WRITTEN QUESTION E-1820/97 by Jesús Cabezón Alonso (PSE) to the Commission (28 May 1997)

Subject: Activities of Spanish shipyards

By letter published in the Official Journal of the European Communities ((OJ C 53, 22.2.1997, p. 3. )) the Commission informed the Spanish Government of its decision to extend the procedure concerning aid to publicly-owned shipyards.

The above text refers to the notification by the Spanish authorities of 31 December 1994 to the effect that Astander (Astilleros de Santander shipyard) would continue its activities of 'repair and conversions' and would cease building new vessels while it remains a public yard.

On what arguments does the Commission base its view that the problem of reducing the capacity of publicly-owned Spanish shipyards would be resolved through the hypothetical cessation of 'conversion' activities at Astander?

How did the Commission arrive at its interpretation that building and conversion are activities which can be dealt with jointly, to the detriment of the Astander company and its workers?

Joint answer to Written Questions E-1820/97 and E-1822/97 given by Mr Van Miert on behalf of the Commission (20 June 1997)

First, to avoid any possible misunderstandings, it should be explained that in deciding to extend the procedure under Article 93.2 EC Treaty, the Commission was concerned about the adequacy of the capacity reductions in the beneficiary public yards as the necessary counterpart for the very substantial amounts of aid proposed, a large part of which was incompatible with the normal shipbuilding aid rules. It was within this context that the Commission had expressed doubts whether the proposals for Astander could be considered a sufficient and genuine capacity reduction, particularly since the yard had ceased new building in 1990 and would remain open to conversions whereas normally conversions and newbuildings are treated together for the purposes of the shipbuilding aid directive (both activities being eligible for contract-related production aid, unlike ship repair).

However, as the Honourable Member is probably aware, the procedure was subsequently overtaken when the Spanish government presented revised proposals to address the Commission's concerns (shared by many Member States) that the possible distortions to competition should be minimised. Under the revised plan, in addition to the cessation of newbuilding at Astander, a series of other measures (involving closure of installations but not total closure of yards) will be taken with immediate effect to achieve an overall capacity reduction in the public yards of 30,000 compensated gross registered tonnes (cgrt). This will be supplemented by the non-reopening to shipbuilding of the public yard at Astano and by further capacity reductions in the private sector amounting to 17,500 cgrt. The Spanish government has also agreed that Astander will not carry out ship conversions as long as it remains in public ownership. Questions about the thinking behind the revised plan are a matter for the Spanish authorities.

On this basis the Industry Council, at its meeting on 24 April 1997, agreed that Spain could be granted a derogation from the rules of the shipbuilding aid directive. This derogation was formally adopted as a Council Regulation on 2 June 1997 ((OJ L 148, 6.6.1997. )) leaving the way clear for the Commission to close the procedure and approve the aid. A final Commission decision is expected shortly.