ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)199
Vol.1979/0087

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)199final
Brussels,4May1979
COMMUNICATION FROMTHECOMMISSION ONTHE
SOCIALASPECTS OFTHERESTRUCTURING OFTHESTEELINDUSTRY
DRAFTOFDECISION OFTHECOMMISSION RELATING
TOTHECREATION OFSPECIALTEMPORARY ALLOWANCES
TOHELPWORKERSINTHEIRONANDSTEELINDUSTRY,
INTHEFRAMEWORK OFTHECOMMUNITY RESTRUCTURING PLAN
(presentedbytheCommissiontotheCouncil)
X''
y-•
/ci;
V:
;'"■\ziiV
C0M(79)199final

COMMISSION COMMUNICATION TOTHi COUNCIL
1. Attheendof1978 the Commission defined itsposition with regard to
thewhole range ofproblems connected with iron and steel producing areas .In
doing soitstressed both theneed tomeet therestructuring requirements ofthe
iron andsteel industry andtheneed for industrial redevelopn ent intheareas con­
cerned whilst providing workers with theguarantees towhich they areentitled .
2. Thoworkforce fell "by
5V.200 in1978 and36.500 in1977 ,i.e. atotal of75.700 over thetwoyears .
Without theintroduction ofrelevant measures ,itisestimated that 80.000 woi–
kers would have toleave the iron and steel industry asaresult ofrestructuring
during 1979 and1980 .This would apply mainly inBelgium ,France ,Luxembourg and
theUnited Kingdom ,and in "these countries more especially incertain areas where
iron andsteel production isthepredominant industry .
3. Against this background the Commission setout indetail itsviews onsocial
matters inacommunication tothe Council entitled "Social aspects ofthe iron
and steel policy ".The ECSC Consultative Committee also issued aunanimous Opinion
onthis subject (with one abstention )atitsmeeting on19September 1978 and a
second nearly unanimous Opinion on9March 1979 .For itspart theEuropean Parlia­
ment adopted aResolution onthe same subject atitssession of16February 1979 .
4* Following thediscussions which took place attheEuropean Council on12
and 13March 1979 (1),the Council should now be "asked for itsunanimous assent
onadraft Decision ofthe Commission toenable the Commission togrant new aid on
behalf ofworkers inthe iron and steel industry after the conclusion ofbilateral
agreements with theMember States defining thenature and scope ofspecial mea­
sures bythe Commission .
(1 European Council underlined theimportance ofthesocial action being
undertaken bytheCommunity forworkers inthe steel industry andother
sectors indifficulty ". . ,
(Conclusions ofthePresident oftheEuropean Council ,Paris 12-13 March 1979 ,
chapt .IIEmployment and Social Policy ).

5. Therestructuring programmes decided upon orbeing elaborated in
most iron andsteel enterprises intheCommunity will inevitably lead to
adecrease intheworkforce inthe iron and steel industry® This will render
raore acute thesocial problems already felt incertain steel producing areas
intheCommunity .Theconjunction oflabour problems inregions which are
particularly dependent onanECSC sector has ,inthepast ,ledtheCommunity
authorities todecide onexceptional interventions infavour ofworkers
affected bytheclosure ofanumber ofcoal mines inBelgium ini960 .In
theCommission 'sopinion ,theconsequence ofthestructural crisis inthe
iron andsteel industry interms oflost jobs inregions where this industry
was themainstay ofeconomic activity calls forthe implementation of
exceptional measures infavour ofworkers whobecome redundant asaresult
ofarestructuring programme .
6. Tiiedecision which isenvisaged bytheCommission isdesigned tobe
acontribution ,interms ofECSC financial aid ,towards setting upadequate
measures which would ensure asharmonius atransition aspossible between
thetine aworker islaid offandthetime anew jobbecomes available .In
this context theCommission plans towiden therange ofsocial measures
eligible forECSC financial aidsothat allinterested parties –Governments ,
enterprises andworkers –may setupsocial programmes adapted tothedivers
characteristics ofeach operation ofrestructuring .Furthermore theCommission
considers itnecessary toconcentrate ECSC financial effort totheprobable
duration ofindustrial reconversion oftheproduction area involved .Moreover
theCommission envisaged increasing theperiod ofitsfinancial contribution
infavour ofworkers affected byarestructuring scheme from sinaverage
twenty four months tothree years .

7. Thehuman andregional problems "brought about bytheimplementation
ofrestructuration schemes aresoacute that Governments .andenterprises
have andwill have toimagine new intervention measures infavour of
workers whoconsequently become redundant .Itisuptothe interested
parties –Governments ,enterprises andworkers –tolaydown the most
appropriate means andways ofeach particular situation ,not only according
totheparticular nature ofeach social security scheme but also according
tothespecial characteristics ofthe situation ineach production area
concerned .TheCommission therefore believes that theproposal fora
decision ought tobeconsidered asdefining awhole set ofmeasures which
would beeligible forECSG financial help .Thequestion ofwhich specific
measures will apply toeach country will beleft forbilateral conventions
tobeagreed upon with each country –theMember State 'saccord necessarily
resulting from itsdecision toco–finance these measures .
TheCommission ,however ,considers itnecessary tofirst ensure that
theECSC exceptional effort ofsolidarity bereserved solely forthose
measures which form part ofarestructuring plan inconformity with the
"General Objectives –Steel "0
8. After theconcertation that ithascarried out onthebasis ofits
26October 1978 Communication ,theCommission haschosen thefollowing
measures aseligible for exceptional ECSC aid–over andabove the "traditional "
aids provided forunder Art,56(2b)oftheECSC Treaty ,
These interventions are :
a)Aidformeasures eligible under Article 5^(2b)oftheECSC Treaty :
–thepayment oftideover allowances toworkers ,
–thepayment ofallowances toundertakings toenable them tocontinue
paying workers temporarily laid offasaresult oftheundertaking 's
change ofactivity ,
–thepayment ofresettlement allowances toworkers ,
–thefinancing ofvocational training forworkers having tochange their
job.
Furthermore ,some oftheexisting agreements have extended ECSC aidto
cover thefinancing ofearly retirement pensions forworkers intheiron
andsteel industry intheform oftideover allowances andwithin the
limits laid down .

This ECSC aid isgranted ,onanindividual "basis ,toworkers inunder­
takings which meet theconditions laid down inArticle %oftheECSC Treaty
without more general restructuring measures inthe iron and steel industry
neco3sarily being involved *
These measures ,which axe .inanycase ,required under theECSC Treaty
should becontinued®
Furthermore ,theCommission isoftheopinion ,onthebasis ofthedetails
available concerning them ,that itshould bepossible toprovide "traditional "
financial assistance tinder Article $6forthe "anti–crisis units "orother
similar measurer set uptodeal with workers who have been laid off .
Moreover ,theCommission will beopen tonewsuggestions drawn tipalong
these lines bytheGovernments oftheMember States®
b)Newmeasures eligible asperanECSC Article 95decision intheframework
ofarestructuring plan t
TheCOMMISSION believes that ,inorder topreserve maximum employment ,
aset ofnewmeasures should beimpleir-ente&o These -will include early
retirement andcertain forms ofre&istr ibutingavailable works Asthe
measures envisaged bytheCommission arenotprovided forinArticle 56
oftheECSC Treaty ,theCommission will call upon Article 95ofthesame
Treaty .Itwill therefore propose granting aidunder thelatter article
tothefollowing measures ;
–early retirement ,
–reorganisation ofthe i/orkcycle –particularly byshort –time working
(shorter working liours intheworking week ),andbyanextra shift ,
–restrictions onovert ime »
These measures would avoid workers ,whobecome redundant asaresult of
restructuring theiron andsteel industry ,being dismissed "enmasse "
oratasingle sweep® Allthese measures areaimed atgaining time®
Itistobehoped that possibilities ofalternative reemployment will
become better after acertain period andthat social and economic
progress will besuch that temporary measures will notthen beexceptional .

9.TheCommissionconsidersthattheimplementation ofthesemeasures
requirestheunanimousassentoftheCouncilaftertheConsultative Committee
hasbeenconsulted,inaccordancewiththetermsofthefirstparagraphof
Article95oftheECSCTreaty,
Thisisclearlythecaseforthelastthreemeasureswhichdonot
comewithinthefieldofapplicationofArticle56,2b.Adecisionunder
Article95»§1wouldallowamoreuniformapproachandwiderapplication
ofthesystemofearlyretirementthaniscurrentlypossibleunder "bilateral
agreements (inwhichprovisionforsuchschemesismade).Aprocedureof
thistypemeansthattheCommissionaskstheCouncilforitsunanimous
assentonadraftdecisiononthemeasuresproposedinparagraph7»The
CommissionisalsosubmittingthepresentCommunication totheParliament
forconsultation .
10.Furthermore ,theCommissionplanstoextendthedetailedrulesfor
theapplication ofaidmeasuresinconnectionwithrestructuring .
Thus,whereasthe"traditional"aidmeasuresunderArticle56are
generallyrestrictedtotwoyears,theCommissionenvisagesinfuture
\djhree–yearplanslinkedtoarestructuring andredevelopment planforthe
areasconcerned.
InadditiontheCommissionisproposingtograntnonrefundableaid
coveringpartofthebenefitsnormallygrantedbyaMemberStateinspecific
caseswheresuchbenefitssireveryhigh,inrespectofcertainrestructuring
measuressuchasearlyretirement,"anti–crisisunits"(employmentpools)
andshort–timeworking.
FinallytheCommissioncontemplates fixingamaximumflatrateor
maximumamounts,equalordifferentaccordingtoMemberState,asaids
coveringpartofthevariousmeasures.Communityaidwouldthusassume
suchanequivalence aswouldensurethatfinancialintervention ,infavour
ofthevariouseligiblemeasures,iswellbalanced.

11« The implementation ofthemeasures 3,&vocated involves .themobilisation
ofconsiderable financial resources® Estimates for the iron and steel
industry give afigure ofabout 89million "SUA x'cr1979 (contrasting with
44million EUAatpresent provided forinthebudget fortraditional aid)
and 53million EUAfor1980 oThey arebased ontheassumption that about
6<jfoofthe50000and30000workers respectively whowould have hadto
leave theiron andsteel industry in1979 a&dI98O will benefit from
traditional types ofaid (including -aidtoearly retirement schemes and
,;anti–crisis units' ")andthat theother 40fowill benefit from aidgranted
inrespect ofshort–time work ,additional shift orrestrictions oixovertime *
Assuming that thegovernments agree toapply theforementicned
measures ,theECSC resources will have tobeadjusted asfrom 1979 according
toprojected requests forfinancial intervention® Inthis regard itshould
berecalled that theCommission reserved theright tocome baclc tothe
Council inorder toobtain anadditional contribution from Member States
ifavailable resources proved insufficient® TheCommission intends to
prepare appropriate proposals which will take into account theneeds set
out inthe present document „
Itisobvious that inorder tocome togrips with andsolve thesocial
problems involved intherestructuring ofthe iron andsteel industry ,the
Community financial instruments forgranting aidforthecreation ofnew
jobs ,particularly inregions facing themajor problem ofretraining workers
from theiron andsteel industry forother sectors oractivities ,must be
used effectively andinthecontext ofintegrated projects .
Itwould beappropriate toincept asystem which allows aclose follow ,
upofthenew jobs created with thehelp offinancial instruments which
exist atEuropean level andfilled byworkers dismissed from ECSC industries .

I-1
ChasterI
SOCIALMEASURESINCONNECTION WITH
THERESTRUCTURING OPTHEIRONANDSTEELINDUSTRY
Restructuring intheironandsteelindustrycould
leadtoabout80OOOworkersinthesteelindustrylosingtheirjobsduring
1979andI98Oifappropriate measuresarenottakenandiftheassumptions
underlyingthecalculations (l)turnoutto"beaccurate.Theinformation
availabletotheCommissionsuggeststhatabout50000peoplecouldlose
theirjobsin1979andabout30000in1980.Thesejobswouldbelost
mainlyinBelgium,Prance,theGrandDuchyofLuxembourgandtheUnited
Kingdomandmoreparticularly inareasofthesecountrieswheresteal-
workingisthepredominantindustry.
Inthepastandwithabetterrateofeoonomicgrowth,workersforced
toleavethesteelindustryhadfewerproblemsinfindingalternative
employmentinothersectorsorregions.Inthisconnection ,"traditional "
measures,suchasareprovidedforunderArticle56(2)(b)oftheECSC
Treatyanddevelopedovermanyyears,couldplayanimportantrole;the
coalminingindustryprovidesagoodprecedenthere.
Atthepresenttime,however,thesituationisobviouslyquitedifferent:
economicgrowthisinadequate,theshort–orevenmedium–termeconomicoutlook
isnotveryfavourable,therearealreadymorethansixmillionpeople
unemployedintheCommunityandvariousbranchesofindustry(including
(1)SeeChapterII

X-a
theshipbuilding and shiprepair mdustiy ,"textiles andespecially theman­
made fibres sector )have to "berestructured .Inaddition ,time isneeded to
attract neweconomic activities ;various conditions need to "bemet inorder
tocomplete this process successfully andproduce avalid alternative ,
particularly inregions dominated layoneindustry .
Under these conditions ,inaddition totraditional measures ,newmeasures
must "beworked outand applied .Mass dimissals can lead toadeterioration
intheeconomic andsocial climate ,andeven spark offserious social conflicts
with alltheattendant consequences fortherestructuring of ■theiron .and .steel
industzy andforsooiety asawhole .Moreover ,newmeasures will have tofit
into therestructuring policy andinsodoing re-establish profitability and
the competitive position ofthe steel sector .
Α

These nowmeasures supplement "traditional "forms ofaid ,amodern
variation ofwhich has developed recently insome Member States with
thecreation of"anti-crisis units ",,and "employment ,pools ".
These various measures are set outbriefly below and situated inthe
context oftherestructuring oftheiron and steel industry ,which
involves :rationalization and modernization ,including the complete
orpartial shutdown ,renovation and extension –inthe Commission 's
opinion .justified oneconomic and social grounds –ofundertakings
orparts ofundertakings inthe iron and steel industry inaccordance
with the "General Objectives "determined "bythe Commission periodically .
Incases where alternative jobs are available within the iron and
steel industry oroutside it,thetraditional aids will continue
tobefully effective .These aids take theform oftideover allowances ,
vocational retraining costs ,travel andremoval grants ,etc.,for
workers taking upnew jobs ,oraid intheform ofawage supplement
forworkers who have found anew jobinwhich thewage islower than
that earned intheir previous joband ,finally ,aid intheform of
grants toundertakings tocover thepayment ofworkers who have been
temporarily laid offwhile theundertaking ischanging toadifferent
activity .

ï«■4
Those"traditional "formsofaidplayalessimportantroleatthe
presenttimeinviewofthefactthattheopportunities foralternative
employmentinsideoroutsidetheironandsteelindustryarerestricted.
Forthisreason,since1973"theCommissionhas"beencontributing tothe
financingofearlypensionsforolderworkersintheformoftideover
allowancesandwithinthelimitslaiddown,asohemeofwhichmoreand
moreuseis"beingmade.
However,thetraditional formsofaidcancontributetothepresent
processofrestructuring theironandsteelindustiy.Firstly,they
makeitpossibletoaidworkersforcedtoleaveironandsteelunder­
takingswhicharetobecompletelyorpartiallycloseddown,inorder
totakeupworkinundertakings whichneedlabour.Secondly,theycan
beusedtohelpworkersinironandsteelundertakings whichareforced
tocloseandenablethemtoreplaoeolderworkersinthesameunder­
takingswhowishtoretireearly.'
The"anti-crisisunits"or"employmentpools",ashavebeensetup
inLuxembourgforsometimewithseeminglygoodresults,areamodern
variationontraditional measures.Theyconsistof"pools"ofworkers
wholosetheirjobsasaresultofrestructuring inthei-ronandsteel
industry.

1-5
These"pools",withoutbeing"parkingsforthe
.unemployed",-tiytoobtainworkforsuchworkers;forexample
theymay"beentrustedwithspecialtasksinthepublicinterest.
Re-employment canalsobefacilitatedthroughperiodsofvocational
retraining,Iftheworkersareemployedinadifferentjobat
alowersalary,awagesupplementcanbegrantedtothem.TheCommission
considersthattheymayqualifyforECSCaidsincetheyarerelated
tothetraditional measuresreferredtoabove.
Article56(2)(b)oftheECSCTreatyisasuitablebasisforthe
measuresreferredto.Ontheotherhand,thenewmeasuresdiscussed
laterarenotspecifically providedforbytheECSCTreaty,necessi­
tatingrecoursetoArticle95ofthesameTreaty.
Itwouldbedesirabletoextendtheearlyretirementsystemin
viewoftherestructuring oftheironandsteelindustry:

Workers -threatened ,withdismissalmundertakings closingdowntotally
orpartiallyshouldhavetheopportunity oftakingtheplaceofolder
workerswantingtoretireearlierthannormalineconomically sound
undertakings orthoseobligedtoundergomodernization .Inthis
connectionthefollowingconditions seemessential :
–anundertaking engagedinmodernization shouldnotembarkuponrenovation
schemesorextensionsagainsttheadviceoftheCommissionoftheEuropean
Commimities ;
–ajobvacatedbyanolderworkermaynotbefilledbyaworkerfrom
asectoroutsidetheironandsteelindustry;
–theageforearlyretirementvariesfromcountrytocountry;
astandardloweragelimitshouldbefixedwithprovisionforexceptions
inspecialcases(heavy,arduousordangerouswork,continuousshift
workoveralongperiod,handicappedpersons,etc*);
–amaximumlimitshouldbefixedforaid;
–asatisfactory solutionshouldbeworkedoutforfinanoingthenormal
pensioncontribution paymentsandsioknessinsurancecontributions for
theperiodbetweentheageofea^rlyretirementandnormalpensionable age
TheCommissionplansforitsaidtolastforthreeyears.

1-7
When amundertaking proceeds onrestructuring ,available work can
beapportioned inadifferent waybyreorganising thework–cycle .This
isaccompanied byreducing working time ,either through short –time working
orbyanextra shift .
a)Short–time work orworking shorter hours during theworking week ,must
notbeconfused with adefinite reduction ofweekly hours ofwork
usually agreed upon incollective agreements signed atnational ,local ,'.
sectoral orundertaking levels .Short –time working canbeintroduced
forspacing outthefull orpartial closure ofanundertaking and
avoiding thesimultaneous dismissal ofalarge number ofworkers .At
issue ,therefore isatemporary reduction inwork while afull orpartial
closure isbeing carried out.Theresult will bealonger period during
which solutions can befound for the workers forced toleave the under­
taking .Inthis connection ameasure ofexperience wasacquired when
anu.-r.berofcoal mines were closed inBelgium in1959-1960 ;theHigh
Authority assumed responsibility forpaying apercentage ofwages over
andabove theunemployment benefits ,with theaimofslowing down the
rate ofclosure ofsome coal mines .Inthis way itwaspossible to
avoid dismissing toomany miners where itwasimpossible toprovide
them with work inother undertakings .Itshould benoted here that
theproportion ofthecost ofreducing working time which hastobe
borne bytheundertakings isgreatly influenced bythelevel of
unemployment benefit .
Inaddition ,itisproposed todivide theadditional cost between four
parties :theundertakings ,theworkers ,theGovernments andthe
Commission .Commission aidfor this measure aspart oftherestruc­
turing oftheiron and steel industry could last forthree years .

1-8
b)Theintroduction ofanc::tra shift implies reduced working time and
could have certain positive social advantages .This measure could "be
eligible forECSC aidand should becompatible with theundertakings'
search for financial equilibrium after acertain time .
The introduction ofanadditional shift would beall the more effective
asregards employment ifeconomically sound iron andsteel undertakings
were prepared touse this measure toemploy workers whowould otherwise
beforced toleave undertakings closing down completely orpartially .
Theadditional costs arising from the introduction ofanadditional
shift could bedivided between various parties :theworkers ,theunder­
takings ,theGovernment andtheCommission .TheCommission isthinking
interms ofaidspread over alimited period ofthree years ,with
digressive Community participation .

Another possible wayofreallocating available work would betoreduce ove
tine ■■orban itcompletely inorder toretain inemployment workers
whowould otherwise have tobedismissed .Itshould bepointed out
that overtime is ..particularly widespread intwoMember States ,i.e. ,
theUnited Kingdom andIreland ,while thenumber ofhours ofovertime
worked intheother Member States isnegligible .Itshould bestressed
inthis connection tiat there isnoquestion ofcontributing tothe
remuneration ofovertime which would nolonger beworked ,butat
themost ofpossible aidforworkers whose wages would fall below
agiven minimum ifovertime were restricted orabolished .
*
* *
Thus ,theCommission could offer Member States
arange ofpossible measures from which tochoose .What iscertain
isthat ,inview ofthe fact that thesituation isquite different
from oneMember State totheother ,Member States will make use
oftheopportunities offered tothem ,notall inthe same wayand
notalltothe same extent .However theCommission Anvi sages appropriate
means ofensuring that itsfinancial intervention stays well balanced .
I-ioreover ,since therestructuring oftheiron and steel industry
isthesubject ofCommunity policy ,itishighly desirable toencourage
theprocess ofconvergence inthe social sector bycreating aset
ofCommunity measures incorporating common procedures andconditions .
Itismoreover desirable when applying thenewmeasures based on
Art.951that acertain harmonisation beachieved with therequirements
ofArt.56oftheECSC Treaty .Thus initsdecision onthebasis of
Art.95theCommission provides inparticular forthe fact ,that in
order toreceive aidtheGovernment should maJce arequest ,that this
request should make mention ofaspecial contribution bytheMember
State and besubject tothepayment bytheMember State concerned
ofacontribution atleast equal totheaidgranted bytheCommission
except ifaderogation isauthorised byaCounoil -two-thrrds majority
vote ,andthat theaidwill begiven toworkers affeoted bythe
restructuring .

II-1
ChapterII
EMPLOYMENT SITUATION ANDOUTLOOK
InitsCommunication totheCouncilof31October1978(DocumentCOM(78)570
final),theCommissiondescribedemploymenttrendsintheironandsteel
industryoftheMemberStatesoftheEuropeanCoalandSteelCommunitybetween1973
and1977andestimatedthelevelofemploymentinthissectorin1980.
Workingontheassumptionofan"average"trendinsteelproduction,interms
ofingotsteelequivalent (referredtoasthe"moderate"assumptionandslightly
amendedinthe"Generalobjectives–Steel"),whichwouldbe4*5i°lowerinI98O
thanin1973»thethreefollowingparameterswereadopted:
–oneasregardstheactualnumberofhoursworked:i.e.,anaveragereduction
ofnearlyonehourperdaybetween1973andI98Oforanannualworkingyear
of220days,
-theothertwoconsistedoftwoaverageannualgrowthrates-3%and4i°-takenas
labourproductivity assumptionfortheperiodfrom1973"toI98O.
Inadditiontoupdatingthestatistics,thebasesforthepreviousestimates
werechangedinthreeways:
•thefirstinvolvedtheinclusionofdataregardingDenmarkandIrelandinthe
previousseries;
.thesecondinvolvedtakingintoetccountthe"favourable"productionassumption
only,drawnfromthe"GeneralObjectives-Steel":
/labour
•thethirdchangewastheadoptionofasingleproductivity growthrate,i.e.,
4%peryear.
./.
(l)GeneralObjectives–Steel,1980-1985–1990 *seetablepage29–SEC(78)
3205finalof20July1978.

Il-2
/labour
Thechoiceofasingleproductivity 'assumption,a.ndthatthehigherofthetvro,i.e.anaverageannualgrowthrateof4$(insteadof3$and4$)isinkeeping
withrecenttrendsintheworkforoesituationandtheprospectofimproved
futureproductivity intheironandsteelindustry.
Inviewofthedivergencesincethestartofthecrisisintheironandsteel
industry,betweentheproductionandmanpowerstatistics(l)whichreflectsthe
importanceofdecis;ion-makingfactorsinmanpowertrends,itisobviousthat
referencetoanannualaveragerateofincreaseinproductivity isonlysignificant
inthelongormediumterm.
Thetendencytoretainmanpowerwhichemergesveryclearlyfromacomparison •
ofthetwosetsoffiguresreferredtoabove,impliesaconsiderable dropin
overallproductivity (perworker,notintermsofhoursactuallyworked)which
wasstillnotmadeupin1978comparedwith1974-Thechoiceofaproductivity
growthrateof4$insteadof3tfoisarbitraryandissimplydesignedtoreflect
thedeterioration inproductivity sincethecrisis;thus,ifthisrateis
projectedandappliedtotheworkforceinI98Othisshouldberegardednot
asanobjective,butasawarningsignwhichdrawsattentiontothevitalneed
forcompetitivity .whichmustberestoredormaintained.
(1)
Crudesteel
production
Mn.Tn.Index
!«Workforce
(yearlyaverage)
000'Index
1974 I55.6 100.0 791.5 i100.0
1975 125.6 80.7 780.9 98.7
1976 134.0 86.1 762.6 96.3
1977 126.4 83.2 742.5 93.8
1978 132.6 85.2 I698.7 88.3
*includingapprentices

n-3
TableIoverleafhasbeendrawnupfollowingtheintroduction ofthethree
changesreferredtoabove*
ItemergesfromTableIthatbasedonthefavourableassumption,thereduction
intheworkforceisestimatedat80.000units.Theestimatesaxebasedonthat
figure(1)
Howeveritshouldbemadeclearthatanyexistingorfuturepolicydecision
takeninMemberStatesasregardstherestructuring oftheironandsteel
industrywhichmighttendtodefer,spaceoutorcompensate bymeansof
aidmeasurestheeffectsofthecrisisintheironandsteelindustry^
wouldresultintrendsintheworkforcewhichwillbedifferenttothose
mentionedhere.
Ooo
A3regardsemploymenttrendsintheironandsteelindustryafter1980,calcula­
tionshavebeenrestrictedtotheperiodfrom1980to1983*Forthisperiod,
therearealreadyanumberofunknownvariablesaffectingtheemployment
situation,inparticularthedevelopmentofproductivity ,thereductionof
workinghoursandthedegreeofintervention bythepublicauthorities and
byundertakings ;thisappliesevenmorestronglytotheperiodafter1983
(upto1985andI990).
Thefollowingconstitutes aninitialapproachbasedon:
-the"favourable"productionassumptionforI98Oand1983(seethe
Commission's"GeneralObjectives–Steel"),thatistosay,acrudesteel
outputof139*6milliontonnesfor1980and148.3milliontonnesfor1983|i.e.,anincreaseofabout6.2$overthreeyears;
-anassumptionofanaverageannualincreaseinproductivityof4%for
1980to1983»i»e«agrowthrateofmorethan12$inthreeyearsf
-anassumptionthattheactualnumberofhoursworkerdperyeardoesnot
change.
Theresultisareductionofabout6$inthenumberofjobs,i.e.,about
35000.
(l)SeeChapterIII.

H-4
TABLE I
ESTIMATED TRENDS INTHENUMBERS EMPLOYED
TNTHEIRON ANDSTEEL INDUSTRY -1977 TO1980
baaed on :
fa)workforce on31December 1976 ;
£b)a"favourable "production assumption ;
(c)anaverage rate ofincrease inlabour ,productivity equal to4$»
(d)reduction ofonehour perdayinthenumber ofhours
worked compared with 1973 *
(Thousands )
WorkforceReductions m
the workforce
inTotal
reductions in
the workforce
1977 +1978
atend of
period
iExpectec
reductic
the worli
ms in
cforce
r-ss– ;– -,Expected
workforce
in1980 31.12.76 31.12.77 1977
(endoI1978
fperiod )inxyiy
and1980
!TOT ax
for
penod
31.12.76
to
31.12.80
744.7 705.5»«F
Τ
39-2'avourable "
crude stee
36.5assumption :
1production in
75.71980 -1:
81.2*9.6Millio
156.9ntonnes )
587.8
Source :SDEC -Workforce (excluding apprentices ).Revised Series (April 1979 ).

III-1
CHAPTERIII
FINANCIAL ASPECTS
I.ChangesintheECSCoperational budgetbetween1975and1979
Withrespecttotheironandsteelindustry(includingiron-oremines),
readaptation aidunderArticle56(2Mb)oftheECSCTreatyhasbeengradually
increased/bothinabsolutefiguresandasregardstheproportionoftheECSC
operational budgetdevotedtothisindustry;similarly,thenumberof
beneficiaries intheindustry(includingiron-oremines)hasrisenconsiderably
since1975.
Readaptation aidunderArticle56(2Mb)fortheironandsteelindustry
(includingiron-oremines)
YearECSCOperationalBudget |Beneficiaries
inabsolutefigures
ιXoftotal
1975 3.4mEUA* 17Χ 6129
1976 3.7mEUA 15X 5520
1977 10.7mEUA 42X 11578
1978 29.7mEUA 49X 31010
TheECSCoperational budgetfor1979provicesfor67millionEUAfor
readaptation aidintheECSCindustries,ofwhich44millionEUA(66X)forthe
ironandsteelindustry.
Until1976,fundscoveredtraditional aids,namelytideoverallowances,
vocationaltraining,resettlement andwagesupplements .Participation infinancing
earlyretirement schemesforsteelworkers**hasbeenintroducedsince1973and
hasaccountedforanevergrowing proportionofthetotaloperational budget.
*EUAonlyin1975.
**Withrespecttominers,thismeasurehasbeenineffectsipce1968.

III -2
Budget estimates for 1979 and 1980
Theestimated financial repercussions ofcarrying out thevarious
measures described inChapter Ihave been calculated asfollows :
A.Level ofECSC aids
A.1.Traditional aids ,(including those relating toanti-crisis units
and toearly retirement )
Theamounts ofthese aids will becalculated onanindividual basis since
account must betaken ofthe last earnings oftheworker affected ,the
income level that itiswished tomaintain ,theamount oftheunemployment
allowance ,direct taxation ,theworker 'sageandcategory ,andpossibly
the region .
From experience inthe last fewyears ,average Community assistance forthose for
traditional forms ofaid,including /early retirement ,varies considerably
from oneMember State toanother .The weighted average Community
assistance per beneficiary isatpresent estimated at1100 EUA .The amount
would beraised to 1300 EUA perbeneficiary topromote early retirement
and the creation of anti-crisis units inthe
context ofthe restructuring ofthe iron and steel industry ,andgranting non
repayable assistance for such measures asearly retirement schemes and
thecreation of anti-crisis units , .partly replacing thebenefits
usually granted byMember States inspecific cases where such benefits
are very high .
A,2.NewAids
a)Reorganisation oftheworlo-cycle "byshort–time working
Here ,four forms ofCommunity assistance would befeasible :

III-3
a)Assistance calculated ,onanindividual basis inthesame wayas
traditional aids and early retirement ;that is,itwould "bebased
onthe amount the redundant worker would have received asatideover
allowance ;
b)Assistance "based onapercentage ofearnings ;
o)Astandard amount perworker ineach country ,uniform throughout the
Community (similar totheuniform payment peryoung worker perweek for
uptooneyear paid bytheESP)j
d)Astandard amount ,uniform ineaoh country butnotthroughout theCommunity
(based ontheaverage tideover allowance perworker ineach country in
agiven period)#
TheCommission prefers d),based onb)jinother words ,assistance based
onapercentage ofearnings andconverted into astandard amount perworker
ineach country#
Community assistance would becalculated onthebasis ofthe difference
between 100 °joofhour ^earnings andtheunemployment allowance .Inthe
case ofshort-time workers intheiron andsteel industry ,thelater amount
varies between 60and80$ofhourly earnings (itiseven higher inDenmark ) «
Taking aweighted average of70to80$,thedifference between hourly
earnings and theunemployment allowance for short –time working would be
between 20and25 Inabsolute figures ,this oomes to1-1.50 EUAperhour
perworker (manual andwhite-collar)#
TheCommunity would ,asamaximum ,bear thepayment ofthesame proportion
ofthat difference asthat borne byGovernments .Itisprepared togrant
free aidinlieu ofpart ofthebenefits normally given inaMember State in
specific cases where such benefits axe very high .

III-4
i'or "thepurport ofactual calculation ,+he'forcing V'jrpofhes ^^is+.>wfcthe
Governments would "bear ono–quarter ofthedifference "between hourly earnings
andunemployment allowance while another quarter will "beborne bythe
Community whose contribution would thus "beabcu"' "-Op25–0.37 EUAperhour .
This assistance would begranted intheform ofastandard amount per
worker varying according tocountry ,earnings andthe level ofthe
unemployment benefit .
Themeasure would beapplied toundertakings which ,under areorganization
plan ,would have toclose partially orcompletely sothat dismissals ^re
spread over aperiod oftime .
Since therapid statistics onemployment intheECSC iron and steel industries
show that inrecent years ,short-time working hasledtoanapproximate average
loss of 25hours work permonth ,theresult would be300hours over one
year .Applying theabovementioned hourly rate ofintervention ,Community
assistance perworker would average about 90–100EUAperyear .
b)Reorganisation ofthework cycle byanextr ashift
Toavoid Laying offworkers anadditional shift could beintroduced .
Inthecase ofcontinuous work performed infour shifts ,afifth shift
could beintroduced thus reducing theaverage working week of40hours to
33hours 36minutes .
Although theaim oftheaidcontemplated istocontribute toacompensation
forhours ofwork lost byworkers affected bythe recycling ofworking
time ,itishere assumed for calculation purposes that the Commission
will ,atthemaximum ,bear aquarter oftheearnings ofevery worker
who stays iri

III -5
employment after the introduction ofthe extra shift .This intervention
will decrease inthe second and third years .
Since continuous shift work islargely performed bymanual workers ,the
intervention level could becalculated onthebasis oftheaverage total
cost forthis category oflabour alone ,which atpresent isabout 12000 EUA
perannum .Then ,ifCommunity intervention isreduced tothree-quarters
inthe second year and half inthe third year (ofthe total involved in
thefirst year )theaverage labour cost perworker isasfellows :
.3000 EUA inthe first year
.2250 EUA inthe second year
.1500 EUA inthe third year .
Inpractical terms Community assistance could becalculated invarious
ways :
a)itcould bebased onapercentage ofthe total labour cost
per worker ;
b)auniform flat-rate amount per worker could beapplied
throughout theCommunity ,asanincentive ;
c)aflat-rate ,uniform ineach country butdiffering from
one country toanother ,could beapplied .
TheCommission isinfavour ofc),but calculated inaccordance with
a);inother words ,assistance calculated asagiven percentage oftotal
labour •cost per worker and then converted into astandard amount
per worker ineach country .
c)Restrictions onovertime
Ashasbeen said onseveral occasions ,only inIreland and the
United Kingdom arethenumber ofhours ofovertime worker ofany
significance .

III-6
Inboth countries overtime worked xnthe xron and steel xndustry represents
about 15/band10$respectively ofthetotal number ofhours worked .In
other Member States the proportion ismuch lower .
Temporary assistance could begranted toworkers whose income ,after the .
restriction orabolition ofovertime ,would nolonger attain acertain
minimum level .For calculation purposes the supplement could bebased on
theaverage earnings ofan -unskilled worker (prior totherestrictions on
overtime )intheundertaking oftheworker concerned .
Theabolition ofovertime would result inaloss ofgross weekly ormonthly
earnings ofabout 20$forworkers inIreland andabout 15%intheUnited
Kingdom .
Thi3 would mean that theearnings ofover half the steel workers inIreland
andover 30fointheUnited Kingdom would bebelow theformer average earnings
ofanunskilled worker inthe steel industry .
Toensure anincome ecjual totheaverage earnings ofthelatter (including
overtime ),their paywould have tobeincreased byvarying rates averaging
just over 10fa.Inabsolute figures ,theincrease would amount to
about 60EUApermonth perworker intheUnited Kingdom and45–50EUA
inIreland ,that is720and540–600EUArespectively perworker peryear .
if,asamaximum ,costs aresplit equally between theGovernments andthe
Community ,theCommunity would contribute 180EUApersyearperworker in
theUnited Kingdom and135 "■150EUAperyear inIreland .TheCommunity 's
intervention would bereduced tothree quarters inthesecond year andto
half inthethird year -theyears being cou'nted asfrom 'the coding into
force ofthis decision .

III-7
B.Other financial implications
Itistobeexpected that tomaintain employment and .ersure the re-employ -
ment ofworkers under threat ofdismissal ,traditional measures will
have tobetaken jnamely ,vocational retraining and resettlement ofthe
workers concerned .
/be
Ontheassumption that measures will applied toone–tenth oftheworkers
who ,itisestknated ,will leave theindustry in1979 1980 »
average cost perbeneficiazy will be1100EUA»
Tot?.!financial implications
The total financial implications ofapplying the various abovementioned
measures intheMember States –acoording topriorities allocated bythe
latter -could bebased onthe following assumptions t
–inaccordance with Chapter IIfthetotal number ofworkers whowill leave
theiron and steel industry in1979 andI98O ifnomeasures aretaken
andtheassumptions underlying thecalculations prove correct will be80000
–taking into account thedata collected and trends observed inthe
different Member States ,j.tcanbeassumed that :
1.60$oftheworkers will benefit from traditional aids (including
anti-crisis units . andearly retirement scheme ^) j
2.25%ofthem will benefit from thereorganisation oftheworks-cycle -
(equally divided between .thetwomeasures xshort–time working and
extra shift );
3.overtime restrictions (abolition )will apply to15$ofthem ;
4.inthecase of10$oftheworkers concerned there will beother
finanoial implications resulting from acombination ofcertain measures .
In vosolute figures this gives t

Ill-8
Workersconcerned
Assumption 19791980
traditional aide 30000 18000
short–timeworking6250 3750
extrashiftI6250 3750
overtime 7500 4500
■ 1
Total
otherfinancialimplications linked
toacombination ofcertainmeasures •50000
(5000)30000
(3000)
Applyingtheinterventionratesreferredto inthisChapter,and
dire^-ardinf:theeffeotsofinflation,thetotalmaximumfinancialrepercussions for
theCommunityareasfollows:
Financialrepercussions (millionEUA)
Appropriations forcommitment
Assumption 1979 1980
traditional aids 39.0 23.4
short–timeworking 0.6 0.4
extrashift 42.2 25.3
ovortime 1.4 0.8
otherfinancialimplications .5.5 3.3
Ironandsteel!
89.O I53.0
Coal 23.0 23.0
Total aid 112.0 !76.0.
?hefinancingoftheextraneedsabovementioned isdealtwithatPoint11
ofthisCommunication *

Decision oftheCommission dated •••••••• relating tothecreation ofspecial
temporary allowances tohelp workers inthe iron and steel industry ,inthe
framework oftheCommunity restructuring plan .
The Commission ,
Having regard toarticles 2,3and95oftheECSC Treaty ;
Considering that the restructuring ofiron and steel firms implies the suppres­
sion ofaconsiderable number ofposts atatime when theCommunity is
experiencing heavy unemployment ;
Considering that itisappropriate ,asaconsequence ,tosafeguard the level
ofemployment inthe iron and steel industry asfaraspossible andtotake
certain appropriate measures tothis end ,such asearlier retirement ,sharing
theavailable work orspreading-out the suppression ofjobs over time ;
Considering that themeasures which may betaken inconformity with article $6
oftheECSC Treaty donotallow theattainment ofallthese objectives ;
Considering that ,onthebasis ofarticle 95ofthis Treaty ,theCommission ,
incases notforeseen intheTreaty ,maytake decisions ,with aview to
instituting asystem oftemporary non–reimbursable aidnecessary toachieve ,
inthefunctioning ofthecommon market forcoal and steel ,oneofthe
objectives defined inarticles 2,3and4{
that ,aswell ,themeasures which serve tomaintain employment in1heiron
and steel industry andwhich contribute atthe same time tosolving the
restructuring problems ofthis sector fulfil these objectives j
After consultation ofthe European Parliament ,
After consultation ofthe Consultative Committee and onthe unanimous
agreement oftheCouncil ofMinisters ,
DECIDES :

«■2«
Art;i-Ir?1
/aeKi-eoialffieauureoinfavourofworkers,whoeverthobeneficiarioe of*
ti.oi.ct:eaaur'.!8maybe,inIron?a>.&stealfirmsandiron–oneminesinthe
Co-i'-urtlV,whosepoets&r©directlyorindireolilyabolishedorthreatenod
ircono.-quanceofareatraoturix»gplanadoptedbytheundertaking ,the
ofundertakings orbypiiblieauthoritiesinooraforroityKith"General
Objectives–Steel",areeligiblefortte©aiflgrsartsd "byVacCommissionfor
EC3Creadaptation t
ThenomeasurestaketheformofJ
-allowancesforearlyretirement,
-allowancesforimprovingtheworkcyole(includingshort–timeworking
andanextrashift)f
-allowancesforearningscompensation inthecaseofreductioninovertime.
Art.iclo2
Thograntingofspeoialallowancesisdependentonthepayment "bytheState
concernedofcontributions atleastequaltotheamountofallowancesgranted,
unlessaderogationisauthorised bytheCouncilonatwo-thirdsmajority.
Article3
1.Tyeallowanceforearlyretirementisgrantedasfromacertainage,which
maydifferaaorgMemberStat^andwhichoarrnot "beleasthan55*"toworkers
whoceasetheiractivityandarenotyetentitledidthelegalretirement
pensionwhentheseworkersare,eitherexcludedfrom,"benefitsunderArti­
cle56oftheECSCTreaty "butgiveupapostinfavourofworkersmentioned
atArtiole1,-orwhentheseworkersarethosementionedinArtiole1
andwho"benefitfi-ommeasuresinvirtueofartiole56oftheECSCTreaty,
designedtosupplementtheirincome.
Whichever "betheoase,theaidwillnotbegrantedformorethanthreeyears.
Theallowanceisgrantedonconditionthatthejobvacatedistakenby
aworkerthreatenedbydismissalfollowingrestructuring measures*

•forworkers inaparticularly arduous job ,forhandicapped workers ,for
workers who ,foratleast tenyears ,were engaged incontinuous shift-
work ,theminimal age mp.y "belowered .
2«Theallowance cannot exceed 50%ofthedifference between theincome
guaranteed totheworker whoretires early byvirtue ofnational dispo­
sitions andtheamount ofunemployment allowance towhich theworker
would have aright inthe case ofdismissal .
Article 4
1.Theallowance forshort-tiras working isgranted toworkers whose working
time isreduced with aview toallowing thespreadin^-out over time of
joblosses inthecase ofapartial orcomplete closure ofthefirm .
2.Ibreach hour notworked ,theallowance cannot exceed 25%ofthedifference
between thewages normally dueandthebenefits granted inthecase ofshort -
time working ,
Article 5
1.Theallowance for improving thework–cycle isgranted toundertakings which
introduce anadditional shift infavour ofthose workers mentioned at
Article 1with aview tomaintaining employment .
2.Theallowance cannot exceed 25%ofthedifference between thecost of
labour ofthese workers before andafter the introduction ofthis measure ,
including employers' social security contributions .
3.Theallowance isgranted foramaximum period ofthree years .This amount
isreduced to3/4oftheinitial sumduring thesecond year andtohalf
during thethird year .

4
Article 6
1.Theallowance for wage compensation inthecase ofreduction inovertime
isgranted toworkers affected "byareduction inovertime work needed to
maintain thelevel ofemployment andwhodonotattain %heminimum income
corresponding totheaverage .wage (including overtime )ofanunskilled
worker .
2.Theallowance camcfc emeed 25%ofthedifference between the wages paid
totheworker before the suppression ofovertime and theearnings paid him
after its suppression *
3.Theallowance cannot exceed anamount equivalent tothat oftheallowance
calculated onthebasis oftheaverage wage (including overtime )ofan
unskilled worker *
4*Theallowance isgranted foramaximum period of3years *This amount is
reduced to3/4of "theinitial sumduring thesecond year andtohalf during
the3rdyear ,follwing theooming into force ofthis decision .

Article 7
Theearnings referred "toinarticles 4and 6should beunderstood asthe
gross salary with deduction oftaxes butinoluding thesooial security
contributions ofthe worker *
Article 8
Intheapplication ofthepresent deoision ,theCommission ,after ensuring
that therestructuring plan complies with the "General Objectives –Steel ",
establishes with theagreement oftheMember State concerned ,the social
measures tobeimplemented infavour oftheworkers mentioned inArticle 1,
aswell astheways and means ,notably concerning t
-themethod ofallocating costs ,
-thedefinition ofthebases -forcalculation ofeach ofthe special
allowances ,
-thedesignation ofthe organisations oharged with making thepayments ,
-thepresentation ofrequests ,
-themethods ofpaying theallowances *
Article 9
The special allowances may begranted during the period from ••••••••••
to•••••••••••••••••• (3years )*
Thepresent decision comes into force onthefifth dayfollowing that of
itspublication intheOfficial Journal of "ftieEuropean Communities *
Bythe Commission ,