Draft Decision of the representatives of the governments of the Member States of the European Coal and Steel Community, meeting within the Council concerning the financial consequences of the expiry of the Treaty establishing the European Coal and Steel Community
Date: 2000-09-06
Institutions: European Commission
Subjects: ECSC Treaty, EU financing, balance sheet, receivership, research

26.6.2001

EN

Official Journal of the European Communities

C 180 E/1

II

(Preparatory Acts)

COMMISSION

Draft decision of the representatives of the Governments of the Member States of the European
Coal and Steel Community, meeting within the Council concerning the financial consequences of
the expiry of the Treaty establishing the European Coal and Steel Community

(2001/C 180 E/01)

(Text with EEA relevance)

COM(2000) 519 final

(Submitted by the Commission on 6 September 2000)

THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER
STATES OF THE EUROPEAN COAL AND STEEL COMMUNITY,
MEETING WITHIN THE COUNCIL

Whereas:

(1) Under Article 97 of the Treaty establishing the European
Coal and Steel Community (ECSC), the Treaty will expire
on 23 July 2002.

(2) Certain financial operations will at that date still need to
be carried out, involving both revenue and expenditure
and resulting from the implementation of ECSC operating
budgets for earlier years and ECSC borrowing and lending
activities.

(3) It is necessary to designate the institution responsible for
winding up these operations
the
procedures needed to do so. It would be appropriate to
entrust
the Commission with the winding-up and to
decide that the procedures to be followed will be those
in force at 23 July 2002, in accordance with the ECSC
Treaty and secondary legislation.

and establishing

(4) At its meeting of 11 September 1996, the Commission
concluded that reserves should be kept to cover, after
2002, 100 % of the outstanding loans not covered by a
Member State guarantee. The ex-ECSC funds administered
will total approximately EUR 1.6 billion on 23 July 2002.
The amount will vary depending on the financial activities
still to be carried out before and after the expiry of the
Treaty.

(5) In order

to distinguish ECSC assets

from other
Community Funds, after expiry of the Treaty, they shall
be referred to as the (cid:145)ECSC in liquidation(cid:146). To the same
end, once the liquidation has been completed, they will be
referred to as the (cid:145)assets of the Coal and Steel Research
to differentiate between net
Fund(cid:146). Finally,
in order
the
revenue and the assets generating that
former
the (cid:145)Coal and Steel
shall be referred to as
Research Fund(cid:146).

revenue,

derive primarily from the
levy on coal and steel
production set up pursuant to Article 49 of the ECSC
Treaty;
the assets should
therefore seems right
benefit the two economic sectors in question.

that

it

(7) The most suitable use for the assets which would benefit
the coal and steel sectors is research. It is also necessary to
determine the distribution of the research appropriations
between the two sectors.

(8) The most appropriate way of doing this is to assign the
assets to the European Community and to establish rules
and procedures to ensure that the assets and the revenue
they generate are used solely for the abovementioned
purpose.

(9) This use and this procedure are consistent with the
resolution on growth and employment adopted by the
European Council at its meeting in Amsterdam on 16
and 17 June 1997 and the resolutions of the Council
and the Representatives of
the
Member States, meeting within the Council, of 20 July
1998 (1) and 21 June 1999 (2).

the Governments of

(10) Where debtors default during the liquidation period after
23 July 2002 and in order to guarantee the annual
stability of the coal and steel research instrument, any
default by an ECSC debtor should first be charged to
the capital and then to the revenues funding research.

(11) It is also necessary to define the ownership of the other

ECSC assets,

HAVE DECIDED AS FOLLOWS:

Article 1

The Commission shall be entrusted with winding up the
1.
financial operations of
Steel
Community which are still in progress when the ECSC Treaty
expires. Where an ECSC debtor defaults during the liquidation
period, the resulting loss shall be charged first to the existing
capital and then to the revenue of the current year.

European Coal

and

the

(6) It is necessary to decide on the future use of these assets.
It should be pointed out in this connection that they

(1) OJ C 247, 7.8.1998, p. 5.
(2) OJ C 190, 7.7.1999, p. 1.

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Official Journal of the European Communities

26.6.2001

The liquidation shall be conducted in accordance with the
2.
rules and procedures applying to these operations, with the
Community institutions enjoying the existing powers and
prerogatives provided for by the ECSC Treaty and secondary
legislation in force on 23 July 2002.

revenue shall be earmarked for a specific purpose, namely
financing research projects in the coal and steel sectors not
covered by the framework programme. It shall form the Coal
and Steel Research Fund and shall be managed by the
Commission.

Article 2

1.
The assets of the European Coal and Steel Community
shall automatically devolve to the European Community,
including all property, rights, duties, claims and actions as
to any increase or
they exist on 23 July 2002, subject
decrease which may occur as a result of
the liquidation
operations mentioned in Article 1; the European Community
shall pay all charges attaching to these assets. All the assets,
save property which is immovable by its nature, by its intended
use or by the purpose which it serves, shall be considered
assets intended for research in the coal and steel sectors,
referred to as the (cid:145)ECSC in liquidation(cid:146). On completion of the
liquidation they shall be referred to the (cid:145)assets of the Coal and
Steel Research Fund(cid:146).

The assets may be augmented by contributions and, in

2.
particular, contributions from future new Member States.

Article 3

The assets shall be managed by the Commission in such a
1.
manner as to ensure a long-term return. The management of
the liquid assets should be aimed at the highest possible yield
that is compatible with security.

2.
The Council, acting by qualified majority as provided for
under Article 205 of the EC Treaty on a proposal from the
Commission after
the European
financial guidelines for
Parliament, shall adopt multiannual
management of the assets.

receiving the opinion of

Article 4

Each year a profit-and-loss account, balance sheet and
1.
financial report shall be drawn up to show, separately from
the other financial operations of the remaining Communities,
the liquidation operations provided for in Article 1 and the
investment transactions under Article 3.

statements

These financial
shall be incorporated into the
financial statements drawn up by the Commission annually
under Article 275 of the EC Treaty and the Financial Regu-
the European
lation applicable to the general budget of
Communities.

2.
The powers of Parliament, the Council and the Court of
Auditors concerning control and discharge as set out in the
Treaties and the Financial Regulation shall apply to the
operations referred to in paragraph 1.

Article 5

Net revenue from the investments provided for under
1.
Article 3 shall constitute revenue in the budget of
the
European Communities. Within the meaning of the second
this
indent of Article 4(3) of

the Financial Regulation,

2.
The amounts yielded by the Fund shall be distributed,
27,2 % being allocated to the coal sector and 72,8 % to the
the Council, acting
steel sector. Should it prove necessary,
unanimously on a proposal
shall
modify the breakdown between coal-related research and steel-
related research.

from the Commission,

The technical multiannual guidelines for the research
3.
programmes
shall be adopted by the Council acting by
qualified majority under Article 205 of the EC Treaty on a
proposal from the Commission after receiving the opinion of
the European Parliament.

In accordance with the provisions contained in the
4.
Financial Regulation, unused revenue
and appropriations
deriving from this revenue still available on 31 December in
any given year shall be carried over automatically to the
following year. These appropriations may not be transferred
to other budget items.

5.
Budgetary appropriations corresponding to cancellations
of commitments shall automatically lapse at the end of each
financial year. Provisions for commitments released as a result
of the cancellations shall be entered in the balance sheet and
profit-and-loss account provided for in Article 4(1) and shall
return initially to the assets of the ECSC in liquidation and
subsequently, when liquidation has been completed,
to the
assets of
the Coal and Steel Research Fund. Amounts
recovered shall similarly be entered in the balance sheet and
profit-and-loss account.

Article 6

1.
Net revenue available to finance research projects for year
n+2 shall be recorded in the balance sheet of the ECSC in
liquidation of year n, and once liquidation has been completed,
in the balance sheet of the assets of the Coal and Steel Research
Fund.

2.
In order to eliminate fluctuations in research funding due
to movements on the financial markets, a smoothing shall be
effected and a provision made for contingencies. Details of the
calculations for smoothing and determining the size of the
contingency reserve are contained in the Annex.

Article 7

Administrative expenditure resulting from the liquidation and
from the investment and management of the Coal and Steel
Research Fund, which replaces that laid down in Article 20 of
the Treaty establishing a
single
Commission of the European Communities of 8 April 1965,
the amount of which was adjusted by the Council Decision of
21 November 1977, shall be met by the Commission from the
general budget of the European Communities.

single Council

and a

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Article 8

Article 9

New Member States may, during accession negotiations,
acquire a share of the assets of the Coal and Steel Research
Fund, and, where appropriate, the ECSC in liquidation or the
Fund, once they have made the necessary contributions, due
regard being had to decisions adopted in the past in similar
situations.

The Commission shall determine the amount of the assets of
the ECSC in a balance sheet closed at 23 July 2002.

Article 10

This Decision shall enter into force on 24 July 2002.

PROCEDURES TO BE FOLLOWED TO ESTABLISH THE AMOUNT OF NET REVENUE TO BE ALLOCATED
TO COAL AND STEEL RESEARCH

ANNEX

1. Introduction

Net revenue which may be used to finance research projects corresponds to the annual net result of the ECSC in
liquidation and subsequently, when liquidation has been completed, to the annual net result of the assets of the Coal
and Steel Research Fund. The method employed consists of establishing the funding for coal and steel research for
year n+2 when producing the balance sheet for year n, taking into account half of the increase or decrease in the net
result in relation to the last level of funding adopted for coal and steel research.

2. Definition

n:

Rn

Pn

reference year

net result for year

contingency provision for year n

Dn+1 allocation for research for year n+1 (established when the balance sheet for year n (cid:151) 1 is produced)

Dn+2 allocation for research for year n+2

3. Algorithms used

The algorithms used to establish the size of the contingency provision and the allocations for research for year n+2,
which will appear in the balance sheet for year n, are as follows:

3.1. Size of contingency provision:

Pn = Pn-1 + 0,5 * (Rn (cid:151) Dn+1)

3.2. Allocations for research for year n+2 (rounded up or down to the nearest hundred thousand euros. If the
calculation gives a result exactly halfway, the allocation shall be rounded up to the nearest hundred thousand
euros):

Dn+2 = Dn+1 + 0,5 * (Rn (cid:151) Dn+1)

Where appropriate, the amount needed for rounding up (or the amount left over from rounding down) will be taken
from (or returned to) the contingency provision.