ARCHIVES HISTORIQUES 
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COM (84) 509 
 
 
 
Vol. 1984/0 203 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the open ing to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 vom  27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION  
OF THE
EUROPEAN COMMUNITIES
General SecretariatC O M (84) 509 fin a l 
Brussels, 12 September 1984 
FO R  OFFICIAL U S E  ONLY
C O M M IS S IO N  C O M M U N IC A T IO N  T O  T H E  C O U N C IL
TRANSITIONAL M E A S U R E S , IN T H E  C O N T E X T  O F  ACCESSIO N, F O R  T H E  S P A N ISH  IR O N
A N D  S TE E L IN D U S T R Y
C O M (84) 509 fin a l

TRANSITIONAL M E A S U R E S , IN T H E  C O N T E X T  O F  ACC ESSIO N , F O R  T H E  S P A N IS H  IR O N  
A N D  S T E E L IN D U S T R Y
The Spanish authorities have transmitted to the Commission a  number of 
documents concerned with the restructuring of part of their iron and steel 
industry and forecasts of Spanish iron and steel production for 1986.
The Commission also possesses questionnaires E C S  2-20 and 2-61 for a ll the 
other categories, which are concerned with structural production 
information.
These documents have been drawn up in keeping with the Community statement 
of 19 June on the iron and steel industry aspects of accession. It should 
be noted that these documents show that the restructuring operations 
notified to us w ill extend beyond 1985 and contain elements of aid which 
w ill extend u n til 1987 at least.
The overall dossier transmitted by the Spanish authorities has, however, 
been completed only very recently (the last questionnaires were sent to us 
on 2 5 August) and it  w ill now  be necessary, in close conjunction with the 
Spanish to undertake a  detailed appraisal, in order to be able to verify 
the situation, having regard to the structural policy currently being 
pursued by the Community.
Hence in this dossier there are too m any uncertainties, starting with the 
level of productivity which is particularly d iffic u lt to determine since 
the information on firms other than those in respect of which w e  have 
received fu ll restructuring dossiers cannot be determined u n til the 
Commission sta ff have m ade a  more detailed structural examination.
Furthermore, the Spanish taxation system, particularly with regard to the 
taxation of products intended for export, provides another element of 
uncertainty with regard to the problem of the financial p ro fita b ility  of a  
number of firms.

2.
In view of this situation - which is unlikely to become to ta lly  clear by 
January 1986 - it  is necessary to prevent, in the interest of both 
parties, there being too brutal a  clash between a  steel industry which is 
only just emerging from a  long and painful process of radical restruc­
turing (with a ll the financial and social sacrifices which this w ill have 
entailed) and a  steel industry which is its e lf to som e extent s t i l l  being 
restructured and whose capacity, in both quantitative and qualitative 
terms, is an unknown quantity.
This is w hy the Commission w ill be presenting to the Council on Tuesday a  
draft protocol, to be inserted in the instructions of accession.
This text w ill be drafted in the light of the present situation and m a y 
therefore , in particular by négociation with the Spanish Government, be 
amended in order to take account of the situation arising should various 
aspects, which are at present unknown quantities, develop more favourably.
From  the formal point of view, this protocol w ill refer to the last 
paragraph of the Community statement of 19 June referred to earlier.
This draft protocol w ill provide the Community with a  guarantee against 
factors which might distort competition, following a  detailed analysis of 
the Spanish iron and steel industry, during the period within which Spain 
w ill s t i l l  have surplus capacity that requires Government-aided restruc­
turing of the industry and could affect the whole Community market.
—  —  —  —  — — —  —  —  —  * ---------------------— —  ★  —  — ---------- —  —
It
 is proposed that the Council adopt:
(1) the draft a rtic le  to be inserted in the accession treaty
(2) the draft protocol.

D R A F T  ARTICLE T O  B E  IN S E R TE D  IN T H E  A C C E S S IO N  T R E A T Y
Until 3 1  December 1989 the provisions of A rticle 4 of the Treaty 
estabi lishing the European Coal and Steel Community m ay be waived on the 
conditions laid down in protocol .........  to this Act.

D R A F T  P R O T O C O L
1. Within the period laid down in A rticle ... of the Act of Accession the 
Spanish Government w ill complete the restructuring of the Spanish iron and 
steel industry.
2. The Spanish Government w ill notify the Commission, on 1  January 1986, 
of any projects involving aid intended to be granted or paid to the 
Spanish iron and steel industry within the prescribed period. Such 
projects w ill be implemented only with the authorisation of the 
Commission.
The Commission w ill appraise these projects in the light of the c rite ria  
and in accordance with the procedures contained in the annex to this 
protocol.
3. During the period in question Spanish supplies of E C S C  iron and steel 
products on to the Community market m a y not exceed the volumes agreed in 
the arrangements to be concluded for 1985 or, fa ilin g  that, in the 
arrangements to be concluded for 1984.
The Commission may, with the assent of the Council, adjust the volumes in 
question to take account in particular of the progress m ade with 
restructuring. The instruments for the surveillance of imports originating 
from non-member countries in force upon the date of accession w ill be able 
to be used in respect of E C S C  products coming from Spain.
4. Without prejudice to the applicaition of A rticle 88 of the E C S C  Treaty 
and u n til such time as the period of application to the transitional 
measures defined in the above paragraph expires, i f  the Commission, at the 
request of a  M em ber State or any other interested party, finds that 
dumping is taking place between the Community as at present constituted in 
Spain, it  shall take the appropriate protective measures or authorise the 
injured M em ber State(s) to take such measures on the terms and in 
accordance with the procedures defined by it .

A N N E X
P R O C E D U R E S  A N D  CRITERIA F O R  A S S E S S IN G  AIDS
1. A LL aids to the steeL industry, whether specific or non-specific, 
financed by the Spanish State or through State resources in any form 
whatsoever m ay be considered compatibLe with the the orderly 
functioning of the co m m on  market onLy if  they respect the general 
rules set out in paragraph 2  and satisfy the provisions paragraphs 3 
to 7. Such aids shalL only be put into effect in accordance with the 
procedures established in this annex.
The concept of aid includes aid granted by the regional or Local 
authorities and any aid elements contained in the financing measures 
taken by the Spanish State in respect of the steel undertakings which  
d ire ctly or in d ire ctly control and which do not count as the 
provision of risk capital according to standard company practice in a 
market economy.
2. Aids granted to the steel industry m a y be considered compatible with 
the orderly functioning of the com m on market provided that:
- the recipient undertaking or group of undertakings is engaged in 
the implementation of a  systematic and specific restructuring 
(modernisation, reduction of capacity and, where necessary, 
financial restructuring) which programme is capable of restoring 
its  competitiveness and of making it  finan cially viable without aid 
under normal market conditions,
- the said restructuring programme results in an overall reduction in 
the production capacity of the recipient undertaking or group of 
undertakings and does not m ake provision for an increase in 
production capacity for the various categories of products for 
which there is not a  growth market,
- the amount and intensity of the aids granted to steel undertakings 
are progressively reduced,

- the aids in question do not entail distortions of competition and 
do not affect trading conditions to an extent contrary to the 
co m m on  interest,
- they are approved not later that 1  July 1986 and do not lead to any 
payments after 3 1  December 1 9 ..(*), other than by way of interest 
rebates or of payments to honour guarantees on loans disbursed 
before that date.
Aids in support of investment in the steel industry m ay be considered 
compatible with the orderly functioning of the com m on market provided 
that
- the Commission has received prior n otifica tion of the investment 
programme concerned where this is required by the Commission 
(Decision No. 3302/81 /E C S C  of 18 November 1981 on the information 
to be furnished by steel undertakings about their investments (1), 
or by any subsequent decision,
- the amount and intensity of aid are ju s tifie d  by the extent of the 
restructuring e ffo rt involved, account being taken of the 
structural problems of the region where the investment is to be 
undertaken, and are limited to what is necessary for this purpose,
- the investment programme takes account of the c rite ria  defined in 
A rticle 2  and of the general objectives for steel, having regard to 
any reasoned opinion which the Commission m a y have issued on the 
investment programme concerned.
(*)End of the transition period 
(1)D J  No. L333, 20.11.1981, P . 35
j

In its  examination of such aids the Commission shall take account of 
the extent of the contribution of the investment programme concerned 
to other Community objectives, for instance innovation, energy saving 
and environmental protection, provided that the rules of A rticle 2  
are adhered to.
Aids to defray the normal costs resulting from the partial or total 
closure of steel plants m a y be considered compatible with the orderly 
functioning of the com m on market.
The cost e lig ib le  for such aid shall be the following :
- payments to workers m ade redundant or retired before legal 
retirement age, where such payments are not covered by aids 
persuant to A rticle 56 (1) (c) or (2) (b) of the Treaty,
- payments due to third parties in respect of the termination of 
contacts, in particular for the supply of raw materials,
- expenditure incurred for the redevelopment of the site , the 
buildings and/or infrastructures of closed steel plant for 
alternative industrial use.
Exceptionally and by w ay of the derogation from paragraphs 3  of the 
Protocol and the f if th  indent of paragraph 2  of this annex, aids for 
closures which could not be foreseen in programmes notified up to 
January 1986 m a y be notified to the Commission after that date and be 
approved after 1  July 1986.
Aids to fa c ilita te  the continued operation of certain undertakings or 
plants m a y be considered compatible with the orderly functioning of 
the com m on market provided that :
- they form an integral part of a  restructuring programme as defined 
in the f ir s t  indent of paragraph 2,

- their duration is Limited to a  m axim um  of two years, they are 
progressively reduced at Least once each year and they do not Lead 
to payments after 3 1  December 1 9 .„..(*)
- they are Limited in intensity and amount to what is absolutely 
necessary in order to enable continued operation during the period 
of restructuring and are ju s tifie d  by the significance of the 
restructuring measures implemented, account also being taken of any 
aid granted for investment.
In its  examination of such aids the Commission shall take account of 
the problems facing the production unit or units in question and the 
region or regions concerned, and of the secondary effects of the aid 
on competition on markets other than the steel market, for instance 
the transport market.
Aids to defray expenditure by steel undertakings on research and 
development projects m a y be considered compatible with the orderly 
functioning of the co m m on  market provided that the research and/or 
development project in question has one of the following objectives :
- a  reduction in the costs of production (notably energy saving) or 
an improvement in productivity,
- an improvement in product quality
(*) O n e  year before the end of the transition period

5.
- an improvement in the performance of iron and steel products or an 
increase in the range of uses of steel,
- an improvement in working conditions as regards health and safety.
The to ta l amount of a ll aid granted for the above purposes m a y  not 
exceed 50 %  of the e lig ib le  costs of the project. The costs eligible 
for such aid shall be the costs d ire ctly associated with the project 
in question and shall exclude in particular a ll expenditure on 
investment related to production processes.
7. The Commission shall seek the views of the M em ber States on the aid 
plans notifie d to it  by the Spanish Government before adopting a  
position on them. It shall inform a ll M em ber States of the position 
adopted by it  on each aid plan.
I f ,  after giving notice to the parties concerned to submit their 
comments, the Commission finds that an aid is incompatible with the 
provisions of this Decision, it  shall inform the Spanish Government 
of its  decision. A rticle 88 of the Treaty shall apply in the event
of fa ilu re  by the Spanish Government to comply with this Decision.
8. The Spanish Government shall supply the Commission twice a  year with 
reports on aids disbursed in the course of the preceding six months, 
on the uses m ade of such aids and on the results achieved during the 
sam e period as regards restructuring. These reports must include 
details of a ll financial measures taken by the Spanish State by 
regional or local authorities in respect of the public steel 
undertakings. They must be supplied within two months of the end of 
each six month period in a  form to be determined by the Commission.
The f ir s t of these reports w ill concern aids disbursed during the 
f ir s t half of 1986.