ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)378
Vol.1979/0136

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(79)378final
Brussels.13thJuly1979
FOROFFICIAL USEONLY
APPLICATION FORTHEGRANTOFAGLOBALLOANONBEHALF
OFINVESTMENTS ININDUSTRY ANDSERVICEACTIVITY
INLORRAINE(FRANCE),PURSUANTTOTHEPROVISIONS OF
ARTICLE56OFTHEECSCTREATY-N°266:
BANQUEPOPULAIRE DELORRAINE (FRANCE)
(Communication fromtheCommission totheCouncil)
COM(79)378final

INTERNAL DOCUMENT
COMMUNICATION TOTHECOUNCIL
Subject:Apruicationforthegrantofagloballoanonbehalfofinvestments
inindustryaf>dserviceactivityinLorraine(France),pursuanttothe
provisionsofArticle56oftheECSCTreaty-N°266:BanquePopulaire
deLorraine(France).
I.BASICINFORMATION
Applicant
Finalbeneficiaries
Project
Location
Globalamountof
investment
globalloanrequested
Interestrebates
Jobscreated:BanquePopulairedeLorraine
:variousundertakings
:creationandextensionofsmallandmediumsize
concerns
:Lorraine
:minimumFF60million(+10.8MEUA)
:FF30million(^5.4MEUA)
:162,000ayearforthefirstfiveyears
:300jobsminimumareintendedasapriority
forformerECSCworkersinLorraine.
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
TheLorraineregion(2.33millionpopulationin1975)employssome
71,300workersinthesteelindustry;lessthan10yearsagoitproduced
2/3oftheFrenchsteel.In1973itsshareofthenationalproductwas
some54%(13.8milliontonnes);thisfellto40%in1978with9.6million
tonnes.Thesameyeartheregionmined32milliontonnesofironore
comparedwith52milliontonnesin1973.
Paralleltheretoasystematicpolicytoincreaseproductivity and
modernisation andtorestructure companiesthemselveshasbeencarried
outforfifteenyears .Inthefirstinstancethesemeasuresconcernthe
mainindustrialgroups,whichareSACIL0R-S0LLAC (35,238workersin1978),
USIN0R(8,450workers),LACHIERSNEUVESMAIS0NS(3,028workers),
C0CKERILL(3,404workers).Thefiguresgivenarefor1976.
■••/•■•
Piovisionaladdress:RuedelaLoi200,B-1040Brussels–Telephone350040-358040–Telegraphicaddress:«COMEURBru&sels-
Telex:«COMEIJRBRU 21877.

Since1968and1975,68,730inhabitants haveLeftLorraine.This
populationdrainisdueessentially totheeconomicstagnationofthe
region:now,thiseconomicsituationisverymuchtheoutcomeof
recessioninsteel,whichremainstheprincipaldrivingforceinLorraine
activity.
TheworkforceemployedinLorrainesteelreacheditspeakin1964with
98,800.Todayitislessthan71,000.Thisreductionhasbeenrealised
throughavarietyofclosures:
MICHEVILLE nearL0NGWY<-3,480workers),H0MEC0URT andJ0EUFinthevalley
ofthe0RNEAM0NTnearBRIEYandtheBATILLYregion(-2,566workers),
KNUTANGEnearHAYANGE
andbyvariousmeasuresofrationalisation bothwithingroupsandbycompany
mergers.
Example:mergerCHIERS-NEUVES MAIS0NSin1977thenmergerofthisnew
groupwithUSIN0R.
Thefollowingredundancies havebeenforecastfrom1977to1980:
SACIL0RS0LLAC 17,200
CHATILL0N L0NGWY 2,868
USIN0RL0NGWY 4,753
USIN0RTHI0NVILLE 2,444
27,265
supplementing 10,000jobsmaderedundantinpreviousyears.
Lorrainehasbeenclassified bytheGovernment asapriorityregionfor
industrialisation .Themeasuresofdiversification adoptedover10years
haveinthemainbroughtapartialsolutiontotheconversion problemin
theCoalBasin(Saint-Avold-Forbach)andthissolution,takingaccountof
theeconomicsituationinthecoalmines,hasprovedjustadequate
provisionally .Butsteelconversion hasbeenslower:onlysmallandmedium
concernshavebeenabletobeinstalled andthejobscreatedhavemainly
enabledsubstitution totakeplaceforredundancies duetothedisappearance
ofothersmallormediumsizeconcernsalsoworkingforthesteelindustry.
Thesettlement ofSAVIEMatBATILLY,ofPEUGEOTCITROENatENNERYand
VILLERSLAM0NTAGNE,ofRENAULTatTHI0NVILLE wi11contributepartlyin,
comingyearstocompensatefortheredundancies abovementioned .Butthese
jobcreationswillnottakeplaceatthesamerhythmastheredundancies ;
hencea"gap"whichmustbefilledasrapidlyaspossiblebyfacilitating
themaximumnumberofprojects,whichcouldbeofinteresttothisregion.

7 •--3-
TheBanquePopulairedeLorraineisaco-operative ofwhichthecapital
isheldbynearly60,000shareholdersresidentinLorraine^they,include
manyhandicraft,tradingandindustrialconcerns.TheBankbelongsto
thegroupofBanquesPopulaires (co-operative banks)and,apartfromits.
ownassets,benefitsaccordingly fromtheguaranteeofthecollective
guaranteefundadministered bytheAssociation (ChambreSyndicale)of
BanquesPopulaires.Inadditionithasafurtherguaranteeintheformof
sufficientsecurityfromtheCentralFundoftheBanquesPopulaires
(CaisseCentrale).
With70branchcountersthroughoutLorraine,theBankcanassure,inthe
caseofcreditsforsmallamounts,aneffectivecontribution duetodirect
contactwitheachoftheundertakings likelytobeconcerned.
Tofacilitateanddevelopfinancingwithsmallandmediumsizeconcernsand
withindividualentrepreneurs ,theCommissionhasalreadygrantedthis
Bankagloballoan22February1979ofFF20million(+3.6MEUA).Since
then,thisloanhasenabledtheBanktoselectandinstall,by31May1979,
70transactions ofanaverageamountofFF285,000creatingaminimumof
251jobs,moreespecially byextendingexistingundertakings .Asubstantial
,proportionofthepreviousloanhasthereforebeenusedinashortspace
oftime.Contactsinprogresssuggestarapidemploymentofthebalance.
ForthisreasontheBanquePopulairedeLorraineisaskingtheCommission
forasecondloanofFF30million<+5.4MEUA);identicalmeasuresto
thoseusedforthefirstloanshouldenablethesecondloantobelaidout
rapidly.
III.THEPROJECT
TheCommissionwillputFF30million<+5.40MEUA)atthedisposalofthe
BanquePopulairedeLorraineforathreeyearperiod.Themoneywillbe
paidtotheBanquePopulairedeLorraineinseveralinstalments inproportion
tothegrantofindividualpartloanstobegiventoeligibleconcerns.
TheBanquePopulairedeLorrainewillsubmiteachuseoftheloantothe
Commissionforpriorapproval.
Thedecisionwithregardtoindividualsubsidiaryloanswillbeaccordingto
theaimsandcriteriapublishedbytheCommission (O.J.C178/2of
27/7/1977)takingaccountinparticularofthenumberofjobscreatedand
reservedforformerECSCworkersinrelationtothesizeoftheloan
contemplated andtotheamounttobeinvestedinfixedcapital.Therate
ofinterestfixedforaninstalmentofthegloballoanpaidtothe
BanquePopulairedeLorrainewillbeappliedtoeachpartloan,whichwill
alsoreceiveaninterestrebate.
TheCommission'scontribution willnotnormallybemorethan40%offixed
investment;howevertheCommission mayraisethisceilingto50%in
justifiable cases.Thiscontribution willtakeaccountofspecialcasesof
creditfacilityforsmallandmediumsizeconcerns,whichoftenhavefewer
accesspossibilities tocapitalmarketsthanotherundertakings,andin
whichinvestments,calculatedastovolumeperjobcreated,areoftenless
thaninotherlargerconcerns.
../.

-4-
TheBanquePopulairedeLorrainewillreporttotheCommissioneverysix
monthsontheusetowhichthegloballoanhasbeenput;areportwill
beaddedfromtheFrenchauthorities responsibleforemployment onthe
re-employment offormerECSCworkersinindustrialconcernsfinancedfrom
thegloballoan.
IV.INFLUENCE OFTHELOANONRE-EMPLOYMENT OFWORKERS
Itisplannedfortheindividualprojects/whichwillbenefitfromaid,
tocreateaminimumof300newjobsforformerECSCworkers,whichmayseem
fairlymodestbycomparisonwiththeoverallneedsoftheregion.';
NeverthelessitisimportanttoencourageinvestmentoutsideECSCsectors
.inLorraineparticularly throughsmallandmediumsizeconcerns.Should
thepresentdecisionproveinsufficient,furtherloanscouldbeenvisaged.
V.CONCLUSIONS
(a)TheCommissionconsidersthattheapplication complieswithArticle56,2a)
dftheECSCTreaty.Inconsequenceithasauthorisedthegranttothe
BanquePopulairedeLorraineofagloballoanofFF30million
<+5.40MEUA)orofanequivalent amount.Interestrebatewillbe
grantedamountingto162,000EUAayearforthefirstfiveyears
followingpaymentorpaymentsoftheloan.
(b)TheCommissioninvitestheCouncilto^ETassenttothisdecision
andtoitsextensionbythesameamountifsuchextensionprovessoon
necessary.7ΠΊΓ
f.
t