ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(77)558
Vol.1977/0182

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)558 final.
Brussels ,10November 1977
AIDE-MEMOIRE
onthefixingoftheECSCleviesandon
thedrawing-up oftheoperational "budgetfor1978
4
COM(77)558final.

_9_
SUMMABY
Page
Preface /
1.GENERAL INTRODUCTION 5
A.ECONOMIC CONTEXT 5
1.Theeconomic outlook for1977 ,and1978 5
2.Prospects inthecoal sector 8
3«Prospects inthesteel sector 9
B. POLICY CONTEXT X1
1.Coal policy 12
2.Iron andsteel policy ^
3.Social policy .
4.Borrowing andVending -activity since 31December 1976
C.FINANCIAL COBTEXT 5 20
II.AMLYSIS OFEXPECTED EXPENDITURE ANDPOSSIBLE
RESOURCES INTHEFINANCIAL YEAR I978 25
A,EXPECTED EXPENDITURE INI978 26
1.Ordinary requirements 26
2.Requirements notincluded inthe "budget
–.loans forfinancing subsidized housing 39
3.Summary ofrequirements putforward 41

-3-
Page
B.POSSIBLE RESOURCES 41
1.Resources forthefinancial year 41
2.Covering ofrequirements notincluded inthebudget 45
3.Summary ofpossible resources for1978 45
III .DRAFT OPERATIONAL BUDGET FOR 1978 4°
A. IRREDUCIBLE :REQUIREMENTS 47
B. COVERING OFREQUIREMENTS 50
C.DRAîT BUDGET 52
ANNEXES
A.Implementation oftheECSC operational "budget for197° 53
B. Forecast implementation oftheECSC operational
budget for 1977 54
C.Breakdown ofloans forthefirst sixmonths of1977 5°
D. Provisional situation oftheECSC at30June 1977 57
E.Draft ECSC operational budget for1978 58

-4-
AIDE-MEMO IRE
onthefixingofthaECSGleviesandon"the
drawing-up oftheoperational "budgetfor1978
Following thevisualpractice ,theviewsoftheEuropean Parliament arebeing
requested "beforetheCommission takesadecision ontheleviesandthe
operational "budgetoftheECSCforthefinancial year1978.
Thisaide-memoire formathe"basisfortheconsultation ofParliament .It
isdividedintothefollowing sections :
I.Generalintroduction ;
II.Analysis oxexpected expenditure andpossible resources inthe
financial year1978;
III.Draftoperational "budget.
Inviewofthefavourable reception giventothewayinwhichthedocument
waspresented "bytheCommission lastyear,thereistobeonlyoneslight
changethisyear,namelytheinclusion atAnnexDofasummaryofthe
provisional situation oftheECSCat.30June1977.
Thevariousfactorsaffecting thedetermination ofthelevyratefor1978
aredescribed inChapterIII.
*
**
Theaide-memoire hasalsobeensenttotheECSCConsultative Committee for
information .

I.GENERAL INTRODUCTION
ThisChaptersummarizes thefactorsnecessary forappreciating theeconomic,
political andfinancial background tothedraftoperational budgetofthe
ECSCfor1978.
A.ECONOMIC ASPECTS
1.Theeconomic outlookfor1977and1978
Theeconomic trendwhichtheCommunity hasbeenexperiencing forsometwo
yearshasbeenmarkedbyalternating periodsofexpansion andcontraction .
Thelatterhavetendedtopredominate sincethe'beginning oftheyear.Asa
resultoftheconstraining influence ofinflationary pressures,excessive
balanceofpayments imbalances ,andunder-use ofproductive capacity-fac­
torsapplying indiffering degreetodifferent Membercountries -thereis
stillnosignoftheappearance ofacumulative cyclical expansion ofthe
sortnotedinearlierphasesofeconomic recovery .Aslightconsolidation
ofeconomic growthisforecastforthesecondhalfof1977onaccountof
thefasterexpansion ofexports and,insomecountries,ofprivate consump­
tion.Fortheyearasawhole,however,therateofeconomic growthisnot
likelytobeanyhigherthan21/2%1nrealtermsoftheentireCommunity
compared with41/2%in1976.Initialestimates for1978suggestthateco­
nomicgrowthwillpickupslightly inthatyearandovertake the1977level.
Utilization ofproductive capacity,however,isexpected tostayatafairly
lowlevelinmanysectorsofindustry.
Theprogress madetowards areturntofullemployment inthemediumterm
hasbeendisappointing .Therehasbeenlittleinclination tomakejob-creating
investments .Whereaneedforlabourhasarisen,ithasbasically been
metbyincreasing productivity orextending theworking hoursofthoseal­
readyemployed .Discounting seasonal variations ,therateofunemployment
forthewholeoftheCommunity reached 5.6%bythesummer.Thisislikely
toincreasefurtherintheautumnandinto1978.Thenumberofyoungpeople
seekingtheirfirstjobislikelytogoonincreasing andagrowing number
ofwomenwillbeseekingemployment .

-6-
Although pressure ofdemandonoverallrealresources hasnotbeenexces­
sive,theriseinpriceswasbriskuntilthespring.Thisphenomenon can
beexplained bytheshortfall inthesupplyofagricultural products
following the1976droughtintheCommunity andalsobytheadversecli­
maticfactorswhichhaveseriously affected thepricesofsometropical
foodstuffs .Therehavebeenothercontributory factorsaswellsuchas
theincrease inpublicservicetariffsandpetroleum productprices.
Ontheotherhand,theeffectofwagecostsonthepricesofmanufactured
products hasgenerally remained moderate .Despitetheslowdown forecast for
thesecondhalfontheyear,theoverallriseinconsumerpricesin1977
isunlikelytoabateincomparison withlastyear.Theaveragerateofin­
creaseisestimated at91/2%.In1978,however,therateofinflation is
expected toslowdown.
3
Inthefinalanalysis,itisonlyontheexternal sidethattheCommunity s
position hasdeveloped fairlysatisfactorily afterthemarkeddeterioration
throughout 1976.Itshouldhowever benotedthatthisimprovement inthe
externalposition isessentially justthereflection ofacontinuing state
ofdepressed economicactivity andunder-use ofproductive capacity.Despite
theworsening inthetermsoftrade,thereduction inthevolumeofpur­
chasesbythedeficitstateshas,sincetheendoftheprevious year,re­
sultedinasignificant improvement intheCommunity'sbalanceoftrade.
If,asisprobable,thisrecoverycontinues,itshouldleadtoanearr
balancesituation in1977,compared withtheprevious year'sdeficit
ofnearly8000milliondollars.Thereisevenapossibility ofasmall
surplusin1978,basedontheincreasing contribution ofNorthSeaoil.

-7-
Thefollowing "tableshowsthetrendintheCommunity'sGDPduringthe
period1975"to1^77s
GROSSNATIONAL PRODUCT INVOLUME TERMS
variation ascomparedwiththepreviousyear)
•I
1975 1976 1977
DenmarkI-1.1 4,8 1
JFed.Rep.ofGermany-2.6 !
I5,7 .3
France 0,1 5,2 -23/4
IIreland 0,4 3.2 5
Italy -3,5 5.6 2
JNetherlands -1,1 4.4 21/2
IBelgium - i-2.0 3,023/4
Luxembourg M. 2,711/4
UnitedKingdom -1,7 1*61/2
Community -1,8 4.6 !:21/2.
Source:Commission staff.'

–8
2.Prospects inthecoalsector
Asaresultofthecombinedeffectofvariousfactors ,theoverallsituation
onthecoalmarketin1978shouldbe"broadlysimilartothatin1977-
Asfarasdemandisconcerned ,thereisnosignatthemomentofany
development intheironandsteelindustry pointing tomajorchangesin
coalandcokeconsumption .However,themeasures takenbysomeMember
Statesmayperhaps meanthatgreaterusewillbemadeofCommunity coal
resources tosatisfy demand.
Theexceptional increase incoalconsumption intheelectricity industry
in1976wasfollowed byalevelling-off in1977 "toafairlyconstantlevel;
consumption shouldremainaroundthislevelin1978unlessanyunforeseen
factorsarise(e.g.aseriousdroughtwhichwouldreducethelevelof
generation ofelectricity inhydro-electric stationsbelownormal).The
reason *forthissituation isthat,although overall Community demandwill
probablycontinuetoriseatthepresentrateof6$>andtherewillbea
substantial increaseintheproportion ofcoalusedinsomeMemberStates,
thesefactorsmustbeoffsetbyafallinconsumption intheUnitedKingdom
(approximately 0>)causedbythecommissioning ofseverallargepowerstations
whichdonotusecoal.
Adegreeofuncertainty surrounds coalproduction in1978owingtovarious
factors.Themostimportant ofthesearethedecision whichislikelyto
betakenbytheFederalRepublic ofGermanytointroduce short-time working
inviewofthegloomyprospects forcokingcoalandcokesales,theserious
strainputontheBelgian "budgetbythesubsidies whicharebeingpaidto
thecoalindustrytoenableittosellitsproducts atcompetitive prices
and,thirdly,theproductivity difficulties facedbytheBritishcoal
industry .
Bearinginmindtheseproduction factors,itmaybeassumedthattotal
Community coalproduction willbearound240milliontonnesin1978.
Similarly ,someuncertainty cloudsthefinancial prospects oftheUnited
Kingdomcoalindustry whichhashadahealthyprofitmarginthroughout the

-9-
period ,endingwiththefinancial yearwhichterminated inMarch1977*
Subsidies will,however ,probably haveto"bemadeavailable inother
MemberStatestoboostproduction .Theneedforsuchsubsidies inthe
caseoftheGermancoalindustryislargelyattributable totheunder-
utilization ofproduction capacities andtothemaintenance oflarge
stocksofcoalandcoke.
Thelargequantity ofstocksputdownbyproducers ,particularly inthe
FederalRepublic ofGermany,isduetothesmallvolumeofintra-Community
tradewhichisattributable inturntothelowerpricesatwhichMember
Stateswhichhavetoimportcoalcanbuyitfromnon-Community countries .
Ifnosolutionisfound,imports ^fromnon-Community countries willprobably
approach 40to45milliontonnes,whilethestocksofcoalandcokeput
downbyCommunity producers mayexceedthecurrenthighlevels.
3.Prospects inthesteelsector
TherewasasevereslumpintheCommunity ironandsteelindustryinthe
firsthalfof1977*Newordersfailedtoreachthelevelsattained in
thecorresponding periodofthepreviousyearandarenaturally welldown
onthoseof1974»whichwasapeakyear.
Crudesteelproduction fellbyapproximately 5*4$in"thefirstninemonths
of1977comparedwiththesameperiodin1976(adropofYJ%comparedwith
thelevelsinthecorresponding monthsof1974)•Therateofutilization
ofCommunity production capacities isstilllow(notmorethan64$).
Therhythmofproduction andsupplyhas,however,morecloselymatchedthat
ofmarketdemandinthelastfewmonths.Thetotalvolumeofordershas
accordingly stabilized atanaverageofaboutonemonth'sfullprotection .
Thedeclineinproduction isduelargelytothesluggishness ofinternal
demandcausedbythelowlevelofinvestment andtheexcessstockskept
byproducers ,dealersandusers.Afurthercontributory factoristhe
deterioration inthetradebalanceinsteelproducts .Thenetbalance

-10-
intheCommunity *sexternal trade infinished products with non-member
countries fell from 20.1 million tonnes in1974 "to14.7 million tonnes in
1975 and6.5million tonnes in1976 . >
TheCommunity steel industiy hasthus notonly suffered from anexcess of
cheap non-member country products ontoitsowninternal market ,"buthas
also lost alarge number ofitstraditional outlets innon-Community
countries .,Thefinancial viability oftheCommunity 'ssteel industry is
inserious danger "because theindustry hashad tobring down itsprices
tocompete with these imports .
This slump inproduction gives particular cause forconcern ,asithas
been accompanied byacatastrophic fall inthemarket prices ofsteel
products -varying from 15to^Cffodepending onthetype ofproduct .The
effect ofthis price drop hasbeen exacerbated bythesharp rise inthe
cost ofraw materials and labour .
Thesteady increase inproduction capacity duetoinvestment projects
launched intheprosperous years of1973 and1974 hasadded tothesteel
industry 'sdifficulties . Investment programmes have ,however ,slowed
down asthecrisis has'dragged on,although theeffects will notbefelt until
later .
Theoutlook isgloomy forthesecond half oftheyear .Community crude
steel production might reach alevel of128to129million tonnes in1977 ;
this isonly slightly less than the1976 level of134»2 million tonnes but
farbelow therecord of155.6 million tonnes inI974 .
/
Theslight acceleration ineconomic growth expected in1978 justifies pre­
dicting that Community crude steel production will reach alevy ofapproximately
135million tons in1978 ,provided that imports arebetter matched tothe
decline ininternal demand .

-11-
B.THEPOLICY COFTEXT
Thegeneralobjectives of"theECSCarepermanently laiddowninArticles 1
to5"tk®TreatyofvParis.
TheCommission periodically formulates objectives orgeneralguidelines for
thefuturedevelopment oftheECSCindustries ,in"boththecoalandsteel
sectors.Thecoalsectorisaspecialcase,asitisalsocovered "bygeneral
documents prepared bytheCommission onCommunity energypolicy.The
medium-tenn guidelines forthesetwosectorsalsoincludeasection on
manpower problemsintheseindustries ;thisprovides thesettingforthe
varioussocialpolicyfunctions discharged bytheHighAuthority /
Commission byvirtueoftheprovisions oftheTreaty.Information onpast
andfutureinvestment trendsandthefinancial activities carriedoutby
theCommunity tofinanceinvestment ispublished bytheECSCinthe
twoyearlyreports,oneontheresultsoftheinvestment surveyinthe
Community coalandsteelindustries andtheotherthefinancial report
dealingwithECSCborrowing andlendingactivity .
J
Theremarkswhichfollowarenotintendedtoreplacethepolicyinformation
giveninthedocuments referredtoabove.Itshouldbenotedthatthe
generalguidelines forsteel–whichweredrawnupbytheCommission in
I976-arecurrently beingrevisedinconsultation withtheparties
concerned .Theensuingremarkswillthusbeconfinedtocertainkeypoints
orrecenteventsthattheCommission feelsshouldbehighlighted indrawing
upthedraftoperational budgetoftheECSCfor1978*They
deal1nturnwiththeindustries ,thesocialpolicies oftheECSCandthe
borrowing andlendingactivities ofthecurrentyear.

-12-
1.Coalpolicy
TheCommunity production -targetof250milliontee"by19°5laiddowninthe
medium-term guidelines forcoal1975-85(OJNoC179of6August1975)also
appearsinthesecondreportontheachievement ofCommunity energypolicy
objectives for1985»whichwasforwarded toParliament andtheCouncilon
3August.
TheCouncil may"becalledupontodecideonthedraftresolution onthe
1985objectives proposedinthereportinDecember .Itwillwaitfor
Parliament 's°Opinionon'thedocuments duetobedrawnupinNovember .
Onthesubjectoftheindividual instruments ofcoalpolicy,theCommission
recallsthatitstatedinitsaide-memoire onthedraftECSCoperational
budgetfor1977thatitintendedtopresentthreecoalpolicymeasures in
thecourseofthisyear:financial aidtoenableproducers tobearthe
burdenofstockpiling coalandcoke,theextension ofthepresentsystem
ofsubsidies forintra-Community salesofcokingcoal(insteadofaphased
redaction ofthesystem),andinvestment aidforcoal-fired powerstations.

-13-
Thesecondofthesemeasures wasadoptedbytheCouncilinmid-summer
althoughinamuchmoredilutedformthanthatproposed bytheCommission .The
twootherproposals ,although approved byParliament andtheEconomic and
SocialCommittee ,arestillbeingdiscussed byCouncilworkingparties.
Becauseoftheeffectsofrecently-introduced Community measures intended
toestablish abetter "balanceinthesteelmarket,theCommission wasled
todecideon5October 1977inthecontextoftheCommunity systemofaid
forcokingcoalandcoketointroduce someflexibility inthelong-term contract
conditions 'whichmustbemetbyproducers whowishtoreceive Community aid.
/•
Deliveries totheironandsteelindustry during1977maybereducedin
directproportion totheadjustment inpigironproduction whichfirmshave
madeundertheCommunity measures .
Incompliance withthedecision oftheCouncilofEnergyMinisters on
29Marchtocollectinformation oncoalimportsfromnon-Community countries ,
theCommission workedoutadraftdecisionforanimproved systemof
information oncoalimportstobeusedforitsreportsonthetrendin
theCommunity coalmarket.Thisdraftdecision hasbeensubmitted tothe
government representatives oftheMemberStatesmeetinginCouncilunder
theECSCprocedure andisnowbeingstudied.

-14-
«t
2.Ironandsteelpolicy
TheEuropean ironandsteelindustryisnowinthethirdyearofa
deep-seated crisis;averageutilization ofcapacityisnowbelow65%,
traditional markets havebeenlostandalmostallfirmsaremakinglosses.
Employment hasalsobeenbadlyhitbythecrisis.Short-time working andre­
dundancies haveoccurred throughout theindustry .Further,moreseriouscuts
affecting severaltensofthousands ofworkersareplannedfortheyearsto
come.Inaddition tothepersistent cyclical depression ,thecrisishasalso
nowassumed astructural character .
TheironandsteelpolicywhichtheCommission hasinviewcanbesummarized
againstthreemainguidelines .AfourthvitaIelementofpolicyconcerns the
/•socialimplications ofthecrisis.Thisisconsidered inSection 3below.
2.1.Firstguideline :keepingthemarketunified andopen
TheCommunity mustdoallthatisneededtomaintain marketunitywhich
isthreatened throughtheestablishment ofcartels andthroughrecourse to
national safeguard measures .TheCommunity alsointendstostandbytheex­
ternaltradingpolicieshitherto pursued.Thisdualobjective cannotbeattained
unlesstheironandsteelindustryisrestructured .
2.2.Secondguideline :Community approach torestructuring problems
Theobjective ofrestructuring istosecure amodernized production capacity(this
affectsbothplantandproducts )ofwhichtheviability andhencethecompetitive­
nesswouldbeassured.
Restructuring policymustbepursuedinconsultation withworkers' organization ,
firms,theMemberStatesandtheCommunity 'sotherinstitutions .

-15-
Severalgovernments particularly interested intherestructuring ofthein­
dustryhavealready madeknowntheirinterest intacklingitonaCommunity
basis.
Allnewinvestment invthesteelindustry shouldbeplacedinthiscontext.
Toguarantee therequisite coordination betweeninvestment projects,itwill
therefore beessential forMemberStates'restructuring programmes tobe
examined assoonaspossible toensurecompatibility withtheCommunity
objectives ,andfortheinvestment projects tobecommunicated earlyenough
foranassessment tobemadeoftheirvalueinrelation totheseprogrammes .
Withthispurposeinmind,theCommission isnowrevisingtheGeneralObjec­
tivesforSteelinconsultation withthepartiesconcerned .
Forthetimebeing,anduntilpreciserestructuring objectives havebeen
established ,anyinvestment resulting inanincrease inexisting production
capacities canbeallowedonlyifitisoffsetbyacomparable reduction .
Forthispurpose,theCommission willinvokeArticle 54.ThegrantofCommunity
finance (loansandinterest relief)willbebasedonthecontribution ofthe
investment inquestiontotherestructuring objectives .Inthemeantime,itis
desirable forgovernments ,authorities andfirmsinvolved intherestructu­
ringandredevelopment processtoavoidtakingconcreteactionuntiltherestruc­
turingprogrammes havebeendefined.
Themagnitude oftherestructuring problemsreflects theexistingstateofCom­
munityproduction capacity.

-lô-
Thedifficulties areattributable notonly tothedeterioration mthe
conditions ofcompetition -atworld level resulting from national finalist
andother measures ,butalso *othefact that part ofthe
Community iron andsteel industry isilladapted tomodern production and
organization structures .
Thelatter drawback isduemainly totheunfavourable siting anddispersion
ofcertain iron-aadsteelmaking establishments ,alack ofcoordination and s
incertain cases -,imbalances inthedifferent stages of'production .The
process ofrestructuring theCommunity iron andsteel industry must be
accelerated sothat theindustry canface uptothepresent difficulties ,
anditscompetitiveness must beattuned tothefuture world market
conditions byadjusting capacity tointernal andexternal needs .
Asregards competi vity ,full useshould bemade ofthecapacity oftechnical
research toimprove product quality randreduce costs .
2.3 .Third guideline :market action
Theproposed restructuring oannot beachieved unless market conditions are
improved .Intheshort term ,wecannot .look toa-recovery intheeconomy for&uch
an improvement :consequently ,limited action aimed atcertain market
mechanisms must bepursued andreinforced ,incompliance with therules and
objectives oftheTreaty ,asfaraspossible with theconsensus ofthe
parties concerned .
This iswhytheCommission intends tocontinue with theplan forthevoluntary
limitation ofinternal market delivery quotas introduced attheendof1975
(OJlibC304of24December 1976 )•However ,asthis action isnotatpresent
securing thedesired hardening ofinternal prices ,firms must also be
encouraged tocharge prices more inline with the realities ofthesituation .

-17-
Inconsultation with theECSG Consultative Committee ,theCommission has
therefore recommended voluntary observation "byfirms ofguidance prices
forcertain iron andsteel products (OJMbL114of5May1977 )-Ina
communication published inOJHoC174of22July 1977 »theCommission
adjusted theoriginal guidance prices and extended therange ofproducts
concerned .These provisions have applied since 1September 1977 *Under
Article 61oftheECSG Treaty ,theCommission introduced minimum prices
forconcrete reinforcement bars (rebars )byDecision 9^2/77/ECSG of
4May1977 (OJKbL114of5 3-977 )»These prices will have tobe
reviewed bytheCommission before 31December 1977 *
Inaddition ,recommendations Eos77/328 ,329and330/ECSC of15April 1977
(OJNoL114of5May1977 )introduced import documents tobeissued
automatically onpresentation ofpurchase contracts ,-tomake iteasier
todetect unfair commercial practices andwith aview totaking action
against them under therules oftheTreaties (anti–dumping ).Another
aimofthese recommendations istoestablish aCommunity surveillance
_system forimports into theCommunity ofcertain iron andsteel products
originating innon-member countries .
Side byside with these autonomous decisions ,theCommunity hasalready
started andintends tocontinue ,conversations with itsmajor world partners
inorder that their conduct should not compromise the intended restruc­
turing efforts .Appropriate contacts must bemade toensure that itis
clearly understood that theiron andsteel policy measures introduced are
inthelong-term interest ofallconcerned .

n46A#48
3.Socialpolicy
Asageneralrule,thesocialpolicies pursuedundertheTreatyofPansare
similartothepolicies developed subsequently bytheEuropean Economic
Community .ECSCresettlement aidhasaimsandmethodsbroadlysimilarto
thoseoftheSocialFund,whilethepurposeofECSCredevelopment aidis
comparable tothatoftheRegional Fund,although thelatterhasawider
range.
However,theeffectofthelegaldifferences andespecially ofthefactthat
ECSCaidisfinanced bytheindustries concerned hasenhanced theimportance
oftheaidprovided .TheECSCresettlement regimeistherefore moredeve­
lopedandmorecomprehensive thancomparable SocialFundoperations ,while
theredevelopment aidsystemalsohasamorespecific purposethantheRegional
Fund'spresentoperations ,sincetheoperations concerned aredesigned to
createjobsintendedprimarily forworkers fromtheECSCindustries .Further­
more,since1955theECSChaspursued apolicyofsubsidizing housingfor
workers intheseindustries .
Inthepresentcircumstances ,itisclearthatintherealmofsocialpolicy
theECSCmustconcentrate onsolvingtheproblems arising fromtherestruc­
turingoftheironandsteelindustry andtheforeseeable reduction inits
labourforce,sinceinthefinalanalysisthisrestructuring willbeimpossible
withoutstepping upredevelopment effortstocreatethenewactivities needed
forthere-employment ofworkers maderedundant bytherestructuring
operations .
Iftherestructuring oftheironandsteelindustryistobeacceptable
fromthesocialandregionalpointofview,theinevitable redundancies
mustbeattenuated and,ifpossible,offsetbythecreation ofalternative
jobsandsupportprovided,onabasisofCommunity solidarity,forthe
resettlement oftheworkersinvolved .

-19-
Theseessential resettlement andredevelopment aspectsmusttherefore form
partandparceloftherestructuring programmes .TheCommunity'staskis
toapplyallthe.meansatitsdisposal inpursuitoftheseprogrammes includ­
ingparticularly :
(i)assistance fronuthe EC§C,theRegional FundandtheEuropean Investment
Bank •for-thecreation ofnewjobs;
(ii)themanpowerresettlement regimeprovidedforinArticle56oftheECSC
Treatyforrehabilitating theworkers. .;
4»Borrowing andlendingactivity since31December 1976
ECSCFinancial ReportNo22summarizes theCommunity's"borrowing and.lending
activityinthefinancial year1976andpresentsanalytical andcumulative
statistics forthewholeofthisactivity since1954*TheCommunity *s
balancesheetasat31December 1976appearsinAnnexIItothereport.
Loanscontracted in1976totalled 956mEUAcomparedwith731mEUAin1975*
Loansdisbursed ,.inthesameperiodtotalled 1O64m-EUAcompared with
(
805'mEUAin1975»bringingtotal "borrowing andlendingsince "theinception
oftheECSCto.4069mEUAand4151mEUA.(including 157e'EUA"inloansfrom
own'funds)respectively .Thebalanceoutstanding asat31December 1976was
3475mEUA.
Inthefinancial year1977ECSCfinancial activity continued tosatisfythe
demandfromfirms.
Inthefirsthalfoftheyear,loanscontracted totalled 283mEUAandloans
disbursed 331mEUAsothatthebalanceoutstanding exceeded 3600mEUA
asat30June1977•
TheECSChascontinued toobtainfavourable termsonthecapitalmarket.
Thebiggestloanscontracted –$50 ■millionover12yearsand$100million
over20years–ontheinternational capitalmarketwereobtained underthe
mostfavourable currently available .

Itisclear,fromapplications inhand,thatECSCborrowing andlending
activity islikelytocontinue atahighlevelinthecomingmonths.
ThetableinAnnexCtothisaide-memoire analyses theloansdisbursed in
thefirsthalfofthefinancial year1977•
Astatement oftheprovisional situation oftheEuropean CoalandSteel
Community asat30June1977isgiveninAnnexD.
C.FIHMCÏAL C0NTEXT
Asregardsthefinancial background tothe1978draftbudget,therise
inpricescontinues tobe-animportant factorinassessing foreoasts
anddefiningtherelation betweenthe1977and1978financial years.
Inthisrespect,itmaybeassumedthattherewillbeanincreasein
costsofbetween1977and-1978,ascomparedwithroughly10%
between 1976and1977•
ItmustbepointedoutthattheECSCbudgethasbeenexpressed in
Europeanunitsofaccountasfrom1January1976.Sincethatdate,
budgetcommitments andthecontracts relatingtheretohavebeen
expressed andpaidinEUA.Initialproblems wereovercome without
majordifficulties despitetheexceptionally heavyworkload which
Commission departments arehavingtobearinmaintaining
theaccounts forbudgetcommitments ,sincetheseaccounts–for
atransitional period–comprisebothsumscontracted inforeign
currencies andcommitments inEUA.Thisproblem,incidentally ,
hasalsoattracted theattention oftheAuditor.Paymentof
leviesduringthe1976financial yearwasbased–duringthis
transitional period–onconversion ratesfixedeverymonth;but,
in1977#dailyconversion ratescameintoeffect.Thelevies
office,incooperation withtheundertakings andbanksooncerned ,
hasapplieditselftoolarifying themethodsofpaymentandto

-21-
solvingtechnical teething troubles .TheCommission ispleased
withthesatisfactory wayinwhichthishasbeendone.
Asregardsthedeadlines forpaymentoflevies,thetemporary
two-month lagforpaymentofsteellevies,decidedin1976
(OJNoL89of2April1976),ended,asscheduled ,attheend
ofthisyear.However,thismeasure wasreplaced permanently
asfromthesecondhalfofthecurrentfinancial year "bya
one-month lagapplicable notonlytosteelbutalsotocoal
levies.Thisadjustnent 'isbasedontheobservation thatthe
periodoftimebetweenthemanufacture ofproducts subjectto
leviesandthereceiptofpaymentfortheseproductsisat
presenttwofullmonthsandmeansthatpaymentofleviesis
now dueonthe25thofthesecondmonthfollowing the
monthinwhichtheproductsweremanufactured (Decision No1687/77/ECSC
of22July1977:OJHoL187of27July1977).
TheCommission recalls,finally,that,initsresolution of
14December 1976ontheECSCoperational budgetforthe1977
financial year,theEuropean Parliament expressed concernover
acertainstagnation andrigidity intheoperational budgetin
aparticularly unstable economic andfinancial contextand
requested theCommission toreflectseriously aboutthebudget
anditsrole.
TheCommission hasbeenguidedbythisrecommendation fromParliament
indrawingupthedraft1978ECSC.operational budgetandhastriedto
showimagination andflexibility infacinguptothecritical
financial contextinwhichnextyear'sbudgetwillfall.

Therehasbeennosubstantial reduction inthecyclical and.structural
difficulties whichhavebesettheCommunity *sironandsteelindustry
since1975.Infinancial terms,thesedifficulties inevitably
taketheformofanappreciable increaseinbudgetrequirements and
ashrinking ofthe"byreforthelevieswhichconsists (self-evident Ly)of
thequantities produced.
TheCommissions thinking onthismatterisfoundedonthefollowing
principles :
~themechanism oftheECSCoperational budgetmustretainthe
abilitytoadjustresources tofinancial requirements regarded
asirreducible ^;
-ifactionsdonotspecifically fallwithinthescopeofthe
SC3C,recoursetofundsprovidedforcertain Community policies
undertheTreatyofRomeshouldbeconsidered :
thisapproachisalreadybeingappliedinthefieldofCommunity energy
policy,andhasmadeitpossibletoenterinChapter32
oftheCommunity budget(expenditure undertheenergypolicy)
Article322covering "Aidstocoalstocks".Thesameappliestothe
Regional Fund.
Apartfromthealreadyexistingpossibility fortheEREFto
contribute tothecostofregionalaidgrantedtoreconversion
projects,theCommission hasproposed –aspartofthe
reorganization oftheEREFin1978–thatasystemofinte.
1Inthiscontextitwouldbeappropriate torecalltheopinionof
theEuropeanParliament'sCommittee onEconomicandMonetary
Affairsin1976,whichstatedinconclusion that'theruleof"stability
towhichtheCommission understandably wishestoadheremaynotbeused
infutureasaprinciple formakingtherateofthelevyunchangeable.'

23-
reliefgrants "besetup,outsidenational quotas,whichwould
enabletheCommission tomakedirect ERDFinterestreliefgrantson
certainloans;
(iii)greatimportance isattachedtocoordinated implementation of
allthefinancing instruments whichcometinderconsideration :
fundsspecifically available forthecoalandsteelsector,
supplemented byactionsfallingundertheGeneralBudgetand,
asregardsloans,byEIBintervention ;
(iv)asregardstheclassicinterventions oftheoperational budget
(research,resettlement ,interestreliefgrantsandloans
forlow-costhousing),theCommission naturally prefersto
continuefinancing thembythemeansprovided bytheECSCTreaty;
(v)finally,theCommission takestheviewthattheexceptional
character andtheunprecedented importance ofthecrisis
nowaffecting theECSC–and,moreparticularly ,theCommunity's
ironandsteelindustry –justifyspecialmeasures inthe
financial sphereaimedatenablingtheCommunity tocarry
outfullythetasksdevolving uponitwithregardtothe
restructuring andredevelopment oftheindustry andthe
resettlement ofitsworkers,withoutexcessive increasein
thefinancial burdenbornebythesectorsinquestion .

-24
Thisis-why,inJune,theCommission suggested thattheannual
contribution madebytheECSCtotheGeneralBudgetinrespectof
Community administrative expenditure bereducedfrom18to
5millionEUA thusallowing thesumreleasedtobeusedto
finance increasing operational requirements .Thisproposal
wasapproved byCOREPERon26.10.77forendorsement bytheCouncil
asanApoint.Afurtherproposal of.thisnatureispresented
inpages50-51below. . '
'Theaboveapproachisfullyreflected intheproposals whichthe
Commission hassetoutinChapterIIIofthisaide-memoire .

-25-
11-ANALYSIS OFEXPECTED EXPENDITURE AIDPOSSIBLE _R?SOURCE5IN"TH3
FINANCIAL YEAR1978
Article 49theTreatyestablishing theEuropean CoalandSteel
Community authorizes theCommission toprocurethefundsitrequires
tocarryouttheactivities laiddowninthatTreatybyimposing
leviesontheproduction ofcoalandsteel.Pursuant to
Article 5->theseleviesareassessed ,annually onthevariousproducts
according totheir"averagevalue",butthe"rate"maynotexceed
*\%unlesspreviously authorized bytheCouncil.
Forthepurposeoffixingthisrate,itisnecessary firstto
estimate thefinancing requirements andthentoseehowfartheycan
bemetfromresources otherthanthelevies,inparticular interest on
investments andonloansfinanced outofcapitalresources and
alsoprovision cancellations .Inthisway,theamounttobe
coveredbytheleviescanbedetermined .
Inaddition ,onthebasisofapreliminary andthussometimes
unavoidably inaccurate assessment oftheaveragevalueofthe
variousproducts ,andofthelikelyvolumeofoutputduringtheyear,
theprobable levyyieldiscalculated :firstofallintensof
theyieldanticipated fromarateof0.01%.Thecalculation ,
therefore ,hingesonanestimate ofproduction whichisdifficult
tomakeowingtotheextremesensitivity oftheindustries concerned
toanysuddenchangeinmarketconditions .
Thesearethetwoelements setoutinthisChapter .Itisthen
necessary todetermine towhatextenttheCommunity shouldforego
satisfying therequirements reported ,whichconsiderably exceed
theresources provided bythepresentrate,ortowhatextentthe
rateshouldberevised upwardsordownwards .Thismatteris
dealtwithinChapterIII.

-26-
Thefollowing presentation ofexpected expenditure andforeseeable
resources ismodelled onthesystematic analysis ofthedataonthe
variousbudgetheadingsintheGeneralBudget,asshowninPartII
oftheGeneralIntroduction tothePreliminary DraftBudget.As
withtheGeneralBudget,thispresentation listsseparately themain
featuresofeachchapter(legalbasisanddescription ofoperation ,
typeandbreakdown ofexpenditure ,explanation ).Topermitabetter
assessment ,theexplanations givenfornon-compulsoryexpenditure
(researchandinterestreliefgrants)aremoredetailedthanfor
theotherchapters . ..
A.,EXPECTED EXPENDITURE Iff1978
1.Ordinary requirements
CHAPTER B1-RUNNING COSTS
1.Legalbasisanddescription ofoperation ,
Legalbasis;
-Article50oftheECSOTreaty;
–Article20oftheMergerTreaty.
ECSCcontribution totheCommission'soperating expenditure .
2.Typeandbreakdown ofexpenditure
Annuallump-sum paymentmadein12equalmonthlyinstalments .
3.Explanation
InitsCommunication C0M(77)280 finalof16June1977,supplemented
on11October1977byCOM(77)511 final,theCommission proposedthat
thesumof18million EUAfixedbytheMergerTreatybereducedto
5million EUAsoastomakeadditional moneyavailable forincreased
operational requirements .
Adecision onthisproposalisamatterfortheCouncilunderArticle
20oftheMergerTreaty,andCOREPERdecidedon26.10.77toproposethat
itbeagreedasanApointataforthcoming Councilmeeting.

CHAPTER B2-AIDTORESETTLEMEOT
1•Legal "basisanddescription ofoperation .
Legalbasis:
–Articles 50and56oftheECSCTreaty;
–Bilateral agreements concluded betweentheHighAuthority/Commission
andthegovernments oftheMemberStates.
TheHighAuthority/Commission providesnon–repayableaidtowards:
(i)thepaymentoftideoverallowances toworkers;
(ii)thepaymentofresettlement allowances toworkers;
(iii)thefinancing ofvocational trainingofworkershavingto
changetheiremployment .
Thegrantoftheaidisconditional uponpaymentbytheStateconcerned
ofaspecialcontribution ofnotlessthantheamountofthataid,
unlessanexception isauthorized bytheCouncil,actingbya
two-thirds majority .
2.Typeandbreakdown ofexpenditure
Earmarking offundsintendedtosubsidize,bymeansofa5Vf°
reimbursement ,expenditure incurred bythegovernments withinthe
scopeoftheagreements signed.

-28-
Thebreakdown bysectorandbycountryof"theexpenditure estimates
madeby"thegovernments ,"takingintoaccountthe"budgetary necessity
ofdelayinguntil1978thecontracting ofcertaincommitments
(1)belonging tothe1977financial year,isasfollows :
mEUA
Country Coal Ironandsteel,
iron–oreminesTotalpercountry
Germany 6 3 9
Belgium 2 .6.5 8.5
Prance 9-5 122,5 32
Italy | 5
Luxembourg 2 2
Netherlands 3 3
UnitedKingdom T7. 5 22
Totalperindustry .34,5 47 0 81,5
>
1
Thesocialrepercussions ofthepresentsituation remaindifficult
topredictanditistobenotedthattheforwardfiguresare
highlyunreliable .
3.Explanation
Thecoalindustry'sforeseeable expenditure isdownon1977*mainly
asaresultoftheprogress madeinrationalizing theindustryin
GermanyandPrance'thoughthefallinpigironproduction hasalso
ledtotheclosingofanumberofcokeplants .-Ontheotherhand,
foreseeable expenditure intheironandsteelindustryisrisingowing
tothegradualrationali zationandrestructuration oftheindustry .The
reduction inemployment intheironandsteelindustryisestimated at
severaltensofthousands ofworkers.
Thecasesconcerned arechieflyapplications fromnationalised coalindustries
whicharegenerally submitted onlyattheendoftheyear.

-29-
CHAPTER B3-AID TORESEARCH
1.Legal "basis anddescription ofthe operation
Legal basis :Articles 50and -55oftheECSC Treaty .
\
TheHigh Authority /Commission grants non–repayable aidtofinance technical
andeconomic research into theproduction andincreased use ofcoal and
steel andoccupational .safety inthecoal andsteel industries ,
2.Type andbreakdown ofexpenditure
Earmarking oftheamounts intended forpart subsidies which take theform
oftherepayment ofaproportion oftheactual costs ofresearch projects
approved bytheHigh Authority /Commission inaccordance with theprocedures
provided forintheTreaty ;these cover ,inparticular ,theconsultation
oftheECSC Consultative Committee and the receipt ofthe Council 'sassent .
Inmost cases ,theaidgranted amounts to6ofooftheestimated andjustified
costs .
Theapplications canbebroken down asfollows :
mEUA
Heading Sector Aid requested
Β3.1 Steel 40.5
Β3.2 Coal 32.2
Β3.3 Social and medical 9.8
TOTAL 82.5

3.Explanation
Steel research .
_/
Th9general orientation ofECSC research inthe steel sector forthe .sent
decade isoutlined inthe "General Objectives forSteel 1975-1980 "and
indicates thedirect link "between theprogramme and themedium-term
technological requirements within theCommunity 'sindustry .Inassessing
thespecific resources needed andthepriorities toheallocated forths
collaborative effort ,consideration must "begiven tothefollowing
developments which arehaving profound consequences for theECSC :
–thesteel industry oftheCommunity remains indepression with reduced
demand causing capacity utilization tofall tobelow 65$ofproduction
potential ;intheresulting economic andfinancial climate ,considerable
pressures arebeing exerted onthefunds available from within theindustry
forresearch ;
–therising cost ofrawmaterials and ,particularly ,ofenergy ishaving
obvious repercussions onproduction costs while theindustry 'sheavy
dependence onexternal sources ofsupply raises also theproblem of
availability ;
–theestablishment ofsteel manufacturing industries intheore-rich and
oil–rich countries ofthedeveloping world will have important consequences
oninternational trade andonthesharing oftheworld market .
Onecertain outcome from thepresent situation isthat internationa.1 competition
will become increasingly severe anditwill bevital fortheEuropean iron
andsteel industry tosuccessfully meet this challenge inachanging pattern
ofworld trade .Anessential requirement will betomaintain the Ut.-,tadvanced
standards cftechnology inallaspects ofsteel production andproceasing and
toensure that ourtechnical expertise isreflected inthequality and
sophistication andtheprice ofoursteel products .Thiswill onlybeachieved ,
however ,ifthenecessary research programmes areundertaken sothat they form
part ofanintegrated andcoherent strategy aimed atimproving thecompetitivity
oftheCommunity 'sindustry .

-31-
Tomeetcurrentrequirements withintheCommunity ,prioritywillbegivento
thefollowing areasofresearchintheallocation ofresources for1978s
(i)Process–orientedresearch
s
-processtechnology (optimization and.automation ofproduction processes
toimproveefficiency andreducecosts;development ofalternative
processing routes)
–energyutilization (conservation andincreasedflexibility intheuse
ofdifferent formsofenergy)
-rollingmilltechnology andqualityassessment ofmillproducts
(improvedmilloperation ,quantitative evaluation ofsurfaceand
internalqualityofsteelproducts).
(ii)Product-related research
–serviceproperties ofsteel(properties ofweldedjoints,formability
andmagneticproperties ofsheetmaterial)
–utilization ofsteel(application ofsteelin"building andbridge
construction )
-basicresearch (togeneratethenecessary scientific understanding
forthedevelopment ofsteelswithimprovedproperties suchas
strength,toughness andhightemperature deformation resistance ).

-22-
Coalresearch
Th.ecoalresoaroh.requirements areclose?LyalliedtotheCommunity sener^
policyobjectives jparticula,rly"theobjectiveofmaintaining' theproduction lev.
at250mteeperyearupto1935®
Oneineanstoachievingtheseproductivity andproduction targetsistointer*;-*y
research.Thequantified researchtargetspublished "bytheCommission on
30January1975(OJHoC22)specified thegrantofannualaidtotalling
from15'to20mSUA,topromoteresearchprojectsintheextraction and
upgradingofcoal;:theseprojectsformpartofthemedium-term coalresearch
aidprogramme (1975to1980)published on2.5May1974(OJHoC60)andsupplemented
"bytheCommunication published on30December1974(OJNoC160).
Inviewofthepresentenergycrisisandtheparticular difficulties facingthe
coalaridsteelindustries ,itisvitalthatresearcheffortsbeconcentrated
inthoseareasspecifically referredto"below,whichconsidercoalasboth
asourceofenergyandasarawmaterialintheproduction ofmetallurgical coke.
Attention shouldbedevotedtotheareaof"Coal-face working"anditsallied
areas,i.e.,"Automation andminingproblems"(firedamp,mineclimate,strata
pressure )andthisisthefirstareatowhichresearcheffortshouldbedirected.
Inviewoftheinadequate cokingcoalreservesintheGommunity andthehigh
pricethereof,research mustalsocentreonimproving outputandcapacity
fromtraditional cokingplantstorendercokemoreeconomic andondeveloping
alternatives 5suchasformedcoke,whichwillhavehelpfulresultsforthe
metallurgical industry .
Finally,undertheenergypolicyaimingatmakingEuropelessdependent on
importsofpetroleum products ,aidmustbegiventocertainfundamental scientific
research projectsinthefieldofcoalgasification andliquefaction ixiorder
toimproveexisting andknownprocesses anddetermine whicharemostproiit.ble.

-33-
Theapplications whichhavealreadybeensubmitted ,ornotified concern
thefollowing research headings .:
Underground v –preparatory work
–firedamp ,mineclimate andstratapressure
–winning andworking
–généralservices underground
–remotecontrol andautomation
upgrading –coking
–coalpreparation
Conversion intohydrocarbons –gasification
–coalliquefactionUpgrading

-34-
)
Socialresearch
Theheading "Socialresearch "coversresearch designed ,"toimproveworking
conditions ,"thesafetyandhealthofworkersandtheprotection ofworker's
healthintheECSCindustries .
During1977 "thedemandforresearchinthesefieldshasnotabated,which
isproofenoughofthepractical usefulness ofthisformofintervention .
Theyear1977sawthelaunching oftwomulti-annual research programmes ,
namely:
–"Chronicrespiratory diseases"(Thirdprogramme )
–"Minesafety".
Thesetwoprogrammes arepartofaseriesofmeasures topromotesafetyat
theworkplace andimprovetheprevention andtreatment ofoccupational
diseases ;thesemeasures haveoperated continuously since1955»when
theoriginaldecisions onsocialresearch weretaken "bytheECSCHighAuthority ,
Thenewprogramme on"Minesafety"effectively gotunderwayin1977withthe
granting ofsubstantial aidto15researchprojects .Anumberofthese
correspond totheresearchproposals putforward "bytheMinesSafetyand
HealthCommission .
Thefightagainstpneumoconiosis isstillthemajorproblemfacingthe
miningindustryin1977•laspiteoftheprogress madeinprevention and
treatment whichhasreducedthelikelihood ofthedisease andcheckedits
progression tothestageofinvalidity ,considerable effortsarestill
required .
Theaimistoguarantee minersanormalworkinglifeandthusfacilitate
therecruitment ofmanpowertosustainthebasicoutputlevelplannedfor
theCommunity .Theproblemsofreduoingatmospheric dustaretheprincipal
concernofthe"FourthHealthinMinesProgramme "proposedtotheCommission
in1977forimplementation in1978.

-35-
Tothis ,must "beaddedtheresearch projectsrelating totheimprovement of
mineclimate ,measures againstnoxiousemissions ofnitrousvapoursand
thereduction ofnoiseinunderground workings *
Underthe"Ergonomics andretraining programme ",workiscontinuing in
relationtoworkercomfort,job-matching andthesearchfora"betterbalance
between man,machineandtheenvironment .Thesignificant researchaid
plannedfor1978reflectstheindustry *sconcerntoimproveworkingconditions
byergonomic methods,especially inworkshop designandproduction techniques .
Lastly,thesteelindustry hasactively continued toseekwaysofreducing
thepollutionitgenerates andofattenuating emissions attheworkplace.
Themajorfive–yearresearch programme decidedbytheCommission in1974
willfinishin1978.Thedistinguishing featurehasbeenitsgreater
emphasis thaninearlierprogrammes onthetreatment oftheproblemof
industrial nuisances ..Apartfromatmospheric pollution ,theprogramme
hasinvestigated theproblemsofwaterpollution (chieflyincokeovens),
wastetreatment orrecycling andnoisefromsurefurnaces .
Anewprogramme istobedevisedin1978whichwilltakeaccountofthe
foreseeable development insteelproduction techniques .
Theprojectstobefinancedin1978chieflyconcernthefollowing fields:
(i)minesafety;
(ii)pollution controlinthesteelindustry :
(iii)industrial healthinmines:
(iv)chronicrespiratory diseases;
(v)ergonomics andretraining .

CHAPTER B4-AIDIB"THEFORMOP.INTEREST RELIEF
1.Legal "basisariddescription ofoperation
Legalbasis:Articles54(investment )and56(reconversion )ofthe
ECSCTreaty,andDecisionsoftheHighAuthority/Commission .
TheECSCmayuseitsownfundstoofferreducedinterestratesforcertain
typesofloan.The»reliefiscalculated inHJAonthe"basisofcriteria
set"bytheCommission .Calculations areatpresent "basedoninterest
reliefof3%over5years.
2.Typeand "breakdown ofrequirements
Provision foroffsetting partoftheinterest dueonloansdisbursed by
theECSC,inaccordance withthecontracts drawnupbetweentheCommission
andthebeneficiaries .
Thedetailsofrequests received areasfollows :
Title SectorAids
requested
Β4-1
Β4.2Investment
Redevelopment3
50
35
TOTAL 85
3.Exrplanation
Investment
Intheinvestment field,thechiefaimofloansatreducedinterestrates
isthestructural improvement andrationalization oftheECSCindustries .
Thecriteriaforgrantingreliefareasfollows:
(i)Environment :reliefonlyforexceptionally expensiveinvestment on
existingplantsandinvestment ofinnovatory character
(OJNoC146of25November1974):

-37-
(ii)Researchandtrainingcentres,andtheelimination of"bottlenecks :
reliefinthelattersectorhas"beenlimitedtoinvestment intended
toremedytheshortageofcokingcoal(OJJfoC73of18June1970);
(iii)Restructuring :reliefmayhegrantedforthoseinvestments that
areofgreatestinterestforrestructuring andre-establishing theLong-term
competitiveness oftheCommunity'sironandsteelindustry ^
(OJNoC174of22July1977).TheCommission attachesspecial
importance tothiscategoryofintervention initsironandsteel
policy(seepages14to16above).
Redevelopment
Reconversion loansgrantedatreducedinterestrateshelpmaintain
employment inregionshitbythedeclineorcessationofactivityin
industries coveredbytheECSCTreaty.TheCommission grantsthese
loanstofirmswhicheitherabsorbredundant workersfromthecoal
industryortheironandsteelindustryormaintainthelevelof
employmentinthesetwoindustriesintheregionsconcerned byestablishing
economically soundactivities .Thefirmsconcernedobtainreduced
interestratesiftheyundertaketocreatenewjobsintheseregionsand
giveprioritytoformeremployeesoftheECSCindustries asregards
recruitment •
Requestsforthistypeofaidarestillontheincrease ,mainlybecause
ofthestructural problemsoftheironandsteelindustry.Restructuring
canonlyproceedonasociallyacceptablebasisifstepsaretakentoprovide
continuing employmentfortheemployeesdirectlyaffected (seealsopages18
and19above).

-38-
Thecriteria andprocedures forgranting interest relief onreconversion
Joans ware published inQJBoC1?8of27July 1977 .These loans canbe
wade tofirms directly ,orindirectly through .financial intermediaries
intheform ofglobal loans .Reconversion loans mayalso begranted for
investment inservices orintheestablishment ofindustrial estates and
advance factories ;these donot,however ,enjcy interest relief .The
Commission attaches special importance toreconversion activities inits
iron andsteel policy .
CHAPTER B5-AIDBASED OffARTICLE 95OF -THEECSG .TREATY (COKING .COAL
AIIDCOKE FORTHEIRON ANDSTEEL INDUSTRY )
1.Lep;al basis anddescription ofoperation
Legal basis :
(i)Article 95oftheECSC Treaty ;
(ii)High Authority /Commission Decision 73/287/ECSC of15July 1973
(OJHoL259of15September 1973 ),aslast amended by
Decision 1613/77/ECSC of15July 1977 (OJNoL160of20July 1977).
TheECSC contributes toaspecial fund ,administered bytheCommission ,
forsubsidizing intra-Community sale ofCommunity coking coke intended
fortheiron andsteel industry .Under Decision 73/287/ECSC of
15July 1973 thefund isfinanced bytheCommunity ,theMember States
andtheiron and steel industry .
2.Type ofbreakdown ofrequirements
Provision foralump-sum contribution tothefund ,estimated at6mMJA .
Thesubsidies due aredetermined inrelation tothetonnages delivered
andaidmaybegranted fornomore than 15000000 tperannum .

-39-
3.Explanation
Theaimofthespecialsystem'ofaidtocokingooalandookesetup
pursuanttoDecision73/287/ECSCof15July1973istohelpmaintain
production ofblast-furnace coalintendedfortheCommunity'sironand
steelindustry andj-tlsotoenablecoalandcoketobesoldatprices
reflecting worldmarketprices.
TheCommission feelsthatcertainproduction capacities shouldbe
maintained inthissector,aswellastherequisite labourforceto
wor&themasefficiently aspossible ,andthatitistherefore appropriate
tohaveanaidsystemtakingaccountofthefactthatthequestionof
Community cokingcoalproduction concernsalltheMemberStates,
particularly sinceonlycokingcoalisthesubjectofsignificant
intra-Community trade.
Requirements notincludedinthebudget--loansforfinancingsubsidized housing
'Inaddition totherequirements tobefinanced bygrantsfromtheyear's
resources,accountshouldbetakenoftheECSCsocialhousingsubsidy scheme,
financed'belowtheline'^whichhasbeeninoperationsince1956.Forecasts
forthisprogramme areincluded inthisaid£-memoire tocomplete thepicture
ofoverall ECSCinterventions provided toParliament andtheConsultative
Committee .Foreaseofunderstanding ,thepresentation followsthesame
"analytical formatasfortherequirements alreadydescribed .
*
••Legalbasisanddescription ofoperation
Legalbasis:Article54andDecisionsoftheHighAuthority/Commission
assigningtothehousingprogrammes thefundsfromthe"specialreserve"
constituted byinterest oninvestments andloansfromownfunds.
ECSCintervention takestheformofreducedinterestloans,andhelps
toeasethecostoffinancing housingbycombining thefundsmade,available
bytheCommunity withresources providednationally . ..

?ype and breakdown ofexpenditure
Grant oflong-term lf0interest rate loans totheresponsible national
bodies .
Thesaoond phase oftheeighth subsidised housing building programme
(1975~78 )«covering 1977 and1973s envisages asumof30mEUAspread
over thefinancial 2ears 1977 and depending onfunds available .,
Allocations tothevarious interested parties inthenine countries wore
decided by-theCommission after alldueprior consultation on29July 1977 .
3.Explanation
Themain reason forproposing tosetaside 30mEUAforthesecond phase
(1977-78 )ascor:;pared with the25mEUAforphase one (1975-76 )isthe
increase inconstruction costs .Moreover ,therequirements putforward
continue tcbefar inexcess ofthe amount ofaid available .
This scheme isintended tosubsidize thefollowing projects ;
" (i)housing forlabour employed inthenewcoastal steelworks ;
(ii)housing linked with industrial restrueturation inthe
traditional steel centres andinthose coal fields whore »
production istobeincreased ;
(iii)specific solutions forimmigrant workers ;
(iv)housing tobemodernized aspart ofthemove torenovate
urban centres insteel andmining districts .
Thescheme isthus both ,inthe interest ofworkers ,since it
alleviates theeffects ofprice increases andhigh interest rates ,and "also
ofbenefit totneindustry since itindirectly facilitates restrueturation ^
Thenumber ofdwellings subsidized bymeans ofECSC loans asat-1January 1977
was 147 327 . - ■■

-41-
3»Summaryofrequirements putforward
Totalrequirements putforwardtherefore amountto273mEUAtobefinanced
undertheoperational budget,plus15mEUAintheformofbelow-the-line
loansatlowinterestratesforthe"buildingofsubsidized housing *The
figuresforrequirements putforwardaresummarized inAnnexEf'inthe
"''applications "column.
B°POSSIBLE RESOURCES
1.Resources forthefinancial .year
CHAPTER R1-CUR5EHTRESOURCES
1.Legalbasisanddescription
Legalbasis?
–Articles 49and50oftheECSCTreaty
–Decisions Ho2/52and3/52of23December1952.
Theleviesarecalculated onthebasisofafixedscalepertonnewhichis
decidedeachfinancialyeartrytheHighAuthority/Commission andpublished
intheOfficial Journal .
Resources frominterestoninvestments andloansfromnon-borrowed fundswillbe
finallydetermined whentheCommission closestheaccountsat31December1977.
Pursuanttothedecisionitadoptedon30April1975,theCommission willenter
theinterestavailable fromthepreviousfinancialyearinthebudgetofthe
current -year.
2.IVpsandbreakdotra
Levyresources represent claimsidentified inrespectofleviesdueon
production inthe1978financial -yearandcalculated onthebasisofthe
production declarations madebyundertakings .
Interestvi.ilbecredited inaccordance withtheallocations decided bythe
Commission khes;ItJ.oSestheaccounts on31December
AbresMovn c.f -sgtr^eur-ees V-sedonthalatestestiu&Us ren

-42-
TitleR1.1:Levy
Tonnagesubjecttothelew,&ndyield,fromarateoflevyof._P.-P_!jg
ProductProduction serving
asbasisforcalculating
thelevyOnelevy
"point"
million tonnes inmEUAj
Brown–coal "bricruettes and
semi-coke 4.0 0.01
Hardcoal–alltypes
Coal–totali 208.4 0.08
0.81
Pigironotherthanthat j
requiredforthemanufacture
ofingots 5-5 0.07
Steeliningots 133 1.94
JFinishedproducts95-8 0.63
Steel-total 2.64
GRAHDTOTAL 3-45
Othertitles
Titles Heading mEUA
Β1.2
R1.3
H1.4Interest oninvestments andloans
fromnon–borrowed funds
Finesandlatepaymentsurcharges
Miscellaneous revenue18
tokenentry
tokenentry

-43-
3oExplanati on•
The latest estimates oftheaverage values which serve asthebasis for
calculating thelevies show that thefigures forthe1978 financial
year which relate t\0thereference period from 1July 1976 to30June 1977
will besome $fchigher inthecase ofcoal andatleast 10^forsteely •as
compared tothose for 1977 •
Itshould benoted that there isanappreciable margin ofuncertainty
inthese figures ;this isbecause thedepartments concerned arenotyet
inpossession ofalltherequisite data andforecasting production
inpresent economic conditions isvery uncertain .
Thefigure for interest revenue isbased onanadvance estimate of
theresources which theCommission will beinaposition toallocate when
itcloses theaccounts on31December 1977 •
CHAPTER E2-CAUCELLAT TONS OFCOMMEPMESTS WHICH WILL PROBABLY KDT BE
1.Legal basis and description
Theallocation offunds earmarked onthestrength ofCommission aid
decisions must bemade firm within areasonable period oftime bythecontracting
oflegal commitments .
TheCommission 'sinternal rules onthedrawing-up andimplementation of
theECSC operational budget therefore provide that intheexceptional event
ofundue delay atthis stage ,theearmarked funds will becancelled .
They also provide that once allparties have discharged their obligations
under alegal contract ,anyremaining unused allocation will likewise "be
cancelled ,-.

-44-
Theamountsthusreleased "becomeavailable againasresources forthe
currentfinancial year.
2.Natureand "breakdown
Saveintheexceptional caseswheredecisions ontheearmarking offunds
arenotfollowed upwithinareasonable periodoftimebylegalcommitments ,
anycancellation ofearmarked fundsnormallyindicates completedischarge
ofthecontract ,agreedwiththecontracting partyconcerned .
Theestimate of2mEUAshowninthischapterrelates,inessence,to
cancellations ofallocations forresettlement aid.Onlyatokenentrywould
beneededfortheotheritemswhichmightbeinvolved (cancellations of
balancesremaining inrespectofcontracts whichhavebeenperformed in
full,delayedlegalcommitments ,etc.).
3.Explanation
Itisdifficult toestimate therateofcancellation inrespectof
resettlement programmes ,asitdependsonthenegotiations tobeheld
withthegovernments concerned .Theestimated figureof2mEUAisbased
onanaverageratefor1978inviewoftheexceptional effortsallowedforin
1977 "toreleasefundsamounting to6mEUA.
CHAPTER R3-REVALUATION OPASSETS AM)LIABILITIES
Thischapter,showinga"token entry'^is providedtorecordtheneteffectof
changesinratesofconversion duringthefinancial year.
CHAPTER R4-UNUSED RESOURCES FROMTHEFINANCIAL YEAR1977
Thischapter,showingV'tokenentry",providesforanybalanceremaining fromthe
fundsofthepreviousfinancial yeartobeenteredasresources forthe
currentfinancial year.

-45
"^P.veri"gofrequirements notincludedIn;thebudget
Provisionhasbeenmadeforthefollowingresourcestocoverrequirements
fortheconstruction of,subsidized housing:
\
-repayments onearlierloans(7.5mSUA);
-apartofthespecialreserveandoftheformerECSCpensionfund
(7-5mEUA).
^P^ary°fpossibleresources for1978
Theestimatesofreso-urcesotherthanleviesamountto20mEUA
(interestavailable-18mEUA;cancellations-2mEUA).Astheyield
fromaleyyrateof0*01%hasbeenestimatedat3,45mEUA,theyieldobtained
fromleviescanbeestimatedat100mEUAonthebasisofthecurrentrate
of0„29fo.-Theestimatedresourcesaresummarized inAnnexEinthesection
on"resources ".

III .DRAFT OFERATIOKAL BUDGET FOR 1978
Before examining theproblems arising inrespect of1973 ,itshould be
remembered that thesituation in1977 isalready complicated bythe
increased requirements established bytheCommission for restructuring
andredevelopment intheiron andsteel industry which already led ,in
April 1977 ,toanadditional allocation offunds totheChapter "interest
su .bsid .ies".Tofinance this priority measure ,theCommission wasforced to
reduce theresearch allocation from 42mEUAto38.4 mSUAandtoprovide for
theentry ontherevenue side ofthecontingency reserve constituted inthe
balance sheet asat31December 1976 .Iftheresearch appropriations were
again reduced inthis way ,itmight jeopardize theCommunity 'scapacity to
take themeasures necessary inthis sector toensure the competitivity of
Community products .

A»IRREDUCIBLE REQUIREMENTS
TheCommission isfacedbyevenmoredifficult conditions thannormalin
drawingupitsproposals onthedraftECSCoperational budgetfor1978*
TheCommission wishestostressfromtheveryoutsetthat,giventheextent
oftheproblems facingthecoalandsteelindustry ,itisdetermined to
propose andpursueapolicymatching tiptotheextentofthedifficulties ;
atatimewhenthesteelindustryispassingthroughaseriouscrisis,it
considers thattheECSCmustincreaseitsaidsandnotresignitselfto
reducing them-Itiswith ,thisinmindthattheCommission willassessthe
variousfinancing requirements todetermine theminimum amount «Itisaware
oftheseriousproblemsthiswillraiseontherevenueside.
Theseexceptional difficulties areaccompanied bythenormaldifficulties
linkedwiththeuncertainty ofproposals ,whichisonlytobeexpected ineconomic
conditions susceptible tounforeseen changesintheshortterm.
Theinformation setoutaboveandsummarized inAnnexEshowsthattotal
requirements forthefinancial year1978amountto273mEUA,comparedwith
163.3mEUAforthefinancial year1977*Tocoveralltherequirements
totalling 273mEUA,therateoflevywouldhavetobefixedat0.73/o«Thebudget's
totalshouldtherefore beadjustedtotherequirements deemedirreducible .
IntheCommission 'sview,itisnecessary toexcludethepossibility of
fixingirreducible requirements atsuchalowlevelasinlastyear's
initialbudgetasthisamountwouldmeanthatonly44%ofapplications couldbe
metcomparedwith68%in1977 78%in1976®

Itshouldalso"asrecognized thatthesharpriseinapplications submitted
byGovernments forresettlement aidfaecestheEGSGwithadifficult
financing probleminviewofthemandatory natureoftheexpenditure .
Inthelightofpastexperience andprovided thatthenegotiations which
willhaveto"beconducted withtheMemberStatestothisendareconcluded
satisfactorily ,theCommission considers thatitwillbeabletolimit
therequirements whichhavetobefinanced in1978toafigureof60mEUA
deferring thecontraction ofcommitments fortheremaining applications until
later*Suchacarry-over ofapplications tofutureyearscouldberegarded
asanexpedient offering onlyshort-term advantages ,butitappearspossible at
presentthatthelevelofapplications forresettlement aidmaydropsomewhat
from1979onwards.TheCommission hastherefore decidedtotakeabasicfigure
of60mEUAasaworkingassumption forthe1978resettlement aidallocation .
Theotherheadings ofexpenditure whichareofamandatory naturerelatetoaidsto
cokingcoalinpursuance ofDecision 73/287ECSC,estimated at6mEUA,and
administrative expenditure ,fixedat5mEUA.
Thisleavesforconsideration thetwoChapters involving discretionary expenditure
aidtoresearch andinterest subsidies .
Asregardsresearch ,theCommission considers anallocation of41mEUA,
distributed assetoutinAnnexE,tobetheabsolute minimuminviewof
thefactthatthesemeasures aremeanttoensurethecompetitivity of
Community products.Inrealterms,thisfigureisstill10%lowerthanthe
initialallocation forthecurrentfinancial year.

-49-
Asnotedabove(seepages15and18),interest subsidies whichstartedoffas
anoperation ofsecondary importance whosescopedepended ontheamount
j •*
offinanceavailable,nowplayakeyDartinECSC
industrial policybecauseofthevitallyimportant character oftherestructur­
ingandredevelopment operations provednecessary ,notablyinordertore­
establish thecompetitivityoftheCommunity steelindustry .Alreadywell
inadvanceofthepublication oftheoverallplantobedrawnupaspartof
therevision ofthegeneralobjectives forsteel,agrowing numberof
applications arereaching theCommission .Theminimumfigurewhichthe
Commission deemsitnecessary toenterinthedraftbudgetforthisitemis
40mEUA.Althoughthisallocation willonlyallowunderhalftheapplications
forsubsidies tobegranted,itshouldenabletheCommission toplayanactive
roleincollaboration withalltheinterested parties,inpromoting there­
structuring andredevelopment operations whichtheCommission considers to
beindispensable andurgentintheinterests oftheindustry .
Thepreceding analysis showsthatthefinancing needsfor1978judgedas
irreducible bytheCommission andsetoutinthesecondcolumnofAnnex
cometoatotalof152mEUA.

BoCOVERING OFREQUIREMENTS
Tofinancetherequirements discussed aboveandamounting inallto152mEUA
itwouldbenecessary inaddition totheuseofexpected non-levy incomeof...
20mEUAtomakeasubstantial increase inthelevyrate.
Inviewofthefinancial situation oftheindustries whichpaythelevies,
theCommission considers thateverything shouldhedonetoavoidimposing
thisadditional burdenonECSCundertakings ..
Ontheotherhand,forthereasonssetoutabove",theCommission doesnot
considerthatitisinaposition torecommend apolicywhichconsists merely
ofadjusting thevolumeofrequirements tothelevelofresources normally
available (120mEUAatthecurrentrateof0.29%)•Abudgetofthistype
justwouldnotmatchuptotheproblems needingtobetackled.
Inthesecircumstances theCommission haslookedforotherpossibilities for
balancing thebudgetwithoutresorting toanincreaseinthelevyrate.
o
TneCommission hasaccordingly studiedthepossibility offinding anewsource
ofincomeabletomakeuptheshortfall of32mEUA.Thiscouldbedoneby
allocating totheECSCsomeorallofthecustomsduties onECSCproducts .
Prom1January 1971onwards,undertheDecision of21April1970relatingto
theCommunities' ownresources ,providedforthedutiesfromthecommoncustomstariff
tobe-allocated totheCommunities asdirectCommunity revenue.
Thisdoesnotextendtocustomsdutiesoncoalandsteelproducts governed bythe
ECSCTreaty,asthecommoncustomstariffadoptedinaccordance withArticle 9
oftheEECTreatydoesnotcovertheproducts comingundertheECSCTreaty.
ThecustomsdutiesonECSCproducts havebeenstandardized asaresult v
ofdecisions takeninaccordance withArticle72oftheTreatyofParis,but
theystillaccruetotheindividual MemberStateswhichcollecttheduescon­
cernedwhentherelevant products areimported intotheirterritory .

Ί
TneComraission willtherefore propose totheCouncil thatthenecessary
procedures besetinoperation forallocating theECSCcustoms duties to
theECSCoperational budget assoonaspossible .Inthemeantime ,andin
anticipation ofadecision along these lines ,theCommission considers
thattheexceptional financial requirements oftheECSCsector in1978
andthemajor economic andsocial interest attached topursuing an
effective Community policy fortherestructuring andredevelopment of
theironandsteel sector andtheresettlement ofredundant workers fully
justify an.adhocdecision bytheMember States tomake aspecial
9rant of32mEUAt0theECSGoperational budget toassist theimplement­
ation ofthefinancial aidpolicies envisaged inthedraft budget .
Thetransfer of32mEUA .could bemadeinaccordance withArticle 49(2 )of
theECSCTreaty and classified' asadonation bytheMember States tothe
Community .
TheCommission willkeepParliament informed ofthedevelopment ofCouncil
discussions onthissubject .TheCommission hopes thatthespecial Council
meeting onthesteel industry 'sproblems attheendofNovember willbeable
topronounce favourably ontheprinciple ofwhat isproposed .
TheCommission wishes tomake itclear that ,iftheproposal meets with
insurmountable difficulties ,itwillnotbeabletoaccept adrop inthe
volume oftheECSCoperational budget toalevel corresponding toalevy
rateof0,29$ ,since thisamount doesnotrepresent anadequate financial
basis forarational andeffective policy .Inthiscase ,theCommission
vouM immediately submit anewdraft budget replacing Annex Eandinvolving
anincrease inthelevy tobalance thebudget .

-52-
C.DRAFTBUDGET
Tnedraftbudgetdrawnup"bytheCommission forthefinancial year1977and
amounting to152mEUAiscontained inAnnexE.

ANNEXA
IMPLEMENTATION OPTHEECSCOPERATIONAL BUDGET FOR1976
' (inmEUA)
REQUIREMENTSBUDGET
•FIGURESFINAL
FIGURESRESOURCESBUDGET 1!
FIGURES iFINAL
FIGURAS
OPERATIONS TOBEFINANCED FROMCURRENT
RESOURCES (NON-REPAYABLE ).CURRENT RESOURCESI
i
i
I1»Administrative expenditure 18 18 1.Levyyield I93 9?.-61
2.Aidtoresettlement
(Art.56)
3.Aidtoresearch (Art.55)
Îa)steelb)coal
(c)social I25
A3.5•
(17,4
(17
(925.12
42.67
(17.AC
(17.27
(8.-2.Interest oninvestments andonloans
fromnon-borrowed funds
3.Miscellaneous14
token
entry14,~
0,37
4.Aidtocokingcoal
(Art.95)
5.Interest subsidies
(a)Article54-Investment6
14
(66.-
10.01
(3.354.Cancellation ofcommitments which
'willnotnowbeimplemented
5«Unusedresources carriedoverfrom
thefinancial year19753.6 4,32
I
(b)Article56–Redevelopment (8 (6*.66!
!
!
6.AidtoFriulivictims
(allocation toreserves)
7.Deficitfrom1975financial year6
1,2î6.-
1.26.Drawingofallocation forbudgetary
contingenciesj
3 !
8.Surplusallocated tothereserves
andfunds • 5.5
113.6 114.50 113.6
*114,50
OPERATIONS FINANCED WITHLOANSFROM
NON–BORROWED FUNDSORIGIN OFNON-BORROWED FUNDSI
j
i
9.Socialhousing 12.5 12,5
7.Repayments onloansforsocial
housing
8.Specialreserveandpartofthe
former ECSCPension Fund6,4
6.16Α
6,1

AWNEXB
FORECAST IMPLEMENTATION OPTHEECSCOPERATIONAL BUDGET FOR1977
(inmEUA)
REQUIREMENTS ". 1
. If ESTIMATES I
initial Iamended I
OPÉRATIONS TOB£FINANCED fROM
CUKRENT-RESOURCES (NONREPAYABLE )
1„Adnimstrat iveexpenditure . 18
2.Aidtoresettlement (Article 56)25 25
3.Aidtoresearch (Article 55) 42 38Λ
3.1stfrel
3.2coal
3.3social(16.5|
<16.5
<9j
■(125
(162
(97
4.Interest subsidie » 15 21.8
4.1Investment (Article 54)
4.2Redevelopment (Article 56)(6
(9(85
(133
5.Aidtocokingcoalandmetall­
urgical coke(Article 95) 6* 6
6.Aidto.Friulivictims
(allocation toreserves )«
5
ψ
«5„'
=iJ
*
• »111
OPERATIONS FINANCED WITHLOANSFROM
NON-DOHROWCO FUNDS
7.Socialhousing '^
>■■„*•
• •-" *%15 15RESOURCES
RESOURCES FORTHEFINANCIAL YEAR
1.Current resources
1.1levyyieldat0,29%?
1.2Interest oninvestments and
onloansfromnon-borrowed
funds
1.3Finesandsurcharges for
delayed pay~vnt
1.4Miscellaneous
2.Cancellation ofcoramitaents
whichwillprobably notbe
implemented
3.Revaluation ofassetsand
liabilities
4.Unusedresources carried
overfromthe1976finan­
cialyear
5.Drawingonthecontingency
reserve
ORIGIN OFNON-BORROWED FUNDS
6.Repayments onloansfor
socialhousing
7.Spécialreserve andpart
oftheformertCSCpension
FUN£>ESTIMATES
initial
89
16
tckenentry
tokenentrytokenentry
tôkençntry
tokenentry
(token
(entry
111
8amended
81.5
16
tokenentry
J--
*
0.7
10
114.2

imorsa-tion relatina ;tolevios
Thelatestavallaole information onproduction andthelevyyieldfor
thecurrentfinancial yearisgiven'belows
LevyyieldfortheperiodfromJanuarytoJune1977'
Produeta
_1'■1''1 aemm
Production
serving aoa
basisforthe
calculation of
thelo\y
inml11iontonnebi_υιιυιιι·ι······ι··ι·»ιι ■■■■■■« ■>.
1/5^7yielö j
i
IfLJEESA ^.
Brovn–oo&l trlcraettas aniesroi–ooke 1.8–j
0.1
Ailtype*ofhardooal 102.8 10.
I Totalforcoal 10.6
Pigironotherthanthatrequired
fortheoanufacture ofingots 2.3 0.8
Steelingots 62.8 24.1
{Piniehed produots 48.7 8.5
%
Totalforateei 33.4
GRA5DTOTAL 44.0
1Information available 24October1977.

BREAKDOWN OFLOANS,^RTHEFIRSTSIXMONTHSOF1977
(inmEUA)
SectorFédéral
itepublic
.lermanyBelgium "Denmark 'FranceItalyNether­
landsLuxembourgUnited
Kingdom Irelandi
I
Community|
I
I..Coalindustry.42,68 41,10 26,421
ί
110a20}
>
Ironand.steelindustry
ιi0,60
I
l15.6147,58 |" I
I
I146,49i
i
i210,29 I
:
pi.Industrialredevelopment
ItI
'0.54 0.77 0-22i
-!t
1.53\
ί
IV,*Socialhousing 5.39 0,45i
0,72I
!1,65 0,07I0.56
II8.83 {
i
i
i
GRANDTOTAL"'"-1
"" L48.07 0,60 0.45 57,97 50.00 0,07 0,56*
173,13 330,85 ί
I
ablesupplementstheinformation givenonpages19-20oftheaide-memoire .

PROVISIONAL SITUATION OPTHEECSCAT30JUNE1977ANNEX D
ASSETS
I.Disbursed loans 3744*12
II.Cashandbanks - 364,98
ni.Shortandmedium-term investments 52.16
IV.Portfolio 78,06
V.Realestate 0,33
VI.Recoverable issuingcosts 60.11
VII.Miscellaneous 92,66
■III.Accrued income 94,79.(inmEUA)„'
LIABILITIES
Suspense account :
Enterprises' liabilities
underguárante e4487,21
18.40I.A.Borrowings
B..Outstanding redemption premiums
II.Reserves
A.Guarantee fund"
B.Otherfunds
III.Provisions
A.Financial assistance
•B.Otherprovisions
IV.Formerpensionfund
V.Miscellaneous
VI.Accruedliabilities -i.
VII.Unallocated balance
Suspense account :
ECSC'sliabilities
underguarantees3^671*13
1.44
160.-
122,-
.210.70
76,69
39.03
84^69
114,37
7,06
4487,21
18,40

(inmEUA)
I REQUIRlOI-IEirrS IAPPLICATIONS PROPOSALS KESCURCES PROPOSALS
OPERATIONS TOBEFINANCED PROM
RESOURCES FORTHEFINANCIAL YEAR
(NON-RSPAYABLE )
1.Administrative expenditure
2.Aidtoresettlement
(Article56)
3.Aidtoresearch (Article55)
3.1steel
3.2coal
3.3social-^5
81/
82,5
5
(40.5
(32,2
(9,85
■60'
41
(16
(16
(9RESOURCES FORTHEFINANCIAL
YEAR
1.Current resources
1.1Levyyieldat0.29?-
(©.0155=3.45mEUA)
1.2Interest oninvestments
andonloansfromnon-
borrowed funds
1.3Finesandlatepayment
,surcharges
,1.4Miscellaneous100.
18
»
tokenentry
tokenen',rv
4.tInterest subsidies
4.1Investment (Article54)
4.2Redevelopment (Article56)85
(50
(3540
(15
*252.Cancellation of
commitments whichwill
probably notbe
implemented2
I
5.i
I
Aidtocokingcoaland
metallurgical coke(Article95)
t6t
i
63.
4.
5.Revaluation ofassetsard
liabilities
Unusedresources carried
overfromthe1976
financial year
Specialcontribution inresoect ofECSCcustomsdutiestokenentry
'tokenentry
I'52•i_]
/273 1 152. I1 1 : I
IOPERATIONS FINANCED WITHLOANS
16.Socialhousing15 15:ORIGIN OFNOH^BORROWED FUNDS
6.Repayments onloansfor
socialhousing 7.5 I
;7.Specialreserveandpart
offormer ECSCPension
Fund7.5I
I