EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 14.04.2005 
COM(2005)140 final 
  
Proposal for a 
COUNCIL DECISION 
on the fulfilment of th e conditions laid down in Article 3 of the Additional Protocol to 
the Europe Agreement establishing an asso ciation between the European Communities 
and their Member States, of the one part, and Romania, of the other part, with regard to 
an extension of the period foreseen in Articl e 9(4) of Protocol 2 to the Europe Agreement 
(presented by the Commission)  
  
{SEC(2005)477}  
 
EN 2   EN EXPLANATORY MEMORANDUM  
1. According to Article 9(4) of Protocol 2 of the Europe Agr eement with Romania, 
during the first five years after the entr y into force of the Agreement, and by 
derogation from paragraph 1 (3) of the same Article, Romania could exceptionally, 
as regards steel products, gr ant public aid for restructur ing purposes, provided that 
this leads to the viability of the benefiting firms under normal market conditions at the end of the restructuring period, the amount  and intensity of su ch aid are strictly 
limited to what is absolutely necessary in  order to restore su ch viability and are 
progressively reduced and the restruct uring programme is linked to a global 
rationalisation and reduction of overa ll production capacity in Romania. 
2. This initial period expired on 31 December 1997 for Romania. 
3. Romania requested an extension of th e above-mentioned period in December 1997. 
4. A realistic restructuring programme, incl uding individual comp any business plans, 
respecting the criteria set out in Article 9(4)  of Protocol 2 of the Europe Agreement, 
are the necessary basis for agreeing the requested extension of  the period during 
which Romania may grant state aid for restructuring purposes. 
5. In May 2002, the Commission proposed an  extension of the period during which 
Bulgaria, the Czech Republic, Poland and Ro mania may grant aids to restructure 
their steel sector, in view of  the urgent need to find an acceptable solution to move 
forward the steel restruct uring process in the candi date countries concerned. 
6. This extension would provide the legal ba sis for granting restructuring aid in the 
period before accession in the framework of the required restructuring plans (i.e. the 
aid provided should be limited and proporti onal to capacity reduction); it would also 
have the effect of retroactively legalising aid that may have b een granted illegally 
since the entry into force or the Europe Agreement. 
7. The extension will come into effect on ly after the adoption and assessment of a 
restructuring plan and individual business pl ans, which fulfil the criteria of Protocol 
2 of the Europe Agreements. 
8. With a view to achieving this aim, an Additional Protocol to the Europe Agreement 
with Romania was drawn up. 
9. The Additional Protocol to the Europe Agreement was signed by the Community and 
Romania on 23 October 2002. A provisional applic ation before entry into force, as 
envisaged by Article 300 (2) of the Treaty establishing the European Community is 
in place, as foreseen by Article 1 of Council Decision of 29 July 2002 on the signature and provisional ap plication of an Additional Protocol  to the Europe 
Agreement. 
10. The Additional Protocol provides for extensi on of the period foreseen by Protocol 2 
by a further eight years starting on 1 January 1998, subject to the fulfilment of certain conditions. 
 
EN 3   EN 11. The first condition has been fulfilled by Ro mania, by submitting to the Commission 
a restructuring programme and business pl ans for the companies concerned, which 
have been assessed and agreed by its Nati onal State Aid Authority (the Competition 
Council). 
12. The second condition is the final assessm ent of the restructuring programme and 
business plans by the Commission, with a view to determining whether the 
requirements of Article 9(4)  of Protocol 2 of the Europe Agreement are met. 
13. The Commission services have made a fi nal assessment which concludes that the 
restructuring programme and plans submitte d by Romania meet the requirements of 
Article 9(4) of Pr otocol 2 of the Europe Agreement. 
14. The Commission is proposing a Council Decision approving the Commission's final 
assessment, as foreseen in Article 3 of the Additional Protocol. Once the Council has 
granted its approval, the conditions laid down in Articles 2 and 3 of the Additional 
Protocol will have been me t and the extension of the pe riod foreseen by Protocol 2 
will take effect. 
15. The Council is therefore re quested to approve the attached draft proposal for a 
Decision on the fulfilment of the conditions  laid down in Article 3 of the Additional 
Protocol to the Europe Agreement establis hing an association be tween the European 
Communities and their Member States, of th e one part, and Romania, of the other 
part, with regard to an extension of the pe riod foreseen in Article  9(4) of Protocol 2 
of the Europe Agreement. 
 
EN 4   EN Proposal for a 
COUNCIL DECISION 
on the fulfilment of th e conditions laid down in Article 3 of the Additional Protocol to 
the Europe Agreement establishing an asso ciation between the European Communities 
and their Member States, of the one part, and Romania, of the other part, with regard to 
an extension of the period foreseen in Article 9(4) of Protocol 2 to the Europe Agreement 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Additional Protocol to th e Europe Agreement establishing an association 
between the European Communities and their Memb er States, of the one part, and Romania, 
of the other part, with regard to an extensio n of the period foreseen in Article 9(4) of 
Protocol 2 to the Europe Agreement, and in particular Article 3 thereof; 
Having regard to the proposal from the Commission1, 
Whereas: (1) A Europe Agreement establishing an association between the European Communities 
and their Member States, of the one part, and Romania, of the other part
2, came into 
force on 1 February 1995. 
(2) Article 9(4) of Protocol 2 to the Eur ope Agreement with Ro mania lays down that 
during the first five years after entry into force of the Agreement, and by derogation 
from paragraph 1 (3) of the same Article, Romania may exceptionally, as regards steel 
products, grant public aid for restructuring pur poses, provided that this leads to the 
viability of the benefiting firms under nor mal market conditions at the end of the 
restructuring period, the amount and intensity of such aid are strictly limited to what is 
absolutely necessary in order to restore su ch viability and are progressively reduced 
and the restructuring programme is linked to a global rationalisation and reduction of 
overall production capacity in Romania; 
(3) The initial period of five years expired on 31 December 1997; 
(4) Romania requested an extension of th e above-mentioned period in December 1997; 
(5) It seemed appropriate to grant an extens ion of this period for an additional period of 
eight years starting on 1 January 1998; 
                                                 
1 OJ C […], […], p. […]. 
2 OJ L 357, 31.12.1994, p. 3. 
 
EN 5   EN (6) To this effect, an Additional Protocol  to the Europe Agreement was signed by the 
Community and Romania on 23 October 2002 a nd is provisionally applied from that 
date; 
(7) Under Article 2 of the A dditional Protocol, the extens ion of the above-mentioned 
period is made conditiona l on the submission by Romani a to the Commission of a 
restructuring programme and business plans that  meet the requirements of Article 9(4) 
of Protocol 2 to the Europe Agreement a nd have been assessed and agreed by its 
National State Aid Authority (the Competition Council); 
(8) In December 2004, Romania submitted to the Commission a restructuring programme 
and business plans for those companies havi ng benefited or benefiting from state 
support for restructuring; 
(9) Under Article 3 of the A dditional Protocol, the extens ion of the above-mentioned 
period is made conditional on a final asse ssment of the restruct uring programme and 
business plans by the Commission; 
(10) The Commission has made a final assessm ent of the restructuring programme and the 
business plans submitted by Romania. This assessment indicates that the implementation of the restructuring program me and the business plans will allow the 
companies concerned to reach viability unde r normal market conditi ons. It also shows 
that the amount of State aid for restructur ing purposes as specified in the plans is 
strictly limited to what is necessary to allow the companies concerned to reach viability and has been progressively reduced and stopped by the end of 2004. The 
assessment provides also that a global ra tionalisation and reduction of excess capacity 
of the beneficiary companies will be reached . The assessment therefore concludes that 
the restructuring programme and the busine ss plans meet the requirements of Article 
9(4) of Protocol 2 to the Europe Agreement, 
HAS DECIDED AS FOLLOWS: 
Article 1 
The restructuring programme and business pl ans submitted to the Commission by Romania 
pursuant to Article 2 of the Additional Protoc ol to the Europe Agreement establishing an 
association between the European Communities a nd their Member States, of the one part, and 
Romania, of the other part, with regard to an extensi on of the period laid down in Article 9(4) 
of Protocol 2 to the Europe Agreement ar e in compliance with the requirements of 
Article 9(4) of  Protocol 2. 
 
EN 6   EN Article 2 
The period during which Romani a may exceptionally, as regard s steel products, grant public 
aid for restructuring purposes in accordance with the provisions of  Article 9(4) of Protocol 2 
is hereby extended by an additional period of  eight years starting on 1 January 1998, as 
foreseen by Article 1 of the Additional Protocol. 
Done at Brussels, 
 For the Council 
 The President