ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(78)519
Vol.1978/0188

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COMMISSION OFTHEEUROPEAN COMMUNITIES
·<:ν>;■COM(78)519final
Brussels,26October1978
Vc. . '■t"■/
>/
SV.
AIDE,-MEMOIRE
ON"THEFIXINGOFTHEESCSLEVIESANDOH
THEDRAWINGUPOFTHEOPERATIONAL BUDGET
...FOR1979
COM(78)519final

Preface
I.GENERALINTRODUCTION
'A.ECONOMIC CONTEXT
1.Theeconomicoutlookfor197°and.1979
2.Prospectsinthecoalsector
3*Prospectsinthesteelsector
B.POLICYCONTEXT
1«Coalpolicy
2.Ironandsteelpolicy
\
3.Socialpolicy
4*Borrowingandlendingactivitysince
31December1977
C.FINANCIAL CONTEXT
II.ANALYSISOFREQUIREMENTS REPORTED ANDRESOURCES
AVAILABLE FORTHEFINANCIAL YEAR1979
A,REQUIREMENTS REPORTEDFOR1979
1•Ordinaryrequirements
2*Requirements notincludedinthebudget
loansforfinancingsubsidizedhousing
3«Summaiyofrequirements reported

-3-
Page
B.RESOURCES AVAILABLE '40
1«Resourcesforthefinancialyear 40
2«Coveringofrequirements notenteredin
thebudget 45
3»Summaryofresourcesavailablefor1979 ^5
III.DRAFT0PERATI0NAL BUDGETP0R1979 46
A.EFFECTSOFMAINTAINING THECURRENTRATE 47
B.BUDGETBALANCE . 49
C.DRAFTBUDGET' aq
ANNEXES , -
A*Implementation oftheECSCoperational budget
for1977 50
B*TheECSCoperational "budgetfor1978 51
C»Breakdownofloansforthefirstsixmonths
of1978 53
D«ProvisionalsituationoftheECSCat30June197854
E*DraftECSCoperational "budgetfor1979 55

-4-
AI2E–MEMOIRE
onthefixingoftheECSCleviesandonthe
drawingupoftheoperational "budgetfor1979
Followingtheusualpractice,theviewsoftheEuropeanParliamentare
"beingrequested "beforetheCommissiontakesadecisiononthelevies
andtheoperational "budgetoftheECSCforthefinancialyear1979.
Thisaide-memoire formsthe"basisfortheconsultation ofParliament.
Itisdividedintothefollowingsections:
I.Generalintroduction ;
II.Analysisofrequirements reportedandresources
availableforthefinancialyear19795
- -/
III#Draftoperational "budget.
Thevariousfactorsaffectingthecoverageofbudgetaryrequirements
for1979aredescribedinChapterIII.
**
Theaide–mémoireisalso
information .senttotheECSCConsultative Committeefor

-5-
I. GENERAL INTRODUCTIOÎT
This chapter summarizes the elements necessary forappreciating the
economic ,political andfinancial "background tothedraft operational
budget oftheECSC forI979 .
A. ECONOMIC CONTEXT
!•The economic outlook for1978 and1979
TheCommunity 'seconomic recovery wasinterrupted in1977 »hutthe
situation took aturn for the "better last autumn .Since then expansion
haspicked up,following aslighly more rapid increase indomestic
demand ,resulting from the expansionist impetus given totheeconomic
policies ofmost Member States .
After theslight downturn inthesecond half of1977 caused byafall-off
inthelarger Member States ,investment demand regained momentum .In
theFederal Republic ofGermany ,this advance wasparticularly marked
inthebuilding industry ,both inthepublic sector andinprivate
housing .InFrance and Italy ,theimprovement halted therun-down of
stocks andeven started amove towards anewbuild –up,notably inthe
commercial sector .However ,there was still reluctance toinvest in
fixed assets ,save forindustrial firms inIreland ,theUnited Kingdom
andLuxembourg .

-β-
Thegrowth mconsumer demand began tospeed upslightly dufring thefirst
half oftheyear .This ispartly duetoasharper rise inpublic consumption
expenditure .However ,itischiefly theresult oftheincrease inreal
personal disposable incomes ,asaconsequence oftheinflation rate easing
offtoagreater degree than nominal wages ,-thetaxconcessions introduced
bysome Member States and incertain cases amore rap'drate ofincrease in
transfer ofincomes .
Inaninternational context ofconstantly fluctuati ^;exchange rates and'
aloss ofmomentum inworld demand ,there hasbeen nomarked ,'.._prcvement
inthe Community ^short-term economic situation .The annua ",growth rate
ofGDPfor allMember States hasbeen put ataround inreal terms for '
thefirst half of1978 .This improvement islargely duetoarecovery ,
inindustrial production ,which hadtended toslacken throughout the
previous year .Nevertheless ,industrial production intheCommunity from ■
January <toApril still did not exceed levels for thecorresponding period
of1977 «nordid itimprove ontheposition before the .1974 recession .
There wasanoticeable improvement inproduction inthebuilding sector ,
inspite ofthe .badweather since thebeginning oftheyear .
Growing demand andeconomic activity have still notbrought about an
improvement ontheemployment market ,which isstill -suiTering from the
sluggish rate ofbusiness investment .Inseveral Member States temporary
factors have held uptheprocess ofcombating inflation .
IntheCommunity asawhole ,theincrease inconsumer prices over the
previous 12months nevertheless dropped tosome 7s$bythespring of
1978 .
Ontheother hand ,thestagnation inexports tonon-member countries ,
together with arise inimports bysome Member States ,reversed thetrend
towards animprovement inthe external balance which hadbecome apparent
atthebeginning of1977 •

Promnowuntiltheendoftheyear,economicactivitywillcontinueto
"bemaintainedbasicallybythemodestincreaseindomesticexpenditure.
Fortheyearasawhole,therateofgrowthoftheCommunity'sGDP
couldreachsome2g$inrealterms.
Therateofactivityshouldincreaseslightlyin1979a-8aresultof
theeconomicpoliciesadoptedinaframeworkofconcertedaction.
Thistrendmayhelptoreduceunemployment somewhat,butwillnothelp
»appreciablytobringdowninflation.
ThefollowingtableshowsthetrendintheCommunity'sGBPduringthe
period1976"to1978:
GROSSNATIONAL PRODUCTINVOLUMETERMS
($changeascomparedwiththepreviousyear)
197619771978
Denmark 6,3 1»90
FederalRepublicofGermany 5*62,8/2,7
France 4,63,03,0
Ireland 2,95,56,0
Italy 5,71,72,2
Netherlands 4,52,41,9
Belgium 5,7_1»32,0
ILuxembourg 2,91,32,5
UnitedKingdom 2,61,03,2
Community ■., 4,82,32,6
Source:Commissiondepartments.

2.Prospectsinthecoalsector
LastyeartotalproductionofCommunitycoalfor1978wasestimatedat
some240milliontonnes:itisnowestimatedthat,theactualfigure
wiilheintheregionof241milliontonnes.Thesefigurescorrespond
tosome220milliontonnescoalequivalent,comparedwith250mtee
whichwasthe1985targetsetin1974*
iIn197,8,importsfromnon–membercountriesshouldamounttoaround
44milliontonnesandthevolumeoftradewithintheCommunityis
expectedtoreachafigureof17milliontonnes.
TheestimateforCommunityoutputin1979may*>©affected "bychangesin
productioncapacityandintheuseofthiscapacity,asthisdependson
demandforcokingcoalandsteamcoalandtheimprovedcompetitivity of
Communitycoal.
In1978,severalpitsintheFederalRepublicofGermanywereclosed
downandthereisapossibility offurtherclosuresintheotherMember
Statesin1979*
Owingtothecontinuingcrisisintheironandsteelindustryand
structural andtechnicalchangesinsteelproduction ?theconsumption
ofcokebythesteelindustryin1978*isunlikelytoberjiuchhigher
thantheverylowfiguresof1977*In1978,cokeovensinthe
FederalRepublicofGermany,France,BelgiumandtheUnitedKingdom
werecloseddown.
Nevertheless ,thereisnoreasontoexpecttotalconsumptionofCommunity
coalin1978todepartappreciably fromthevolumeof285to
290milliontonnesburntinthelasttwoyears,asfollows:justunder
50$forelectricitygeneration,some35$forcokeovensandtheother
requirements oftheironandsteelindustryandtherestforother
purposes.

-9-
There hasbeen little change since the sharp increase intheconsumption of
coal forelectricity generation recorded in1976 ,astheslight increases in
some Member States tend tobepartly offset bycorresponding decreases in
others .Apart from imponderables ,such asshortages ofwater for
hydro –electric power orasubstantial increase inthe oilprices ,theslight
upward trend ofthe last twoyears canbeexpected tocontinue in1979 *
' - ' ••
isunlikely that demand forcoke andcoal bythe steel industry will be
greater in1979 than inthelast fewyears .Asforother sectors ,theslight
upward trend incoal consumption byindustry ingeneral which began some years
agoshould continue ,butwill nodoubt beoffset byasteady corresponding
drop indemand forhousehold heating purposes .
Disregarding improvements tothe Community coal industry which could result
from thenewcoal policy measures described inthesection on"Coal Policy ",
the factors mentioned above would leave theindustry with thefollowing
options :planned reductions inoutput ,further increases inunsold stocks or
sales atlower prices inareas where coal produced intheCommunity has to
compete directly with ooal imported from non-member countries .
Oneofthefactors which affects thecompetitivity ofCommunity coal isthe
fluctuation inexchange rates andparticularly thesteady depreciation ofthe
dollar ,particularly against theGerman mark .
Allthese factors will have anegative effect onthefinancial position of
theCommunity ooal industry andcould oompel national governments togrant it
more aidthan thetotal of1.480 mSJAgranted in1978 *

3.Prospectsinthesteelsector
Thelowlevelofactivityin1977(only126milliontofcrudesteel
produced,ascomparedwith134milliontin1976and155»5milliontin
1974-arecordyear)improvedslightly ,in1978.Themoderaterecoveryin-
economicactivityintheCommunitywasduefarmoretoprivateconsumption
thantofixedinvestmentandwasnotthereforefullyreflectedinsteel
consumption .
'J ' '
■' /
Therewas,however,anincreaseinnetsteelexportsbytheCommunity,due
partlytomeasurestakenbytheCommissiononimportsandpartlytothe
increasedbuoyancyofcertainmainexportmarkets.In1978,netexportswill
probablymatchorexceedthe19milliontofcrudesteelequivalent
reachedin1975*whichisatleast4milliontmorethanin1977*
Crudesteel"productioninthefirsteightmonthsof1978was4,5%higherthan
inthecorresponding periodin1977•®iishighproductionfigure,particularly
inthesecondquarter,exceededthequantitieslaiddownin.theprogrammes ,
workedoutbytheCommissiontoadjustproductiontomarketdemandandrestore
economioviability.Iftheprogrammeforthefourthquarterisadheredto,
totalproductionfor1978willbearound130milliont,
Comparedwithanestimatedproductionpotentialof200,Atrilliont,this
representsacapacityutilizationrateof65%,comparedwithin1977*In
1978,therewasacertainimprovementinexportanddomesticpricelevels,due
tosomeextenttotheminimumpricesandguidepriceslaiddownbythe
Commission.Asaresult,somemajorproducerswereabletocuttheconsiderable
financiallossestheyhadsufferedin1977andmoveintoprofitagain,even
thoughgenerallythefinancialpositionofsteelfirmsintheCommunityis
stillnotsatisfactory .
Itisdifficultatpresenttomakeanypredictionsfor1979*Certainfactors-
couldunderminetheCommunityandworldsteelmarkets,butinthelastanalysis
itisreasonabletoexpectthatECSCsteelproductionwillremainmuchthe
sameasin1978.
IfECSCsteelproductioncapacityincreasesasexpectedby7milliont,the
utilizationratewillfallbackto6yfoin1979*Th©problemsofeconomic
viabilityandmarketdisciplinearethereforelikelytocontinueintheimmediate
future.

B. POLICY COOTEXT
The general objectives oftheECSC axepermanently laid down inArticles 1
to5ofthe Treaty ofParis .
The Commission periodically formulates objectives orgeneral guidelines for
the future development oftheECSC industries ,inboth the coal arid steel
sectors ,.The coal sector isaspecial case ,asitisalso covered bygeneral
documents prepared bytheCommission onCommunity energy policy 0The
medium -term guidelines for these two sectors also include asection on
manpower problems inthese industries ;this provides thesetting forthe
various social policy functions discharged bytheHigh Authority /Commission
under the Treaty ,Information onpast and future investment trends and
the financial activities carried outbythe Community tofinance investment
ispublished bytheECSC .inthe twoyearly reports ,one onthe results of
the investment survey inthe Community coal s,nd steel industries and the
other the financial report dealing with ECSC borrowing andlending activity .
The remarks which follow are not intended toreplace the policy information
given inthe documents referred toabove . Itshould benoted that the
general guidelines for steel -which v/eredrawn upbytheCommission in
1976 -arecurrently being revised inconsultation with theparties concerned .
The ensuing remarks will thus beconfined tocertain key points orrecent
events that the Commission feels should behighlighted indrawing upthe
draft operational budget oftheECSC for 1979 •They deal inturn with the
industries ,thesocial policies oftheECSC andtheborrowing andlending
activities ofthe current year .

-12-
1.Goal polic.y
TheCommission 'sefforts topersuade theCouncil toapprove itscoal
policy proposals this year have sofarborne little fruit .
TheCouncil hasreached nodecision ontheproposals forasystem of
aidforfinancing cyclical stocks ofhard coal and coke andaidfor
investment in "building coal-fired power stations orconverting
existing power stations tocoal ,which theCommission placed before it
in1977 -
Atthebeginning of1978 |"theCommission asked the Council tolook into
asystem ofaidforintra-Community trade inpower –station coal ,in
order toencourage sales ofCommunity coal topower stations bymeans
ofasubsidy oftheorder of10EUApertonne ,tobridge tbogap
between theprice ofCommunity coal and theprice ofimported coal .
Theaim isboth toreduce Community dependence onimported energy and
tomaintain long-term coal production capacity .Aformal proposal for
aregulation tothis endwasputtotheCouncil on28September 1978 .
TheCommission has decided tocontinue the system ofshor -t-+erm
adaptation introduced in1977 >relating 'tothesystem ofaidfor
coking coal and coke .Under this system theproducers concerned were
granted Community aid inspite ofthe fact that supplies anddrawings
ofcoal and coke were lower than those provided for inlong-term
contracts between themselves and theiron and steel firms ,provided
however that thedeliveries were reduced indirect proportion tothe
adjustments which these firms had made intheir production ofpig
iron byapplying Community measures designed toimprove thebalance
between supply anddemand onthe steel market .

TheCommission madeproposalsrecently (documentCOMC785516finalof19.10.78)
forimprovingthepresentsystemofaidsforcokingcoal(whichalreadylast
year,wasextendedto1981),witheffectfrom1.1.79.
On1November19T7»"therepresentatives ofthegovernments ofthe
MemberStatesoftheEC3C,meetingintheCouncil,reachedadecision
onCommunitysurveillance ofimportsofhardcoal(forpowerstations)
originatinginthirdcountries.Underthissystem,MemberStateswillbe
requiredtosendtotheCommissionquarterlyreportsonquantities ,
pricesandthecalorificvalueofsteamcoalimportedfromnon-member
countries .
2.Ironandsteelpolicv
Overthexastyear,problemsintheironandsteelindustryhave
continuedtonecessitate considerable effortsbytheCommunity
institutions –theCouncil,theECSCConsultative Committeeandthe
Commission–bothtostabilizethemarketandtodevelopaCommunity
approachtorestructuring problems.TheCommissionhasalsobeen
examiningthesocialrepercussions ofthesteelcrisis;theseaspects
ofsteelpolicyarecoveredlaterundertheheading"Socialpolicy".
2•1Commission a.ctiontostabilize themarket
In1978,theCommissionadopted3,numberofmeasurestomitigatethe
effectsofasluggishsteelmarketonprofitability andtoalleviate
thepressurecausedbyimports.
Thesystemofguidepriceswascontinuedandextendedandpriceswere
increasedduringtheyear.Minimumpriceswereintroducedatthe
beginningoftheyearforfurtherproducts(merchantbarsajndhot-rolled
widestrips)andcontinuedforreinforcingbars.

-14-
Tighter checks have "been introduced ,concerning theminimum price
provisions :their scope has "been extended toinclude dealers ,.
certificates ofconformity have been introduced ,andtemporary -
deposit arrangements forintra –Community trade inthe products subject
tochecking were introduced on 1July andextended foranother two
months from 1October .These measures were ,necessary because certain
suppliers were notexercising sufficient discipline over rices .
Bilateral agreements have been made with anumber ofcountries to
ensure that theprices ofimports from these countries arecompatible
with thepricing policy pursued within theCommunity ,Quan +-tative
preference clauses have been included inthese agreements toguarantee
tothecountries inquestion that traditional trade patterns will be
maintained .
TheCommission fyascontinued touse thequarterly forward programmes and
firms' quotas forcertain finished products asanti–crisis instruments .
Various improvements have been made tothemethod ofdrawing upthe -
programmes ,andthesystem used forthemonthly comparisons ofresults
and forecasts has been refined .
AsLong asthestate ofcrisis persists ,itwill benecessary tokeep all
these measures inoperation and,ifneed be,introduce anydesirable improve
ments .
2.2 Community approach toproblems ofrestructuring
Theobjective ofrestructuring istomaintain aproduction capacity
which ismodern interms ofequipment andproducts ,theviability and
consequently the competitiveness ofwhich would beassured .
Restructuring policy must beconducted inconsultation with theworkers *
♦ '
organizations ,thefirms ,theMember States andtheCommunity 'sother
institutions with aview toaCommunity approach totheproblem .All
newinvestment inthe steel industry should beplaced inthis context .

-15-
With aview toguaranteeing therequisite consistency ,theCommission
hassubmitted totheCouncil adraft decision (under thefirst
paragraph ofArticle 95oftheECSC Treaty )concerning aidand
intervention inthesteel industry ,andisnowreviewing theGeneral
Objectives for Steel inconsultation with theparties concerned .
Thefirst results ofthis review show that crude steel production
capacities in1978 areover 25million tonnes inexcess ofthe
capacities which will beneeded tosatisfy demand in1983 .
/ •
Thesame applies torolled products ,although inthis sector theamount
ofexcess capacity differs greatly from product toproduct (comparatively ,
insignificant forwide hot-rolled strip ,considerable forvirtually all
bars andsections andheavy plate ).
TheCommission hasbeen negotiating since May 1978 with thefirms and
all theother parties concerned ,inorder todraw upmediuia-terra programmes
for coordinated investment and closures .
Inseveral cases ,e.g. Saarland /Luxembourg ,decisions torestructure have
already been taken .Nevertheless ,itisnotyetpossible tohave an
overall view and considerable efforts will certainly have tobemade in
order toattain thegoal set .
Inanyevent ,theexcess capacities remaining would certainly notpermit
anincrease inself–financing ratios byraising prices sufficiently ,even
though themarket measures taken bytheCommission have apositive ,
stabilizing effect .
That iswhy the firms will have toresort toexternal financing and
whytheCommission will make use ofallthe ,financial possibilities
afforded byArticle 54concerning loans andinterest relief grants ,
based onthe contribution ofthe investments inquestion tothe
restructuring objectives .

-16-
3.Social policy
V
Ingeneral ,the social policies pursued ,under theTreaty ofParis are
. *
similar tothepolicies developed subsequently "bytheEuropean Economic
Community .The aims andmethods ofECSC resettlement aid are "broadly
similar tothose oftheSocial Fund .,while thepurpose ofECSC redevelopment
aid iscomparable tothat oftheRegional Fund ,although thelatter have a
wider range .
/
However ,theeffect ofthe legal differences -andespecially the fact that
1
ECSC aid isfinanced bythe industries concerned –has increased the scale
oftheaidprovided .TheECSC resettlement scheme ismore fully developed ,
andmore comprehensive than thecomparable Social Fund operations ,while
theresettlement aidsystem also has amore specific purpose than the
Regional Fund 'spresent operations ,since the operations concerned are
designed tocreate jobs intended primarily forworkers from theECSC
industries .Furthermore ,since 1955 "theECSC haspursued apolicy of
subsidizing housing forworkers inthese industries .
Inthepresent circumstances ,itisclear that intherealm of .social
policy theECSC must concentrate onsolving theproblems arising from the
restructuring oftheiron andsteel industry andtheforeseeable reduction
inits labour force .

-17-
Ifthisrestructuring istobeacceptable fromthesocialand.regional
pointsofview,theinevitableredundancies mustbekepttoaminimumand
beoffsetbythecreationofalternative jobs;also,theconsequences of
redundancyforindividualworkersmustbemitigatedbyCommunitysolidarity
gearedspecifically tovocationalretraining.
Therehasbeenasignificant increaseintherateatwhichinterestrelief
hasbeengrantedforrestructuring operations „Inpractice ,however,
therearecertainpracticallimitstotherestructuring policy,since
demandisbasicallydeterminedbythenumberofeligibleprojectssubmitted
bythenationalauthorities onbehalfoftheundertakings concernedandnot
bythenumberofjobswhichitwouldbedesirabletocreate.Between1975
and1977;forexample,redevelopment programmeswhichreceivedfinancial
aidgaverisetoapproximately 15-000newjobswhilethetotalnumberof
jobslostinthesteelindustrywasnearly47*000.Furthermore ,nojobs
willbecreatedunderECSC–financedprojectsuntil1983°Consequently ,
redevelopment loans-althoughincreased–willcoveronlyafractionof
potentialrequirements .Inaddition,theseloansareveryunevenly
distributed betweenthemainregionsaffectedbyclosures.
Asfarasgeneralsocialproblemsinthesteelindustryareconcerned ,
theCommissionhasitselftakentheinitiativeofopeningadebateonthe
socialaspectsoftheCommunity'ssteelpolicythroughitscontactswith
theConsultative Committeeonwhichbothsidesofthisindustryare
represented .

-18-
The Commission believes thai ;there must be "broad concertation "between the
Member States ,manufacturers andtrade unions ,andthe Commission onthe
subject ofECSC aidforworkers affected "byrestructuring measures ;such
concertation would help prepare theground forarestructuring programme .
inline with theGeneral Objectives forSteel .
Itshould bepointed outthat thesteel industry will have made 3«000 people
permonth redundant in1978 andthat thetotal work force inthis sector
might fall byabout 100.000 over thecoming years inorder togear manpower
levels toproduction requirements . ,.
. / '
Since the economic situation precludes the re-employment ofall such workers
inother areas ofactivity ,themajority ofsteel-manufacturing countries
I
have introduced early retirement schemes asthe least harmful solution in
thepresent circumstances . -
Special schemes -generally financed bythenational authorities and
employers -have been setupbyMember States tocater foracertain
category ofearly retirement ,i.e. ,theoldest agegroup .
Forother groups ofworkers ,Member States have requested financial help
from theCommission under Article $6oftheECSC Treaty . .Inthebelief
that early retirement iscomparable toatideover allowance foryounger
workers inthecase ofworkers individually affscted byclosures ,theCommission
hasaccepted the'principle offinancing such early retirement schemes inlieu
oftideover allowance anduptotheamount ofthat allowance ,asitdid
previously forthe coal industry .
Since theCommission believes ,however ,that early retirement isatemporary
exceptional measure andthat theaimofresettlement grants must always be
theproductive re-employment ofworkers ,ithasretained theprinciple of
placing aceiling onaidgrants forearly retirement inline with that placed
onresettlement aidnormally granted .

-19-
Byitsvery nature ,theearly retirement option islimited .Consequently ,
anysignificant fall inthetotal wcrk foroe ofthe steel industry over
thecoming years will demand further exceptional social measures .
This aimcan "beachieved only byspecial measures devised byboth sides
ofthe industry and the publio authorities .
Iashort ,itisclear that the social dimension ,especially essential
redevelopment andresettlement aspects ^must form part oftherestructuring
programmes .TheCommunity 'stask istoapply allthemeans atits
disposal inpursuit ofthese programmes ,including inparticular :
(i)Assistance from theECSC ,theRegional Fund andtheEuropean
Investment Bank forthe creation ofnew jobs ;
(ii)Themanpower resettlement scheme provided forinArtiole 56ofthe
ECSC Treaty for the resettlement ofworkers .
4.Borrowing and lending activity since 31December 1977
ECSC Financial Report No23summarizes the Community *sborrowing and
lending activity inthefinancial year 1977 andpresents analytical
andcumulative statistics forthe vfcole ofthis activity since 1954 .
The Community *sbalance sheet asat31December 1977 appears in
Annex IItothe report .
Borrowings in1977 totalled 729mEUA ,compared with 956mEUAin1976
and 731mEUA in1975 «Loans paid out inthe same periods totalled
742 raEUAcompared with 1.064 mEUAand805mEUA .

20
Totalborrowingandlendingsincetheinoeptionof"theECSCistherefore
broughtupto4.734mEUAand4«903oEUArespectively (including
190mEUAinloansfromownfunds).Thebalanceoutstandingasat
31December1977was3*900®EUA.
Inthefinancialyear1978,ECSCfinancialactivitycontinuedto
satisfythestrongdemandfromfirms–notonlyinthesteelindustry
butalsotoasignificantextentinthecoalindustry–anxiousto
modernizeorrestructuretheirplant.Inthefirsthrlfoftheyear,
borrowingstotalled605mEUAandloansdisbursed378mEUA,sothat
at30June1978thebalanceoutstanding exceeded4»300mEUA.
TheECSChascontinuedtoobtainfavourabletermsontheoapital .
marketandhassuccessively developedapolioyofprivateloans
whenconditions ontheopenmarketwereunfavourable *.
ThetableinAnnexCtothisaide-m£moire analysestheloansdisbursed
inthefirsthalfofthefinancialyear1978..
AstatementoftheprovisionalsituationoftheEuropeanCoaland
SteelCommunityasat30June1978isgiveninAnnexD„
Itisclearfromapplications inhandthatECSCborrowingandlending
activityislikelytocontinueatahighlevelintheoomingmonths.
Asfaras1979isconoerned,itisdifficultatpresenttogiveany
estimatesinceborrowingoperationsarecarriedoutsolelyinresponse
toloanapplications alreadyagreedbytheCommission ;moreover,
suchapplications donotspanperiodssofarahead,eventhough
occasionally someapplications arelonginawaitingsettlementasa
resultofparticularconditionsimposedbyfinnsinrespectof
currencyorexchangerates.

21-
At7July 1978 ,total loan applications approved bytheCommission ,
butawaiting settlement ,amounted ,to98O inEUA .Applications
officially lodged andbeing processed amount to750mEUA .Applications
for substantial loans are also anticipated inthecoming months .
Asageneral guide ,however ,itmay besaid that theplanned level ofECSC
industrial investment ,only for theprojects approved before
1January 1978 ,wasstill setat2t360mEUAfor1979 compared with
3,287 niEUAin1978 andapplications forredevelopment byECSC industries
ontheincrease ,theoverall level offirms' requirements islikely to
remain stable .
C. FINANCIAL C0NTEXT
Itmust bepointed outthat theECSC budget hasbeen expressed and
implemented inE.uropean units ofaccount since 1January 1976® Since
that date ,budget receipts andcommitments andthecontracts relating
thereto have been expressed andpaid inEUA .
Asregards thefinancial background tothe 1979 draft budget ,the
rise inprices continues tobeanimportant factor inmaking forecasts
anddefining comparisons between the 1978 and 1979 financial years .
Inthis respect ,itmaybeassumed that there will beanincrease in
costs of6,5to7$,ascompared with roughly 10/£between 1977 and1978 *
TheEuropean Parliament raised theproblem oftherelationship between
theECSC operational budget and theGeneral Budget inPoint 5ofits
Resolution of14December 1977 on "theECSC operational budget for 1978 ;
theCommission has setoutitsthoughts onthematter onpages 78–87
ofthe Introduction tothe Preliminary Draft General Budget ofthe
Communities for 1979 *

-22u
ThemamfinancialproblemtheECSOagainfacesinconnectionwithiso
1979operationalbudgetisthegrowingimbalanoe "betweenrequirement
andtraditionalresouroes,asituationaggravatedbytheserious
difficulties encounteredbyindustryintheCommunity,particularly
inironandsteel.
Inadditiontothetraditionalrequirementsvdiiohareincreasing
rapidly,therearenewprioritytasksconnectedwiththerestructuring
andredevelopmentoftheironand.steelindustry.Becauseofthe
financialburdenbornebycompaniesasaresultofthestructural
difficulties ,unfavourable worldwidemarkettrendsandeconomic
factors,theCommissionjudgeditadvisabletomakeuseofthe
mechanismforbalancingthebudgetprovidedforintheTreatyof
Paris,namelyan^appropriateadjustmentofthelevyrate.This
rate–Whichwasrelativelyhighduringtheinitialperiodofthe
*ECSC'sexistence–hasremainedfixedat0,29$since1972even
though,sincethebeginningofthesteelcrisis,theyieldfromthe
levies,whichislinkedwithproductionandthepricesofthe
taxableproducts,hastendedtodropinrealterms.
Overtheyearsthesefactorshaveledincreasinglytoareduction
inbudgetrequirements inordertoadaptthemtorevenueatallcosts,
asthelevelofthisrevenuewasregardedasoneoftheunchangeable
politicalandeconomicfactorsoftheproblem.In1977the
CommissionsubmittedtoParliamentandtheCounciltwoproposalsaimed
atregulatingtheproblemoftheimbalanoeintheECSCbudgetinthe.
•future.OneoftheseproposalsresultedintheCouncilDecisionof
21November1977(0J306/28of30November1977)andhadtheeffect
ofreducingtheobligatory B3SCcontributiontotheexpenditure of
theoperationalbudgetof.theCommunities from18to5millionEUA.

Also,on8November1977»inordertoavoidanincreaseinthelevies,
theCommissionproposedthattheCouncilshouldinitiatetheprocedures
requiredinordertoallocatetheECSCcustomsdutiestotheEGSC
operational "budgetassoonaspossibleandmeanwhilearrangefora
transferof32millionEUAbytheMemberStatesinordertobalance
thebudgetforthe1978financialyear.On21Deoember 1977»
actingonthisproposal,theCouncilundertooktotransferthe
32millionEUAandmakethenecessaryarrangements induetime.This
allowedtheCommissiontoenterthesumof32millionEUAonthe
creditsideofthebudgetforthe1978financialyear.
IntheResolutionof14December 19779Parliamentsupportedthe
proposalforapermanenttransferofcustomsduties.However,when
theCounciltookupthemattertheMemberStatesshowedsome
hesitation# TheCommissionstillconsidersadecisionofthis
typetobefullyjustified.

-24-
IT.ANALYSIS OFREQUIREMENTS REPORTED AND RESOURCES AVAILAB LEFOR .
THEFINANCIAL^YEAR 1979 '
This chapter first ofall gives adetailed account ofthetwofactors
traditionally taken into account "bytheCommission in ■determining
the levy rates onwhich tobase thedraft budget forthenext
financial year ,namely expected requirements andtheestimated yield
from resources .
Article 49oftheECSC Treaty empowers theCommission toprocure the
funds needed topursue theactivities set out inthat Treaty by
imposing levies ontheproduction ofcoal and steel .These levies
areapplied annually tothevarious products according totheir average
value ,though therate thereof maynotexceed 1$unless previously -
authorized bytheCouncil inaccordance with Article 50«
Tofixthis rate itisfirst ofallnecessary toestimate requirements ,
then toconsider how farthese may becovered from budgetary resowces
other than thelevies ,namely theinterest oninvestments andonloans
financed out ofcapital resources andcancellations ofprovisions .
Theamount which will have tobecovered bythelevies canthen be
determined .
Next ,thelikely yield from thelevies iscalculated onthebasis ofa
preliminary –and thus sometimes unavoidably inaccurate –estimate ofthe
average values ofthevarious products ,and inthelight oftheestimates
(also somewhat tentative )ofthevolume ofoutput during theyear .
Theprobable levy yield isfirst expressed .astheestimated yield from
arate of0,01$ .
•These arethe twomain elements described inthis chapter .Tocomplete
theanalysis ofrequirements reported andresources available ,the
chapter also contains the information intheCommission 'spossession
forevaluating thenewresource envisaged ,namely ECSC customs duties . -

-25-
The next stage istodetermine the extent towhich theCommunity must
forego satisfying therequirements ,which far exceed theresources
provided bythepresent rate ;or,conversely ,how far therate must
beeither raised orlowered .This question isdiscussed inChapter III .
The following presentation ofrequirements reported and foreseeable
resources ismodelled onthe systematic analysis ofthedata for the
various budget headings inthe General Budget ,set out inPart IIof
the General Introduction tothePreliminary Draft Budget .Aswith
theGeneral Budget ,this presentation lists separately themain features
ofeach heading (legal basis anddescription oftheoperation ,type and
breakdown ofexpenditure ,explanation ).Three categories ofexpenditure
areobligatory ,inthat they derive from decisions already taken
(administrative expenditure ,aidtocoking coal andcoke forthesteel
industry )orfrom framework agreements with theMember States (onaids
toresettlement ).Togive aclear picture ,theexplanations for
expenditure which isnotobligatory (research andinterest relief grants )
are more detailed than for the other chapters .
A. REQUIREMENTS REPORTED FOR 1979
1.ORDINARY REQUIREMENTS
CHAPTER B1;ADMINISTRATIVE EXPENDITURE
1.Legal basis and description ofoperation
Legal basis :
-Article 50of "theECSC Treaty ;
-Article 20oftheMerger Treaty .
ECSC contribution tothe Commission 'sadministrative expenditure .
2.IVpe and breakdown ofexpenditure
Annual lump-sum payment infour equal quarterly instalments .
3.Explanation
The Council has settheannual amount ofthe lump–sumpayment at5®EUA

-26-
CHAPTER B2:AIDS TORBSETTLET-TEM 1
1-Legal "basis and description ofoperation
Legal basis :
–Articles 50an<l56oftheECSC Treaty ;
–Bilateral agreements concluded "between theHigh Authority /
Commission andtheGovernments oftheMember States . t
TheHigh Authority /Commission provides non–repayable aidtowards ?
(i)thepayment oftideover allowances toworkers :
(ii)thepayment ofresettlement allowances toworkers ;
(iii)thefinancing ofvocational retraining forworkers having
tochange their employment .
Insome cases ,thetideover allowances isreplaced "byacontribution
corresponding tothecost ofa-bridging pension system .
The grant oftheaid isconditional upon payment bythe State
concerned ofaspecial contribution ofnot less than theamount ..
ofthat aid ,unless anexception isauthorized by "theCouncil ,
acting byatwo–thirds majority .
2.Type and breakdown ofexpenditure
Creation ofaprovision tosubsidize ,bymeans ofa reimbursement ,
expenditure incurred tythegovernments within thescope oftheCreation ofaprovision
expenditure incurred by
agreements signed .

-27-
Thebreakdownbysectorandbycountryoftherequirements asestimated
fromthedataprovidedbygovernmentsisasfollows:
mEUA
Country CoalSteeland
iron–oreminesr– |
Totalper
country
Germany 8S
2 10
Belgium
i1,5 11 12,5
Denmark ]
Itokenentry tokenentry
Prance >■ .jA,5 16 2°,5
Ireland tokenentrytokenentrytokenentryj
Italy 3,53'5i
Luxembourg3 3"'i
r
Netherlands 3,5 3,5
UnitedKingdom 9 5 1A|
Totalperindustry 23 AA 67|
?
î
l
ί
iThesocialrepercussions ofthepresentsituationremaindifficultto i
predictandtheforwardfigures,whichareinprinciplebasedonthe
policynowinforce,arethereforenomorethantentative*
3.Explanation
Thecoalindustry'srequirements arelowerthanin1978»mainlyasaresult
oftheprogressmadeinrationalizing theindustry,thoughthefallinpig
ironproductionhasalsoledtotheclosingofanumberofcokeplants* [
Ontheotherhand,requirements Intheironandsteelindustrycontinueto
beatahighlevel,owingtothegradualrationalizing andrestructuring
oftheindustry*Thereductioninemploymentintheironandsteelindustry
isestimatedatseveraltensofthousandsofworkers*/ ' J
I
I

-28-
CHAPTERB3'•AIDTORESEARCH
1.Legalbasisanddescription ofoperation
Legalbasis:Articles50and.55of"theECSCTreaty.■
TheHighAuthority/Commissionmustencouragetechnicalandeconomic
researchintotheproduction andincreaseduseofcoalandsteeland
occupational safetyinthecoalandsteelindustries.Tothisend
itgrantsaidtofinanceresearchafterreceivingtheCouncil's
assent.
2.Typeand"breakdownofexpenditure
Creationofprovisionstocoverpart–subsidieswhichtaketheform
oftherepaymentofaproportionoftheactualcostsofresearch
projectsapprovedbytheHighAuthority/Commissioninaccordance
withtheproceduresprovidedforintheTreaty;thesecover,in
particular,theconsultation oftheECSCConsultative Committee
andthereceiptofthe00x01011*8assent.Inmostcases,"theaid
grantedamountsto60%oftheestimatedaridsubstantiated costs.
Theapplications canbebrokendownasfollows:
° ~-, mEUA
Heading Sector Aidrequested
Β3.1
Β3.2
Β3.3Steel
Coal
Socialandjnedical42,8
30,7
10,5
TOTAL84-,

3•Focplanation
Steelresearch
ThecriticalsituationoftheironandsteelindustryintheCommunity
andtheplannedmeasurestorestoreitsrecoveryandeconomicviability
mustnecessarily "betakenintoaccountinassessingthefinancial
requirements oftheECSCresearchprogrammeinthesteelsectorfor1979*
TheECSChasinevitablybeenprofoundlyaffectedbythegeneraleconomic
recessionandtheworldwidechangesintheironandsteelindustry.
Thesearethefundamental causesofthepresentsteelcrisis,which
beganattheendof1975a-ndhasshownupmajorstructural weaknesses
resultingfromovercapacity andadeterioration intheinternational
competitivity oftheindustry®Moreover,itisclearthat,incertain
sectors,newtechniques havebeenintroduced moreslowlyinthe
Communitythaninitsmaininternational competitors ,notablyJapan.
AspartoftheoverallstrategywhichtheCommissionisintheprocess
offormulating withaviewtosolvingtheseproblems,aprogrammefor
therestructuring oftheironandsteelindustryintheCommunityis
beingpreparedinconjunction withthereviewofthegeneralobjectives
fortheperiod1980–1990 *Inviewoftheimportantroleoftechnical
progressinthiscontextttheCommissioniscurrentlyworkingoutnew
guidelinesfortheECSCresearchprogrammeinthesteelsectorto
ensurethatthisformsafully–integrated partofitsoverallstrategy
fortheindustry.
Oneoftheprincipalobjectivesoftherestructuring programmeisto
maketheCommunity'ssteelindustrymorecompetitive andthus
consolidateitspositionbothondomesticmarketsandasamajorsteel
exporter® Theaimshouldthereforebetocombatforeigncompetition
onCommunitymarketsacrossthewholerangeofproductsandinexport
marketstoconcentrate moreonspecialised productsandproductsof
thelatesttypesandqualities®Ifsuccessisto"beachieved,BCSO
researchinthesteelsectormistcosrtirmstoplayaniimportantpart
inattainingtheobjectives commontoth«Gotroowuityasawhole*

Greater emphasis should ,however ,beputonmeeting short –and
medium -term needs .This collaborative effort will thus continue to
provide acommon core around which individual steelmakers canorganize
their ownresearch and development programmes andwhich will enable
thsm tofree resources totackle problems ofamore specific and/or
commercial nature *
Theintegration ofthis EC.SC research into therestructuring programroe
means that in1979 efforts will largely bedirected towards the
following three major objectives :
(a)reduced production costs :improved productivity intheproduction
andprocessing ofsteel ;more efficient useofrawmaterials ,
especially energy ;
(b)improved product quality :projects relating toalmost allaspects
ofproduction (process control ,quality evaluation andreproducibility );
(c)more effective utilization ofsteels anddevelopment ofnewapplications
effort *toachieve better understanding oftheproperties ofsteels
with aview tomore effective utilization andthe .development of
products capable ofsatisfying users *most sophisticated requirements .
The level ofthefinancial requirements forthe 1979 programme reflects
both the increased effort needed ifEurope isnot tofall behind the
other major world producers andthe interest shown bythe steel industry
inthis Community approach toR&D.Itisworth pointing out her-e that
R&Dexpenditure bytheCommunity 'ssteelmakers represents barely 0,5$ of
their turnover ,whilst thefigure forJapan isapproximately 1,5%*' It
istherefore hardly surprising that this country ,which isoneofthe
Community 1smain competitors ,should have been intheforefront in
recent years indeveloping newtechniques inthefield ofsteel ,
production andprocessing –techniques which have been exploited byits
ownsteel industry andexported toother countries ,including some in
theCommunity *

31
Coalresearch
Theaimsofcoalresearchremainthesameasthosepursuedbythe
Community'scoalindustryandresearcheffortsmusthelptomaintain
productionatthetargetlevelset"bytheCommunity.
Intensification ofresearchendeavoursisoneofthewaysofachieving
productionandproductivity objectives.TheCommissionmadeits
viewpointontechnicalcoalresearchclearbydefiningthetotal
amountofECSCaidstocoalresearchinthe1975-85
medium-termcoalguidelineswhichithaspublished(OJC22of
30January1975)•Theseaidsshouldamounttosome15-20mEUA
ayearandservetoencourageresearchprojectswithinthe1975-60
medium–termcoalresearchaidprogramme(OJC60of25May1974)»
assupplemented bytheCommissionCommunication of30December1974
(OJc...1968).
Thepresentenergysituation,whichhaspersistedsincethecrisis
attheendof1973*hasgivenanewfilliptotheCommunity'sown
energysources,includingcoal,ofwhichtherearestilllarge .
reserves.Furthermore,theBonnEconomicSummit,indealingwith
theenergyquestion,stressedcoalandtheimportantpartitmust
playinEuropeinthefuture.
However,theCommunity'scoalindustrycontinuestoencountervery
gravedifficulties becauseofthediversityofthecoaldepositsand
theever-greater depthstowhichitmustgotogetatthemandthe
factthatit'isstillalabour-intensive industry.Thebusinessof
workingcoalseamsandtheworkwhichprecedesorfollowsworkatthe
mface,together-withsuchhazardsasfiredasqp,mineclimateandstrata
pressurecontinuetobethemajorsubjectsforresearchonwhich
effortsshouldbeconcentrated .
Cokeisakeyelementinthemanufacture oftheproductsofthe
Community'sironandsteelindustry,asregardsbothqualityand
price.Anyimprovement inthecompetitiveness oftheironandsteel
industryistotheadvantageofthecoalindustry,fortheironand.
steelindustryisoneofthelargestcoalconsumers.Intheinterests
ofbothindustries,itisthereforenecessarytocontinuetoputthe
emphasisonresearch ,aimedatimprovingCommunitycoke.

»32
Finally,productupgradingand,inparticular,basicresearch
onthegasification andliquefaction ofcoalaimedatimproving
existingprocessessoastoimprovetheirprofitability ,fitsvery
\ . >wellintotheframeworkoftheenergypolicy.
The1979coalresearchprogrammewillheconcernedwiththe
followingmatters:
Miningtechniques
-preparatory work
-firedamp,mineclimateandstratapressure
-winningandworking ,
-généralservicesunderground
Upgrading
-preparation ofcoal /
-coking
-upgradingprocesses

33-
Socialresearch
Theheading"Socialresearch"coversresearchdesigned ,toimprove
workingconditionsandoccupational safety,hygieneandhealthin
theECSCindustries.
During1978"thedemandforresearchinthesefieldshasnotabated,
whichisproofenoughofthepracticalusefulnessofthisformof
intervention .Itshouldberememberedthateachprogrammeis
thoroughlyexaminedbothbymanufacturers andworkersinindustry
andbytechnicalexpertsandgovernmentspecialists.
Theresearchprogrammeonpollutioncontrolinthesteelindustry
wascompletedthisyearandworkhasbegunonpreparinganew
five–yearprogramme,duetostartin1979*TheCommissionhas
alsopromotedaspecialsafetyprojectinthesteelindustry,asa
resultofaseriousaccidentwhichoccurredattheScunthorpe
steelworks,UnitedKingdom,in1975®I11"thecoalindustrythe
minesafetyresearchprogramme,launchedin1977»continuesto
contributetosafetyinthecoalfields.ThiByeartheCommission
alsolaunchedafourthresearchprogrammeonindustrialhygienein
mines(1978–1983)(OJC159of5July1978).Diefirstgrantsof
financialassistancefor.16projectscontainedintheprogrammehave
beenmade.
Inthebattleagainstpneumoconiosis ,theprogrammeonchronic
respiratorydiseases,begunin1977tisstillbeingimplemented.
Thethirdresearchprogrammeonergonomics andretrainingisalso
nearingcompletion,andheretootheCommissionhastakenstepsto
extenditssupportmeasures.
Themajorprinciplesofthefourthprogramme,pollutioncontrolin
thesteelindustry,havenowbeenagreedoReseaxchneedsinthis
fieldhavechangedinrecentyears.Thedischargeofliquideffluents,
especiallyfromcokeplants,thetreatmentofwasteandby-products ,
noisearidvibration abatement–researchonallthesehasbecome
moreimportant -becauseindustry,thepublicatlargeandtheauthorities
arenowavareoftheneedtoprotectth<3environment *Changesin
industrya!BOjMoessitaieurgentadaptiveoperation?-,toensurethai;
theworkforceis?effactiveljrprotected the>or?cplaceandtohelp

34-
combatlndustrialnuisances.
Attentionisdrawnheretothegreatinterestarousedbythebriefing
organizedbytheCommission onresearchintothetreatmentofdifferent
formsofwastefromthesteelindustry.
Thenewprogrammeonergonomics(thefourthprogramme)istobe
increasingly directedtowardspracticalsolutions,usingknowledge
acquiredfromthepreviousprogrammes,totheproblemsofimproving
comfortatworkonarationalbasisandtherebythesafetyofthe
workforceinthecoalminesandsteelworks.
Tosumup,theprojectstobefinancedin1979concernthefollowing
fields: '
(i)Pollutioncontrolinthesteelindustry;
(ii)Minesafety;
(iii)Industrialhygieneinmines;
(iv)Chronicrespiratorydiseases;
(v)Ergonomics.

35-
C!lAPTgR .54' I-Mflig FORM OPMTiiPT 7;:''!'fjEIJF :?1G/lastts
1•Le^al "basisanddescri ption ^ofoper^atjon
Legal "basis :Articles 54(investment )and56(redevelopment )ofthe
ECSC Ereaty ,andDecisions oftheHigh Authority /Commission .
TheECSC mayuse itsownfunds tooffer interest relief grants for
certain types ofloan .Therelief iscalculated inEUA onthe basis
ofcriteria setbythe Commission® Calculations are atpresent based
oninterest relief ofyfoover five years ,
2.Type andbreakdown ofrequirements
Provision foroffsetting part ofthe interest due onloans disbursed
bytheECSC ,inaccordance with thecontracts drawn upbetween the
Commission and the beneficiaries »
Theapplications can bebroken down asfollows !
Title Sector Aids applied for
Β4.1
Β4.2Investment
Redeve1opment50
45
TOTAL 95 I
3.Explanation
ECSC loans with interest relief aretheprincipal financial instruments
forpromoting theCommunity restructuring a.ndredevelopment policies
set out inChapter IsBo Thepolicy reasons forthese needs ,given
inthat Chapter ,arecomplemented below with thenecessary technical
information .
Investment
Intheinvestment field ,thechief aimofloans with interest relief
isthe structural improvement andrationalization oftheECSC industries .
Thecriteria forgranting relief are asfollows :
(i)Environment :relief only forexceptionally expensive investment
inexisting plants and investment ofaninnovatory character
(OJHbC146of25November 1974 );

36
(ii)Research andtraining centres ,and .theelimination of
"bottlenecks :relief inthe latter sector has "been limited to
\
investment toremedy theshortage ofcoking coal (OJNoC73
of18June 1970 );
(iii)Restructurings relief may "begranted forthose investments
that are ofgreatest value forrestructuring andre–establishing
thelong-term competitiveness ofthe Community 'siron and steel
industry (OJHoC174of22July 1977 )* Commission attaches
special importance tothis category ofintervention initsiron
and steel policy .
Itshould besaid that ,thefigure of50®EC&only covers 2$of
therecent average level ofinvestment inthis sector ,which stands
atapproximately 2.500 mETJ .A.peryear .
Redevelopment -
Redevelopment loans aregranted ,pursuant toArticle 56ofthe
ECSC Treaty ,tofirms orpublic bodies which encourage new investment
creating alternative jobs inregions hitbyfalling employment
inthecoal andsteel industries .IGaeguidelines drawn upby
theCommission forgranting these loans arepublished inOJ178
of27July 1977 .
Themaximum size ofloan eligible for interest relief atthemoment
is20»000 EUApernew job.When recruiting ,therecipients give
priority toex-ECSC workers .
During thenext fewyears thenumber ofjobs disappearing intheCommunity
steel industry could beintheregion of25.000 peryear .This trend will
continue ,-andcould even rise .Asaresult ,butsubject tothe limited
effectiveness inthe short term of redevelopment measures referred toon
page 17,itispossible ,where jobcreation isconcerned ,todefine
objectives interms ofscale :iftheECSC were tobecalled upon in
1979 touse itsredevelopment policy asameans ofreplacing allthe
25«000 jobs which arelikely todisappear inthesteel industry alone ,
then loans with interest relief totalling 500 jpEUAwould have tobe
granted ,together with non-repayable interest relief amounting to
75mEUA.

-37-
However ,experience over the last fewyears and thepaucity ofprojects
which are eligible for ECSG financing suggest that the 1979 budgetary
requirements could correspond tosome 15.000 jobs ,or45®EtfAininterest
relief terms .Itshould besaid that ,inthemost optimistic view ,
these jobs will becreated during the next three tofour years andwill
nottherefore beavailable when the joblosses inthe steel industry
actually occur .
Inthe coal industry ,further joblosses will mean ageneral increase in
budgetary requirements ,but should nothave aay major repercussion onthe
demand for interest relief# Inany event ,applications forprojects in
mining regions will continue tobeconsidered interms oftheadvantages
they will bring when introduced .
CHAPTER B5–AIDS UNDER ARTICLE 95
1.Legal basis anddescription ofoperation
Legal basis :
(i)Article 95oftheECSC Treaty ;
(ii)High Authority /Commission Decision 73/287/ECSC of15July 1973
(0JNoL259of15September 1973 )»aslast amended by
Decision 1613/77/ECSC of15July 1977 (0JNoL180of20July 1977).
The ECSC contributes toaspecial fund ,administered bytheCommission ,
for subsidizing intra –Community sales ofCommunity coking coal intended
fortheiron andsteel industry »Under .Decision 73/287/ECSC of
15July 1973 "thefund isfinanced bytheCommunity ,theMember States
and the iron and steel industry .The Decision asitnow runs sets the
amount ofaidupto1979®
2.Type ofbreakdown ofrecruirements
Provision foralump-sum contribution tothefund ,estimated at6mEUA »
The subsidies due aredetermined inrelation tothetonnages delivered ,
and aidmay begranted for nomore than 15*000,000 tperannum .

-38-
3.Explanation
Theaimofthespecialsystemofaidtocokingcoalandcokesfetuppursuantto
Decision73/287/ECSCof15July1973istohelpmaintainproductionofblast-furnace
coalintendedfortheCommunity'sironandsteelindustryandalsotoenablethe
coalandthecokederivedtherefromtobesoldatpricesreflectingworldmarket
prices. .
TheCommissionfeelsthatcertainproductioncapacitiesshouldbemaintainedin
thissector,,aswellastherequisitelabourforcetoworkthemasefficiently as
possible,andthatitisthereforenecessarytohaveanaidsystemwhichtakes
accountofthefactthatthequestionofCommunitycokingcoalproductionconcerns
alltheMemberStates.Undertheaidsystem,aidstoproduction andsalesinthe
producercountryarefinancedbythatcountry;aidstointra-Community jsalesare
financedatCommunitylevel,thecostbeingdividedbetweenthesteelindustry,.:
theMemberStatesandtheECSC.
Inaproposalof19.10.78(C0M(78)516final),theCommissionisproposingtobring
theaidschemeuptodateandinparticulartoincreasesignificantly theMember
States'contribution soastaraisethetotalamountofaidpayablefrom31MEUA
to70MEUAayear.Thisproposalhasnoeffectonthepresentdraftbudget.
3.REQUIREMENTS NOTINCLUDEDINTHEBUDGET:LOANSFORFINANCINGSUBSIDIZED '.
HOUSING -
Inadditiontotherequirements tobefinancedbynon-repaygble grantsfromthe
year'sresources,thereistheECSChousingsubsidyscheme,financed'belowthe
line1,whichhasbeeninoperation^ince1955.Forecastsforthisprogrammeare
inclucjedinthisaide-memoire tocompletethepictureofallECSCinterventions for
ParliamentandtheConsultative Committee.Foreaseofunderstanding ,thepresen­
tationfollows ,thesameanalyticalformatasfortherequirements alreadydescribed.
1.Legalbasisanddescription oftheoperation -
Legalbasis:Article54andDecisionsoftheHighAuthority/Commissionassigning
tothehousingprogrammesthefundsfromthe"specialreserve"constituted by
interestoninvestments andloansfromownfunds. ■
ECSCintervention takestheformofreduced-interest loans,andeasesthe
costoffinancinghousingbycombiningthefundsmadeavailablebytheCommunity
withresourcesprovidednationally.

Grantoflong–term 1%interestrateloanstotheresponsiblenational
bodies.
Thefirstphase(1979–80)cftheninthsubsidizedhousingprogramme
(1979and.I98O)providesforasuraof35mEUAspreadoverthefinancial
year8"(979an-~1980,dependingonfundsavailable,Allocationstothe
sectorsconcernedintheninecountrieswillbedecidedbytheCommission
afterallduepriorconsultation .
3.Explanation
Themainreasonfor-proposingtosetaside35mEUAforthenext
phase(1979-80)aacomparedwith30mEUAforthelastphase
(1977–78)istheincreaseinconstruction costs.Moreover,
therequirements reportedcontinuetobefarinexcessofthe
amountofaidavailable.
Thisschemeisintendedtosubsidizethefollowingprojects;
(i)housinglinkedwithindustrialrestructuring inthetraditional
steelcentresandinthosecoalfields -whereproductionistobe
increased ;
(ii)housingforlabourtransferredtothenewcoastalsteelworks ;
(iii)specificsoliitionsformigrantworkers,employeeswithspecial
skillsandpersonsemployedinarduoustasks;
(iv)housingtobemodernizedaspartofurbanrenewalinsteel
andminingdistricts.
Theschemeisbothintheinterestofworkers,sinceitalleviates
theeffectsofpriceincreasesandhighinterestrates,andalsoof
benefittotheindustrysinceitfacilitatesrestructuring .
Thenumberofdwellingssubsidizedbymea-nsofECSCloansasat
1January1978was151,644*

-40-
3.SUMMARY OF1REQUIREMENTS REPORTED
Total requirements reported therefore amount to257mEUAto "be
financed under theoperational budget ,plus 17,5 mEUA intheform
ofbelow~t he-line loans atlowinterest rates forthebuilding of
subsidized housing .Thefigures forrequirements reported are
/ . --
summarized inAnnex E,inthe "applications' *column .
*
* *
B.RESOURCES AVAILABLE -
1.RESOURCES FOR THE FINANCIAL YEAR
CHAPTER R1:GEHERAL RESOURCES
TITLE R1.1 îLevy
1•Legal basis and description ~
Legal basis :
-Articles 49®^d50oftheECSC Treaty
–Decisions 2/52and3/52of23December 1952 .
Thelevies arecalculated onthebasis ofafixed scale per tonne which
isdecided each financial year bytheHigh Author ity/Commission and
published intheOfficial Journal .
2.Type and breakdown
Levy resources arethesums owing ,andduly established ,intheform
oflevies payable onoutput inthe 1979 financial year andcalculated
onthebasis oftheproduction declarations made bytheundertakings .
3.Explanation
The latest estimates ofthe average values which serve asthebasis
forcalculating thelevies suggest ,thai thefigures forthe1979 .
financial year ,which relate tothereference period from 1July 1977
to30June 1978 ,will besome higher inthecas® ofcoal androughly
yfolower forsteel than thefigures for1978®
Itshould.be noted that there isanappreciable margin ofuncertainty
inthese figures ;this isbecause thedepartments concerned are not
yet inpossession ofalltherequisite data ,andforecasting production
/
inpresent economic conditions isvery uncertain .

-41-
Tonnagesubjecttothelevy,andyieldfromarateoflevyof0.01%
ProductProduction onwhich
thelevyiscalculated
milliontonnesOnelevy
"point"
!inmEUA
i
Browncoalbriquettes andI
I 1
Isemi-cokederivedfrombrown
1coal 3,9 0,01
|Hardcoalofallcategories 194,3 0,82
I Coal-total 0,83
|PigironotherthanthatusedI
|formakingingots5,5 0,06
ISteeliningots 130. |1,87
IFinishedproducts 93,6 0»62
Steel-total 2|?g
GRAKDTOTAL 3,38
TITLERe1a2:Interest;otherinterest
Resourcesderivingfromincomeoninvestments andonloansagainst
non-borrowed fundswillbedetermined whentheCommissionadoptsthe
balancesheetat31December1978.UnderitsDecisionof30April1975,
theCommissionentersinthebudgettheinterestavailablefrom
thepreviousfinancialyear.
2.Typea-ndbreakdown
Interestwillbecreditedinaccordance withtheallocations decided
bytheCommissionwhenitadoptsthebalancesheetat31December1978.
Abreakdownofforecastresourcesbasedonthelatestestimates
isgivenbelow:
/

-42
Titles Heading jmEUA
i
I„_. .
>-.
H1.2
R1.3
H1.4Interestoninvestments andloans
.againstnon-borrowed funds
Finesandlatepaymentsurcharges
Miscellaneous revenue18
tokenentry
tokenentry^
3.Explanation ■<
Thefigureforinterestrevenueisbasedonanestimateofthe
resourceswhichtheCommissionwillbeinapositiontorelease
whenitadoptsthebalancesheetat31Deoember1978*
CHAPTERR2:CANCELLATIONS OPCOMMITMENTS WHICHWILLPROBABLY NOT
II–■■■UMIM–IHIini!■■■> Il»IR»ll1IIMIIBIIIPIIUIWITITIUIIIIIUI»MPIII■»Wl–■II >11111■IIIIIWIIMIIIII »MWIIUIm III««II!■!Hwiim«i■■■■
BEIMPLEMENTED v -
1.Legalbasisanddescription
Theprovisionscreated-inresponsetoCommissionaiddecisions
mustbegiventangibleformwithinareasonableperiodoftime
bythecontractingoflegalcommitments. _
TheCommissions InternalRulesforthedrawingupandimplementation
oftheECSCoperational budgetthereforeprovidethatintheexceptional
eventofunduedelayatthisstagetheprovisionswillbecancelled.
TheRulesalsoprovidethatonceallpartieshavedischargedtheir
obligationsunderthelegalcommitment,anyremainingpartofthe^
provisionwilllikewisebecancelled.

-43-
Theamountsthusre.-.easedbecomeavailable&gainasresourcesforthe
currentfinancialyear.
2oiTatureard"breakdown
Savemtheexceptional caseswheredecisionsontheearmarkingoffunds
arenotfollowedupwithinareasonableperiodoftimebylegalcommitments ,
anycancellation ofearmarkedfundsnormallyindicatescompletedischarge
ofthecontract,agreedwiththecontracting partyconcerned.
Theestimateof4©EUAshewninthischapterrelates,inessence,to
cancellations ofallocationsforresettlement aid.Onlyatckenentry
would "beneededfortheetheritemswhichmight "beinvolved(cancellations
ofbalancesremaininginrespectofcontractswhichhavebeenperformedin
full,delayedlegalcommitments,etc*).
3.Explanation
Itisdifficulttoestimatetherateofcancellation inrespectof
resettlement progranaries,asitdependsonthenegotiations tobeheldwith
thegovernments concerned,Theestimatedfigureof4sEUAis"basedonan
averageratefor1979•
CEAPTER13-REVALUMTQÌf OFASSETSANDLIABILITIES
Thischapter,showinga"tokenentry",isprovidedtorecordthenetaffect
ofchangesinratesofconversionduringthefinancialyear.
CHAPTERR4-UWJSEBRESOURCES FROMTHEFINANCIAL YEAR1977
Thischapter,showinga"tokenentry",providesforanybalanceremaining
fromthefundsofthepreviousfinancialyearto"beenteredasresources
forthecurrentfinancialyear.
CHAPTERR5-REVERIEFROMECSCCUSTOMSDUTIES
Légalba.sisanddescription
i■III–'inniun»i«mitili»IIH>«iininni«11>imn<HIFnisÉKIIIimiIIl'iuniimi
TheallocationofECSCcustomsdutiestotheECSCoperational "budget,
necessitated "bytherapidincreaseinfinancialrequirements withoutary
possibilityofincreasingtraditionalresources,dependsonadecisiontobe
takenbytheMemberStates^Thisdecisionwasproposedinprincipletothe
CouncilbytheCommissionon8Sfoveaiber1977(C0M(77)5 <51final)anddrafted
inpreciseforminasecoudcommunication on16May1978(C0M(78)l8lfinal).
ThematterwasalsoreferredtotheEuropeanParliamentwhichagreedinits
Resolutionof14December1977thattheresourcesaccruingfromthecustoms
tariffappliedtoECSCproductsshouldbeallocatedtotheECSCbyentering
themintheoperational budget.TheCouncilhasnotyetruledonthe
proposal.

44-
Natureandbreakdown •
Themethodsofpaymenthavestilltohedecided*Thesystemwill
probablybethesameasthatusedfortheGeneralBudget,whereby
themonthlypaymentsarecredited'totheCommission *saccountson
the20thdayofthesecondmonthfollowingthemonthofcollection *
Explanation ,
TheestimateoftherevenuefromECSCcustomsdutiesfor1979is
basedontheassumptionthattheywillnotbesubstantially
differentfromthesumsraisedin1977*If"thequantitiesand
pricesofimportsdevelopinamannerlikelytochangethevalue
oftheECSCproductssubjecttocustomsduties,theestimatewould
havetobeadjustedaccordingly *Itshouldbenotedthatthe
estimatesfortheotherCommunitycustomsduties,drawnupfor
thepurposesofthePreliminaryliraftGeneralBudgetfor1979,
forecasta5*7$increaseinrevenueover1977*
Therevenuefor1977communicated bytheMemberStatesamountedto
agrosstotalof80,3mEIJAattheaverageratefortheyear*
However,asproductsfromEFTAwereexemptedfromCommunity
customsdutiesfromthesecondhalfoftheyearonwards,the *
overallfigureforthesedutiesshouldbereducedbyanestimated
13mEUA*Theremustalsobeapayment(onthelinesofthe
provisionsdrawnupfortheGeneralBudget)bytheCommunityto
theMemberStatesofa10/£lump-sumrefundforthecostsof
collection *Talcingthisrefundintoaccount(andwithout
anticipatingthequestionofenteringthissuminthebudget),
availablenetrevenueisestimatedat60mSUA*

2«Covering;of^requirementanotenteredinthebud-T^t
Provisionhasbeenmadeforthafollowingresourcestocover
requirements fortheconstruction ofsubaid:sedhousing;
–re-payroentsenearlierloans(7«5mE.UA.)|
–apartoftiisspecialreserveandoftheformerBCSCpensionfund
(10aEUA)J
Themakingavailableoftheresourcesoft-hsespecialreserveremains
to"beconfirmedwhantheCommissionadoptsthebalancecheoton
31December1978#
3.Summaryofresource:;availablefor1979
Theestimatesoftraditional resourcesotherthanleviesamount
'to22mEUA(interestavailable–18mEUA;cancellations ~4'&EUA)«
Astheyieldfromalevyrateof0?0l$hasbeenestimatedat3,38mEUA,
theyieldobtainedfromleviescanbeestimatedat98®EUAonthe
basisofthecurrentrateof0.29%»
TheoutturnoftheEGSCcustomsdutiesasregardsnewresourcesis
estimatedat60mEUA»Theestimatedresourcesaresummarizedin
AnnexEinthesection 011"resources"®

HI .DRAJFT OPERATIONAL BUDGET FOR 1979 . ^
The situation inwhich theCommission hasbeen called upon todraw
upthedraft operational budget for 1979isdominated Toytwomajor
factors * -
Thefirst isquite clearly thesteel crisis® ,TheCommunity is
about topass frojn the stage ofimplementing short-term stabilization
measures toaphase where theemphasis will beputonrestructuring
measures with the social consequences this entails for the
redevelopment andresett lement oftheLabour force .Community
measures encouraging andpromoting thenecessary adjustments and
adaptations will play anessential role *This leads toconsiderable
financial requirements * . '
The second factor –anindispensable counterweight tothefirst
factor since financing isimpossible' from thetraditional resources
alone -isthe -proposal foradditional resources (ECSC customs duties )introduced
attheendoflast year and still awaiting adecision bytheMember
States *Even in1978 thebudgetary requirements considered asa
minimum byalltheparties concerned could befinanced only asa
result ofaspecial contribution of32mEUAbytheMember States
andareduotion from 18mto5mEUA inthecontribution made bythe
ECSC budget totheGeneral Budget foradministrative expenditure .
The contribution of32mEUAwasapproved inprinciple before the
adoption ofthebudget andwas entered asresources *The transfer
ofthe 60mEUA ofestimated revenue from theECSC customs duties
remains amajor element ,forbalancing the 1979 budget *The
Commission bases this draft budget ontheassumption that the transfer
(already recommended bytheEuropean Parliament )will beapproved in
time ,i*e»bytheendof1978 *
Taking account ofthese twofactors –establishment ,ontheonehand ,
oftheincreased requirements and ,ontheother hand ,oftheheed for
additional resources tocover these requirements –theCommission
examined therequire meats inorder tocontain them andalign them
tothemeans available tocover themo Aware oftheextreme difficulty
which anysignificant rise iithe levy burden would atpresent entail
fortheundertakings ,itbased its examination ofrequirements or>
theidea that ,asfaraspossible ,thebudget should bebalanced at
thelevel offoreseeable resources attherate of0,29$ ,i®e»180mEUA.,
including thenewresource which thecustoms duties will represent *

""47–
A. EFFECTS OFMADTTAINING THE CURRENT RATS
The information set out above and summarized inAnnex Bshows that
total requirements for thefinancial year 1979 amount to257mEUA®
Assuming theabovemantioned allocation totheECSC ofresources
from customs duties amounting to60mEUA ,onewould need toseta
rate oflevy of "tocover infull therequirements expressed .
However ,theadoption ofa"budget "based onthepresent rate of0.29 /&
andthus limited to180mEUAwould reduce theappropriations
required byanoverall 30%«Theeffects ofsuch areduction should
beexamined bystudying therequirements onanitem~by~item basis »
Itmust berecognized first ofall that the level ofthe appropriations
requested for resettlement aid must this year beconsidered asa
minimum .Firstly ,itrepresents unavoidable expenditure (seep027)*
Secondly ,last year theCommission already cutdown theamounts
requested bythe Governments byspreading some ofthem over tothe
following years this approach must remain the exception and cannot
berepeated .Thirdly ,itshould bestressed that thefigure of67mEUA
does not provide anyreserve forfinancing new measures toadapt the
traditional ECSC resettlement system totheneeds ofthe current
situation :however ,there isagrowing insistence that such special
measures should beintroduced .The Commission has therefore d.ecided
totake abasio figure of67mEUA asaworking assumption forthe
resettlement aid allocation .

Theotherheadingsofexpenditure whichareofamandatorynature
relatetoaidstocokingcoalinpursuanceofDecision73/287/ECSC,
estimatedat6mEUA,andadministrative expenditure,fixed
at5mEUA.Some78mEUAshouldtherefore "besetasidetocover
alltheunavoidable requirements .
Thisleavesforconsideration thetwoChaptersinvolvingexpenditure
whichcan"bedeterminedwithacertaindegreeoflatitude-aidto
researchandinterestsubsidies#Unlessthelevyrateisincreased,
theresourcesavailabletocoverthem,willbe102mEUA,i.e.57$
oftherequirements expressed. .
Asregardsresearch,theCommissionconsidersanallocationof47mEUA,
distributedassetoutinAnnexE,tobetheminimuminviewofthe
factthatthesemeasuresaremeanttoensurethecompetitivity of
Communityproducts.*Inparticular,itdrawsattentiontothecomparison
betweentheoutlayforsteelresearchintheCommunity of
.turnover)andinJapan(1j5$)«
Some55mEUAthusremainforthefinancingofinvestment,including
investmentinredevelopment Thisamountisverysmallinviewof
thesizeoftheproblemfacedoLastyeartheCommission,facedby
statedrequirements of85mEUAinthissector,allocated40mEUA
totheChapterinquestion.Thisdecisiontookintoaccountthe
factthatthestateofprogressofthepreparation ofthegeneral
objectivesuseda3aframeworkfortherestructuring ofthesteel
sectordidnotsuggestanimmediateandgeneralcommitmentofthe
necessaryinvestmentinalltheregionsconcerned.Uowthatwork-
onthissubjeothasprogressed,alargersummustbeestimatedfor
subsidizing loansintendedforrestructuring .Thesubsidiesto
encouragethecreationofnewjobsformthekeypointofthe
redevelopment measuresandtheCommissionconsidersitessentialto
allocatemoretothisitemaswell.Itthusconsidersthe
appropriation of55mEUAastheindispensable minimumforthe
Chapteroninterestreliefgrants. \

-49-
Because ofthepriority itattaches tothecreation ofnewjobs ,it
will continue toallocate more than half theappropriation to
retraining ,asin1973 (30mEUAforretraining and25mEUAfor
investment)® w
B. BALANCING THE BUDGET
The Commission considers that the draft "budget "broken down inAnnex E
andconsisting oftheabove mentioned allocations maybeadopted asa
valid Community contribution fortheyear tocome ,asregards both
thetraditional objectives oftheCommunity 'sfinancial measures
and the increased and urgent requirements arising from the difficult
problems facing the steel industry .TheCommission cannot envisage
any reduction inthis budget®
TheCommission recalls that theECSC treaty does provide certain room for
manoeuvre inthat itallows theCommission tovary the rate ofthe levies .
Nonetheless ,itconsiders that inthepresent economic circumstances anup­
wards adjustment ishighly inadvisable .
The Commission thus insists onthe absolute need for mobilizing
additional resources byallocating totheECSC the customs duties
onECSC products intime forbalancing the 1979 budget bythis means®
Assuming this ,theCommission proposes that therate oflevy of0,29^
bemaintained®
Ifthedecision concerning theallocation ofthe -customs duties is
nottaken intime ,thedraft budget will have toberadically
revised®
C® DRAFT BUDGET
The draft budget drawn upbytheCommission forthefinancial year 1979
andamounting to180mEUA iscontained inAnnex E®

IMPLEMENTATION OPTHBECSCOPERATIONAL BUDGETFOR1977
REQUIREMENTS
OPERATIONS TOBEFINANCED PROM
CURRENTRESOURCES(NON-REPAYABLE )
1*Administrative expenditure
2%Aidtoresettlement
(Article56)
3»Aidtoresearch
(Artiole55)
3.1steel
.3.2coul
3.3social
4•Interestreliefgrants
4.1Article54–Investment
4.2Article56–Redevelopment'
5»Aidtocokingcoalandmetallurgical
coke(Article95)
6.AidtoFriulivictime
(allocutiontoreserves)
/•EffectinRJAofthechangesin
currencyexchangeratesonlegal
commitfiienta to-becarriedoutin
currencies .
OPERATIONS FINANCEDWITHLOANS
FROMNON-BORUOWSD RJNIB
8.Socialhousing ,
αANNEXA
(inmEUA)
BUDGET,PIGUHÏÏ3(1)
18
25
38/4
21,812,5
16,2
9,7
8,5
13,3
6
5
ru,2
15
nendingbudget(OJL351of31.12.1977,p.62).PNALFICURE3
17,9
25
38,4
19,8
6
5RESOURCES
15,5
16,2
9,7
2,5
17.3
114,'1
15RESOURCES OFTHEFINANCIAL YEAS
1.Currentresources
1.1Levyyield(at0,29$)
1.2Interestoninvestments
andonloansfrom
non-borrowed funds
toFinesandsurchargesfor
'delayedpayment
1.4Miscellaneous
2.Cancellation ofcommitments which
willnotnowbeimplemented
3.Revaluation ofassetsandliabilities
4.unusedresourcescarriedoverfrom
thefinancialyear1976
5.DrawingoncontingencyreserveBUDGET
FICURES
ORIGINOFNON-BORROWED FUNIS
,6.Bepaymentsonloansforsocial
housing <
7.Specialreserveandpartofthe
formerECSCPensionFund81,5
'16
tokenentry
tokenentry
«
itokenentry
0,7
10FINA
114,2
7
S

r-n ANNEX BECSC OPERATIONAL BUDGET FOR1978 ^'
(inmEUA )
REQUIREMSNTS»
ESTIMATES 'RESOUHCES ESTIMATES
iOPKSA 'T'iOfS TOBSFINANCED FROM CURRENT .I
RESOURCES FOR THE FINANCIAL YEAR
;RœOTiKCES (NON-Ri'JPAYABLE ) \
UAdministrative expenditure 5 1.Current resources
;•2.,Aid toresettlement 60 1.1Levy yield at0.29$
i.3*Aid toresearch (0,01% -3,45 MEUA) 100
: {Article 55) *1" 1.2 Interest oninvestments and onloans
§ 3.1st&el | <16 from non-borrowed funds 18
; 3.2coai (16 1.3Fines andsurcharges fordelayed payment token entry I
l j,3social <9 |1.4Miscellaneous token entry I
2*Cancellation ofcommitments which will
I4«Interest relief grants *0 probably not beimplemented 2
* )investment (Article 54) <15 3.Revaluation dfassets and liabilities token entry I
I 4*2redevelopment (Article 56) <25 4*Unused resources carried over from the ' I■
5»Aid tocoking coal andmetallurgical •i
[ 1976 financial year Itokenentry J coke (Article 95) 6 5«Special contribution under theCouncil
I
! : Decision of21December 1977 L 32
t !
j152 152
:OPSHATIOfB FINANCED WITHLOAN3 FROM ] |ORIGIN OFNON-BORROWED FUNIS In
.íJOlí–KOiíSOWLÍD FUNIE
■6cSocial bousing 15 i6.Repayments onloans forsocial housing 7,5
I
i !7®Speoial reserve andpart oftheformer
ECSC pension fund 7/5
^:*'Vha1978budget published in0JL351of31December 1977 ,P«55»doesnotrequire amendment andappears inthisdocument
onl ;/tofacilitate comparison with thedraft budget for 1979 «

-52-
Information relatingtolevies
Thelatestavailableinformation onproductionandthelevyyield
forthecurrentfinancialyearisgivenbelow:
LevyyieldfortheperiodfromJanuarytoJune197°
ProduotsProductionserving
asabasisforthe
calculation ofthe,
levy
inmilliontonnesLevyyield
inmEUA
Brown–coalbriquettes
andsemi–coke 1,3 '0,1
Ailtypesofhardcoal 98,*3
jI11
Totalforcoal !
. I11,1
Pigironotherthanthatrequired
forthemanufacture ofingots 2,3 0,8ν
Steelingots%
67,2 29,8
PinishedproductB 52,1 10>3
Totalforsteel l-'M'9""'
GRANDTOTAL ;j
l
I.
I52

BREAKDOWNOPLOANSFORTHEFIRSTSIXMONTHSOP1978ANNEXC
(inoEUA)
Seotor
,• *Fédéral
Republio
of
GermanvBelgiumI
Lenmark*
FranceItalyNether­
landsLuxeifr-
bourgUnited
KingdomIrelandCommunity'
t
I.'Coalindustry 17,30•m3,70 m α» «p*141,95 162,98
I•Ironore
*910c92,19
|II..Ironandsteelindustry34,29 14,4749,3581,75 m19,76
:199,64 •
• •
III.Industrialredevelopment»
1,68 m!
8,23
ψ9,9t'
|IV.Socialhousing0,731,01 0,180,280,19«»0,76I ■3,15.
GRANDTOTAL 52,321,0114,4754,9182,030,19 172,94m377,87I

PROVISIONAL SITUATION OPTHEECSCAT30JUNE1978 ANNEXD
ASSETS LIABILITIES(indEUA)
I*Disbursedloans
II•Cashand'banks
III*Short-andmedium-term investments
IV.Portfolio
V.Realestate
VI.Recoverableissuingcosts
VII.Miscellaneous
Till,Accruedincome
Suspenseaooounti
Enterprises'liabilitiee
undergu&rantee4360/3•*
296,6
65,2
154/2
>«
0/3
•71/8
116/9
•104/3
5.169,6
15/5I.
II.
mlA.Borrowings
B.Outstandingredemptionpremiums
Reserves
A.Guaranteefund
B.Otherfunds
Provisions
A*Financialassistance
B.Otherprovisions
IV.Formerpensionfund :>
V.Miscellaneous
«
VI.Accruedliabilities
VII.Unallocated balanoe
Suspenseaccounts
ECSG'sliabilities
underguarantee4.264/3
1/2
183.-
134/5
281.2.
15/9
39/9 j
100/7
■ l
134,3£
,14/6l
«
5.169,6
15/5.
4

ΑΙΖΤΕΧΕ
BRAFTECSCOPERATIONAL BUDGETFOR1979
.(inmBJA)
>––––– !––
REQUIREMENTS
iAPPLICATIONS PROPOSALS RESOURCES .PROPOSALS
OPERATIONS TOBEFINANCED FROM
RESOURCES FORTHEFINANCIAL YEAR
(NON-REPAYABLE )
1.Administrative expenditure
2.Aidtoresettlement (Articlej6)
3.Aidtoresearch(Article55)
j3„1steel
J3<>2coal
3.3social
4»Interestreliefgrants
4»1Investment (Artiole54)
4»2Redevelopment (Artiole$6)
5«Aidtocokingcoaland
metallurgical coke(Artiole95)
OPERATIONS FINANCED WITHLOANS
6oSooialhousing5 j
i
67
84
{47,8
(30,7
(10,5
:95
(50
(45
t
6
i5
67
47
(20
(17
(10.
55
(25
(30
6RESOURCES FORTHEFINANCIAL YEAR
1.Currentresources
1.1Levyyieldat0,29$
(0r0l£-3,38mEUA)
1.2Interestoninvestments andon
loansfromnon-borrowed funds
1.3Finesandlatepayment
surcharges
1.4Miscellaneous
2.Cancellation ofcommitments
whiohvillprobablynotbe
implemented
'3*Revaluationofassetsand
liabilities
4.Unusedresourcesoarried
overfromthe1978financial
year
5.ECSCcustomsduties98
18
tokenentry
•-tokenentry
i
\•
4
Itokenentry
tokenentry
&.CL£57
J180
»
17,5I
17,5180
ORIGINOFNON-BORROWED IUNDS
6.Repaymentsonloansfor
sooialhousing
7.Specialreserveandpartof
formerECSCPensionFundI75
!7'5
i
j-10.