Proposal for a Decision of the Council and the Commission on the position to be taken by the Community within the Association Council established by the Europe Agreement signed on 16 December 1991 between the European Communities and their Member States of the one part, and the Republic of Poland of the other part regarding the extension of the period during which Poland may grant public aid in the steel sector
Date: 1997-09-12
Institutions: European Commission
Subjects: European Association Agreement, Poland, State aid, competition policy, iron and steel industry

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  12.09.1997 
COM(97) 452 final 

97/0236 (ACC) 

Proposal for a Decision of the Council and the Commission 

on the position to be taken by the Community within the Association  Council 
established  by the Europe Agreement signed on 16 December 1991 between the 
European Communities and their Member States of the one part, and the Republic of 
Poland of the other part regarding the extension of the period during which Poland  may 
grant public aid in the steel  sector 

(presented  by  the  Commission) 

Explanatory  Memorandum 

1.  In  accordance  with  Article  8.4.  of  Protocol  2  to  the  Europe  Agreement  with  Poland, 
during  the  first  five  years  after  the  entry  into  force  of  the  Agreement  Poland  may 
exceptionally,  as regards ECSC steel  products, grant public aid  for  restructuring  purposes 
under the conditions mentioned  in that Article. 

2.  The period of five years referred  to above expired on 31 December  1996. 

3.  In  accordance  with  Article  8.4.  of  Protocol  2  to  the  Europe  Agreement,  the  Association 
Council  has, taking  into account  the economic  situation  of  Poland, to decide whether  the 
above-mentioned  period of five years could be extended. 

4.  In November  1996 Poland  requested the extension of the period during which  it may grant 
public  aid  in the steel  sector. This request has been examined  by the Commission  and  the 
Council,  with  the  result  that  in  its  Common  Position  which  was  presented  at  the 
Association  Council  meeting  of  30  April  1997,  the  Community  side  expressed  its 
agreement  in  principle  to  the  extension  of  the  above-mentioned  period  under  the 
conditions  specified  in the  attached  draft  Association  Council  Decision,  accompanied  by 
the  attached  Joint  Declaration  of  the  Council  and  the  Commission  of  the  European 
Communities. 

5.  The  Commission  therefore  requests  the  Council  to  adopt  the  attached  proposal  for  a 
Decision  of  the  Council  and  the  Commission  as  well  as  the  Joint  Declaration  of  the 
Council and the Commission  of the European  Communities annexed to it. 

l 

Proposal  for a Council and Commission Decision 

on the position to  be taken by the Community within the Association  Council 
established  by the Europe Agreement signed on 16 December 1991 between the 
European Communities and their Member States of the one part, and the Republic of 
Poland of the other part regarding the extension of the period  under which Poland  may 
grant public aid in the steel sector 

THE COUNCIL OF THE EUROPEAN UNION, 

THE COMMISSION  OF THE EUROPEAN COMMUNITIES, 

Having  regard to the Treaty  establishing the European  Community,  and  in particular  Article 
113 in conjunction  with the first  sentence of Article 228(2) thereof, 

Having  regard  to  the  Treaty  establishing  the  European  Coal  and  Steel  Community,  and  in 
particular Article 95 thereof, 

Having regard to the proposal of the Commission  of the European  Communities, 

After  consulting the ECSC Consultative Committee, 

Whereas  the  European  Communities  and  their  Member  States  have  concluded  a  Europe 
Agreement with the Republic of Poland on  13 December  1993, 

Whereas  Article  8.4.  of  Protocol  2  to  the  Europe  Agreement  lays  down  that  the  Parties 
recognise  that during the  five  first  years after  the entry  into  force  of the  Agreement,  Poland 
may  exceptionally,  as  regards  ECSC  steel  products,  grant  public  aid  for  restructuring 
purposes  under  the  conditions  mentioned  in  that  Article,  and  that  the  Association  Council 
shall, taking into account the economic situation of Poland, decide whether the period  of  five 
years could be extended, 

HAVE DECIDED AS FOLLOWS: 

The position to be taken by the Community within the Association  Council established  by the 
Europe  Agreement  signed  on  16 December  1991  between  the  European  Communities  and 
their  Member  States of the  one  part, and  the  Republic  of Poland  of the other  part  regarding 
the extension  of the period  during which Poland may grant public aid in the steel  sector  shall 
be based on the draft  decision  of the Association Council annexed to this Decision. 

Done at Brussels on 

For the Council 

For the Commission 

Association Agreement  between the European Union 
and the Republic of Poland 
The Association  Council 

/... of the Association Council between the European  Communities 
Draft Decision no 
and their Member States of the one part and the Republic of Poland of the other part of 
... adopting the extension  of the period during which Poland  may grant public aid in 
the steel sector 

THE ASSOCIATION  COUNCIL 

Whereas  the  Europe  Agreement  in  its  Protocol  2, Article  8.4  provides  that  the  Association 
Council  shall,  taking  into  account  the  economic  situation  of  Poland,  decide  whether  the 
period of five years for granting state aid in the Polish steel sector could  be extended, 

Having taken  into account the economic situation of Poland, 

Having  taken  into  account  that  there  is  still  a  necessity  of  considerable  rationalisation  of 
production  structure of the Polish steel  industry, 

HAS DECIDED AS FOLLOWS: 

Article 1 

The  period  during  which  Poland  has  been  exceptionally  allowed,  under  Article  8.4.  of 
Protocol  2 to the Europe Agreement, as regards  ECSC steel products, to grant  public  aid  for 
restructuring  purposes  under  the  conditions  mentioned  in  that  Article,  is  extended  until 
31.12.1999.  The  Association  Council  may,  taking  into  account  the  economic  situation  of 
Poland  and  the  implementation  of  the  restructuring  of  the  Polish  steel  sector  in  the  period 
1996-1999, decide to further  extend this period  until 31.12.2001. 

Article 2 

The conditions  mentioned  under Article 8.4. of Protocol  2 for granting such  state aid  remain 
valid  and  fully  applicable.  Poland  will  inform  the  Association  Committee  on  the  individual 
aid  to  individual  companies  two  months  before  the  granting  of the  aid  in  the  framework  of 
concrete  restructuring. 

Article 3 

The  implementation  of  the  restructuring  of  the  Polish  steel  sector  shall  be  subject  to  a 
continuous  review  and  exchange  of  information  by  means  of two  annual  meetings  between 
the Commission  of the European Communities and  Poland. 

For the Republic of Poland 

For the Council of the European  Union 

t 

Joint Declaration by the Council and the Commission of the European  Communities 

Although  the  present  Polish  restructuring  plan  is,  in  the  view  of  the  Union,  still  far  from 
being  satisfactory,  the  Council  and  the  Commission  of  the  European  Communities  agree  to 
grant  to  Poland  a three  year  extension  of  the  period  during  which  state  aids  can  be  granted 
under  the  conditions  mentioned  under  Article  8.4.  of  Protocol  2  of  the  Europe  Agreement, 
with  the  understanding  that  the  modified  restructuring  plan,  which  will  be  submitted  soon, 
will be in full  conformity  with Article 8.4. of Protocol 2. 

For the fulfillment  of these conditions, the  implementation  of the restructuring  programme of 
the Polish steel sector shall be subject to a continuous review and exchange of  information. 

For the  implementation  of  Decision  .../... of the Association  Council, the Commission  of the 
European  Communities  will  continue  consultations  with  Poland  about  certain  specific 
issues, namely: 

- the Polish restructuring plan for the period  up to 2001 ; 

- the reference  period for measuring changes in capacity ( 1992 or later), and 

-  the  reduction  of  the  production  capacity  for  hot-rolled  products,  having  regard  to  the 
overcapacity  in the relevant market. 

These elements shall also be taken  into account when assessing concrete state aid cases. 

ISSN 0254-1475 

COM(97) 452 final 

DOCUMENTS 

EN 

10  11  02  08 

Catalogue  number  :  CB-CO-97-464-EN-C 

ISBN  92-78-24576-3 

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