WRITTEN QUESTION E-2311/99

by Carlos Westendorp y Cabeza (PSE) to the Council

(13 December 1999)

Subject: Aid to the shipbuilding industry

The European shipbuilding sector is in serious difficulty. One of the EU's priorities should be to secure the future of a competitive shipbuilding industry which will contribute to social and economic development by maintaining a certain level of employment in a number of regions, many of which have a high level of unemployment.

In its report to the Council on the situation of shipbuilding in the world, the Commission acknowledges that South Korea's public aid scheme for shipbuilding is destabilising the world market in that sector. With a view to planning measures which will remedy this state of affairs, has the Commission quantified the amount of such aid?

Council Regulation (EC) No 1540/98(1) of 29 June 1998 lays down new rules on state aid to the shipbuilding sector up to December 2000. Is the Commission planning to extend the provision of such aid to European production beyond that date as a precautionary measure whilst it pursues its investigation into shipbuilding aid in South Korea?

The Council of Industry Ministers is to meet on Tuesday, 9 November. Is the Council intending to include this item on the agenda for the meeting? If so, what measures is it intending to adopt?

(1) OJ L 202, 18.7.1998, p. 1.

Joint answer to Written Questions E-2290/99, E-2311/99 and E-2351/99

(13 March 2000)

1. In response to the questions and legitimate concerns expressed by the Honourable Members, the Council would first point out that:

- in general the system of aid to shipbuilding is governed by the provisions of Council Regulation (EC) No 1540/98 of 29 June 1998(1);

- more specifically, the Commission, pursuant to Council Regulation (EC) No 1013/97 of 2 June 1997(2), approved aid to certain shipyards under restructuring in Germany and Spain.

2. At its meeting on 9 November 1999, the Council, in its Industry meeting, was presented with two separate reports from the Commission, relating to:

- the situation in world shipbuilding (report drawn up in accordance with Article 12 of Regulation (EC) No 1540/98),

- the monitoring of the restructuring programmes for shipyards in Germany and Spain (fourth report drawn up in accordance with Article 2 of Regulation (EC) No 1013/97).

3. Following the discussion on this item, the Council adopted the conclusions on the situation in world shipbuilding, of which the following key aspects should be noted, in summary:

- the concern expressed by the Council over the critical situation the sector is facing as a result of overcapacity and very low price practices attributable to the Republic of Korea, and its request to the Commission to resume talks with that country with a view to halting such unfair competition,

- the request to industry, the Member States and the Commission to gather as much evidence as possible of such anti-competitive behaviour, in order to take appropriate action within the WTO,

- the urgent appeal to the IMF and the World Bank to monitor compliance with the conditions under which aid was given to the Republic of Korea following the economic crisis,

- the request to the Commission and the Member States to make renewed efforts in the appropriate international fora, including the OECD, in order to ensure the application forthwith of rules guaranteeing fair competition.

Finally, at the close of those conclusions, the Council welcomed the determination of the Commission to fulfil its obligations under Article 12 of the abovementioned Regulation No 1540/98 (3) and to report on developments as soon as necessary.

The Council intends to include the item on the agenda for its Industry meeting on 18 May 2000.

(1) OJ L 202, 18.7.1998, pp. 1 to 10.

(2) OJ L 148, 6.6.1997, pp. 1 to 3.

(3) Article 12: The Commission shall present to the Council a regular report on the market situation and appraise whether European yards are affected by anti-competitive practices. If it is established that industry is being caused injury by anti-competitive practices of any kind, the Commission shall, where appropriate, propose to the Council measures to address the problem.The first report shall be presented to the Council no later than 31 December 1999.