ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)349
Vol.1980/0126

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)349 final
V.•^Brussels.24thJune1980
A
ι
MEMORANDUM
onthefinancialaidawardedbythe
MemberStatestothecoalindustryin
1979
andontheadditionalfinancialaidawardedbythe
MemberStatestothecoalindustryin
1978
(presentedbytheCommissiontotheCouncil)
C0M(80)349final

TABLEOFCONTENTS
Page
PARTONE
Memorandum onthefinancialaidawardedbytheMemberStates
tothecoalindustryin1979
ChapterI
Introduction 1/1
ChapterII•.,•<
Thesituation onthecommonmarketincoalin1979andthe 7
trendsinfinancialaidtothecoalindustry 1/3
1.Thesituation onthecommonmarketincoal 1/3
2.Thefinancialsituationofthecoalindustryinthe 1/5
Community
3.Thetrendsinaidsin1979 1/6
4.Compatibility ofthefinancialmeasuresplannedfor19791/9
withtheproperfunctioning ofthetcommonmarket
ChapterIII
Conclusions . 1/14
Annex
Surveyoffinancialaidawardedin1979andexamination of
theircompatibility withtheprovisionsofDecision528/76
I.Aidsnotrelatedtocurrentproduction A/1
II.Financialaidsrelatingtocurrent -production A/7
*
Tables
PARTTWO
Additional financialaidawardedtotheFrenchand
UnitedKingdomcoalindustriesin1978
/
Introduction II/1
I.IncreaseinaidinitiallyawardedtotheFrenchcoalII/2
miningindustryin1978
II.IncreaseinaidinitiallyawardedtotheUnitedKingdom
coalminingindustryin1978 II/6
III.Conclusions 11/10
Statistical Annex

PART ONE
MEMORANDUM
on
thefinancial aid awarded "bythe Member States to
the coal industry in1979

CHAPTER I
INTRODUCTION -
1.This memorandum examines thefinancial aidawarded tothecoal industry
bytheMember States in1979 from thepoint ofview ofitscompatibility
with theprovisions ofCommission Decision No,528/76/ECSC (1)andwith the
proper functioning ofthecommon market .
2.The 1979 memorandum follows the same pattern asthat oftheprevious year .
Themain section isdevoted tothe economic andfinancial problems of
undertakings andtothecompetitive situation onthecoal market .The
compatibility ofaids tocurrent production with theproper working of
-thecommon market pursuant toArticle 3(1)ofDecision No.528/76is
examined onthe basis ofthese data .The annex describes individual measures
andtheir compatibility with theother provisions ofDecision No.528/76.
3.Under Article 2ofDecision No.528/76,theCommission received information
regarding aidmeasures for1978 from theGovernments ofthefollowing Member
States :
-theGerman Government ,
inaletter dated 13December 1978
-the French Government .
inletters dated 2July 1979 i
9February 1980
κ
-the British Government .
inletters dated 19March 1979
16January 1980
-theNetherlands Government , 11
inaletter dated 23August 1979
-theLuxembourg Government ,
inaletter dated 1August 1979
(1)Official Journal oftheEuropean Communities No.L63of11March 1976 p.1.

1/2
–the Dam ahGovernment .
inaleeter dated 17January 1979
-the Belgian Government ,
inaletter dated 31May 1979
Where the Commission ,obtained knowledge from thereports ofMember States
Governments ofeconomic facts which are covered bythe obligation ofpro­
fessional secrecy assetoutinArticle 47ofthe ECSC Treaty ,these were
not included inthis memorandum .,
Incalculating the amount ofaidpertonne for 1978,thefollowing output
wasused asabasis (million oftonnes ,t=t):
Germany 93«3
Prance 18.6
United Kingdom 120.6
iBelgium 6.1
TOTAL 238.6
For converting the aid amounts expressed innational currencies into
European units ofaccount ,the following exchange rates were used :
(annual average for 1979 )
1EUA .=2.51 DM
=5.83 FF
-0.70 £
=40»00 Bfrs
There has been adelay insubmitting this Memorandum tothe Council .
Inthe United Kingdom anew Government came inin1979 andthis delayed .
negotiations onaids forthe1979/80coal year with the NCB.TheFrench
Government wasunable tosubmit itsfigures before February 1980 asthe
original aids had tobeincreased and the budget therefore had tobe
revised ,upwards .

1/3
CHAPTER II
The situation onthe common market for coal in1979 and "thetrends
infinancial aid tothe coal industry
The situation onthe common market incoal
This memorandum deals only with themost significant details ofcoal market
developments ,specifically thos which areofimportance forthegranting of
aids andthecompetitive situation .Thefigures given refer partly to
estimates andpartly those final results already available for 1979 »
In1979*total demand forcoal increased byabout 7.4$ over the1978 level -
anincrease ofroughly 20million t.There have been certain changes in
thedemand structure ,thecall forpower station andcoking coal inparticular
increasing byapproximately 8.9$ anddemand fordomestic coal dropping
slightly .Consumption ofindustrial coal ,has stabilized .Changes indemand
arerunning almost inparallel inallCommunity countries andarerelated
tothedifficulties experienced inthesteel industry (coking coal )andthe
rising overall consumption ofelectricity ,tomeet which there islikely to
beincreased generation ofelectricity using steam coal .
The rise indemand was met from various sources .
Prom the final statistics already available itisclear that coal imports
from non-member countries were 11million thigher in1979 than in1978 .
Demand forCommunity coal also picked up,with theresult that production
rose by0.5million tand itwaspossible torundown coal andcoke stocks
by14*3 million t.

1/4
Inspite ofthe improvement inthe volume ofsales ,Community coal
production in1979 w&sunder competitive pressure from imported coal
although ,asaresult ofOPEC price rises ,competitive pressure from oil
was reduced .Community coal producers will beunable tostand upto
this pressure ontheir own.This means that aids will benecessary to
strengthen the capacity ofCommunity coal tocompete and tomaintain Community
coal production .This isintheinterests ofthe Community 'slong-term plans
for maintaining levels ofCommunity production .
Although some Community coal producers raised their prices in1979 "tokeep
upwith the cost trend ,there isnomistaking thefact that itisvery
difficult toobtain acceptance for such increases inthe market .Earnings
per tonne rose very slightly with all that this implies for the financial
situation ofthemining companies (faiure tocover costs ).Forallthe
general difficulties toobtaining acceptance for increases inthe prices
ofCommunity coal ,two exceptions must benoted ;
-The competitivity ofBritish coal isbetter than that ofother producers ;
-Under the provisions ofthe 3rdelectricity -from-coal law,Community coal
can besold toGerman power stations atcost-covering prices ,anarrangement
from which the German coal industry profits most .The additional costs
borne bythe power stations are offset from afund maintained byalevy on
electricity consumption .
However ,itistobenoted that prices onthe Community steam coal market are
increasingly determined bythe supply situation onthe world market .

1/5
Polish and South African Bteam coal isbeing offered atprides of£35 "to
^40/tcifEurope .These prices arefarbelow thecorresponding prices for
heating oil ornatural gas.The Community coal *industry isfaced with the
problem ofaligning its ownprices onthe lowprices for imported steam
coal .
Prices onthe coking coal market started moving slightly .The Commission has
found that anaverage price of^64.50/"twasbeing paid fordeliveries under
long-term contracts from the USA andAustralia ,inthefirst half of1979
and f>66.00inthesecond half .Short-term contract quantities arebeing put
onthe market ataprice of
Prices for domestic coal are also under some pressure .The supply of
Community anthracite isonthe decrease ,because itisnolonger profitable
tomine it,while imported anthracite -primarily from the Soviet Unibn -
isoffered socheap ,particularly inthe Benelux states ,that itisable to
compete with light fuel oil andnatural gas.
Generally speaking itamy besaid that in1979 the Community coal market
expanded relatively firmly asfarasvolume isconcerned andprices rose v
gradually .Asregards Community coal ,itshould benoted that not only
prices but also changes incurrency parities exert adecisive influence on
νthe competitive situation ,since theprices ofthis imported energy carrier
arecalculated in USdollars .
2.The financial situation ofthe coal industry inthe Community
Inview ofthe competitive situation onthe Community coal market described
above ,the mining undertakings were unable in1979 "toincrease earnings per
tonne inline with the increase inproduction costs .These continued torise
in1979 but the increase inindividual countries varied with individual
conditions .Itwas due mainly tothe discrepancy between therise inoutput
per manshift and inwages and tothe overall effects ofinflation .The
average increase inoutput permanshift forthe Community wasamere 1.2$.
Average wage increases for 1979 -however much they varied from country to
country -were well above the increase inoutput per manshift and,in
•/

1/6
view ofthehigh labour -cost-intensity ofcoal mining (60jaofthetotal
production costs arelabout costs ),theincrease inlabour costs certainly
affected overall output .Itisnot yet possible togive exact figures for
production costs andreturns for 1979 asclosed accounts for the mines are
notyet available forallquarters .Ingeneral ,though ,thefinancial
position ofthe undertakings isworse than in1979 *Asaresult there was a
further increase inaids .in1979 *
In1978 "thereturns from coal sales only partially covered production costs .
Table A
Production costs^'andreturns ofCommunity coal mines in1978
(EUA/tt=t)
Production Costs Returns Difference
Germany '61 ,- 55,- -6,-
Belgium 84,- 44,- -40,-
Prance 62,- 38,- -24,-Britain (2) 40,- 34,- -6,-
(1)Full costs ,including capital service anddepreciations ;rounded-off
figures 1
(2)Including opencast mining
The trends infinancial aids bythe Member States tothe coal industry in1979
Aids granted under Articles 4and 5ofDecision No.528/76arecompatible
with the common market ,provided they donot exceed certain limits .Aids under
Article 4arefor social security benefits and those tinder Article 5 "tohelp
cover inherited liabilities .The relevant explanations aretobefound in .
the Annex onpages A1toA7.Prom these itcan beseen that permissible aid
limits were not exceeded .

1/7
Thefigures areinTable 1ofthe Annex ,they show that ,incomparison with
1978 ,there were some increases .Asregards social measures within the
meaning ofArticle 4»theincreases (+6,6% )aremainly theresult ofthe
constantly deteriorating ratio between thetotal number ofmen employed and
those receiving unemployment benefits .Therise inthe cost ofcovering
/
inherited liabilities within themeaning ofArticle 5(+4«"W i0partly
theresult offurther pit closures because ofrationalization andpartly of
increased prices andcosts insome categories ofinherited liabilities (costs
forclosures ,water supply anddisposal ofwaste water ,pensions ,concession­
arycoal ,etc.).
Aids tocurrent production are those direct and indirect measures which
aredefined inArticles 7to12ofDecision No.528/76andwhich provide the
criteria injudging the proper functioning ofthe common market .Details of
«these measures andwhat they cost areavailable inthe Annex (page A7onward
orTable 2). -
Table Bbelow provides anoverall ,view ofthe trends inaids envisaged in
1979 vis-i-vis 1978 .
Table B
Total sums Amounts per tonne
- · million EUA EUA
1977 1978 1977 1978 .
Germany 907.3 1023.5 10.07 10.98
Belgium 24O.6 296.8 36.46 48.65
Prance 478.I 477.3 24.39 25.66
Britain 189.7 279.2 1.56 2.31
Community 1815.7 2076*8 7.63 8.70
ofthetotal sums the following were
allocated tos
–direct measures 32.4 34.9 O.14 O.15
-aids tocoking coal 599.0 735.8 2.52 3.08
-indirect measures -, 1184.3 1306.1 4.98 5.47
breakdown :Art.7(investments ) 318.2 337.6 1.34 1.41
Art.8(Personnel ) 45.2 48.8 0.19 0.20
Art.9(Stocks ) 56.2 19.1 0.24 0.08
Art.10(Strategic reserves ) 42.2 48.4 0.18 0.20
Art.11(Power station coal ) 39.5 13.7 O.17 0.06
Art.12(Loss coverage ) 683.O 838.5 2.87 3.51

1/8
The figures inthe preceding table show that the aids per tonne ofoutput
in1979 will change asfollows vis-&-vis 1978 *
Absolute increase
Germany + +0.91 EUA/t
Belgium +33.4$ +12.19 EUA/t
France +5.2# +1.27 EUA/t
Britain +48.1# +0.75 EUA/t
Higher aids are needed inall countries although the extent ofthe increases
differs from one country tothe next .Relative tothe absolute increase
per tonne ,aid increases are lowest inthe United Kingdom andhighest
inBelgium .
x V
Generally speaking ,the average increase inaid per tonne inthe Community
in1979 (+14$ a-3compared with 1978 )wasconsiderably lower than in1978
(+75$ascompared wit.h 1977 )*This means that there hasbeen some
improvement inspite of"the increase inaids in1979 *
Itshould bepointed outatthis point that while the sume of10.98EUA per
tonne for Germany inthis international comparison following the provisions
ofDecision No,528/76iscorrect statistically andaccording tothe
definition ,ithas only alimited validity for asubstantial comparison
with the other Community countries .This isdue tothethird electricity -
from-coal law,which lays down that German power stations must buy steam
coal from thecoal industry atbreak-even prices .Theadditional cost
incurred bytheelectricity companies byusing coal instead ofoilifoffset
byincreasing electricity prices .In 1979 *this offset levy will amount
tosome 2.4thousand million DM(10.25EDApertonne ofcoal output ).
This sumisnot included inthelist ofaids ,since itisnot astate aid.
•/

1/9
Theinformation contained inChapter IIofthe Annex (seepage A7)shows that
thefinancial measures planned bythe Member States for 1979 are compatible
with thecriteria setoutinArticles 7"to12ofDecision No.528/76.
However ,itisnecessary that allaids beexamined forcompatibility with
theproper functioning ofthe common market assetoutinArticle 3(1)
ofDecision No.528/76.
/
Compatibility ofthe financial measures planned for 1979 with the proper
functioning ofthe common market
a)General points ofview
a.1)The amounts ofaidper tonne for 1979 cited inTable Bonpage 7show
that theBritish amount isvery small andthat there isalarge gap
particularly between itand those granted byBelgium and Prance ;the
German amount lies roughly inthe middle .This difference inamount is
not toberegarded asindicating adistortion ofthe competition bewteen
coal producers .Essentially ,the common market incoal consists of
national markets which are hardly subject tocompetition from several
Community producers .There are only afew so-called contested areas
inwhich several producers offer their products atthe same time ,but
thequantities ofcoal sold inthese areas arerelatively small ,
accounting foronly about 2$ofoutput .Alignment byCommunity producers
ontheprices ofother Community producers applies only to1.4million
tonnes (0.2$ ofCommunity output )in1978.Inview ofthis ,itmay
beassumed that competition will not bedisrupted by1979 because ofthe
differences inthe amount ofaid granted .
a.2)Supplies ofcoal andcoke tothe Community in1979 were atalltimes
assured .Pit closures envisaged in1979 aspart ofrationalisation

1/10
measures had noeffect onsupplies .The large pitheat stocks and
current production allowed therising demand tobemet.Itistherefore
clear that aids did not jeopardize supplies in1979 *
■. \ v
3)According toresults sofaravailable ,there wasaslight drop in
intrar-Community coal trading .Thetotal for 1979 was so.ne 17.7 million t.
Itisclear that supplies from the Federal Republic ofGermany in
particular are decreasing ;this isbecause new markets for .German coal
have been found inGermany andthis has ledtohigher earnings than
would have been possible from exports toother Community countries .
Table C
Coal deliveries toother Community countries 1000t
Germany Belgium France Britain Total
1978 15957 299 393 2214 18793
1979 14550 245 485 2410 17690
Most deliveries ofGerman coal toother Community countries (15.6%
ofproduction )aredeliveries ofcoking coal .Because ofthespecific
use towhich this coal isput thereal competitive problems are not
between Community producers ,but inrelation tocoking coal imported
into the Community from non-member states .
Belgian coal traded within the Community (4$ofproduction )issold in
France and Germany for steam-raising and for domestic heating .The
amounts are small and have tocompete with coal imported from non-Community
countries .

1/11
French deliveries toother Community countries (2,6% ofproduction )
chiefly involve steam coal supplied tothe south German market byIhe
Lorraine coalfield .
United Kingdom deliveries toother Community countries (2$ofproduction )
involve steam coal sold mainly tothe Federal Republic ofGermany ,Belgium ,
Franc eiand the Netherlands .Inthelight ofoverall British production ,
these exports arerelatively small and,inview ofthe size ofpithead
stocks ,itmight well beasked whythis relatively cheap coal hasnot
become more firmly established onthe continental market .This isdue
tothe competition from coal imported from non-Community countries :prices
forSouth African ,Australian and USsteam coal ,cifEurope ,were /rf35-40A »
Power stations inother Community countries would demand that British
prices bebrought down tothat level ,but theBritish producer isnot
always prepared todothis .Contracts orsales are therefore relatively
rare .
Generally speaking ,the conclusion can bedrawn that aid measures have
little influence onintrar-Community trade .
.4)Output wasfurther rationalized in1979 *Twounprofitable pits inthe
French coalfields ,Nord/Pas -de-Calais andCentre-Midi ,were closed ,the
pace ofthe closures being soarranged that regional andsocial problems
will beavoided ;the same applies totheclosure ofapitinBelgium 's
Southern coalfield .For reasons ofrationalization ,five pits were closed
inBritain and two inGermany .
In1979 »"the Government oftheFederal Republic isgranting investment aids
tofacilitate modernization ofpits .
The aim ofallaids and closures istorationalize coal production in
the Community ,remove theburden ofunprofitable installations ,andmaintain
thecompetitivity ofthose pits selected toensure future supplies .

1/12
b)Particular aspects affecting thetrends incoal prices
b.1)Changes incoal prices inanumber ofselected Community coalfields can
beseen from the following tablet
Table D
Trend incoal list prices
(innational currency pertonne )
I ■i \ \
Steam Coal Coking Coal
Dates 1.1.1979 15.1.1980 1.1.1979 15.1.1980
Germany
RAG ·
Saarbergwerke
AachenDM
DM
DM175,-
193–185,-
204,-179,-
194.50
188,-187,-
204,-
197,-
Belgium Bfrs 2450,- 285O,- 2500,- 2650,- '
Prance *
Nord/Pas-de –Calais
Lorraine Nuts 2
Nuts 5FF
PP
PP294,-
259,-395,-
381,-340,-
321,-340,-
385,-
Britain
North Yorkshire
Nuts 2
Nuts 5£
£-27.60
25.3034.30
32.0029.80 35.40
Asthetable shows ,coed prices rose almost everywhere between the
beginning of1979 saidthebeginning of1980 butitdidnot always
prove possible togain acceptance for these prices inthe market .
I
b.2)Asprovided forbythethird electricity -from-coal law,German steam
coal prices are linked totheproduction costs ofthe mining industry ;
i.e. ,prices arerelatively high .There are noindirect aids topower
stations .

1/13
Theprices forGerman coking coal given inthetable arelisted prices .
Theprices actually charged aresligned onprices forimported coking coal
sothat there are noindirect aids toindustrial consumers .
b.3 )There were noproblems in1979 asregards British prices forsteam or
coking coal ;prices aresuch astobeunlikely tolead toindirect aids
toindustrial consumers.' .
b.4)French steam coal issold atprices aligned onacomposite price formed from
therelatively lowprice forimported non-Community steam coal andtheprice
offuel oil .This does nothave theeffect ofcausing indirect aids to
industrial coal consumers .Thesame applies tocoking coal prices fwhich
are ~j;hesame asthose forimported coking coal .
b.5)Asprovided forbyBelgium 'senergy price pool ,theprices ofBelgian steam
coal are based onthose ofrival fuels .This does not have the effect of
indirect aids toindustrial coal consumers .Nordotheprices ofcoking
*
coal constitute indirect aids totheBelgian steel industry .
)Conclusions about theproper functioning ofthecommon market
Onthebasis ofthepreceding facts ,theCommission hassome totheconclusion
that -there wasnodisruption oftheproper functioning ofthecommon market in1979
byeither steam coal orcoking coal prices .

'1/14
CHAPTER III
>
Conclusions
The Commission examined the compatibility ofthe measures envisaged for *
1979 with theprovisions ofDecision No.528/76ineach Member State
and came tothe conclusion that the aids for current production envisaged
bythe Member States in1979 are compatible with the provisions of
Decision No.528/76.
Although there has been awelcome upturn involume turnover ,the general
situation asregards competition inthe Community coal market has deteriorated
bringing with itadeterioration inthefinancial results ofCommunity mining
*
undertakings .Rising production costs ,theeffect ofchanges inexchange
rates and other factors meant higher operating losses than inthe previous
year .Theresult isthat the amount ofaidtobegranted for current
production inthe Community hasrisen from 1815*7 million EUA (1978 )to
2076.8 million EUA in 1979 »"the Community average ofaidper tonne of
production rose from 7*63 to8.70 EUA.Thedifferences between the aid
sums granted bythe coal-producing Member States have increased .
Finally ,the Commission emphasises that theaids ofthe Member States
serve not only tosolve national problems ofenergy supply and employment
but also help toguarantee thestabilization ofcoal production with the
intention offarthering the security ofthe Community ^energy supplies *

ANNEX
Survey offinancial aid awarded bythe Member States
tothe coal industry in.1979
Examination ofthe compatibility ofthe measures envisaged
with theprovisions ofDecision No.528/76
Tables

A/1
Aids not related tocurrent production
These aids arerelated tosocial measures andthe covering ofinherited
liabilities deriving from earlier pitclosures .
A. Description and assessment offinancial measures inthe social security
field
Article 4ofDecision No.'528/76/ECSC states that contributions "byMember
States tothefinancing ofsocial security benefits shall beconsidered
compatible with thecommon market ,provided that ,forundertakings inthe
coal mining industry ,they bring theratio between theburden perminer in
employment andthebenefits perperson inreceipt ofbenefit into line
with thecorresponding ratio inother sectors .
Thefollowing section isconcerned solely with theamount offinancial
aidgiven inthesocial sector and ,where appropriate ,with cases where
thelimits setoutinArticle 4ofDecision No.528/76/ECSC have been
exceeded .
A.1)GERMANY .FRANCE .BELGIUM
InGermany DM7868million areenvisaged in1979 "tocover thedeficit in
thesurviving dependents pension scheme ofthemining industry asawhole ,
some 80%-DM6294million -ofwhich goes totheCoal industry .
Information provided bytheFrench Government shows that state aidtothe
French coal industry inthe social sector in1979 will amount to
FF7007.6 million .Thefollowing table gives details :

A/2
SourceExpenditure
(inmillion FF)Purpose
State I643.0 Disability and old-age pensions insurance
Regular contribution amounting to22%of
wages subject tocontribution ,andadditional
State adjustment
General
system389.0 Disability and old-age pensions insurance
Regular contribution tocover part of
"exceptional expenditure "(amount fixed bylaw)
General
system1060.0 Insurance against industrial accidents and
occupational diseases
Regular repayment ofinherited liabilities
General
system.739.0 Sickness insurance
Treatment benefits
State 687.6 Disability and old-age pensions insurance
"Exceptional expenditure "incoal mining industry
within the meaning ofArticle 4ofDecision No.
528/76
General
system489.O Supplementary scheme :worker ,sretirement pensions
TOTAL 7007.6
-"i
State contribution tothe financing ofsocial security benefits for the
Belgian mining industry may beestimated atBfrs .25142.6 million for
1979 .The following table gives details
SourceAmount ofState
subsidiesPurpose
State 10961.0 (1) Old-age pension and insurance ofsurviving
dependants s
Regulax statutory contribution
State 1956.8 Old-age pension and insurance ofsurviving
dependants
Contribution tocover the deficit _ .
State 4513.4 Disability pensions insurance
Disability pensions
State 7711.4 Occupational diseåses
505& ofthe expenditure arising from miner's
pneumoconiosis
TOTAL 25142.6
(1)Commission estimate

Calculations bytheCommission reveal that Germany ,Prance andBelgium
have notexceeded thelimits setinArticle 4ofDecision No.528/76:
-InGermany theundertakings *actual welfare expenditure isDM299million
(8.0$ )higher than thenormal expenditure defined inArticle 4*
#
-InPrance theState subsidy toCharbonnages dePrance (PP687.6 million )
causes actual social expenditure andnormal expenditure tocoincide .
-InBelgium theundertakings *actual social expenditure isBfrs 290.6
million higher than thenormal expenditure defined inArticle 4*/
A.2)BRITAIN -
Apart from thegeneral social security system -into which the coal
industry isintegrated -almost allbranches ofindustry inBritain have
insurance systems oftheir ownfrom which pensions surepaid toretired
workers .TheBritish coal industry also has such asupplementary system
intheform ofapensions fund ,into which theBritish Government will
pay£36.5 million inthe1979/80coal marketing year .However ,this
sum isonly tobalance outtheratio between working andretired miners ,
•sothat thelimits set -outinArticle 4ofDecision No.528/76arenot .
exceeded .
A.3)Summary offinancial measures inthesocial security sector .
AsTable 1intheAnnex reveals ,State intervention inthesocial security
sector ofthecoal industry in1979 will be6.6$ higher than in1978 and ,
will total 4390.4 million EUA .*
/•

A/4
B.Description and assessment ofthefinancial measures tocover inherited
liabilities
Pursuant toArticle 5ofDecision 528/76measures taken toyMember States
toassist theundertakings tocover thecosts arising from pit closures
which are notrelated tocurrent production andthesale ofcoal shall
becompatible with the common market provided that the amounts involved
insuch measures donot exceed the amount ofsuch costs ,i.e. theinherited
liabilities .Sums inexcess thereof represent direct aidtocurrent production
andaretoberegarded asaids pursuant toArticle 7"to12ofDecision
No.528/76.
B.1)GERMANY '
For 1979 "theFederal Government has planned the following measures to
cover inherited liabilities :
/
million DM
-closure premium , ■ ■ 105.0
-dispensation from obligations arising under
theEqualization ofBurdens Law 12.0
Sub-total 117.0
-aid forwater-control costs 105.0
-aid tocover expenditure resulting from
contraction 87.0
-aid tocover inherited liabilities 159*0
-aid tocover Ruhrkohle AG*s closure
.write-offs ' 48.0
TOTAL 510.0
(=203.2 million EUA)
All the above liabilities represent liabilities inherited bythe under­
takings ,i.e. those resulting from the closure ofpits ,inprevious
years ,andtherefore donotrelated tocurrent production .
These measures are aids already granted inprevious years .
Through theAktionsgemeinschaft Deutscher Steinkohlenbergbau (Action
Association ofGerman Coal Mining Undertakings ),theFederal Government
pays theundertakings concerned apremium ofDM20/tofannual capacity
forallclosures undertaken in1978 .These closures are made to
rationalize production .The aid covers only asmall fraction ofthe
actual costs that have tobeborne bythe undertakings inconnection
with the closures .
i

A/5
Thepublic authorities will payDM12.0 million totheequalization of
burdens fund asaidtocover theequalization ofburdens payments ,and
thereby release closed pits .from their obligation .The level ofthe aid
isequivalent tothe costs charged .
The sumofDM105.0 million forwater control costs will bepaid tothe
Ruhr mining industry specifically tocover thefinancial burden arising
from closures since 31December ^^66.Asaresult ofpitclosures ,the
Ruhr coal mining industry bore aheavy burden intheform ofconstantly -
rising contributions towater control associations and thePumpgemenschaft
Ruhr (Ruhr pumping association ).Theaiddoes notexceed theactual
additional costs tobeborne bytheundertakings .
ThesumofDM81.0 million tocover expenditure resulting from contraction
isadditional totheclosure premiums which (asmentioned above )donot
cover actual costs ofclosures .This measure concerns liabilities arising
out ofpit closures since 31December 1972 .The aid isspread over a
period offive -years intheform ofaflat-rate payment ofDM30forevery
tonne bywhich annual capacity isreduced ,butnotexceeding actual costs
borne bytheundertakings asaresult ofthe closures .
The sum ofDM159«0 million isaid forcovering inherited liabilities
concerns those inherited liabilities arising from pit closures before
1January 1973«The relevant German laws ensure that the aid does not
exceed actual liabilities borne byundertakings .
ThesumofDM48.0million asaidtowards closure write-off 3only concerns
Ruhrkohle AG.Inprevious years theRuhrkohle AGhas had toinclude
depreciation forassets lost asaresult ofpitclosures which could not ,
however ,beincluded intheprofit andloss account since this would have
bankrupted theundertaking .Aspecial item wastherefore introduced on
theassets side ofthebalance andon31December 1978 ,this amounted to
DM205 million .

A/6
Because ofthe unfavourable economic situation ,the undertaking isnot
inaposition towrite offthis special item inannual instalments ;the
public authorities have therefore agreed totake over DM480million of
thetotal sum-payable in10equal annual instalments ofDM48million .
Allthe above measures clearly meet therequirements ofArticle 50)°f
,Decision No.528/76.Thetotal suminvolved inthese measures in1979
is203.2 million EUA and isincluded inTable 1ofthe Annex .
B.2 )FRANCE .UNITED KINGDOM .BELGIUM
For 1979 ,the French Government hasallocated asumofFF459*1 million
(70.6 million EUA)asaidtowards covering inherited liabilities borne by
Charbonnages deFrance .This sum inaidis.intended tocover the following
inherited liabilities :
million FF
-contribution toearly retirement pensions 24.9
-premiums ,lump sums forretrained personnel ,
cost ofhousing forthose retiring early 68.7
-financial liabilities inrespect ofthose
retiring early 351.3
-concessionary allowances for those retiring
early 14.2
TOTAL 459.1
(78.8 million EUA)
Broken down between coalfields asfollows :
Nord/Pas -de-Calais 303.4
Lorraine 40.4
Centre-Midi 115.3
The Commission estimates that theactual liabilities borne bythe
Charbonnages deFrance arethe same asthe sumgranted inaid.
In1979 ,theBritish Government plans tointroduce thefollowing measures
under Article 5ofDecision No.528/76:
million £
-redundancy payments tominers affected bypit
closures 8.2
-early retirement payments 4.6
-aidinrespect ofconcessionary coal forpensioners - 5.8
TOTAL ïfe
(26.6 million EUA)

A/7
The United Kingdom measures cover inherited liabilities arising out ofpit
closures ;these liabilities are the same asthe sum granted inaid.
For 1979 ,theBelgian Government hassetaside asumofBfrs 30million
(0.7million EUA),asaidtowards covering inherited liabilities inits
Southern coalfield .Ofthis sum Bfrs 16million istobeused tocover
damage from subsidence and Bfrs 14million tocover water control charges .
The Commission estimates that the costs arising out ofsubsidence and water
control following pit closures for which undertakings inthe Southern coal­
field are responsible ,are the same asthe sum granted inaid.
Tosummarize ,itcan besaid that Belgian ,French and United Kingdom
measures listed above meet thecriteria ofArticle 5(0 °fDecision No.
528/76.
B.3 )Summary ofthe measures to .cover inherited liabilities
Ascan beseen from Table 1ofthe Annex ,the planned state aids tocover
inherited liabilities in1979 will total 309million EUA for the Community
asawhole ;anincrease of4*1$ over 1978 .
Financial aid relating tocurrent production
All aids that are not social measures within the meaning ofArticle 4of
Decision No.528/76,oraids tocover inherited liabilities within themeaning
ofArticle 5are aids tocurrent production .
Aid tocurrent production may begranted directly orindirectly toundertakings .

'A/8 . .-
Indirect financial aid tocurrent production inthe coal mining industry
Indirect financial aid covers all measures which Member Governments announce
inaccordance with thefirst ,paragraph ofArticle 2(1)ofDecision No.528/76
butwhich donot come into thecategory ofthedirect measures defined in
Articles 7to12oftheDecision .Indirect measures arereported tothe
Commission under Decision No.528/76andassessed according totheprovisions
oftheECSC Treaty .
Only Germany ,Prance andBelgium have announced indirect measures toaid
current production inthecoal industry for1979 »Thefollowing measures
were taken inprevious years .
A.1 )Description oftheGerman .Belgian andFrench measures
For 1979 "theFederal Government hasprovided for special depreciation •
facilities inrespect ofexpansion and .rationalization measures inthe
underground sector ofthe coal industry .Thesumofthese special
depreciations amounts toDM22.8 million (=9»1million ETJA).The
measure isbased onparagraph 51of "theIncome TaxLawandonparagraph
81oftheIncome TaxRegulation andwill give theGerman coal industry
nocompetitive advantages vis-Sr-visother Community coal producers ,since
thebalance sheets ofGerman coal mining undertakings inanycase show
losses which arepartially reduced bydirect aids .
Theindirect financial measures planned bytheBelgian Government in
1979 involve thefollowing sectors :
million Bfrs
-expenditure onseason tickets orcheap ,
holiday tickets forminers ,pneumoconiosis
sufferers 14.0
-subsidies tothe Miners *National Pensions
Fund tocompensate fornew expenditure on »
i welfare arising from the increase inthe
miners 1annual holiday allowance ,the
introduction ofnew sickness benefits and
longer annual holiday (Articles 32.12 ,32.14
and0104 inthebudget oftheEconomic Affairs
Ministry ) 758.3
TOTAL 722.3
(=19.3 million EUA)

A/9
TheFrench Government plans astate subsidy ofFF38.0 million (=6.5
million EUA)fortheresearch programme ofthe"Centre d*Etudes etde
Recherches desCharbonnages deFrance (CERCHAR )"in1979 *
A.2)Assessment ofindirect financial aidtothecoal industry
TheCommission hasexamined theabove-mentioned measures ,which have
already been inforce for several years anddoes not consider that they
violate theban onsubsidies setoutinArticle 4oftheECSC Treaty .
A.3)Summary ofindirect measures
Table 2of'thestatistical annex gives therelevant figures Tinder A/2.
In1979 ,direct aidtothecoal industry rose to34*9 million EUA
(+7.7$ )ascompared with 32.4 million EUAin1978 .
B. Direct financial aid toCurrent production in .the coal mining industry
B.1 )Federal Republic ofGermany
a)Theextent towhich direct financial aidtocurrent production in
the German coal mining industry iscompatible with the provisions of
Articles 7-12ofDecision No.528/76
TheFederal Government proposes tocontinue in1979 "thedirect aids
already granted in1978 .
t•/••

A/10
it , ^ „
Legal basis
under Doc .
No.528/76MeasuresAmount ofaid
Total V Pertproduction
MDM DΕΠΑ DM EUA
Art.7(1)
Art.7(3)
sub.8.3Investment aid
Promotion ofinnovation746.4
68.0297-5
27.1.8.00
0.733.19
O.29
Art..8 Mineworkers *bonuses 110.0 43.8 1.18 0.47
Art.10 Aid tosecurity .stocks 121.5 48.4 1.30 O.52
TOTAL 1046.1 416.8 11.21 4.47
.\
Inaddition tothe aids mentioned above ,the Federal Government isto
grant acoking coal aidtothevalue ofII 1500million in 1979*an
aidtoproduction pursuant toDecision No.287/73.
1
The investment aid of297*5 million EUAisintended for investment project
"inpits ,coking plants ,briquetting plants andpithead power stations .
In1979 ,total investment inthe German coal industry will come tosome
350million EUA.Investment aidwill represent more than 80%oftotal '
investments .
Inrelation tothe Community 'snewpolicy forcoal ,this 1979 investment
aid,which increased slightly vis-&-vis 1978# istoberegarded as
 
beneficial since itwill promote the long-term stabilization of
'production inthe German coalfields .The aid complies with the pro­
visions ofArticle 7(1)»ofDecision No.528/76.
The »sum of27.1 million EDA topromote innovation isintended toensure
that research results areapplied toproduction asquickly aspossible .
Theaidislower than thecosts borne bytheundertakings andisgranted
"* • • /
inrespect ofindividual projects which ,when completed ,arelikely
toprove their economic worth to:coal mining inthe medium-term .The
purpose and amount ofthis aid show that itiscompatible with Article 7
ofDecision No.528/76.

A/11
/
Mineworkers *bonuses ,amounting to43*8 million EUA,have applied since
1956 .Abonus ofDM5ispaid forevery shift worked underground ,thus
ensuring that thequalified mineworkers required for the German coal
industry toincrease its output stay incoal mining .The measure therefore
meets theprovisions ofArticle 8ofDecision No.528/76.
The sumof48.4 million EUA asaidtowards building uplong-term security
stocks isameasure introduced bythe Federal Government inorder to
increase the long-term security ofenergy supplies .Forthis purpose ,
theNotgemeinschaft Deutscher Steinkohlenbergbau (Emergency Association
ofGerman Coal Mining Undertakings )brought up10million tonnes ofcoal
and coke .The Federal Government covers only part ofthe actual current
cost ofmaintaining these stocks in1979 »bygranting anaid ofDM121.5
million .The aim and sum involved show that the measure meets the
requirements ofArticle 10ofDecision No.528/76.
Theforegoing remarks show that thefinancial measures planned bythe
Federal Government for 1979 infavour ofthe German coal mining industry
comply with theprovisions ofArticles 7»8and 10ofDecision No.528/76.
b)Theextent towhich direct measures infavour ofcurrent production inthe
German coal mining industry are compatible with the proper functioning
ofthe common market
Anassessment ofthe extent towhich German aids axe compatible with the
proper functioning ofthe common market requires consideration ofall
direct andindirect aids forcurrent production in1979 (Article 3(2)
ofDecision No.528/76).
Therelevant figures aregiven inasummary table (seeStatistical Annex ,
Table 2).
••/••

j A/12
I ' •>
i
Bythis method ofcalculation ,the ,total proposed ,aid tinder theGerman
measures amounts to1023.5 million EUA ,i.e. 10.98EUA/t.Incomparison
with 1978 aids pertonne have thus risen by9
7
Asregards thecompatibility ofGerman aids with theproper functioning
ofthecommon market ,reference ismade tothecomments inthemain body
ofthis document (seepage 9onwards ).
B.2)France •
a)Theextent towhich direct financial aidtocurrent production inthe
French coal mining industry iscompatible with the provisions of
Articles 7-12ofDecision No.528/76
TheFrench Government didnotprovide foranynewmeasures in1979 »but
continued with aids instituted inprevious year ;this involves only loss-
covering aid ;
Legal basis
under Decision
No.528/76MeasuresAmount ofaid
Total Per tproduction
MFF MEUA FF EUA
Article 121
(a)Cover forthelosses bythecen­
tral administration ofCharbon­
nages deFrance
(b)Cover forthecoalfields· opei>-
ating losses3I7.O
2478.0 *54.4
414.8I7.O4
130.02.92
»
22.30
-TOTAL 2735.0 469.2 I47.O4 25.22
♦Including aportion ofthecoking coal aid
In'addition intheabove-mentioned aids ,anaidforcoking coal ofFF9*3
million (1.6million EUA)istobegranted in1979 *This figure islow,
since part ofthecoking coal aid iscovered byArticle 12.
Inassessing thefigures given intheabove table ,itmust bepointed out
that ,although theFrench Government continued in1979 "theagreement J
concluded with theCharbonnages deFrance in1978 onthegranting ofa
flat-rate aidofsome 100FF/tce,theaidamount hadtobeincreased
beyond theflat-rate ceiling ,asthelosses sustained bypits increased
beyond theexpected figures . -

A/13
Asregards theassessment oftheaidgranted in1979 within thelimits of
Decision No.528/76,theaidsumofFF2735*00 million isexpected tobe
less than thetotal losses oftheCharbonnages dePrance .Theamount of
theaid istherefore inline with theprovisions ofArticle 12ofthe
Decision .
I
Thefollowing points arerelevant inconnection with aidtotheindividual
coalfields : _
-In1979 »aidtotheNord/Pas -de-Calais andCentre-Midi coalfields will be
calculated insuch awaythat ,asaresult oftheclosure offurther pits r
there will beareduction inproduction ,which will mean that some
2700fewer persons will beemployed inthecoal industry .Theaids will
prevent severe economic and social disruption inareas where there are
notyetadequate opportunities forre-employment .Theaids tothese
coalfields therefore comply with theprovisions ofArticle 12(l )sub­
section 1andArticle 12(2 )oftheDecision .
-The output planning oftheCharbonnages deFrance intheLorraine coalr -
field aims atlong-term stabilization ,since thecoking coal produced
inthis coalfield isimportant forsupplying thesteel industry .The
aidgranted forthis purpose complies with Article 12(1 ),subsection 2
andArticle 12(3 )oftheDecision .
The extent towhich direct aid tocurrent production inthe French coal
mining industry iscompatible with theproper functioning oflhe common
market .
Total direct andindirect aidtocurrent production amounts to477*3 million
EUAfor1979 (=25.66 EUA/t;seeAnnex ,.Table 2).Incomparison with 1978 ,
(24.33 FF/t)this means that theaidwashigher by5$in1979 *
Asregards thecompatibility ofFrench aids with theproper functioning
ofthecommon market (Article 3(1)ofDecision No.528/76,reference^is
made tothecomments inthemain body ofthis document (seep.Il/9).
7

A/14
B.3)Belgium
a)Theextent towhich direct financial aidtocurrent production inthe
Belgian coal mining industry iscompatible with the provisions ofArticles
'7-12ofDecision No.528/76
In1979 ,theBelgian Government intends toprovide investment aid andaid
tocover operating losses . .„
Legal basis
under Decision
No.528/76MeasuresAmount ofaid
Total Pertproduction
MBfrs ΜΕΠΑ Bfrs EUA
Art.7(1) Investment aid 520.9 13.0 85 2.73
Art.12 Aid tocover losses
Coal :Campine
Southern
Sub-total
TOTAL3893.5
1707.197.3
42.7695
341415.95
85.35
5600.6 :M40.0 918 22.95
6121.5 153.O 1003 25.O8
Inaddition tothe above aids ,the Belgian Government intends togrant a
coking coal aid (Decision No.73/287)ofBfrs 4979*0 million (=124.5 million
EllA)forthecurrent production ofthe Campine coalfield .Total direct
ι
Belgian aid amounts toBfrs 11100.5million ;itisdivided between the two
coalfields asfollows :
Campine :Bfrs 9386.5 million =1676,-Bfrs/t
Southern :Bfrs 1714*0 million ■3428,-Bfrs/t
TOTAL sBfrs 11100.5million =1820,-Bfrs/t
Ofthe investment aid sumofBfrs 520.9 million ,514*0 million will goto
the Campine coalfield and6.9million tothe Southern coalfield .Inthe
Campine coalfield ,special investments are envisaged onbehalf ofthe
Eisden colliery (Bfrs 150million )andtheremaining Bfrs 364million will
cover depreciation ,sothat thecoalfield canmaintain the supply ofcoking
coal forthe Belgian steel industry .The investment aidfor the Southern
coalfield will enable ittocariy outthemost essential repairs ,sothat
thetechnical safety ofthepits isnot jeopardized .

A/15
Belgian investment aid istherefore compatible with the provisions of
Article 7(2)ofDecision No.528/76.
Aidtotalling Bfrs 5600.6 million tocover operating losses ispaid tothe
two Belgian coalfields fordifferent reasons .The aid paid tothe Campine
coalfield will almost make upthe difference "between costs and returns .This
almost complete covering of-the difference "between costs and reutrns is
necessary ,because thecoalfield ismeant tosupply the Belgian steel industry
with coking coal and must therefore maintain its output .The purpose and
amount ofaid granted tocover losses inrespect ofthe Campine coalfield
therefore comply with theprovisions ofArticle 12(1),subsection 2,and
Article 12(3 )ofDecision No.528/76.
The Southern coalfield ,however ,receives aid covering only part ofthe
difference between costs and returns .Here the intention istoensure that
only essentials axe maintained and thepits remain viable inthe short-term
only sothat thecoalfield canbeclosed down asplanned within aperiod (by
about 198l)which will ensure that serious economic andsocial disturbances
over the re-employment ofredundant miners are avoided .Onepit inthe
Southern coalfield was closed in 1979 *affecting approximately 63Ominers .
Prom all this itcan beseen that the aid tacover losses inthe Southern
coalfield iscompatible with Article 12(1),subsection 1,andArticle 12(2).
b)Theextent towhcih direct measures infavour ofcurrent production inthe
Belgian coal mining industry are compatible with the proper functioning
ofthe common market
Inthe Belgian coal mining industry ,aids tocurrent production total
296.8 million EUA (=48.65 EUA/t)for1979 (seeAnnex ,Table 2).This is
anincrease of33.4$ pertonne vis-^-vis 1978 .

A/16
Asregards thecompatibility ofBelgian aids tocurrent production with
the proper functioning ofthe common market ,reference ismade tothe
comments inthemain body ofthis document (seep.9onwards ).
B.4)United Kingdom
a)Theextent towhich direct financial aidtocurrent production intheBritish
coal mining industry iscompatible with the provisions ofArticles 7-12
ofDecision No.528/76 ►
Forthecoal marketing year 1979/80,theBritish Government plans the .
following direct aids tocurrent production ; ,
Legal basis
under Decision
No.528/76MeasuresνAmount ofaid
Total Pertproduction
M£ MEUA £ EUA
Art.8 Aid toattract skilled workers 3.5 5.0 0.03 O.O4
Art.9 Aid toproducers· stocks 13.4 19.1 0.11 0.16
Art .11 Aid tosteam coal 9.6 13.7 0.08 0.11
Art .12 Aid tocover losses 160.5* 229.3 1.33 1.90
TOTAL I87.O 267.1 1.55 2.27
♦Including aportion ofthe coking coal aid
Theaidtocoking coal isestimated at£8.5 million (1).
Theaidforattracting andkeeping skilled workers (£5million )isintended
tooffset inpart the NCB'scosts arising from rationalization and the
transfer ofproduction totheir best pits .This results inoutgoings on
removals ,transport ,etc.Theaidiscompatible with Article 8of
Decision No.528/76.
(1)Should this amount beincreased ,aidtocover losses would bereduced
proportionately .

A/17
When assessing theaid tocover costs forproducers' stocks ofcoal and'
coke (£13.4 million ),itmust beremembered that total pitheat stocks
andadditional distributed stocks directly orindirectly financed bythe
producers total about 19million tonnes .Given amonthly production of
some 10.0 million tonnes ,thevolume ofpithead stocks qualifying foraid
under Article 9ofDecision No.528/76is9million tonnes .This means
that theper-tonne grant inaid is£1.5 .Theactual costs ofmaintaining
producers' stocks (including depreciation andinterest )areconsiderably
higher than thesumgranted .Theaidtherefore complies with theprovisions
ofArticle 9ofDecision No.528/76.
Theaidgranted tosteam coal (£.9•6million )isasumfordeliveries of
power station coal toScotland .Prom theinformation provided bythe
British Government ,theamount andpurposes oftheaidgranted canbe
regarded ascompatible with Article 11ofDecision No.528/76.
Theaidgiven tocover losses (£160.5 million )will only partly cover the
losses sustained byNCBpits in1979/80.Theaidisgiven toavoid serious
economic and social disturbances inthose coalfields where there are not
yet adequate re-employment opportunities and tomaintain existing production
capacities soastosafeguard energy supplies .Theaid istherefore
compatible with Article 12oftheDecision .
The extent towhich direct measures infavour ofcurrent production in
the British coal mining industry are compatible with the proper functioning -
ofthe common market
Inthecoal marketing year 1979/80,aidtocurrent production intheUnited
Kingdom will total 279*2 million EUA(=2.31 EUA/t)(seeAnnex ,Table 2).
Incomparison with 1978 ,this means that theaidfor1979 pertonne will
beO.75 EUAhigher (=+48#).

A/18
Asregards the compatibility ofBritish aids tocurrent production with the
proper functioning ofthe common market ,reference ismade tothe comments
inthe main body ofthis document (seep.9onwards ).

Table 1
Aids not relating tocurrent production
(million EUA)
»
Federal Republic
ofGermany
Belgium
Prance
United Kingdom
Total for the
CommunitySocial security measures pursuant toArticle 4
ofDecision No.528/76Aids tocover inherited liabilities pursuant to
Article 5ofDecision No.528/76
Total Infringements of
Art .4(1979 )Total Infringements of
Art.5(1979 )1978 1979 1978 1979
2383.1
600.8
IO79.9
56.1<1>2507.7
628.6
1202.0
52.1^1^- 203.4
0.4
71.3
22.0203.2
0.7
■78.7
26.6 .-
4119.9 1390.4- 297.I 309.2-
(1)TheUnited Kingdom hasanintegrated social security system .Thefigure shown inthis column covers only
thespecial miners *pension fund ,which exists side-by-side with thegeneral social security system .

Aid forcurrent production in1979 Table 2
A.Aids under Decision No.529/76
1.Infringement ofArticle 4
ofArticle 5
Total
per tonne ofproductionUnitFederal Repu -
blic ofGermanyPrance -United
KingdomBelgium Community
million EUA
million EUA- - - " - -
million EUA
EUA- -
– _
2.Direct measures
per tonne ofproductionmillion EUA
EUA9.1
0.106.5
0.35 ,–19.3
3.1634.9
0.15
3·Indirect measures
Article 7;
Article 8
Article 9
Article 10
Article 11
'Article 12
Total
per tonne ofproductionmillion EUA
million EUA
million EUA
million EUA
million EUA
million EUA324.6
43.8
48.4
-i
469.25.0
19.1
Í3.7
229.3I3.O
140.0337.6
48.8
19.1
13.7
838.5
million EUA
EUA416.8
4.48469.2
25.22267.1
2.21I53.O
25.O81306.1
5.47
B.Coking coal aid (Decision
No.73/287
per tonne ofproductionmillion EUA
EUA597.6
6.411.6
0.0912.1
0.10124.5
20.41735.8
3.08
C.Total (A+B)
Totals million EUA 1023.5 477.3 279.2 296.8 2076.8
per tonne ofproduction EUA . 10.98 (2) 25.66 2.31 48.65 8.70
(1)Planned figures
(2)Excluding aidunder the3rdelactricity -from-coal law

PART TU0
Additional financial aid awarded tothe French and
United Kingdom coal industries in1978

II/I
INTRODUCTION
1.Inthe Memorandum onthe financial aid awarded bythe Member States tothe
Coal Industry in1978 (COM(78 )367final of28July 1978),theCommission
outlined thefinancial aid awarded bythe Belgian ,French ,German and
United Kingdom Governments tothecoal industry in1978 and examined itfrom
thepoint ,ofview ofitscompatibility with theprovisions ofDecision 528/76.
2.The Commission was informed
-bythe French Government initsletter of27April 1979 and­
-bythe United Kingdom Government initsletter of19March 1979
that theaidplanned for 1978 would fail tosolve the problems faced by
the coal industry inthese twocountries ,necessitating anincrease inthe
aid awarded inFrance under Article 12and inthe United Kingdom under
Articles 9»11and 12ofDecision 528/76/ECSC.
3.These increases aredescribed and examined below .Where appropriate ,
reference will bemade tothetext and figures inthe Memorandum onthe
Financial Aid Awarded bythe Member States tothe Coal Industry in1978 .
4.The following exchange rates were used for converting national currencies
into European units ofaccount :
1EUA »5.63 FF
-£0.65
I "
5.Thetotal given inCOM(78 )367final forthe amount ofaidawarded by
France has been replaced byanewfinal figure .The estimated figures for
theFederal Republic ofGermany have been replaced byfinal figures .
Tables Aand Binthe Annex toPart One show the revised totals ofaid
granted tothe Community coal industry in1978 .

11/2
Increase inaidinitially awarded tothe French coal industry in1978
a)Compatibility ofdirect aidtocurrent production inthe French coal industry
with Articles 7to12ofDecision 528/76
Asstated onpage A/12oftheMemorandum ontheFinancial AidAwarded bythe
Member States totheCoal Industry in1978 (CQM(78 )367final ),theFrench
Government reported atotal ofFF2429*9 million inaidtocover losses
under Article 12ofDecision 528/76/ECSC. ^
.Initsletter of27April 1979 »the French Government applied toinorease the
1
amount ofaidoriginally awarded asfollows :
Original
amount in
million FFChange
in
million FFHew amount
in
million FF
Cover for the losses bythe
central administration of
Charbonnages deFrance
Cover for coalfields *
operating losses200.0
2229.9+117.0
+100.1317.0
2330.0
Total 2429.9 +217.1 2647.0
Coking coal aid
TOTAL9.8 1.2 11.0
2439.7 +218.3 2658.O
Charbonnages deFrance must beviewed asasingle undertaking for the
purpose ofassessing aidtoitscentral administration ,i.e. aids tothe
central administration and tothe coalfields are classed together .
According tothefinal balance sheet for 1978 ,total aid (FF2647million )
isFF18million less than Charbonnages deFrance'stotal losses .

II/3
Aid tocover coalfields *losses can bebroken down asfollows bycoalfield :
million FF .
Nord/Pas- T . Centre - .,.J.. Lorraine TotalNord/Pas-
de-CalaisLorraineCentre -
Midi
Original amounts
Additional amounts
TOTAL1056.9
-63.9574.5
+163.1598.5
+0.9
993.0 737.6 599.42229.9
+100.1
2330.0
Aid tocover interest paid bythe central administration
ofCharbonnages dePrance
Total aidtocover operating losses317.0
2647.0
per tonne ofproduction inPP 135.05
The increase inFrench aidtocover coalfields' operating losses concerns
theLorraine coalfield only where operating losses in1978 were higher than'
originally estimated .According toinformation received bythe Commission
onactual cost andreturns in1978 ,production costs pertonne were much
higher inthe Lorraine coalfield than originally forecast whereas returns per
tonne were only slightly higher .The increase inaid covers only part ofthe
operating losses in1978 andishence compatible with the second subparagraph
ofArticle 12(2 )oftheDecision .Itshould also benoted that coking coal
from this coalfield isessential tothesteel industry 'ssupply and hence
complys with thesecond subparagraph ofArticle 12(1 )andArticle 12(3 )
ofthe Decision .
b)Compatibility ofdirect financial aidtocurrent production intheFrench
coal mining industry with the proper functioning ofthe common market
.Afigure of478.1 million EUA (=24.39 EUApertonne )isgiven inTable Binthe
Annex -forthe total amount ofaid awarded in1978 tocurrent production inthe
French coal mining industry .Theoriginal amount ofaidfor 1978 was
approximately 22EUA per tonne ;i.e. therevised per tonne grant inaid'is
about 10$higher .

11/4
Therevised (1978 )per-tonne grant inaidis23.4% higher than in1977•
Thefollowing points should benoted with regard tothecompatibility of
French aidtocurrent production with theproper functioning ofthecommon
market s
1.There were noindications intrade incoal between Prance and the other
Member States in1978 ofdistortions incompetition between theFrench
•coal industry andthat ofother Member States .France 'stotal imports ,
mainly ofGerman andBritish steam coal ,were 1.7million tonnes higher
in1978 than intheprevious year .French coal deliveries toother
Member States were slightly lower in1978 than they hadbeen in1977 *
2.List prices forFrench coal in1978 were (inFFpertonne ): xs •
Nord/Pas -de-Calais
Lorraine *Nuts 2 . 250,- 270,- ,91 -91
.Nuts 5 223,- 240,- ^»" .
French steam coal issold atprices ,which arealigned onacomposite
price formed from therelatively lowprice forimported non-Community
steam coal and theprice offuel oil .There arenoindirect aids to
industrial coal consumers .Thesame applies tocoking coal prices which are
aligned ontheguide price forimported coking coal . . . ,
3.Itcanbeconcluded from theabove that the increase inFrench aid for
1978 iscompatible with theproper functioning ofthecommon market .Steam coal : Coking coal
1.1.1978 1.5.1978 1.1.1978 1.5.1978
340,- 340 ,-
25O,– 270,– ,2^_ 32^_223,- 240 ,-

II/5
c)Summary
Theaidapplied forunder Decision 528/76/ECSC tocover current production
intheFrench coal mining industry in1978 isshown inthetable below .
LegalbasilAmount ofaid•
under Doc.
528/76MeasuresTotal Pertofproduction
MPP' MEOA FF ΕΠΑ
Art.12 -cover for the losses by
the central administra­
tion ofCharbonnages de
Prance 317.0 56.3 16.17 2.87
-cover for the coalfields'
.operating losses 2330.0 413.9 118.88 21.12
TOTAL 2647.0 470.2 135.05 23.99
Inaddition totheaidlisted above ,atotal ofPF11million («2million EUA)
were granted incoking coal aidand PP33million («5*9million EUA.)in
state subsidies tothe research programme being undertaken bythe Centre
d'Etudes etdeRecherche des Charbonnages deFrance (CERCHAR ).
'\

II/6
II.Increase inaidinitially awarded tothe United Kingdom coal industry in197°
a)Compatibility ofdirect financial aidtocover current production inthe
United Kingdom coal industry with the provisions ofArticles 7to12of
Decision 528/76
The United Kingdom Government requested authorization from the Commission
toaward thefoll<^«ring aidunder Articles 8to11ofDecision 528/76
(see COM(78 )367final of28July 1978,page A/l6)i
-aidtoattract skilled workers under Article 8(£3»3 million )
-aidtoproducers *stocks under Article 9(£9million )
-aidforpower station coal under Article 11(£8.5 million ).
Initsletter of19March 1979 »"theUnited Kingdom Government applied to
increase aidtoproducers' stocks ofcod .and coke "by£27*5 million and
aid for power station coal by£17*2 million and toaward afurther
£50 million inaidtocover pit operating losses .
1.Theapplication togrant aidtoproducers *stocks totalling £9million
wasbased ontheestimates ofthecosts ofproducers *stocks ofcoal
.for September 1977 *A.falling-off insales hasthowever ,ledtoan
increase incoal stocks and hence also toadditional costs with the
result that producer stock aid hasrisen by£11.5 million .There has
also been asteep increase inthe coke stocks held byNSF (National
Smokeless Fuels ),asubsidiary ofthe NCB.TheUnited Kingdom Government
thus plans toaward aidtotalling £16million toJTSFforthe 1978/1979
coal marketing year aspart ofafive-year programme tobalance supply
and demand onthe coke market .
Any assessment ofaid tocover the cost ofmonitoring pithead stocks of
coal and coke (£36.5 million )must take into account thefact that the
total pitheat stocks held byproducers and the additional stocks held by

11/7
consumers ,which aredirectly orindirectly financed "bytheproducers ,
totalled approximately 21.5 million tonnes attheendof1978.Given
amonthly production ofsome 10million tonnes ,the volume ofproducers *
stocks qualifying foraidis11.5 million tonnes .This means that the
per-tonne grant inaidis£3.2 andtheactual costs ofmaintaining
producers 1stocks (including depreciation andinterest )axeapproximately
£5per tonne .Theaid hence complies with theprovisions ofArticle 9
ofDecision 528/76.
The£8.5 million inaidfor power station coal which the United Kingdom
applied toaward was based onprice estimates for September 1977 9which
didnottake account ofthe sharp fall inthedollar in1978 .
Generally speaking ,there are nonewfactors inaddition tothose
described inCOM(78)367final (page A/17)which need tobeconsidered
inassessing the increase inaidfor power station coal .The aid envisaged
ishence compatible with theprovisions ofArticle 11ofDecision 528/76.
The United Kingdom government has applied togrant aidtotalling
£50million tothe NCBtocover operating losses forthe 1978/1979 coal
marketing year .Theactual losses suffered byNCBcoalfields in1978/
1979 are estimated tobearound £100 million inthe NCB'sannual report .
The aidwill beused todefer the closure ofunprofitable pits inorder
toobviate serious economic andsocial problems inareas inwhich
there isnotyetsufficient scope for redeployment fandtomaintain the
production capacity needed forsecurity ofenergy supply inthe long-
term .Itthus meets the requirements ofArticle 12.

H/8
b)Compatibility ofdirect financial aidtocurrent production intheBritish
coal mining industry with the proper functioning ofthe common market
Thetotal aidawarded tothe NCBinthe1978/1979 coal marketing year is
shown inTable Binthe Annex for comparison with other Member States .It
should "bepointed out "battheaidamounts given onpage A/16ofCOM(78)367 final
have been revised inthelight ofthefinal information received and incorpor­
ated inthe figures inTable B.
Onthis basis ,calculations show that total British aidtocurrent
production inthe 1978/1979 coal marketing year will be189.7 million EUA
=1.56 EUApertonne .Despite this increase ,thepep-tonne ofproduction
grant inaidtotheBritish coal mining industry isstill relatively low
compared with other Member States .
The following can besaid about "thecompatibility ofBritish aidto
current production with the proper functioning ofthe common market :
* /
1.There are noindications from thepattern oftrade incoal between the
United Kingdom andthe other Member States in1978 that distortions
incompetition between theBritish coal mining industry andthat ofthe
other Member States might becaused bydiffering levels ofaid.British
deliveries toother Member States include steam coal which was sold
mainly toBelgium ,theFederal Republic ofGermany ,France andthe
Netherlands .The amounts involved arerelatively small compared with
total British output ,because they have tocompete with imported coal .
2.Thelist prices forBritish coal in1978 inthefollowing
were (in£pertonne ):coalfields

South Wales
Scottish -Nuts 2
-Nuts 5
North Yorkshire
-Nuts 2
-Nuts 5II/9
Steam Coal
1.1.1978 1.5.1978
29.82
28.74
25.20
31.2032.40
23.03
27.60
25.30Coking Coal
1.1.1978 1.5.1978
34.70 37.60
31.10 34.10
29.04 32.00
TheBritish prices forsteam coal andcoking coal in1978 didnotgive rise
toanyproblems asthey arenotatalevel which necessitates indirect aid
tobeprovided toindustrial coal users .
Summary
Details ofaidtocurrent production intheBritish coal mining industry applied
forunder Decision 258/76forthe1978/1979 coalmarketing year aregiven
inthefollowing table :
Legal basisAmount ofaid
under Doc .
258/76MeasureTotal Per tofproduction
M£ ΜΕΠΑ t EUA
Article 8 Aid toattract skilled \
workers 3.4 5.3 O.03 O.O4
Article 9 Aid toproducers' stocks 36.5 56.2 0.30 O.46
Article 11 Aid forpower station
coal 25.7 39.5 0.21 O.32
Article 12 Aid tocover coalfields'
operating losses 50.O 76.9 0.41 0.63
TOTAL 115.6 177.9 0.95 1.45

Tl/10
Inaddition totheaid Listed above ,atotal of fc7.7million (=11.8 MEAU )
wasawarded incoking coal in1978 .
III .Conclusions
/The increase inaidgranted tothe French andBritish coal mining industries
hasaffected theoverall pattern ofaid in1978 .Aid tocurrent production
in1978 was70.8% higher intheCommunity than in1977 andtherate pertonne
•ofourpur was75.4% higher .
The increase inFrench andBritish subsidies proved necessary astheestimates
forlosses bythecoal mines made in1977 proved too low .Theunforseeable
more rapid rise incosts ofproduction than -inreceipts ledtolarger losses .
The increased subsidies requested bythetwogovernments canbeagreed in
accordance with Decision N°528/76.
Thefollowing twotables provide afull picture ofsubsidies agreed forthe
year 1978 .

Table A
Aids not relating tocurrent production
(million EOA.)
Social security measures pursuant toArticle 4
ofDecision No528/76Aids tocover inherited liabilities pursuant to
Article 5ofDecision No528/76
Total Infringements of
Art.4(1978 )Total Infringements of
Art.5(1978 ) 1977 1978 1977 1978
Federal Republic
ofGermany 2137.3 2383.1 197.6 203.4.
Belgium 55O.2 . 600.8 - 1.1"
O.4 _
Prance 942.1 1079.9 - 57.6 71.3 «
United Kingdom 43.4 (1) 56.1 (1) 18.7 22.0 -
Total for the
Community3673.0 4119.9 - 275.0 297.1 -
(1)TheUnited Kingdom hasanintegrated social security system .Thefigure shown inthis column covers only
thespecial miners *pension fund ,which exists side-by-side with thegeneral social security system .

Table B
Aid for current production in1978 -
'UnitFederal Repu-
blic of
GermanyPranceUnited
KingdomBelgium Community
A.Aids under Decision No.528/76
1.Infringement ofArticle 4
ofArticle 5
Total
per tonne ofproductionmillion EUA
million EUA- - -' - -
million EUA
EUA- -
–-
-
2.Direct Measures
per tonne ofproductionmillion EUA
EUA9.1
0.105.9
0.30- 17.4
2.6432.4
0.14
3.Indirect Measures
Article 7
Article 8
Article 9
Article 10
Article 11
Article 12million EUA
million EUA
million EUA
million EUA
million EUA
million EUA311.2
39.9
42.2
470.25.3
56.2
39-5
76.97.0
135.9318.2
45.2
56.2
42.2
39-5
683.0
Total
per tonne ofproductionmillion EUA
EUA393.3
4.37470.2
23.99177.9
1.46142.9
21.651184.3
4.98
B.Cokiiur coal aid (Decision No.73/287)
per tonne ofproductionmillion EUA
EUA504.9
.5.602.0
0.1011.8
0.1080.3
12.17599.0
2.52
C.Total (A+B)
Totals
per tonne ofproductionmillion EUA
EUA907.3
10.07 (1)478.1
24.39189.7
I.56240.6
36.461815.7
7.63
(1)Excluding aidunder theThird Coal-into-Electricity Law