Financial statements of the European Coal and Steel Community at 31 December 1999
Date: 2000-10-04
Institutions: European Commission
Subjects: ECSC, balance sheet, financial management, financial year

4.10.2000

EN

Official Journal of the European Communities

C 281/5

FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY AT 31
DECEMBER 1999

(2000/C 281/03)

In accordance with undertakings given by the Commission on behalf of the ECSC with regard to its
borrowing activities, the following financial statements, drawn up in conformity with Article 45c of the
Treaty establishing the ECSC, have been published:

(cid:151) the balance sheet of the European Coal and Steel Community at 31 December 1999,
(cid:151) the profit and loss accounts for the year ending 31 December 1999,
(cid:151) the allocation of the surplus for the year ending 31 December 1999,
(cid:151) the notes relating to the financial statements at 31 December 1999.

These financial statements are accompanied by the report of the Court of Auditors, as provided for under
Article 45c of the ECSC Treaty.

ECSC FINANCIAL STATEMENTS AT 31 DECEMBER 1999

ASSETS

Balance sheets at 31 December 1999

(Amounts in EUR) (cid:151) before allocation of surplus

Balances with central banks (note 3)

95 385

27 373

31 December 1999

31 December 1998

Loans and advances
(cid:151) repayable on demand
(cid:151) with agreed maturity dates or periods of

notice (note 4.1.)
(cid:151) loans (note 4.2.)

Loans and advances to customers (note 5)
(cid:151) loans
(cid:151) levy
(cid:151) fines
(cid:151) credit

Financial assets (note 6)
(cid:151) issued by public bodies
(cid:151) issued by other borrowers
Shares and similar securities

Total

Total

Total

Tangible and intangible assets (note 7)

Other assets (note 8)

Prepayments and accrued income (note 9)

TOTAL ASSETS

Off-balance-sheet commitments (note 26)

4 975 072

71 316 975
931 643 446

1 541 269 262
63 217
37 195 283
4 539 978

1 214 680 318
503 230 250
50 318 525

5 687 189

400 672 394
1 249 393 642

1 007 935 493

1 655 753 225

1 583 902 933
732 880
90 001 060
6 039 382

1 583 067 740

1 680 676 255

1 133 982 993
390 437 998
34 770 301

1 768 229 093

710 287

21 094 201

106 529 763

4 487 661 962

427 969 333

1 559 191 292

1 293 461

8 083 389

121 505 439

5 026 530 434

372 924 076

C 281/6

EN

Official Journal of the European Communities

4.10.2000

Balance sheets at 31 December 1999

(Amounts in EUR) before allocation of surplus

31 December 1999

31 December 1998

LIABILITIES

(cid:151)

(cid:151)
1 404 681 748

244

(cid:151)
1 847 546 788

LIABILITIES VIS-(cid:192)-VIS THIRD PARTIES

Amounts owed to credit institutions

(cid:151) repayable on demand
(cid:151) with agreed maturity dates or periods of

notice

(cid:151) borrowings (note 10)

Total

Debts evidenced by certificates (note 11)

Other liabilities by certificates (note 11)

Accruals and deferred income (note 13)

Provisions for liabilities and charges (note 14)

Commitments for
(note 15)

the ECSC operating budget

Total liabilities vis-(cid:224)-vis third parties

NET POSITION

Provisions
budget (note 16)

for

financing the ECSC operating

Provisions for major exposures (note 17)

Reserves (note 18):

(cid:151) Guarantee Fund
(cid:151) Special Reserve
(cid:151) Former Pension Fund

Value adjustment reserve

Surplus brought forward

553 000 000
176 055 284
72 959 662

Total

Surplus for the financial year (note 19)

Net total

TOTAL LIABILITIES

Off-balance-sheet commitments (note 26)

1 404 681 748

1 027 547 730

27 764 503

84 524 667

113 461 382

556 154 370

3 214 134 400

434 735 261

18 000 000

802 014 946

16 946 242

666 841

1 164 272

1 273 527 562

4 487 661 962

415 913 293

530 000 000
176 055 284
71 285 439

1 847 547 032

958 179 659

29 591 303

93 919 208

122 906 181

695 662 822

3 747 806 205

476 042 442

23 000 000

777 340 723

(cid:151)

1 195 230

1 145 834

1 278 724 229

5 026 530 434

497 605 519

4.10.2000

EN

Official Journal of the European Communities

C 281/7

Profit and loss account for the year ending 31 December 1999

CHARGES

(Amounts in EUR)

Financial year 1999

Financial year 1998

171
17 752 113

55 704 738

32 334 370

30 102 913

Interest payable and similar charges
(note 20)

Commissions payable
Net losses on financial operations
(cid:151) foreign-exchange losses
(cid:151) losses on financial assets
(cid:151) value adjustments in respect of financial assets

(note 6)

Total

Administrative expenditure (note 21)

Value adjustments in respect of
(note 7)

tangible assets

Other operating charges (note 22)

Provisions and value adjustments for loans and
advances:
(cid:151) value adjustments for loans and advances
(cid:151) allocation to the provision for liabilities and

charges (note 14)

Total

Total operating charges

Extraordinary charges

Conversion differences

Allocation to the reserve for value adjustments

Legal commitments for the financial year (note
15)

Allocation to the provisions for financing the
ECSC operating budget (note 16)

Allocation to the Guarantee Fund (note 18)

Surplus for the financial year (note 19)

Total charges

TOTAL

49 625
3 940 390

29 237 056

13 479 465

2 874 287

179 314 809

439 353

33 227 071

5 000 000

328 378

308 312

16 353 752

234 971 675

2 984 370

(cid:151)

16 946 242

145 553 799

34 000 000

23 000 000

457 456 086

1 164 272

458 620 358

232 061 730

561 449

73 457 022

5 000 000

407 994

267 708

62 437 283

374 193 186

137 845

2 735 343

(cid:151)

153 992 955

26 000 000

30 000 000

587 059 329

1 145 834

588 205 163

C 281/8

EN

Official Journal of the European Communities

4.10.2000

Profit and loss account for the year ending 31 December 1999

(Amounts in EUR)

Financial year 1999

Financial year 1998

INCOME

254 449 772

346 079 959

Interest receivable and similar income (note 23)
(including interest on fixed-income securities:
EUR 64 332 666 in 1999 and EUR 78 459 620
in 1998

Net profit on financial operations

(cid:151) foreign-exchange profits

(cid:151) profits on financial assets

(cid:151) withdrawal of value adjustments in respect of

financial assets (note 6)

9 942

17 405 532

0

257 775

12 386 190

11 882 835

Total

17 415 474

24 526 800

Withdrawal of value adjustments in respect of
loans and advances and provisions:

(cid:151) withdrawal of value adjustments in respect of

loans and advances

(cid:151) withdrawal from the provisions for liabilities

and charges (note 14)

Total

Other operating income (note 24)

Extraordinary income

Total operating income

Exchange-rate difference

Withdrawal from the value adjustment reserve

Income relating to the ECSC operating budget
(note 25)

Withdrawal
exposures (note 17)

from the provisions

for major

Withdrawal
contingencies

from the provisions for budgetary

TOTAL INCOME

13 760 280

26 131 467

63 963 378

(cid:151)

39 891 747

455 630

14 166

312 226 789

15 556 247

(cid:151)

104 837 322

5 000 000

21 000 000

458 620 358

63 963 378

2 729 291

22 262

437 321 690

313 119

146 570 354

4 000 000

(cid:151)

588 205 163

4.10.2000

EN

Official Journal of the European Communities

C 281/9

Allocation of the surplus for the year ending 31 December 1999

(Amounts in EUR)

Surplus not allocated at 1 January

Surplus for the year to be allocated

Allocation to the former pension fund (note 18)

Surplus not allocated at 31 December

Financial year 1999

Financial year 1998

666 841

1 164 272

1 831 113

1 617 659

213 454

1 195 230

1 145 834

2 341 064

1 674 223

666 841

Total

C 281/10

EN

Official Journal of the European Communities

4.10.2000

NOTES RELATING TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 1999

1.

PRESENTATION OF THE FINANCIAL STATEMENTS

(Amounts in EUR)

The European Coal and Steel Community (ECSC) was establishing by the Treaty of 18 April 1951.
According to the Treaty, the task of the ECSC is to contribute to the economic expansion of the
Member States through the establishment of a common market for coal and steel. Since the ECSC
Treaty is due to expire on 23 July 2002, the rate of the ECSC levy was reduced to zero in 1998
(Commission Decision of 23 December 1997), and the ECSC’s lending activity has been virtually
discontinued since July 1997 (Commission Decision of 22 June 1994). Thus most of the ECSC’s
funds now come from the net balance obtained in the management of the various reserves and
provisions.

The ECSC’s financial statements at 31 December 1999 are presented in accordance with Council
Directives 78/660/EEC (1) and 86/635/EEC (2) on the annual accounts and consolidated accounts of
banks and other financial institutions.

ECSC accounts are kept in the various currencies used for its financial activity. The financial
statements are expressed in EUR.

The following rates have been used for converting year-end balance-sheet amounts expressed in
national currency into EUR:

Euro zone

Belgian and Luxembourg francs

German mark

Portuguese escudo

French franc

Finnish markka

Dutch guilder

Irish pound

Italian lira

Austrian schilling

Spanish peseta

Danish krone

Swedish krona

Greek drachma

Pound sterling

Canadian dollar

Swiss franc

United States dollar

Japanese yen

Non-euro zone

(1) OJ L 222, 14.8.1978, p. 11.
(2) OJ L 372, 31.12.1986, p. 1.

40,3399

1,95583

200,482

6,55957

5,94573

2,20371

0,787564

1 936,27

13,76030

166,386

31 December

1999

7,44330

8,56250

330,300

0,621700

1,46080

1,60510

1,00460

102,730

1998

7,44878

9,48803

329,689

0,705455

1,80613

1,60778

1,16675

132,800

4.10.2000

EN

Official Journal of the European Communities

C 281/11

1.1. At 31 December 1999, the various currencies listed above, together with the euro, made up

the ECSC’s balance sheet as follows:

CURRENCY

ASSETS

LIABILITIES

(EUR)

1 489 052 756

1 719 607 735

81 983 657

529 865 635

139 129 652

573 397 236

707 977

3 589 318

457 617

121 659 139

238 505 038

8 179 208

55 995 507

32 551 821

563 913 065

138 392 711

555 979 452

0

2 076 280

0

120 295 403

176 763 379

3 702 982

50 397 421

Subtotal

3 242 522 740

3 363 680 249

715 243

1 220 008

296 315

0

1 998

0

857 372 107

729 899 870

591 397

275 428 560

109 515 592

589 413

284 009 143

109 481 289

Total

4 487 661 962

4 487 661 962

Euro

Belgian franc

German mark

Portuguese escudo

French franc

Finnish markka

Dutch guilder

Irish pound

Luxembourg franc

Italian lira

Austrian schilling

Spanish peseta

Danish krone

Greek drachma

Swedish krona

Pound sterling

Swiss franc

United States dollar

Japanese yen

NOTES:

The euro has a much larger place in the ECSC’s accounts than suggested by the above table.

This is explained by certain accounting operations, mainly the offsetting of accounts reeivable and
payable relating to currency swaps.

The offsetting of these items on the assets and liabilities sides is designed to prevent artificial inflation
of the balance sheet.

This accounting operation is carried out in euro and involved a total of EUR 193 464 564 in 1999.

The real weight of the euro in the ECSC’s accounts can therefore be assessed more accurately if this
amount is added both to the assets and to the liabilities sides of the balance sheet.

2.

ACCOUNTING PRINCIPLES AND METHODS

The financial statements are drawn up in accordance with generally recognised accounting prin-
ciples.

Charges and income for the financial year are converted to euro at the monthly accounting rate in
force on the day of the transaction.

C 281/12

EN

Official Journal of the European Communities

4.10.2000

3.

BALANCES WITH CENTRAL BANKS

This item represents the ECSC’s balances with the central banks of certain Member States.

4.

LOANS AND ADVANCES TO CREDIT INSTITUTIONS

4.1. With agreed maturity dates or periods of notice

The breakdown of the remaining time to maturity of these operations is as follows:

(EUR)

31 December

1999

1998

60 700 922

10 616 053

390 192 760

10 479 634

Total

71 316 975

400 672 394

Up to three months

Three months to one year

4.2.

Loans

The breakdown of the remaining time to maturity of these operations is as follows:

Up to three months

Three months to one year

One to five years

Over five years

31 December

1999

1998

(EUR)

60 655 213

250 263 601

538 569 222

82 155 410

54 614 003

275 119 394

827 990 889

91 669 356

Total

931 643 446

1 249 393 642

4.10.2000

EN

Official Journal of the European Communities

C 281/13

5.

LOANS AND ADVANCES TO CUSTOMERS

5.1.

Loans

The loans granted to credit institutions are shown under (cid:145)Loans and advances to credit institutions(cid:146)
(see note 4).

The other loans break down as follows:

1. Loans disbursed from borrowed funds

(cid:151) amounts outstanding

(cid:151) value adjustments

(EUR)

31 December

1999

1998

1 622 783 270

1 648 424 166

(cid:150) 143 847 841

(cid:150) 129 626 942

Subtotal

1 478 935 429

1 518 797 224

2. Loans from the special reserve and other own funds for financing subsidised housing

21 862 834

23 693 878

The breakdown of these loans by time remaining to maturity at 31 December is as follows:

Interim total

1 500 798 263

1 542 491 102

(cid:151) Up to three months

(cid:151) Three months to one year

(cid:151) One to five years

(cid:151) Over five years

1999

1998

41 007 561

63 949 913

19 462 330

90 966 387

1 015 442 411

1 074 090 693

524 246 220

487 598 634

3. Loans paid from the former Pension Fund to officials of the European Communities for housing

construction

4. Loan repayments overdue and interest on arrears

39 218 203

41 160 654

1 252 796

251 177

Grand total

1 541 269 262

1 583 902 933

NB: Loans are generally guaranteed by Member States, banks or businesses or by mortages.

5.2.

Levy

The 1998 and 1999 levy rate was 0 %, so the claims at 31 December 1999 therefore relate to
previous years.

Before value adjustment,
(EUR 7 488 192 at 31 December 1998).
legal proceedings
temporary deferment in respect of coal in stock (EUR 42 261 at 31 December 1998).

item amounted to EUR 6 061 793 at 31 December 1999
It comprises in particular EUR 5 281 288 subject to
(EUR 5 958 532 at 31 December 1998) and EUR 40 833 relating to

this

Payment of the levy in respect of coal in stock is temporarily deferred under a general decision
taken in 1972.

5.3.

Fines

This item contains the Commission’s claims on companies fined in accordance with the rules set out
in the Treaty.

After value adjustment it amounts to EUR 37 195 283 (EUR 90 001 060 at 31 December 1998).

C 281/14

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Official Journal of the European Communities

4.10.2000

This item has two main componentes.

A fine totalling EUR 104 364 350 that the Commission imposed on steel companies for infringing
the rules on competition in the marketing of steel beams (Decision 94/215/ECSC (1) of 16 February
1994). In its judgment of 11 March 1999, the Court of First Instance reduced the total fines by
EUR 24 774 000 to EUR 79 590 350. EUR 50 631 350 had been paid in fines by 31 December
1999. Seven companies have lodged appeals against the judgment of the Court of First Instance.

A fine totalling EUR 27 380 000 was imposed by the Commission (Decision 98/247/ECSC (2) of 21
January 1998) under Article 65 of the ECSC Treaty on steel companies for concerted agreement on
the formula for calculating the alloy surcharge. Payments totalling EUR 14 740 000 have been
received, while two thirds of the companies affected by the decision have lodged appeals with
the Court of First Instance.

5.4.

Interest subsidies to be recovered

This item comprises claims on companies in receipt of subsidised loans which the Commission has
been obliged to ask to reimburse all or part of the interest subsidy already paid.

6.

FINANCIAL ASSETS

The ECSC’s internal rules imposing the obligation to exercise due caution stipulate that portfolio
in 1998,
investments are to be confined to securities issued by first-ranking entities. However,
exceptionally, the ECSC acquired shares and other variable-income securities from a private-sector
company under an agreement to restructure the debt of a defaulting debtor.

6.1. Valuation

Bonds, other fixed-income securities and shares and similar securities are valued at the average
purchase price or the market value obtaining at the end of the financial year, whichever is the lower.

This principle is not applied in the case of securities considered as financial fixed assets (see note
6.5.).

(1) OJ L 116, 6.5.1994, p. 1.
(2) OJ L 100, 1.4.1998, p. 55.

4.10.2000

EN

Official Journal of the European Communities

C 281/15

6.2. Composition

Bonds and other fixed-income securities bread down as follows:

(EUR)

31 December

Value adjustments on
bonds/shares and similar
securities
Allocation (withdrawal)

1999

1998

(a) Bonds

ISSUED BY PUBLIC BODIES

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

OWN-DEBT SECURITIES

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

ISSUED BY OTHER BORROWERS

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

TOTAL BONDS

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

(b) Shares and similar securities (1)

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

GRAND TOTAL

(cid:151) Gross value

(cid:151) Value adjustments

(cid:151) Net value

1 223 352 880

1 114 016 464

29 957 417

(cid:150) 31 920 764

(cid:150) 1 963 347

1 191 432 116

1 112 053 117

23 359 671

22 028 111

13 234

(cid:150) 111 469

(cid:150) 98 235

23 248 202

21 929 876

510 404 016

390 861 607

6 750 157

(cid:150) 7 173 766

(cid:150) 423 609

503 230 250

390 437 998

1 757 116 567

1 526 906 182

36 720 808

(cid:150) 39 205 999

(cid:150) 2 485 191

1 717 910 568

1 524 420 991

98 449 511

90 385 039

(cid:150) 7 483 752

(cid:150) 48 130 986

(cid:150) 55 614 738

50 318 525

34 770 301

1 855 566 078

1 617 291 221

29 237 056

(cid:150) 87 336 985

(cid:150) 58 099 929

1 768 229 093

1 559 191 292

(1) These shares and securities were received by the ECSC on signing a plan to restructure the debt of a defaulting debtor.

C 281/16

EN

Official Journal of the European Communities

4.10.2000

6.3. Marturities in 2000

Securities in the portfolio reaching final maturity during 2000 represent the following amounts (in
EUR):

(cid:151) Issued by public bodies:

(cid:151) Own-debt securities

(cid:151) Issued by other borrowers:

189 167 611

14 076 656

167 500 363

Total:

370 744 630

6.4.

Listed/unlisted securities

The securities portfolio comprises 1 690 290 303 of securities with a stock-exchange listing, the
balance of 77 938 790 being unlisted securities.

6.5.

Financial fixed assets

6.5.1. Financial fixed assets are defined as securities that will remain in the portfolio until their final

maturity.

They comprise mainly short-term paper and own-debt securities repurchased for servicing ECSC
borrowings.

6.5.2. Financial fixed assets are valued at average purchase price or redemption value, whichever is the

lower.

The redemption value of these securities is less than the average purchase price by a total of
1 651 618.

6.5.3. Financial fixed assets are made up as follows (in EUR):

(cid:151) Issued by public bodies:

(cid:151) Own-debt securities:

(cid:151) Issued by other borrowers:

50 068 146

23 359 671

0

Total

73 427 817

7.

TANGIBLE AND INTANGIBLE ASSETS

Date of
acquisition

Acquisition price

31.12.1998 Net
value

Acquisitions

Net book value of
disposals

Amortisation

Operations during the year

(EUR)

31.12.1999 Net
value

Tangible assets

(cid:151) Lisbon

(cid:151) Windhoek

Intangible assets

1986 to 1993

2 670 796

1992

802 172

815 183

298 294

1 113 477

(cid:151) Lease on Milan building

1986

879 882

179 984

Total tangible and
intangible assets

1 293 461

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

224 882

590 301

254 796

43 498

0

254 796

268 380

590 301

(cid:151)

59 998

119 986

254 796

328 378

710 287

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Official Journal of the European Communities

C 281/17

The various buildings owned by the ECSC were originally leased to the European Community. The
rent paid on such leases provided a return on the funds invested by the ECSC.

Under the terms of the leases, in 1994 and 1995, the Commission repaid the outstanding principal
due to the ECSC with a view to transferring ownership officially from the ECSC to the European
Community.

The transfer of ownership of the building in Windhoek was completed in 1999.

For the ECSC, this transaction generated a capital gain of EUR 405 036, this being the difference
between the transfer price (EUR 659 832) and the net book value (EUR 254 796) at the date of
transfer.

As regards the other buildings, pending the completion of the legal formalities for the transfer of
ownership that are currently being conducted with the competent authorities, the advances received
from the European Community feature on the liabilities side of the balance sheet for a total of
EUR 2 531 228 (note 12).

8.

OTHER ASSETS

Exchange value in EUR of
the difference between currency
receivable and payable under currency exchange operations
(swaps) (1)

(cid:151) Portfolio taxes and VAT to be reclaimed

(cid:151) Loans to officials

(cid:151) Miscellaneous

(1) See note 12.

(EUR)

31 December

1999

1998

12 068 721

2 530 182

6 467 479

27 819

(cid:151)

2 619 620

5 423 399

40 370

Total

21 094 201

8 083 389

9.

PREPAYMENTS AND ACCRUED INCOME

(cid:151) Interest on loans and swaps

(cid:151) Interest on deposits and securities portfolio

(cid:151) Issuing costs and redemption premiums

(cid:151) Cumulative value adjustments

(EUR)

31 December

1999

1998

76 126 468

30 998 437

4 743 361

78 722 077

39 676 408

6 897 774

111 868 266

125 296 259

(cid:150) 5 338 503

(cid:150) 3 790 820

Total

106 529 763

121 505 439

C 281/18

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Official Journal of the European Communities

4.10.2000

10.

AMOUNTS OWED TO CREDIT INSTITUTIONS

The remaining time to maturity on these operations is as follows:

Repayable on demand

Up to three months

Three months to one year

One to five years

Over five years

(EUR)

31 December

1999

1998

(cid:151)

244

96 254 541

154 270 850

293 297 086

329 368 744

976 419 166

1 326 792 455

38 710 955

37 114 739

Total

1 404 681 748

1 847 547 032

11.

DEBTS EVIDENCED BY CERTIFICATES

No such borrowings are due to reach maturity in 2000.

12.

OTHER LIABILITIES

Exchange value in EUR of
the difference between currency
receivable and payable under currency exchange operations
(swaps) (1)

Current account, ECSC operating budget

Advance payments for transfer of buildings (2)

Other

(EUR)

31 December

1999

1998

(cid:151)

14 945 315

20 542 964

2 531 228

4 690 311

7 276 488

3 191 060

4 178 440

(1) See note 8.
(2) In accordance with the possibility offered under Decision of 11 June 1992, in the course of 1994 and 1995 the Commission

had made advance payments in respect of the transfer of the buildings leased to it by the ECSC (note 7).

Total

27 764 503

29 591 303

13.

ACCRUALS AND DEFERRED INCOME

Interest on borrowings and credit lines

Commissions on loans

Issuing premiums

(EUR)

31 December

1999

1998

79 638 283

87 650 053

146 412

4 739 972

189 976

6 079 179

Total

84 524 667

93 919 208

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Official Journal of the European Communities

C 281/19

14.

PROVISION FOR LIABILITIES AND CHARGES

Operations in 1999

(EUR)

31 December 1998

Allocation

Withdrawal

Exchange-rate
movement

31 December 1999

Provisions for withholding tax to be paid
Provision for interest-rate risk (1)

Provision for special costs relating to banking activities (2)

6 465 743
68 824 067

200 000

(cid:151)
(cid:151)

(cid:151)

Provision for appeal against Decision 94/215/ECSC (3)

39 129 309

12 468 954

Provision for appeal against Decision 98/247/ECSC (4)

8 287 062

218 562

6 465 743
24 938 502

(cid:151)
9 271 930

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

0
53 157 495

200 000

51 598 263

8 505 624

Total

122 906 181

12 687 516

31 404 245

9 271 930

113 461 382

(1) Following the default of one borrower, long-term fixed rate securities issued by the ECSC (i.e. with a maturity date after 2002) are no longer paired with assets items
bearing an equivalent interest rate. Under the principle of caution and in view of the expiry of the ECSC Treaty in 2002, a provision has been constituted to fully cover
interest-rate risks.

(2) This provision was created to cover any legal costs and other unforeseen expenditure. The risk in question is primarily in the legal field because the ECSC has less

recourse, for its operations, to national agents who bear all expenditure relating to loan operations.

(3) This provision was created from the fines paid under Decision 94/215/ECSC of 16 February 1994 to cover the possible reimbursement of the amounts received should
the Court of Justice rule in favour of the companies which have appealed against the judgment of the Court of First Instance of 11 March 1999 (note 5.3).
(4) This provision was created from the fines paid under Decision 98/247/ECSC of 21 January 1998 to cover the possible reimbursement of the amounts received should

the Court of First Instance rule in favour of the companies which have appealed against this Decision (note 5.3).

15.

COMMITMENTS FOR THE ECSC OPERATING BUDGET

In 1999, commitments for the ECSC operating budget were as follows:

Redeployment

Research

Interest subsidies Article 54

Interest subsidies Article 56

Social measures steel industry

Social measures
(Rechar)

coal

industry

Commitments at
31.12.1998

211 302 964

206 641 953

2 611 922

127 610 253

79 925 499

New legal commitments

Payments

Cancellations

(EUR)

Commitments at
31.12.1999

37 717 849

83 999 950

(cid:151)

(cid:151)

(cid:151)

68 209 325

88 413 465

439 425

10 339 497

15 237 878

29 292 604

151 518 884

7 922 086

194 306 352

49

32 095 651

14 829 583

2 172 448

85 175 105

49 858 038

67 570 231

23 836 000

17 068 232

1 214 456

73 123 543

Total

695 662 822

145 553 799

199 707 822

85 354 429

556 154 370

C 281/20

EN

Official Journal of the European Communities

4.10.2000

16.

PROVISION FOR FINANCING THE ECSC OPERATING BUDGET

Provision at 31.12.1998

Operations during the year

Withdrawal

Allocation

(EUR)

Provisions at 31.12.1999

Provision for budgetary contingencies (1)

80 000 000

21 000 000

(cid:151)

59 000 000

Provision for financing future operating budgets (2)

300 000 000

(cid:151)

34 000 000

334 000 000

Impact on the result

21 000 000

34 000 000

Provision for late-payment fines and surcharges to be
paid subsequently (3)

90 001 060

52 805 777

Provision for subsidies to be recovered (3)

6 041 382

1 501 404

Total

476 042 442

(cid:151)

(cid:151)

37 195 283

4 539 978

434 735 261

(1) This reserve is intended to cover any differences between expenditure committed and income generated by activities during the budget period.
(2) This provision was constituted as a precautionary measure with effect from the 1999 financial year. It was prompted by the reduction of the levy to 0 % from 1998 and

the need to plan for the regular financing of future operational bugets until 2002.

(3) Fines and interest subsidies whose repayment has been requested are considered as ECSC resources only when they have actually been paid. Fines imposed but not yet

paid and interest subsidies whose repayment has been requested are therefore allocated to provisions.

17.

PROVISIONS FOR MAJOR EXPOSURES

Against the background of the expiry of the ECSC Treaty in 2002 and the gradual reduction in
outstanding loans, exposure is becoming increasingly concentrated on a limited number of large
loans (these large exposures are defined in accordance with Directive 92/121/EEC of 21 December
1992 on the monitoring and control of large exposures).

The provision for major exposures concerns loans exceeding 25 % of the ECSC’s own funds which
are not covered by first-rate guarantees.

It is intended to provide cover specifically for this concentration of risk and to enable the ECSC to
weather any major default.

The provision, calculated on the basis of outstanding major exposures at 31 December 1999
according to a procedure recommended by a firm of international experts, totals EUR 18 million.

18.

RESERVES

Reserves at 31.12.1998
after allocation

Allocation (withdrawal)

Reserves at 31.12.1999
before allocation

Allocations at
31.12.1999

Reserves at 31.12.1999
after allocation

(EUR)

Guarantee Fund

Special Reserve

Former Pension Fund

530 000 000

23 000 000

553 000 000

176 055 284

72 959 662

(cid:151)

(cid:151)

176 055 284

72 959 662

(cid:151)

(cid:151)

553 000 000

176 055 284

1 617 659

74 577 321

Total

779 014 946

23 000 000

802 014 946

1 617 659

803 632 605

The Guarantee Fund is intended to cover lending and borrowing operations. After allocation of
EUR 23 million, the Guarantee Fund totalled EUR 553 million at 31 December 1999. This rein-
forcing of the Guarantee Fund is connected with the forthcoming expiry of the ECSC Treaty.

4.10.2000

EN

Official Journal of the European Communities

C 281/21

On 11 September 1996 the Commission confirmed its intention of maintaining reserves to cover
100 % of those loans outstanding after 23 July 2002 which are not guaranteed by a Member State.
This means that the reserves (Guarantee Fund and provisions) must be gradually increased to
approximately EUR 720 million.

In view of (a) the regular decrease in the amounts outstanding up to and after 23 July 2002 and (b)
the increase in the Guarantee Fund, the solvency ratio can be expected to depart from the 14 % to
16 % range laid down during the period of continuous operation and move towards 100 %.

The ECSC’s solvency ratio thus increased from 33 % at 31 December 1998 to 38 % at 31 December
1999.

The Special Reserve is used to grant loans from ECSC own funds to finance subsidised housing.

Lastly, the former Pension Fund originally represented the ECSC’s total pension obligations prior to
5 March 1968. Since that date, the Member States have assumed responsibility, via the general
budget, for the payment of staff pensions. This fund is used to finance housing loans for officials of
the European Communities and has also been used to grant special
loans to the coal and steel
industries.

19.

ANALYSIS OF THE RESULT FOR THE FINANCIAL YEAR

Overall ECSC performance is influenced by both the result of non-budgetary operations (lending/
borrowing, investment, exchange-rate variations) and the outturn of the ECSC operating budget.

19.1. Non-budgetary operations

Result

(EUR)

31 December

1999

1998

CHANGES

IN

GROSS OPERATING MARGIN BEFORE
PROVISIONS
(cid:151) Lending/borrowing operations
(cid:151) Interest on bank accounts
(cid:151) Transactions concerning portfolio securities
(cid:151) Miscellaneous

Total

NET CHANGES IN PROVISIONS
(cid:151) Provision for liabilities and charges (1)
(cid:151) Provision for major exposures (2)
(cid:151) Reserve for exchange differences (3)
(cid:151) Value adjustments in respect of loans and advances

2 065 277
6 319 306
50 243 418
12 660 996

71 288 997

23 257 179
5 000 000
(cid:150) 16 946 242
280 815

15 129 889
17 797 802
32 845 995
(cid:150) 2 044 464

63 729 222

(cid:150) 30 102 913
4 000 000
313 118
31 629 008

Result of non-budgetary operations

82 880 749

69 568 435

Amount allocated to financing the operating budget (4)

(cid:150) 79 716 477

(cid:150) 38 422 601

Result after deducting the net balance allocated to the operating
budget

3 164 272

31 145 834

(1) note 14.
(2) note 17.
(3) During 1999, changes in exchange rates produced profits on the Danish Krone, pound sterling, Swedish krona and Japanese

yen totalling EUR 16 946 242, which were offset by an allocation to the reserve for exchange differences.

(4) In accordance with the change of accounting method on 31 December 1992, income received during the 1999 financial year

has been allocated to financing the 1999 operating budget (net balance as in note 19.2).

C 281/22

EN

Official Journal of the European Communities

4.10.2000

19.2. Out-turn of the ECSC operating budget

(EUR)

31. December

1999

1998

OUT-TURN OF THE BUDGET
Expenditure
(cid:151) Administrative expenditure (note 21)
(cid:151) Legal commitements (note 15)
(cid:151) Financing of future operating budgets

Revenue (net amounts)
(cid:151) Levy (note 25)
(cid:151) Fines (note 25)
(cid:151) Interest subsidies (note 25)
(cid:151) Miscellaneous (note 25)
(cid:151) Cancellations of legal commitments (note 25)
(cid:151) Net balance for the year (note 19.1)

5 000 000
145 553 799
34 000 000

5 000 000
153 992 955
26 000 000

Total

184 553 799

184 992 955

(cid:151)
16 605 836
2 557 049
320 008
85 354 429
79 716 477

(cid:151)
6 686 169
4 808 477
831 970
134 243 738
38 422 601

Total

184 553 799

184 992 955

Budget outturn

0

0

19.3. Result for the financial year

(EUR)

31 December

1999

1998

from no-budgetary operations after deducting the net

Result
balance allocated to the operating budget (note 19.1)

Outturn of the budget (note 19.2)

3 164 272

31 145 834

0

0

Withdrawal from provisions for financing the operating budget/
budgetary contingencies (note 16)

21 000 000

(cid:151)

Allocation to the Guarantee Fund (note 18)

(cid:150) 23 000 000

(cid:150) 30 000 000

Total

3 164 272

31 145 834

Result before allocation

1 164 272

1 145 834

20.

INTEREST AND SIMILAR CHARGES

Interest on loans and swaps

Bank interest

Issuing costs and redemption premiums

(EUR)

31 December

1999

1998

177 112 390

229 569 814

44 317

2 158 102

15 769

2 476 147

Total

179 314 809

232 061 730

4.10.2000

EN

Official Journal of the European Communities

C 281/23

21.

ADMINISTRATIVE EXPENDITURE

The ECSC paid a lump sum of EUR 5 million to the general budget of the Commission of the
European Communities to cover its administrative expenditure.

22. OTHER OPERATING CHARGES

Borrowing costs

Swift/Reuters charges

Other

23.

INTEREST RECEIVED AND OTHER INCOME

Interest on loans and swaps

Payment and redemption premiums

Bank interest

Interest on financial assets

24.

OTHER OPERATING INCOME

Lapsed coupons and bonds

Other income from lending activities

Miscellaneous

31 December

(EUR)

1999

98 417

192 031

17 864

Total

308 312

1998

27 159

205 013

35 536

267 708

(EUR)

31 December

1999

1998

179 588 983

242 206 441

2 208 051

6 637 370

66 015 368

3 809 968

17 997 505

82 066 045

Total

254 449 772

346 079 959

31 December

(EUR)

1999

12 681

(cid:151)

442 949

455 630

1998

27 964

1 744 517

956 810

2 729 291

Total

C 281/24

EN

Official Journal of the European Communities

4.10.2000

25.

INCOME RELATING TO THE OPERATING BUDGET

Levy (1)

Fines (2)

Miscellaneous

(EUR)

31 December

1999

1998

(cid:151)

16 605 836

320 008

(cid:151)

6 686 169

831 970

Cancellation of legal commitments (note 15)

85 354 429

134 243 738

Repayment of interest subsidies notes 5.4 and 16) (3)

2 557 049

4 808 477

Total

104 837 322

146 570 354

(1) The ECSC is authorised under the Treaty to impose a levy on coal and steel produced by undertakings in the Community.
The levy is calculated on the basis of the average values in the Community for the various products concerned. The levy rate
was 0,31 % for the years 1980 to 1990, 0,29 %, for 1991, 0,27 % for 1992, 0,25 % for 1993, 0,23 %, for 1994, 0,21 % for
1995, 0,19 % for 1996 and 0,17 % for 1997. The European Commission decided to set the levy rate for the 1998 and 1999
financial years at 0 %.

(2) This item comprises the revenue from fines imposed by the Commission in accordance with Articles 58 and 65 of the ECSC

Treaty, together with surcharges for late payment.

(3) This item comprises the revenue from the repayments of interest subsidies which the Commission was obliged to demand.

26. OFF-BALANCE-SHEET COMMITMENTS

26.1. Commitments received

(EUR)

31 December

1999

1998

Commitments arising from swaps

(cid:151) Notional capital commitments relating to interest-rate swaps

222 436 108

203 535 235

(cid:151) Capital commitements relating to interest-rate and currency

205 533 225

169 388 841

swaps

Total

427 969 333

372 924 076

26.2. Commitments given

(EUR)

31 December

1999

1998

(a) Loans granted

(cid:151) Loans from borrowed funds signed but not yet disbursed

(cid:151) Loans from own funds signed but not yet disbursed

(cid:151)

(cid:151)

109 708 164

(cid:151)

(b) Commitments arising from swaps

(cid:151) Notional capital commitments relating to interest-rate

swaps

222 436 108

203 535 235

(cid:151) Capital

commitments

relating

to interest-rate

and

currency swaps

193 464 504

184 334 156

c) Receipts from lapsed coupons and bonds

12 681

27 964

Total

415 913 293

497 605 519

4.10.2000

EN

Official Journal of the European Communities

C 281/25

27.

CHANGES IN THE FINANCIAL SITUATION FOR THE YEAR ENDING 31 DECEMBER 1999

(EUR million)

1999

1998

ORIGIN OF FUND

Balance of profit and loss account

Items not involving a movement of funds

(cid:151) Amortisation of issuing costs and redemption premiums

(cid:151) Value adjustments in respect of financial assets

(cid:151) Value adjustments in respect of tangible assets

(cid:151) Value adjustments in respect of loans and advances, net

(cid:151) Decrease in (cid:145)Provision for legal commitements(cid:146)

(cid:151) Increase (decrease) in (cid:145)Provision for financing the ECSC operating

budget(cid:146)

(cid:151) Increase (decrease) in accruals and deferred payments

(cid:151) Decrease in accruals and deferred income and issuing costs/

redemption premiums

(cid:151) Increase (decrease) in (cid:145)Other liabilities(cid:146)

(cid:151) Increase in (cid:145)Other assets(cid:146)

(cid:151) Allocation to (withdrawal

from) the provisions for liabilities and

charges

(cid:151) Allocation to (withdrawal from) the provisions for major exposures

(cid:151) Withdrawal from the provision for changes in the euro rate

(cid:151) Exchange-rate adjustments in respects of borrowings and loans

(cid:151) Allocation to the Guarantee Fund/Special Reserve

1,2

2,2

29,2

0,3

15,7

(cid:150) 139,5

(cid:150) 41,3

(cid:150) 9,4

11,3

(cid:150) 1,8

41,3

(cid:150) 9,4

(cid:150) 5,0

16,9

20,8

23,0

Total funds

(cid:150) 44,5

OTHER RESOURCES

(cid:151) Proceeds from borrowings

(cid:151) Loan repayments

(cid:151) Disposals of buildings

(cid:151) Decreases in bank balances and securities portfolio

USE OF FUNDS

(cid:151) Loan disbursements

(cid:151) Redemption of borrowings

(cid:151) Increase in bank balances and securities portfolio

Total resources

Total uses

(cid:151)

463,5

0,3

91,8

511,1

(cid:151)

511,1

(cid:151)

511,1

1,1

2,3

43,8

0,4

(cid:150) 36,8

(cid:150) 158,1

34,3

(cid:150) 27,3

41,8

16,8

178,5

35,5

(cid:150) 4,0

(cid:150) 0,3

(cid:150) 17,5

30,0

140,5

(cid:151)

690,6

0,9

(cid:151)

832,0

23,2

797,2

11,6

832,0

C 281/26

EN

Official Journal of the European Communities

4.10.2000

OUTTURN OF THE ECSC OPERATING BUDGET FOR FINANCIAL YEAR 1999

Requirements

Resources

(EUR million)

Forecast

Outturn

Resources for the financial year

Forecast

Outturn

Operations to be financed from current
resources (not reimbursable)

1. Administrative expenditure

2. Aid for redeployment (Article 56)

3. Aid for research (Article 55)

3.1. Steel research

3.2. Coal research

56,0

28,0

4.

5.

Social measures (coal) (Article 56)

Provisions
budgets

for

financing future

5,0

75,0

84,0

32,0

0,0

56,0

28,0

5,0

37,7

84,0

23,9

34,0

1.

Current resources

1.1. Yield from levy at 0,00 %

1.2. Net balance

1.3. Fines and surcharges

for

late

payment

1.4. Miscellaneous

2.

Cancellation for commitments

3. Unused resources carried over

from 1998

4. Withdrawal from the provision
ECSC

the

for
financing
operating budget

5.

Extraordinary resources

0,0

80,0

p.m.

5,0

57,0

p.m.

54

p.m.

0,0

79,7

16,6

2,9

85,4

0,0

0,0

0,0

Total

196,0

184,6

Total

196,0

184,6

REPORT OF THE EUROPEAN COURT OF AUDITORS

on the financial statements of the European Coal and Steel Community at 31 December 1999

This report concerns the reliability of the accounts drawn up by the Commission in accordance with

1.
Article 45c of the Treaty establishing the European Coal and Steel Community.

The Court has audited the accounts and financial statements of

2.
the European Coal and Steel
Community at 31 December 1999 in accordance with generally accepted auditing standards and carried
out such checks as it considered necessary. By means of this audit the Court obtained a reasonable basis for
the opinion expressed below.

3.
In the Court’s opinion, the attached financial statements (balance sheet at 31 December 1999, profit
and loss account, statement of the allocation of the surplus for the financial year and notes to the financial
statements), which have been drawn up in accordance with generally accepted accounting principles, give a
true and fair view of the assets and financial situation of the European Coal and Steel Community at 31
December 1999 and of the result of its operations for the year then ended.

Luxembourg, 30 June 2000.

Jan O. KARLSSON

President of the Court

V(cid:237)tor CALDEIRA

Member of the Court