2001/58/ECSC: Commission Decision of 20 September 2000 authorising France to grant aid to the coal industry for 2000 (Text with EEA relevance) (notified under document number C(2000) 2923)
Date: 2000-09-20
Institutions: European Commission
Subjects: France, State aid, application of EU law, coal industry, control of State aid, production quota

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EN

Official Journal of the European Communities

23.1.2001

COMMISSION

COMMISSION DECISION

of 20 September 2000

authorising France to grant aid to the coal industry for 2000

(notified under document number C(2000) 2923)

(Only the French text is authentic)

(Text with EEA relevance)

(2001/58/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Commission Decision 3632/93/ECSC of 28
December 1993 establishing Community rules for State aid to
the coal
in particular Article 2(1) and Article 9
thereof,

industry (1),

(3)

Having regard to Commission Decision 95/465/ECSC of 19
July 1995 approving the French coal industry's plan for the
reduction of activity (2),

Whereas:

(1)

(2)

I

By letter of 26 October 1999, France notified the
Commission, in accordance with Article 9(1) of Decision
No 3632/93/ECSC, of the financial aid it proposes to
grant to the coal industry for 2000. By letter of 26 May
2000, France also notified the Commission of an adjust-
ment to this financial aid.

In accordance with Decision No 3632/93/ECSC,
the
Commission is required to take a decision for 2000 on
the following financial aid:

(4)

— aid for

the reduction of activity amounting to
FRF 2 381 million to cover operating losses for
2000,

— aid for

the reduction of activity amounting to
FRF 220 million. This aid is intended to cover the
interest due for 2000 on the part of the loan issue
floated by Charbonnages de France in 1997, 1998

(1) OJ L 329, 30.12.1993, p. 12.
(2) OJ L 267, 9.11.1995, p. 46.

and 1999 to cover the balance of the operating
losses for those years which are not covered by
direct subsidies and capital

injections,

— aid to cover exceptional losses for 2000 amounting

to FRF 4 071 million.

The financial measures envisaged by France for its coal
industry are covered by Article 1 of Decision No 3632/
therefore be approved by the
93/ECSC and must
Commission in accordance with Article 9, which refers
in particular to the general objectives and criteria laid
down in Article 2 and the specific criteria set out in
Articles 4 and 5 of the Decision. In its assessment, the
Commission checks, in accordance with Article 9(6) of
the Decision, whether the measures are in conformity
with the plans for the reduction of activity which have
been approved by the Commission.

II

The
is
sum of FRF 2 381 million which France
proposing to grant to the coal industry under Article 4
of Decision No 3632/93/ECSC is intended to cover the
difference between the production cost and the selling
price of coal
freely agreed between the contracting
parties in the light of the prevailing conditions on the
world market
for coal of similar quality from third
countries. This aid forms part of the plan for the reduc-
tion of activity by the company, which plans to cease all
mining activities in 2005. In view of the exceptional
social and regional consequences of the reduction of
activity by the company, the French Government,
in
agreement with the two sides of industry, has decided to
stagger the closures up to 2005.

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(5)

(6)

(7)

(8)

Although coal production has to be reduced from 3,673
million tce (1) in 1999 to 2,954 million tce in 2000, a
reduction of about 20 % in one year, the Commission
notes that the amount of aid has remained stable. The
rise in the production costs from FRF 975 per tce in
1999 to an estimated FRF 1 103 per tce in 2000 — has
neutralised the effect of reducing the volume of produc-
tion to the overall amount of aid. This trend in the cost
of mining coal merely serves
to confirm France's
decision to cease all mining by 2005.

In accordance with Article 3(1) of the above Decision,
the Commission has checked that, for the coal mining
year 2000, the aid notified per tonne does not exceed
for each production unit the difference between produc-
tion costs and foreseeable revenue.

In accordance with Article 2(1), second indent, the aid
helps to solve the social and regional problems created
by total or partial reductions in the activity of produc-
tion units. Furthermore, the Commission has checked
that the aid meets the requirement of Article 2(2) of
Decision No 3632/93/ECSC.

Except for the sum of FRF 45 million, on the basis of
the information provided by France, the aid proposed
for 2000 is compatible with the objectives of Decision
No 3632/93/ECSC and the proper functioning of the
common market. The Commission will decide on the
balance of FRF 45 million at a later date, in particular in
the light of France's replies to the questions in the
Commission's letter of
formal notice of 9 February
1999, in the context of complaint No 97/4717 of 26
August 1997 against Charbonnages de France, which
has been lodged by five French companies,
including
Thion et Cie.

(9)

This decision is also without prejudice to the decision
which the Commission will be
required to take
following consideration of the complaints against Char-
bonnages de France, in particular Cokes de Drocourt SA,
in the context of the coke market.

III

(10)

The sum of FRF 220 million which France is planning
to grant to the coal industry under Article 4 of Decision
No 3632/93/ECSC is intended to cover the interest due
for 2000 on the part of the loan issue floated by Char-
bonnages de France in 1997, 1998 and 1999 to cover
the balance of the operating losses for those years which
are not covered by direct subsidies and capital injections.

(1) tce = tonne coal equivalent.

(11)

(12)

(13)

In its Decision authorising France to grant aid to the
coal industry for 1997, 1998 and 1999, the Commis-
sion considered that the part of the loans covering the
balance of the operating losses for those years was aid
within the meaning of Article 1 of Decision No 3632/
93/ECSC. Since the interest due for 2000 is accessory to
the part of the loans covering the balance of the oper-
ating losses for 1997, 1998 and 1999, it must therefore
be regarded as aid within the meaning of Article 1 of
Decision No 3632/93/ECSC in the same way as the
principal sum.

This aid forms part of the plan for the reduction of
activity by the company, which plans to cease all mining
activities in 2005. The Commission has checked that the
aid notified does not exceed the costs for 2000 for the
part of the loans covering the balance of the operating
losses for 1997, 1998 and 1999. The Commission
therefore believes that the aid notified fulfils the require-
ments laid down in Article 3(1) of Decision No 3632/
93/ECSC.

In accordance with Article 2(1), second indent, the aid
helps to solve the social and regional problems created
by total or partial reductions in the activity of produc-
tion units. By letter of 3 July 2000, the French authori-
ties have also provided the Commission with proof that
the interest due for 2000 is entered in the State budget
for 1999. The Commission therefore considers that the
sum of aid fulfils the requirement of Article 2(2) of
Decision No 3632/93/ECSC.

(14)

In the light of the above and on the basis of the infor-
mation provided by France, the aid proposed for the
year 2000 is compatible with the objectives of Decision
No 3632/93/ECSC and with the proper functioning of
the common market.

IV

(15)

The aid amounting to FRF 4 071 million which France
proposes to grant to its coal
industry is intended to
cover exceptional costs due to modernisation, rationali-
sation and the restructuring of the coal industry which
are not related to current production (inherited liabili-
ties).

(16)

In accordance with Article 5 of Decision No 3632/93/
ECSC, this aid covers costs which are expressly referred
to in the Annex to the Decision, namely:

— FRF 870 million towards the cost of paying social-
welfare benefits resulting from the pensioning-off of
workers before they reach statutory retirement age,

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— FRF 70 million as other exceptional expenditure on
workers losing their jobs as a result of restructuring
and rationalisation,

— FRF 83 million towards residual costs resulting from

administrative,

legal or tax provisions,

— FRF 331 million towards additional work resulting

from restructuring,

— FRF 10 million towards mining damage attributable

to pits previously in service,

— FRF 45 million towards exceptional intrinsic depre-
ciation in 1997, 1998 and 1999 resulting from the
restructuring of the industry,
— FRF 2 662 million towards

the increase in the
contributions, outside the statutory system, to cover
social security costs as a result of the drop, following
restructuring,

in the number of contributors.

(17)

In accordance with Article 5(1) of Decision No 3632/
93/ECSC, this aid may be regarded as compatible with
the common market if it does not exceed the costs
arising from or having arisen from the modernisation,
rationalisation or
industry
restructuring of
which are not related to current production. Having
checked the data
the Commission
communicated,
concludes that this requirement has been fulfilled. In the
light of the above and on the basis of the information
provided by France, the aid planned for 2000 is compat-
ible with the objectives of Decision No 3632/93/ECSC
and with the proper functioning of the common market.

the coal

informed of the amounts of such payments and the way
they are broken down for 2000,

HAS ADOPTED THIS DECISION:

Article 1

industry for 2000:

France is authorised to apply the following measures in favour
of its coal
— aid for the reduction of activity, amounting to FRF 2 336
million, intended to cover operating losses for 2000. The
Commission will take a decision on a balance of FRF 45
million at a later date;

— aid for the reduction of activity, amounting to FRF 220
million, intended to cover the interest due for 2000 on the
part of the loan issue floated by Charbonnages de France in
1997, 1998, and 1999 to cover the balance of the oper-
ating losses for those years which are not covered by direct
subsidies and capital

injections.
— aid to cover exceptional costs for 2000 amounting to

FRF 4 071 million.

Article 2

France shall communicate the amounts of aid actually paid
under this Decision for 2000 to cover the operating losses for
that year no later than 30 September 2001.

This Decision is addressed to the French Republic.

Article 3

V

Done at Brussels, 20 September 2000.

(18)

In accordance with the second indent of Article 3(1) and
Article 9(2) and (3) of Decision No 3632/93/ECSC, the
Commission has to check that the aid authorised for
current production is only for the purposes stipulated in
it must be
the Decision. To this end,
Article 4 of

For the Commission

Loyola DE PALACIO

Vice-President