateshavenotyetfullyunderstood andaccep
tedtheirobligationtonotifyallaidstothesteelindustry.
TheCommissioninsistsonthisobligation andstressesthat
aidsgrantedtothesteelindustryinapplication ofregional
orgeneralschemesmustbenotifiedtotheCommission atthe
initiativeoftheMemberStates,andnotonlyatitsrequest.
TheCommissionwilltakeallstepsavailabletoittoensure
observance ofthisobligationtonotifyinadvance,foritis
wellawarethatinmanycasesthesteelindustryobtainsState
assistance underregionalandgeneralschemes.TheCommissioni
thereforetakingtheopportunity inthisfirstReport .toremind
allMemberStatesoftheirobligations inthisrespect.

-5-
1.5.2.Anotherproblemconcernstheprovisionoffundsbypublicautho­
ritiestotheir.ownundertakings,notablyintheformofincrea­
sedcapital.Inthepresentsituationofgravecrisisinthe
steelindustry,thereisapresumptionthatincreasesincapital
madebyStatesfortheirownpublicsteelundertakings,parti­
cularlywhensuchoperationsarerepeated,involvesomeelement
ofaid.OneMemberStatehasalreadyinformedtheCommission
thatonthisaccountitwillnotifyallthefundsitmakes
availabletoState-ownedsteelundertakings .TheCommission
assumesthatallMemberStatesinthesamecircumstances will
alsomakethenecessaryadyancenotification .
1.6.InpresentingthisfirstReportontheapplication oftherulesfor
aidstothesteelindustry,theCommissiongivesitsassurancetothe
Councilthatitwillensurethattheprocedures andcriterialaiddown
.atthebeginningof1980arestrictlyfollowed.Itisconvincedthat
it-~isonlyinthiswaythatitcanmakeasubstantial andessential
contribution tothelong-termrestoration ofnormalconditionsof
competition intheindustry.
1.7.PartTwoofthisReportoutlinestheactualdecisionstakenbythe
Commissionduringtheyearonthebasisofthenewrules.Therehave
infactbeenfewcases.Thisisduetothefactthatanumberofmea­
suresenvisagedbytheMemberStateshavenotyetbeenfinalizedand
arenotyetsufficiently preciseanddefinitefornotification and
alsobecauseafairlysubstantial numberofaidshadalreadybeen
grantedtothesteelindustry,notablyunderregionalandgeneral
schemes,beforethenewrulescameintoforce.TheCommissionthere­
forefeltitworthwhiletooutlinecasesofwhichitwasinformed,
inanAnnextothi/sReport.
1o8«Asregardstheselatteraids,theMemberStatesinformedtheCommission
during1978and1979ofanumberofcasesofspecificaidgrantedto
steelundertakings beforethenewruleswereapplicable;themost
/

importantofthesewerediscussedatmultilateral meetingswith
expertsfromtheMemberStates.AstheCommissionpreviously pointed
outinananswertoaWrittenQuestion,itconsidersthataidsgran­
tedduringthesetwoyearswereinthemainconsistent withthe
objectives pursuedbymeansofthecurrentrules.Certainsteel
undertakings mayhavereceivedregionalandgeneralassistance as
wellasthesespecificaids.However,theCommission hasnoinforma­
tionontheextenttowhichsuchassistance wasgranted,sincethis
hasonlyhadtobenotifiedtotheCommission sincethenewrules
cameintoforce.

7
Part 2:Aidnotifications from 1.2 .1980 to13.2.1981
2.1.During this period theCommission received nine notifications :
2.1.1 .five cases ofaids forindividual investment programmes :two
from theFederal Republic ofGermany ,twofrom theNetherlands
and one from the United Kingdom ;
2.1.1 .aids forinvestment torestructure theItalian steel industry ;
2.1.3 .aids forcontinued operation inDenmark ;
2.1.A.aids programmes fortheBelgian andLuxembourg steel industries ;
2.1.5 .emergency aids fortheBelgian steel industry .
2.2.Initsexamination ofaids tothesteel industry theCommission 's ,
principal concern istoensure theachievement ofthe two
objectives oftheaids "discipline ",i.e. that aidmakes a_
• ;genuine contribution totherestructuring oftheindustry and ,
that itdoes not cause unwarranted distortions ofcompetition .
These principles have sofarbeen applied inthe following cases .
2.2.1 .Investment aids (Article 2ofDecision n°257/80ECSC )
2.2.1.1 .Federal Republic ofGermany
The Commission received notification 6ianaid for aninvest­
ment programme torestructure andmodernize asteelworks at
Dortmund byreplacing open-hearth furnaces byanoxygen plant
andanassociated continuous caster .Thecapacity ofthenew
plant would be2/3ofthat oftheopen-hearth furnaces and
thetechnology adopted would permit asubstantially higher •
than normal scrap input aswell asreduced energy consumption .
There would beimportant reductions inemployment attheworks .
TheCommission gave afavourable opinion onthis investment
programme .
/

ε-
Theaidforthisprojectwouldbeintheformofaloanatareduced
rateofinterestfromtheFederalandLandGovernments.Thenetgrant
equivalentoftheaidwasestimatedbytheCommissiontobeofthe
orderof12%.TheFederalandLandGovernment wouldreceiveashare
ofanyrevenuefromthelicensingofthetechnology.
Giventheimportanceofthemodernization andtheextentofthecapa­
cityreductionforliquidsteelaswellastheexistenceofcertain
structuralproblemsintheareaconcerned,theCommissionconsidered
thatthisaidconformedtothecriteriaofArticle2ofDecisionn°
257/80/ECSCandaccordingly decidednottoraiseanyobjectionstoits
implementation .
2.2.1.2.Italy
TheItalianGovernment informedtheCommission ofitsintentionto
*assistrestructuring investment bythesteelindustrybothatasteel­
worksnearNaplesandelsewherebyusinggeneralandregio­
nalaidregimes.RegionalaidwouldbeavailableintheMezzogiorno
in,,theformofgrantsatarateof20%whilegeneralaidwouldbe
providedintheform'ofinterestreliefgrantsonloansofupto15
yearswithafiveyeargraceperiodforupto50%ofinvestmentcosts.
Theseinterestreliefgrantswouldreducetherateofinterestto
30%ofthereferencerate.Thecombinednetgrantequivalentofthese
aidsisabout38%.
TheCommissionexaminedthisproposalintwoparts.
First,asregardstherestructuring ofthesteelworksnearNaples,
.whichinvolvedtheinstallations ofcontinuouscastingequipment,the
modernisation oftheworks1heavysectionmillandtheconstruction
ofahotwidestripmill,theCommission hadgivenafavourableopinion
underArticle54oftheECSCTreaty.Inviewoftheimportanceofthe
restructuring programme,ofitscompatibility withtheCommunity's
./5

9
>restructuring policyandoftheLocationoftheworksinanareaof
i■'theItalianMezzogiOrnosufferingfromseriousstructuralproblems,
theCommissionconsideredthataidsofthisintensitywerejustifiable
andaccordinglydecidednottoraiseanyobjectiontotheirimplemen-
-tation/'
Second,asregardstheuseoftheseaidsystemstoassistothe'rsteel
investmentprogrammes,theCommission wasunabletoexaminethe
.justifications andeffectsoftheseaidsintheabsenceofinformation
1 . '
on,th^cpipjectsthat..-theItalianGovernmentintendedto-supp-oetevThis
problemwasexplainedtotheItalianauthorities,whoinconsequence
■•V'V.-r.>:•••.undertooktonotifyinadvancetheotherindividualcasesofapplica­
tiontosteeloftheaidregimesinquestion.AccordinglytheCommis-
V
siohconsideredthatthissecondpartoftheoriginalnotification did
'notcallforanyfurtheractionatthisstage.
2.2.2.Aidtocontinuedoperation (ArticleAofdecisionn°257/80/ECSC)
Asindicatedintheannexe ...theDanishGovernmenthadin1978
grantedaidtoassistinthefinancingamajorsteelrestructuring pro­
grammeinvolvingareductionincapacity.Theaidsprovedtobeinsuffi-
fienttoresolvethecompany'sdifficulties infinancingtherestructu­
ring,afailureattributedtothefactthatferrousscrappriceshad
risenmorerapidlyinrelationtosteelpricesthanhadbeenexpected
in1978."( ^'...
AccordinglytheDanishGovernmentdecidedtoprovideadditionalaidto
thecompanyintheformofaparticipatory loanofDKr108million.This
isalongtermunsecuredloanwhichwillberemuneratedatarateof
interestequaltotherateofdividendonsharecapitalupto1985and
willthereafterbearamarketrateofinterest.
.../6

TheCommission hadsomereservations abouttherestructuring planin
particularbecauseitdidnotconsideritsufficiently far-reaching to
securethecompany'slong-termcompetitiveness .Followinganunderta­
kingbythe.DanishGovernmenttoensuretheclosureofthecompany's
medium-section millby30June1982atthelatesttheCommission was
inapositionfullytoapprovetherestructuring programme.Inthelight
ofthisundertaking andofthefurtherrestructuring investmentwhich
thecompanyhadtocarryoutintheperiodupto1985theCommission
consideredthattheaidcouldbeconsidered anintegralpart,ofan
approvedrestructuring programme.Theaidwasmoreoveroflimiteddura­
tionandofreasonableintensity .andamount.Inthislatterconnexion
itshouldbenotedthatitformedpartofatotalfinancialpackageof
DKr450million,therestofwhichwastobeprovidedbythesharehol­
dersandthebanks.
Accordingly theCommissiondecidedthattheaidconformedtothecri­
teriaofArticle4ofDecisionn°257/80/ECSCanddidnotraiseany
objectiontoitsimplementation .
Belgianaidprogramme (Articles2,4and5ofDecisionn°257/80/ECSC)
TheBelgianGovernmentnotifiedtheCommissionofthefollowingaids:
-Aidsfor"strategic"investmentprogrammes,involvingestimatedtotal
expenditure ofBF22bn,intheformofinterestreliefgrants,state
guarantees,accelerateddepreciation andexemptionforthreeyears
fromtheprScompteimmobilierCrates).Theseaids,whichwouldbe
grantedinapplication oftheEconomicExpansionLawsof17.7.1959
and30.12.1970,wereestimatedtoamounttoanetgrantequivalent
of14%to,17.5V.,
-Aidsfor"minor"investmentprogrammes,involvingtotalexpenditure
ofBF3.5bnwouldbeavailableonthesamebasisintheformof
interestreliefgrantsandstateguarantees.

-Anumberofemergencyaidshadbeengrantedintheformofstategua­
ranteesfor15yearLoanswithafiveyeargraceperiod.Theseguaran­
teesamountingintotaltoaroundBF2bnwererequiredinorderto
avoidbankruptcyprocedingsbeingstartedinrespectofthreecompa­
nies. *
TheCommissionexaminedtheseaidsinthecontextoftherestructuring
planfortheBelgiansteelindustry.Theaidedinvestmentprogrammes
'takenasawholewouldresultinanincreaseinproductioncapacityeven4?
-£aftertakingaccountoftheassociatedclosuresdecideduponbythe
undertakings .Furthermore,therewereseriousdoubtsconcerningtheeffec­
tivenessofthe*restructuring planinrestoringthefinancialviability
oftheindustryinthefuture.ForthesereasonstheCommissionconsidered
thattheinvestmentaidsdidnotmeetthecriteriaofeitherArticle2
(fornotifiedinvestmentprogrammes )orArticleA(forinvestmentpro-.
»grammesnotnotified)(1).
Fortheemergencyaids,theundertakings inquestionwereallimportant ,
sourcesofemploymentinareassufferingfromregionalproblems.TheCom­
missionaccordingly consideredthattheywererequiredinordertocope-
withacutesocialdifficulties pendingtheimplementation oftherestruc­
turingplan.Inviewoftheirminimalintensity,itthereforeraisedno
\objectiontotheseaids. .
However,theCommissionlearnedthattheBelgianGovernment haddecided
toprovidefurtherguaranteesforloansuptoBF1.5bnforundertakings ,
oftheTriangledeCharleroi.Inviewoftheeffectsthatfurtheremer­
gencyaidsofthisamountcouldhaveonthesteelmarkettheCommission
consideredthatthiscaseshouldbeexaminedmorethoroughly,inparti­
cularsoastoensurethattheaidswouldcontributetotheattainment
ofabetterequilibrium betweensupplyanddemand.
ForthesereasonstheCommissioninitiatedtheprocedureofArticle93(2)
oftheEECTreatyinrespectoftheinvestmentaidsandoftheemergency
aidsfor,theundertakings ofthe"TriangledeCharleroi".
(1)Aidsforinvestmentprogrammeswhichdonotrequiretobenotifiedtothe
CommissionunderDecisionn°22/66donotmeetthefirstcriterionof
Article2andaccordingly mustbeexaminedunderArticle4ofDecisionn°
257/80/ECSC.

-.12"
2#3*Theotheraidsthathavebeennotifiedbutwhichwerestill "beingexa­
mined"bytheCommissionattheendoftheperiodcovered "bythisre­
portwerethefollowing:
2,3»1»IntheFederalRepublicofGermanytheGovernmenthasdecidedtoaid
theconstruction ofacentralised cokeandpig-ironproductionunit
forthesteelindustryintheSaar.Theclosuresassociatedwith
thisrestructuring planwillresultinareductionofpig-iron
capacityofabout23Theaidnotifiedwouldbeintheformof
grantsamountingtoDM200million,tobeprovidedjointlybythe
FederalandLandGovernments jandafurtherDM80millionofregio­
nalgrants.*
2.3*2.TheNetherlands Government ha3notifiedanaidintheformofan
•unsecuredloanatamarketrateofinterestfortherebuildingand
modernisation ofcokingcapacityofasteelworksatIjmuiden.The
totalcostoftheinvestment programmewouldbeHFL.440million
andtheloanwouldbeforanamountofHFL200million.
(Anearliernotificationofanaidforthemodernisation ofahot
widestripmillwaswithdrawnbytheNetherlandsGovernment),
2*3«3*Athirdcasestill.underexamination concernedanaidforthe
restructuring oftheproductionfacilities,ofaspecialsteelpro­
ducerintheUnitedKingdomaccordedonthebasisofaregionalaid
system.Therestructuring involvesconcentration ofproductionat
threeworksandtheolosureofafourthworkstogetherwithmoder­
nisationofsomeexistingproductionfacilitiesandwillresultin
asignificantcapacityreduction(39forcrudesteel).Capital
costsoftheprojectwouldbeUKb1.7millionandtheaid,inthe
formofregionalgrantsandexchangeriskcoverwouldhaveanet
grantequivalentof15
...A?

-13-
'2.3.4.TheBelgianGovernment hasnotifiedtheCommission offurther
emergencyaidsintheformofstateguaranteesforLoans
totallyBF6,456millionforfivesteelundertakings .
2.3.5.TheLuxembourg Governmentnotifiedanaidprogrammeforthe
steelindustryinvolvinginparticular investment aidfor
expenditure ofFLUX20bnovertheperiod1980-1984inthe
formofgrantsatarateof25-%.Additional measuresinthe
formofcertaintaxfacilities,loansatfavourable ratesof
interestamountingtoFLUX29million,stateguaranteesfor
ECSCloansandgrantstowardsthecostoftheAnti-Crisis-
Division.

", IV/208/80-EN
ANNEX
Aidsandinterventions priortotheentryintoforceofDecisionn°257/80/ECSC
A.1.InDenmarktheGovernment decidedin1978toassistinthefinancingof
arestructuring programmebyprovidingaidsintheformofaparticipatory
loanofDKr108millionandofguaranteesforborrowingfromCommunity
sources(EIBandECSC)uptoatotalofDKr105million.
(
A.2.IntheFederalRepublicofGermanytheGovernment decidedtointerveneto
promotetherestructuring oftheSaarsteelindustrybyprovidinginvest­
mentgrantspayableinfiveannualinstalments withapresentvalueof
DM200millionandguarantees uptoDM900million.Therestructuring
programmeinvolvedsubstantial modernization andrationalization oftwo
ofthethreesteelcompaniesintheSaarfollowingtheirtakeoverbyan­
.othercompanyandwouldresultinasignificant capacityreduction (ranging
*from10%to25%accordingtothestageofproduction).Thecostofthe
programme wasestimatedatDM1.3bnforinvestment andDM0.5bnfor
socialcosts.
A.3.InFrance/long-termloanstotalling FF1200millionweregrantedin1977and
,1978fromtheEconomicandSocialDevelopment Fund(FDES)(1)underare­
coveryprogrammeforthesteelindustry.Inadditionrepayments ofprinci­
palamountingtoFF90millionofearlierFDESloansweredeferred,and
theGovernment agreedtoguarantee ECSCandEIBloanswherenecessary .
Subsequently ,theFrenchGovernment decidedonafinancialreconstruction
toreducetheindustry'sfinancialcosts.Ownershipofthesteelindustry
wastransferred tothreenewholdingcompaniescreatedbytheindustry's
creditors.Inadditionthetermsofexisting FDESloansweremodifiedin
particular byareductionintherateofinteresttoanominallevel.
Bondswouldbearasimilarrateofinterest,tobemadeuptothecoupon
byanewfundcreatedbytheState.Theamountofloansandbondsaffected
totalledFF22,200million.Thesewerethemainelementsofthefinancial
reconstruction whichwasexpectedtoreducetheindustry'sfinancial
chargestoalevelcomparabletothatinotherMemberStates(from13%as
apercentage oftuinov-erin1977toaround5%).Atthesametimethein­
dustrywastoprepareandimplement arestructuring plan.
(1)FondsdeDéveloppement EconomiqueetSocial.

IV/208/80-EN
ANNEX
A.4.FOPLuxembourg anotification wasmadeofaidintheformofagrantof
12.5%andoftaxreliefforaninvestmentprojectinvolvingtheproduc­
tionoftreatedandcoatedsheet.Thenewplantwouldreplacesteelcapa­
cityclosedinthearea.Theinvestmentexpenditure wouldbeLFR1.3bn.
Itisunderstoodthatthisaidhasnotyetbeengranted.
A.5.TheNetherlandsnotifiedaidsintheformofgrantstotallingHfI53.6
millionforaninvestmentprojectinvolvingtheinstallation ofaconti­
nuouscasteratacostofaboutHfl250million.
A.6.IntheUnitedKingdom,theGovernmentdecidedinMarch1978tofinance
theBritishSteelCorporation (BSC)exclusively bythesubscription of
capital/thusabandoningthepreviousarrangement bywhichtheCorpora-
V - -tion'sfinancialrequirements weremetessentially byamixofcapital
•andloans.Itwasrecognizedthatacapitalreconstruction wouldbere­
quiredinduecourse,butitwasintendedtoundertakethisonlywhenthe
marketsituationandprospectsbecameclearer.AtthesametimetheBSC•
wastotakestepstobringcapacitymoreintobalancewithprospective
demand.1"
« -2-