No C 84/16 Official  Journal  of the  European  Communities 8. 4. 78 
Opinion  on the  proposal  for a Council  Directive  on aid  to shipbuilding 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of  the 
European  Communities  No  C 294  of 7 December  1977,  page  4. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 15 November  1977,  the  Council  referred  the  abovementioned  proposal  to the 
Economic  and  Social  Committee  in accordance  with  Article  198  of the  Treaty  establishing 
the European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
155th  plenary  session  held  in Brussels  on 1 and  2 February  1978. 
The full  text  of the  opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof, 
Having  regard  to the  request  made  by the  Council  of 
the European  Communities  on 15 November  1977 
for an opinion, 
Having  regard  to the  decision  taken  by its Bureau 
on 23 November  1977  instructing  the  Section  for 
Industry,  Commerce,  Crafts  and  Services  to draw  up 
an opinion  on the  matter, 
Having  regard  to the  opinion  approved  by  the 
Section  for  Industry,  Commerce,  Crafts  and  Sevices 
at its meeting  on 11 January  1978, 
Having  regard  to the  oral  report  made  by  the 
rapporteur,  Mr  Evain, 
Having  regard  to the  discussion  at its 155th  plenary 
session  held  on 1 and  2 February  1978  (meeting  of 
1 February  1978), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
unanimously: 
1. In  the  past  the  Council  has  issued  a number  of 
Directives  on national  aids  to shipbuilding.  In doing 
so the  Council  sought  to harmonize  such  aids  and  to 
reduce  some  of them  gradually. 2. The  draft  fourth  Directive  maintains  these 
principles.  However,  to help  the  industry  through 
the serious  difficulties  in which  it now  finds  itself,  the 
draft  Directive  allows  governments  to  grant 
exceptional  temporary  aids  to the  industry. 
2.1. The  Committee  considers  that  the  Directive  is 
only  a very  piecemeal  and  limited  response  to the 
extremely  grave  problems  facing  the  shipbuilding 
industry  at the present  time. 
The problems  of the  industry  are  the  subject  of a 
communication  from  the  Commission  to the  Council, 
on which  the  Committee  will  shortly  be asked  for  its 
comments. 
The Committee  will  therefore  not  comment  now  on 
the wider  issue  of the  nature  and  implications  of the 
crisis,  particularly  with  regard  to employment,  and 
the Community  adjustment  assistance  which  ought  to 
be given  to help  overcome  it, but  will  reserve  its 
comments  for the later  opinion. 
3. The  new  draft  Directive's  exceptional  temporary 
aids clause  covers  all  counter-recession  aids 
introduced  by Member  States  (Article  6). Such  aids 
are to be vetted  to ensure  that  they  do not  distort 
competition  between  Member  States,  and  they  must 
be coupled  with  restructuring  programmes,  which  the 
8.4. 78 Official  Journal  of the European  Communities No C 84/17 
Committee  thinks  should  pay  close  attention  to their 
effects  on capacity  and  employment. 
4. In  its draft  Directive  the  Commission  is trying 
to push  an  increasingly  hard  line  against  unfair 
competition  arising  from  aids  not  peculiar  to 
shipbuilding  but available  to other  industries  as well. 
These  include  the  cost-escalation  insurance  schemes 
in the  UK  and  France.  If the  Commission  continues 
to involve  itself  in this  area,  as it does  with  regard  to 
aids to shipowners  and  regional  aids  in the  draft 
Directive,  it should  be able  to establish  a more 
complete  list  of such  non-specific  aids  and  to assess 
the extent  to which  they  distort  competition  between 
Member  States. 
5. Where  the  appropriate  authorities  find  that 
yards  are  receiving  aids  to help  them  keep  afloat 
through  protracted  operating  losses,  these  aids  should 
be taken  into'  account  for  the  purposes  of the 
Directive. 
6. Article  4 subjects  national  investment  aids  to 
Commission  approval.  The  Committee  urges  the 
Commission  to exercise  maximum  flexibility  in its 
interpretation  of this  clause  and  in particular  to 
approve  aids  designed  to boost  productivity  even  if a 
slight  increase  in output  is inevitable. 
7. Aids  to shipowners  for  the  purchase  of ships 
could  be closely  considered  where  orders  are placed outside  the Community.  The  Commission  should  see 
to it that  Community  shipbuilders  are  given  early 
notice  of projected  orders  for ships  so that  they  too 
can tender  and  have  a fair  chance  of winning  the 
order. 
8. The  exceptional  temporary  aids  clause  applies 
to shipbuilding  only.  It should  also  cover  repairing, 
which  has also  been  hard  hit by the recession. 
9. The  Committee  would  like  the  threshold  of 
1500  gross  register  tons  for  conversion  aids  (second 
indent  of Article  2) lowered  to 1000  gross  register 
tons.  This  would  help  employment  and  smooth  out 
regional  disparities. 
10. The  Committee  notes  that  the  Commission 
sees a particular  need  in the present  circumstances  for 
rescue  aids,  and  that  it considers  that  on  social 
grounds  such  aids  are  compatible  with  the  common 
market. 
11. The  Committee  would  draw  attention  to the 
problem  of the  shipyard  workers  whose  jobs  are 
threatened  by restructuring  measures.  This  problem 
needs  to be given  close  consideration. 
Done  at Brussels,  1 February  1978. 
The Chairman 
of the  Economic  and  Social  Committee 
Basil  de FERRANTI 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
The following  amendment  was  rejected  by the meeting. 
Add a new  paragraph  12 reading  as follows: 
'12. A  medium-term  plan  for the essential  restructuring  of the  sector  must  be worked 
out at Community  level  in consultation  with  all the interests  concerned.' 
No C 84/18 Official  Journal  of the European  Communities 8. 4. 78 
Reason 
More  comprehensive  measures  based  to a large  extent  on the Commission's  communication 
to the Council  on the reorganization  of the Community  shipbuilding  industry  should  be adopted 
as a matter  of urgency. 
Voting 
For: 28, against:  32, abstentions:  10.