Commission Decision of 21 December 2000 on German aid to the coal industry for 2000 and 2001 (Text with EEA relevance) (notified under document number C(2000) 4407)
Date: 2000-12-21
Institutions: European Commission
Subjects: Germany, State aid, application of EU law, coal industry, control of State aid, financial aid

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COMMISSION

COMMISSION DECISION

of 21 December 2000

on German aid to the coal industry for 2000 and 2001

(notified under document number C(2000) 4407)

(Only the German text is authentic)

(Text with EEA relevance)

(2001/361/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(3)

Having regard to the Treaty establishing the European Coal and
Steel Community,

Having regard to Commission Decision No 3632/93/ECSC of
28 December 1993 establishing Community rules for State aid
industry (1), and in particular Article 2(1) and
to the coal
Article 9 thereof,

(4)

Having regard to Commission Decision 1999/270/ECSC of 2
December 1998 authorising Germany to grant aid to the coal
industry for 1998 and also giving a favourable opinion on the
compatibility with Decision No 3632/93/ECSC of the new
guidelines for coal policy up to the year 2002 (2),

Whereas:

I

(1)

(2)

By letter of 28 September 1999, Germany notified the
Commission, in accordance with Article 9(1) of Decision
No 3632/93/ECSC, of the aid it intended to grant to the
coal industry in 2000. By letters of 21 December 1999,
18 February 2000, 13 April 2000, 15 May 2000, 14
July 2000 and 22 November, Germany submitted the
information requested by the Commission.
additional

By letter of 29 September 2000, moreover, Germany
notified the Commission, in accordance with Article 9(1)
of Decision No 3632/93/ECSC, of the aid it intended to
industry in 2001. By letter of 22
grant to the coal
November 2000, Germany submitted the additional
information requested by the Commission.

(1) OJ L 329, 30.12.1993, p. 12.
(2) OJ L 109, 27.4.1999, p. 14.

In its letters of 21 December 1999 and 22 November
2000, Germany more specifically notified the Commis-
in accordance with Article 8(4) of Decision No
sion,
3632/93/ECSC, of certain changes to the plan for the
modernisation,
rationalisation and restructuring of
activity in the coal industry approved by the Commis-
sion by Decision 1999/270/ECSC.

In accordance with Decision No 3632/93/ECSC,
the
Commission first gives an opinion on the compatibility
of the proposed changes to the plan referred to in recital
3 with the general and particular objectives of
the
Decision. Secondly, it gives its opinion, in accordance
with the abovementioned Decision, on the following
financial measures:

(a) for 2000:

— operating aid within the meaning of Article 3 of
the Decision totalling DEM 3 847 million,

— aid for

the reduction of activity within the
meaning of Article 4 of the Decision totalling
DEM 3 138 million,

— aid within the meaning of Article 3 of

the
Decision totalling DEM 71 million to maintain
an underground labour
(‘Bergmanns-
prämie’),

force

— aid to cover

costs within the
meaning of Article 5 of the Decision totalling
DEM 2 124 million;

exceptional

(b) for 2001:

— operating aid within the meaning of Article 3 of
the Decision totalling DEM 3 433 million,

— aid for

the reduction of activity within the
meaning of Article 4 of the Decision totalling
DEM 1 889 million,

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— aid within the meaning of Article 3 of

the
Decision totalling DEM 67 million to maintain
an underground labour
(‘Bergmanns-
prämie’),

force

— aid to cover

costs within the
meaning of Article 5 of the Decision totalling
DEM 2 740 million.

exceptional

(5)

(6)

(7)

(8)

The financial measures proposed by Germany for the
coal industry comply with the provisions of Article 1(1)
of Decision No 3632/93/ECSC.
In accordance with
Article 9(4), the Commission is therefore required to
give an opinion on these measures. For this purpose, it
checks whether they conform to the general objectives
and criteria defined in Article 2 and the specific criteria
defined in Articles 3, 4 and 5 of the Decision and
whether they are compatible with the functioning of the
in accordance with
common market. Furthermore,
Article 9(6) of the Decision, the Commission has to
decide whether the notified measures are compatible
with the plan for modernisation, rationalisation, restruc-
turing and the reduction of activity, as modified by
Germany.

II

On 13 March 1997, agreement was reached on the new
guidelines for the German coal industry for the period
1998 to 2005 (hereinafter called the agreement on coal)
between the Federal Government,
the Federal State
Governments of North Rhine-Westphalia and Saarland,
the coal undertakings and the trade union federations
for mining and electricity production. Although the
planning was for the period up to 2005, the Commis-
sion, by Decision 1999/270, approved the various
modernisation, rationalisation, restructuring and reduc-
tion of activity measures only up to 2002, more specifi-
cally the date of expiry (23 July 2002) of the ECSC
Treaty and of Decision No 3632/93/ECSC.

from 47 million tce (1)

This agreement provided for a continuing reduction in
production,
in 1997 to 37
million tce in 2002. This plan involved a reduction of
30 000 in the workforce to a total of 56 000 in 2002,
including subsidiary activities. The agreement also
provided for a gradual reduction in the total amount of
aid linked to the new plan for the restructuring of the
German coal
the ceiling being fixed at
DEM 6,9 billion for 2002.

industry,

Only 12 production sites were to remain operational
after 2002. Apart from the merger of several sites and
the concentration of activity on the most productive
deposits, the agreement also provided for the closure of
three mines. The ‘Westfalen’ and ‘Göttelborn/Reden’
mines were due thus due to cease production in 2000,
while the closure of the ‘Ewald/Hugo’ mine was planned
for 2002.

(1) Tonnes of coal equivalent.

(9)

(10)

In view of the difficult conditions on the international
markets, due in particular to the rapid fall in coal prices
since 1997, and given the fact that the aid provided for
in the coal agreement could not exceed a certain ceiling
established in the framework of multiannual planning.
Germany decided to bring forward the closure of the
‘Ewald/Hugo’ mine to 30 Apil 2000. The year 2000 thus
sees the closure of three production units.

The plan for the modernisation, rationalisation, restruc-
turing and reduction of activity in the coal industry for
the period 1998 to 2002 is based on two fundamental
objectives, namely optimum use of the lower financial
resources and reduction of production and productions
costs.

(11) Under the plan, moreover, restructuring measures must
be implemented in a way which ensures that the work-
reduced in a socially acceptable manner,
force is
avoiding economic redundancies, and secondly that the
regional impact of the measures adopted is taken into
account.

(12)

(13)

(14)

(15)

(16)

In order to achieve these objectives, the situation of the
production sites must be assessed on the basis of the
following criteria: extent of the deposit, coal quality,
costs. These standard criteria should make it possible to
provide an objective assessment of the current situation
and the future development of the production units.

Commission Decision 1999/270/ECSC of 2 December
1998 also stated that ‘it can be concluded that a sustan-
tial reduction in aid can largely be achieved by means of
measures to reduce mining activity’. Indeed, ‘even if the
average production costs in the German coal industry
have fallen slightly, taking account of Article 3(3) of
Decision No 3632/93/ECSC,
the production costs,
expressed at 1992 constant prices, are still too high as
they should be DEM 242 per tce in 2002 as compared
with DEM 288 per tce in 1992’.

III

In the light of the above, the German Government noti-
fied the Commission on 14 December 1999 of
its
decision to close a further two production sites in 2001
and 2002. Under the coal agreement, these measures
were not due to be taken until after 2002.

Several factors account for the early closure of these two
production units, particularly the fall in coal prices on
international markets to an historically low level and the
sharp decline in demand for coal from the steel industry
which has led to a substantial reduction in revenue.

The first measure planned for 2001 is the amalgamation
of the ‘Auguste Victoria’ and ‘Blumenthal/Haard’ mines.
Of the ‘Blumenthal/Haard’ mine, only the Haltern coal-
field will be maintained with access from the ‘Auguste
Victoria’ mine. The latter features a compact well struc-
tured field allowing optimum working.

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(17)

(18)

(19)

(20)

The ‘Auguste Victoria’ mine should produce 3,160
million tce in 2000 and has 3 600 registered under-
ground workers. As
the ‘Blumenthal/Haard’
regards
mine, the German authorities consider that it should
produce 2,124 million tce in 2000, with 3 370 regis-
tered underground workers.

The amalgamation of the two mines in 2001 will bring
production down to some 3,5 million tce, a reduction
estimated at between 1,5 and 2 million tce compared
with 2000. The number of underground workers should
not
exceed 4 000, a reduction of around 3 000
compared with the year 2000.

The second measure planned for 2002 is the amalgama-
tion of the ‘Friedrich Heinrich/Rheinland’ and ‘Nieder-
berg’ mines. Production at the ‘Niedeberg’ site will be
finally closed down, the two deposits maintained being
attached to the ‘Friedrich Heinrich/Rheinland’ mine.

The ‘Friedrich Heinrich/Rheinland’ mine should produce
3,298 million tce in 2000 and has 3 090 registered
line should
underground workers. The ‘Niederberg’
produce 2,132 million tce in 2000, with 1 720 under-
ground workers.

(21) After amalgamation in 2002, the production capacity of
the mine should be reduced to some 3,5 million tonnes,
a reduction estimated at 2 million tonnes compared with
2000. The amalgamated mine should employ 3 800
underground workers, a reduction of around 1 000
posts compared with 2000.

(22) Although the coal agreement provided or an output of
the additional measures
37 million tce in 2002,
concerning reduction of activity — including the
closures of two mines referred to above (‘Blumenthal/
Haard’ and ‘Niederberg’) — will cut production in 2002
to less than 29 million tce.

(23) At 35 million tce, estimated production for 2000 is
therefore lower than had been foreseen by the coal
agreement for 2002.

(24)

In its notification of 22 November 2000, Germany
stated that new reductions of activity inevitably leading
to additional closures of production sites had to be
considered.

(25) According to the notifications of 28 September and 14
December 1999 concerning the year 2000, Germany
was proposing to grant aid under Article 3 of Decision
No 3632/93/ECSC totalling DEM 5 047 million and aid
under Article 4 of that Decision totalling DEM 2 024
million. According to the German Government, new
measures relating to reduction of activity will entail a
revision of the aid granted under Decision No 3632/93/
ECSC. According to the notification of 22 November
2000, aid proposed for 2000 under Article 3 of
Decision No
to
DEM 3 847 million and aid under Article 4 of that
Decision to DEM 3 138 million. In other words, this

now amounts

3632/93/ECSC

corresponds to a reduction of DEM 1 200 million in aid
under Article 3 of Decision No 3632/93/ECSC.

(26) According to the German Government, these new meas-
ures to reduce activity will have very serious social and
regional consequences if they are not planned in an
It should be emphasised in this
optimum manner.
connection that
the unemployment rate recorded in
coalmining areas is already significantly higher than that
the
in regions wihout coal. Germany estimates that
unemployment rate in the Ruhr coalfield was 14 % in
1999 and 12 % in Saarland, although these figures are
even higher if the spotlight is placed in particular on the
situation in locations affected by the decline in coal
production. The major reductions in activity carried out
in recent years, which will have resulted in a 25 %
reduction in coal production between 1997 and 2000,
have contributed to this difficult social situation.

(27)

The closure of
three mines in 2000 alone and the
cutbacks in production already planned for 2001 and
2002 will considerably worsen the social situations in
the regions concerned. The total workforce in the coal
industry was expected to fall from 66 000 in 1999 to
57 000 in 2000. Germany expected the restructuring of
the coal
industry to cut the workforce by a further
21 000 between 2000 and 2005, an average rate of 350
to 400 job losses per month.

(28) Germany considers that the very difficult social situation
described in recitals 26 and 27 cannot be allowed under
any circumstances to be aggravated further by new
measures relating to reduction of activity to be imple-
mented immediately. The current programme of accom-
panying social measures is based very largely on the
effective redeployment of the workforce outside the coal
industry. If the workforce in the coal industry were to be
cut at a faster rate, this would seriously compromise this
programme.

(29)

(30)

Consequently, in order to alleviate as far as possible the
social and regional problems which will inevitably result
from the new reductions in activity notified by Germany
in its letter of 22 November 2000, the German authori-
ties consider that it will be possible to carry out the
latter measures only after 2002.

The German Government undertakes however to imple-
ment these closure measures as soon as possible after
2002, in a manner which is compatible with the under-
takings entered into by the various interested parties in
Germany, particularly under the agreement on coal. It
should be pointed out in this connection that the agree-
ment on coal
is based not only on criteria for the
optimum use of financial resources, and a reduction in
output and costs but also on the principle of a restruc-
turing of the coal industry which takes account of the
to reduce
social and regional
activity. It should moreover be noted that several meas-
ures, including those referred to in recitals 14 and to 23
above, already result in reductions in production and the
workforce which are significantly greater than those
provided for in the coal agreement concluded in 1997.

impact of measures

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(31)

In any event, all the closure measures referred to in
recitals 24 and 25 will be implemented in an effective
and tangible way at the latest immediately after the
expiry of the coal agreement.

IV

the principle of reducing the coal

(32) According to the 20th recital of Decision No 3632/93/
ECSC,
industry's
production costs and capacity is necessary in order to
achieve degression of aids. The 21st recital lays down
moreover
rational distribution of
production requires reductions of costs and of capacity
to be concentrated primarily on those areas of produc-
tion receiving the highest level of aid’.

‘a policy of

that

(33)

In this connection, Article 2(1) of the abovementioned
Decision lays down that aid granted to the coal industry
must help to achieve at least one of the three objectives
mentioned,

including the following:

(34)

(35)

(36)

— to make, in the light of coal prices on international
markets, further progress towards economic viability
with the aim of achieving degression of aids,

— to solve the social and regional problems created by
total or partial reductions in the activity of produc-
tion units.

The closure measures which will be carried out by
means of mergers of mines in 2001 and 2002, and the
new measures to reduce activity to be implemented by
Germany after 2002, must help to achieve the objectives
set out in recital 33. They must bring about a concentra-
tion of production at those sites offering, in terms of
production costs,
improving
economic viability.

the best prospects of

Coal production which cannot help to achieve this
objective will be phased out and will be eligible only for
aid for the reduction of activity under Article 4 of
Decision No 3632/93/ECSC.

The German auhorities have scheduled certain closure
measures to take effect after the expiry of Decision No
3632/93/ECSC. As stated in recitals 26 to 29 above, and
in accordance with the provisions of Article 4(2) of
Decision No 3632/93/ECSC, these measures cannot be
implemented more quickly because of their exceptional
social and regional consequences. It should be pointed
out in this connection that major reductions of activity
will be carried out in 2001 and 2002, while 2000 has
already seen the closure of three mines.

(37)

In accordance with Article 2(2) of Decision No 3632/
93/ECSC, the measures which will be carried out after
2002 form part of a plan for a gradual and continuous
reduction of activity providing for a significant reduction
before the expiry of Decision No 3632/93/ECSC.

(38)

Production of coal in Germany, estimated at 35 million
tce for 2000 will have to be cut to 30,5 million tce in
2001 and 28,5 million tce in 2002, which is a reduction
in capacity of almost 20 % in the space of two years.

The German Government undertakes to ensure that the
reductions in production referred to in recitals 36 and
37 above are carried out in strict compliance with the
provisions of Decision No 3632/93/ECSC by the sole
coalmining undertaking in Germany, Deutsche Stein-
kohle AG, which forms part of the RAG Aktiengesell-
schaft Group. In particular, Deutsche Steinkohle AG will
carry out all necessary measures to achieve the reduc-
tions in production among the production sites in the
undertaking,
for which there will be an additional
DEM 1 200 million of aid for reduction of activity.

(39) All these reductions of activity will also enable Germany
to achieve degression of aid. The agreement on coal
concluded in 1997 provides for a ceiling on such aid,
which is fixed at DEM 6 900 million for 2002. Having
regard to production conditions and price trends on
international markets, such a reduction in the amount of
aid requires the gradual closure of the least profitable
production capacities.

(40)

(41)

(42)

The Commission notes that these reductions of capacity
form part of the sequence of the major measures for
restructuring, rationalisation, modernisation and reduc-
tion of activity which have already been carried out
since the 1997 coal agreement came into force.

These measures which resulted in a reduction in produc-
tion from 47 million tce to 35 million tce between 1997
and 2000, have produced a significant reduction in
production costs. (Thus, the production costs linked to
production sites receiving aid under article 3 of Decision
No 3632/93/ECSC were reduced — at constant 1992
prices — by around 10 % between 1994 and 1997 and
should fall by 6 % between 1997 and 2000). (1). The
new rationalisation measures should moreover allow
further reductions in production costs (of up to 6 %
between 2000 and 2001 and 4 % between 2001 and
2002).

The successive plans implemented by Germany should
therefore allow a significant reduction in production
costs expressed at constant prices of
the order of
DEM 62 per tce over the period covered by Decision No
3632/93/ECSC. This must be regarded as being in line
with the provisions of Article 3 of Decision No 3632/
93/ECSC.

(43) Having regard to the above, the Commission considers
that the modifications to the plan for modernisation,
rationalisation, restructuring and reduction of activity
which was approved by the Commission in its Decision
1999/270/ECSC of 2 December 1998, are compatible
with the objectives and criteria laid down in Decision No
3632/93/ECSC, and in particular Articles 2, 3 and 4
thereof. The gradual reductions in production capacity
will have to help to achieve the objectives laid down in
Article 2(1), first and second indents. Firstly, in accord-
ance with Article 3 of Decision No 3632/93/ECSC,
further progress towards economic viability will have to

(1) The decision adopted by the Commission contains information on
the production costs of Deutsche Steinkohle AG which must be
treated as confidential. Solely for the purposes of this publication, it
has been replaced by figures expressed as percentages.

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be made with the aim of achieving degression of aids.
Secondly, in accordance with Article 4 of Decision No
3632/93/ECSC, these measures have been designed to
solve the social and regional problems created by reduc-
tions in activity.

(44) Germany will give reasons for any deviation from the
plan for modernisation, rationalisation, restructuring and
reduction of activity in coalmining which is the subject
of this Commission Decision.

(45)

If it becomes apparent, in particular, that the condiions
and criteria laid down in Article 3 of Decision No 3632/
93/ECSC cannot be met, Germany will propose to the
Commission on its own initiative
the necessary
corrective measures. These measures include a possible
review of the classification of production capacities in
accordance with Articles 3 and 4 of Decision No 3632/
93/ECSC.

V

(46)

(47)

(48)

The amounts of DEM 3 847 and 3 433 million that
Germany is proposing to grant to the coal
industry
under Article 3 of Decision No 3632/93/ECSC, for 2000
and 2001 respectively, are intended to cover the differ-
ence between production costs and the selling price for
coal freely agreed between the contracting parties on the
basis of the conditions prevailing on the world market
for coal of similar quality from non-member countries.

This aid is granted only to cover operating losses linked
to production capacities meeting the conditions laid
down in Article 2(1),
indent and Article 3 of
first
Decision No 3632/93/ECSC.

The measures relating to restructuring, rationalisation,
modernisation and reduction of activity in the coal
industry taken since 1994 have enabled significant
progress to be made in terms of a reduction of produc-
tion costs for coal. For production capacities receiving
aid under Article 3 of Decision No 3632/93/ECSC,
production costs, expressed at constant 1992 prices,
(went down by 12 % between 1994 and 1999). In 2000,
production costs (will record a further reduction of
around 3 % compared with 1997).

(49)

The year 2001 will see a further significant reduction in
production costs (of 6 %) in the space of a year.

(50)

These reductions in production costs are the result of
industry, and in
the major restructuring of the coal
particular the gradual closure of
the least profitable
production units which do not meet the criteria laid
down by Article 3 of Decision No 3632/93/ECSC.

(51)

(52)

(53)

(54)

(55)

(56)

It should be noted that the annual reductions in produc-
tion costs of the German coal industry have, to some
extent, been offset by the costs connected with the
workforce of the undertaking. There has been some
delay in following up the reductions in production with
in order to
the necessary cutbacks in the workforce,
attenuate as far as possible the social consequences of
the measures to reduce activity. Costs in 2000 have
therefore been influenced by the excessive size of the
workforce compared with the level of activity.

The reductions in production costs in 2000 and 2001
helped to improve the economic viability of the German
coal industry. Although the level of costs remains high,
the sustained efforts which have led to the significant
ongoing reduction in production costs mean that coal-
mining is less unprofitable and uncompetitive.

The level of coal prices on the international market has,
to a certain degree, limited the impact of the reductions
in production costs on improved viability of the coal
industry. The measures to reduce certain production
capacities and the already apparent recovery in coal
prices on the world market should however help to
increase the impact on reductions in production costs
on the viability of the sector.

and economic

The Commission has carried out a detailed analysis of
the operating conditions
situations
specific to each production unit. Although there are
certain variations between the production costs of the
various production sites,
the situation for each site
considered individually does not differ significantly from
the situation and development of the coal industry as a
whole. The terms and conclusions of the analysis of the
data relating to the whole of the German coal industry
therefore apply mutatis mutandis at
the
various production units.

the level of

The restructuring measures have moreover helped,
in
accordance with Article 2(1), first indent of Decision No
3632/93/ECSC, to achieve degression of aid. Operating
aid, not including the amount for the ‘Bergmannsprämie’
went down from DEM 6 357 million in 1997 to
DEM 5 141 million in 1999.
It will be DEM 3 847
million for 2000 and DEM 3 433 million for 2001.

The reduction in the amount of operating aid between
2000 and 2001 is moreover directly linked to a reduc-
tion in aid per tonne. The efforts to reduce production
costs therefore reduced the need for State aid for
production covered by measures under Article 3 of
Decision No 3632/93/ECSC.

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(57)

(58)

In accordance with Article 3(1), first indent, of Decision
No 3632/93/ECSC, Germany is taking the necessary
measures to ensure that the amount of aid per tonne
does not exceed for each production unit the difference
between the production cost and foreseeable revenue in
2000 and 2001 respectively. Germany undertakes more-
over to ensure,
in accordance with Article 3(1) third
indent of the abovementioned Decision, that the amount
of operating aid per tonne does not cause delivered
prices for Community coal to be lower than those for
coal of a similar quality from non-member countries.

Should it transpire that certain production capacities
could not meet the conditions laid down in Article 3 of
Decision No 3632/93/ECSC, Germany will give the
reasons for any deviations from the forecasts given in
the plan for modernisation, rationalisation, restructuring
industry and
and reduction of activity in the coal
compared with the economic and financial
forecasts
submitted to the Commission in connection with the
notification of aid relating to 2000 and 2001. Germany
will propose to the Commission, on its own initiative,
where appropriate, the necessary corrective measures,
including measures to reduce production capacity in
addition to those mentioned in recitals 14 to 31.

(59) On the basis of the information provided by Germany,
and having regard to the obligations on the German
Government set out in recitals 82 to 90 of this Decision,
the operating aid planned for 2000 and 2001 is
compatible with Decision No 3632/93/ECSC, and in
particular Articles 2 and 3 thereof. These aid amounts,
DEM 3 847 million for 2000 and DEM 3 433 million
for 2001, are moreover in line with the provisions of
the plan for modernisation, rationalisation, restructuring
and reduction of activity in the coal
industry, and in
particular the new guidelines for this plan as set out in
recitals 14 to 31.

VI

(60)

The sums of DEM 3 138 million and DEM 1 889
million that Germany is proposing to grant to the coal
industry under Article 4 of Decision No 3632/93/ECSC,
for 2000 and 2001 respectively, are intended to cover
the difference between production costs and the selling
price for coal
freely agreed between the contracting
parties on the basis of the conditions prevailing on the
world market for coal of a similar quality from non-
member countries.

(61)

In accordance with Article 4(1) of the abovementioned
Decision, this aid is granted only for the purpose of
covering the operating losses
linked to production
capacities which are unable to meet the conditions laid
down in Article 3(2) of the said Decision.

(62)

(63)

The considerable amount of aid notified under Article 4
of Decision No 3632/93/ECSC for 2000 reflects the
major reduction of activity measures carried out during
that year, as well as those planned for subsequent years.
As stated in recitals 14 to 45, this reduction in capacity
must result in a concentration of production at those
sites offering the best prospects of improving economic
viability in terms of production costs.

The aid planned for 2000 is intended firstly to cover
losses on current production at
the ‘Westfalen’ and
‘Göttelborn/Reden’ mines whose closure in 2000 was
planned in the agreement on coal, as well as operating
losses at the ‘Ewald/Hugo’ mine whose closure, originally
planned for 2002, has been brought forward to 2000.
This aid must also cover the operating losses at produc-
tion sites which will be closed as a consequence of the
amalgamation of mines, namely ‘Auguste Victoria’ and
‘Blumenthal/Haard’
in 2001 and ‘Friedrich Heinrich/
Rheinland’ and ‘Niederberg’ in 2002 (see recitals 16 to
the aid proposed under Article 4 of
21). Finally,
Decision No 3632/93/ECSC covers operating losses at
production capacities which will have to close after the
expiry of Decision No 3632/93/ECSC and which were
notified to the Commission on 22 November 2000 (see
recitals 24 and 25).

(64)

The final closure of the production units in 2000 has
resulted in a significant reduction — from DEM 3 138
million to DEM 1 889 million — in the amount of aid
notified under Article 4 of Decision No 3632/93/ECSC
for 2001.

(65)

(66)

In accordance with Article 4(2) of Decision No 3632/
93/ECSC, exceptional social and regional grounds justify
the postponement of the closure of certain production
capacities beyond the date of expiry of the ECSC Treaty.
These measures form part of a plan for the gradual and
continuing reduction of activity providing for a signifi-
cant reduction in production before the expiry of the
abovementioned Decision (see recitals 36 and 37).

In accordance with Article 3(1), first indent, of Decision
No 3632/93/ECSC, Germany is taking the necessary
measures to ensure that the amounts of aid per tonne do
not exceed for each production unit
the difference
between production costs and foreseeable revenue for
2000 and 2001 respectively. Moreover, Germany under-
takes to ensure, in accordance with Article 3(1), third
indent, of
the
the abovementioned Decision,
amount of aid for reduction of activity per tonne does
not cause delivered prices for Community coal to be
lower than those for coal of a similar quality from
non-member countries.

that

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(67) On the basis of the information provided by Germany,
and having regard to the obligations on the German
Government set out in recitals 82 to 90 of this Decision,
the aid for reduction of activity planned for 2000 and
2001 is compatible with Decision No 3632/93/ECSC,
and in particular Articles 2 and 4 thereof. These aid
amounts, DEM 3 138 million for 2000 and DEM 1 889
million for 2001, are moreover in line with the provi-
sions of
the plan for modernisation, rationalisation,
restructuring and reduction of activity in the coal
industry, and in particular the new guidelines for this
plan as set out in recitals 14 to 31.

production unit and for each year,
between production costs and foreseeable revenue.

the difference

(72) Having regard to the above and on the basis of the
information provided by Germany, the aid proposed for
2000 and 2001, amounting to DEM 71 million and
DEM 67 million respectively for the ‘Bergmannsprämie’,
is compatible with the objectives of Decision No 3632/
93/ECSC, and in particular Articles 2 and 3 thereof.

VII

(68)

aid measures

totalling DEM 71 million and
The
DEM 67 million are intended to fund the payments to
miners in the German coal
industry (‘Bergmannsprä-
mie’), for 2000 and 2001 respectively. This is an incen-
tive scheme, corresponding to a sum of DEM 10 per
underground job, aimed at encouraging skilled workers
to work underground and help to rationalise production.
According to the notifications submitted by Germany,
this aid covers a cash benefit for miners. Although this
payment to miners is not involved directly in the calcu-
lation of the production costs of the undertaking, the aid
intended to cover this payment constitutes a reduction
of the wage burden borne by that undertaking. It there-
fore constitutes aid within the meaning of Article 1(2)
which has to be examined in accordance with the provi-
sions of Article 3 of Decision No 3632/93/ECSC.

(69)

The proposed aid facilitates the restructuring and ratio-
nalisation of the coal industry by allowing productivity
levels to be raised as far as possible. This aid therefore
helps to achieve the objective referred to in Article 2(1),
first indent, of Decision No 3632/93/ECSC, namely to
in the light of coal prices on international
make,
markets,
further progress towards economic viability
with the aim of achieving degression of aids.

(70)

This aid will help to some extent, in accordance with the
provisions of Article 3 of Decision No 3632/93/ECSC,
to make the coal industry less uncompetitive by helping
to reduce the costs of coalmining, thanks to increased
productivity achieved by maintaining a skilled labour
force underground.

(71)

In accordance with Article 3(1), first indent, of Decision
No 3632/93/ECSC, Germany undertakes to ensure that
the combination of the ‘Bergmannsprämie’ with other
aid for current production does not exceed, for each

VIII

(73)

(74)

(75)

(76)

(77)

The amounts of DEM 2 124 and DEM 2 740 million
that Germany is proposing to grant to the coal industry
under Article 5 of Decision No 3632/93/ECSC, for 2000
and 2001 respectively, are intended to cover the costs
arising from or having arisen from the modernisation,
industry
restructuring of
rationalisation or
which are not related to current production (inherited
liabilities).

the coal

Some of this aid, namely DEM 609 million for 2000
and DEM 562 million for 2001, is the result of deci-
sions taken by the mining undertakings, the Federal
Government, the State Governments of North Rhine-
Westphalia and Saarland and the trade unions repre-
senting the mining industry and the electricity producers
during the negotiations (Kohlerunde) on 11 November
1991.

The remainder of the aid, DEM 1 515 million for 2000
and DEM 2 178 million for 2001, is intended to cover
the costs arising from further closures scheduled under
the agreement on coal of 13 March 1997. This amount
covers in particular the costs resulting from reductions
in capacity connected with the amalgamations in 1998
of the production units ‘Haus Aden/Monopol’ and ‘Hein-
rich Robert’ on the one hand and the units ‘Fürst
Leopold/Wulfen’ and ‘Westerholt’ on the other.

The increase in the amount of aid notified for 2000
under Article 5 of Decision No 3632/93/ECSC, as
compared with the amount authorised by the Commis-
sion for 1999 (1), is justified by the closure in 2000 of
three production units, namely ‘Westfalen’, ‘Göttelborn/
Reden’ and ‘Ewald/Hugo’.

The impact of these closure measures is reflected more-
over in the considerable amount of aid notified under
Article 5 of Decision No 3632/93/ECSC for 2001. The
amalgamation in 2001 of the ‘Auguste Victoria’ and
‘Blumenthal/Haard’ mines is also a factor in increased
exceptional costs.

(1) See Commission Decision 1999/299/ECSC of 22 December 1998,

OJ L 117, 5.5.1999, p. 44.

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Official Journal of the European Communities

9.5.2001

(78)

(79)

These aids are intended to cover the following, with the
exception of the costs of social benefits borne by the
State by way of the special contribution referred to in
Article 56 of the ECSC Treaty: the cost of paying social
welfare benefits resulting from the pensioning-off of
workers before they reach statutory retirement age;
other exceptional expenditure on workers who lose their
jobs as a result of restructuring and rationalisation; the
payment of pensions and allowances outside the statu-
tory system to workers who lose their jobs as a result of
restructuring and rationalisation and to workers entitled
to such payments before the restructuring; the supply of
free coal to workers who lose their jobs as a result of
restructuring and rationalisation and to workers entitled
to such supply before the restructuring. On the technical
and financial levels, the aid is intended to cover addi-
tional underground safety work resulting from restruc-
turing and exceptional
intrinsic depreciation provided
that it results from the restructuring of the industry.

The costs described in recital 78 correspond to the
categories of costs defined in the Annex to Decision No
costs
3632/93/ECSC,
mentioned in point I(a), (b), (c), (d), (f) and (k). In accord-
ance with Article 5(1) of the abovementioned Decision,
the amounts of aid proposed by Germany for 2000 and
2001 do not exceed the costs incurred.

and more

specifically

the

(80)

The reduction in pressure on the undertaking receiving
aid made possible by the covering of these costs will
reduce its financial imbalance and enable it to continue
its activities. The aid therefore complies with the objec-
tives of Article 2(1) of Decision No 3632/93/ECSC.

(81) Having regard to the above, and on the basis of the
information communicated by Germany,
the aid to
cover exceptional costs for 2000 and 2001, amounting
to DEM 2 124 and DEM 2 740 millions respectively, is
compatible with the objectives of Decision No 3632/93/
ECSC, and in particular Articles 2 and 5 thereof.

IX

(82) Given that the aim is to minimise aid, and pursuing the
principle applied by Germany that aid is only to be paid
for production which is supplied for electricity genera-
industry,
tion and to the Community iron and steel
Germany undertakes to sell the production intended for
use by industry and as domestic coal at prices (net prices
without discounts) which cover the production costs.

(84)

(85)

(86)

(87)

(88)

(89)

The Commission would remind Germany that an essen-
tial feature of the aid rules is that the aid must be in the
Community interest and must not disturb the proper
functioning of the common market. Germany will also
take care to ensure that
the aid does not distort
competition or produce discrimination between coal
producers or between coal buyers and users in the
Community.

It also gives it assurance, pursuant to the provisions of
Article 86 of the ECSC Treaty, that the aid will be
limited to what is absolutely essential taking account of
the economic considerations linked to the necessary
restructuring of the coal industry on the one hand and
the social and regional considerations relating to the
decline of coalmining in the Community on the other.

It must not provide an economic advantage, either
directly or indirectly, for production for which aid is not
authorised or for any activity other than coalmining, for
example industrial activities relating to the mining or
processing of coal from the Community.

To enable the Commission to examine whether the
production units which receive operating aid pursuant
to Article 3 of Decision No 3632/93/ECSC actually
generate a trend towards a reduction in production costs
at world prices, Germany undertakes to notify the
Commission no later than 30 September of each year of
the production costs of each production unit during the
previous year and of all the information pursuant to
Article 9 of Decision No 3632/93/ECSC.

the

If, in particular, the conditions laid down in Article 3(2)
of
abovementioned Decision cannot be met,
Germany will propose the necessary corrective action to
the Commission such as a review of the classification of
production capacities pursuant to Articles 3 and 4 of the
Decision.

The Commission is required,
in accordance with the
second indent of Article 3(1) and Article 9(2) and (3) of
Decision No 3632/93/ECSC, to verify whether the aid
granted for current production achieves only the objec-
tives set out
the Decision.
in Articles 3 and 4 of
Germany will provide notification no later than 30
September 2001 of the level of aid actually paid in 2000
and no later than 30 September 2002, the level of aid
actually paid in 2001. It will give notification of any
changes to the sums originally notified. In this annual
list,
in accordance with recital 88, all
information required for verifying compliance with the
criteria laid down in the abovementioned Articles.

it will provide,

(83)

In accordance with Article 2(2) of Decision No 3632/
93/ECSC, the aid must be entered by Germany in the
national, regional or local public budgets or channelled
through strictly equivalent mechanisms.

(90)

In approving the aid, the Commission has taken account
of the need to minimise the social and regional impact
of restructuring,

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Official Journal of the European Communities

L 127/63

HAS ADOPTED THIS DECISION:

Article 1

The changes to the plan for the modernisation, rationalisation
and reduction of activity in the coal industry, as approved by
the Commission in Decision 1999/270/ECSC of 2 December
1998, are compatible with the objectives and criteria laid down
in Decision No 3632/93/ECSC.

Article 2

Germany is hereby authorised to take the following measures
to assist the coal

industry for 2000:

(a) operating aid as defined in Article 3 of Decision No 3632/

93/ECSC totalling DEM 3 847 million;

(b) aid for the reduction of activity as defined in Article 4 of
Decision No 3632/93/ECSC totalling DEM 3 138 million;

(c) aid as defined in Article 3 of Decision No 3632/93/ECSC
totalling DEM 71 million to maintain an underground
labour force (‘Bergmannsprämie’);

(d) aid as defined in Article 5 of Decision No 3632/93/ECSC
totalling DEM 2 124 million to cover exceptional costs.

Article 3

Germany is hereby authorised to take the following measures
to assist the coal

industry for 2001:

(a) operating aid as defined in Article 3 of Decision No 3632/

93/ECSC totalling DEM 3 433 million;

(b) aid for the reduction of activity as defined in Article 4 of
Decision No 3632/93/ECSC totalling DEM 1 889 million;

(c) aid as defined in Article 3 of Decision No 3632/93/ECSC
totalling DEM 67 million to maintain an underground
labour force (‘Bergmannsprämie’);

(d) aid as defined in Article 5 of Decision No 3632/93/ECSC
totalling DEM 2 740 million to cover exceptional costs.

Article 4

In accordance with Article 86 of the ECSC Treaty, Germany
undertakes to take all appropriate measures, whether general or
particular, to ensure fulfiment of the obligations arising from
this Decision.

It shall ensure that aid granted is used only for the specified
purposes and that any unused, overestimated or misused
expenditure in relation to any items referred to in this Decision
repaid to Germany.

Article 5

Germany shall provide information no later than 30 September
2001 about payments actually made during the 2000 financial
year and shall forward the information pursuant to Article 9 of
Decision No 3632/93/ECSC.

Article 6

Germany shall provide information no later than 30 September
2002 about payments actually made during the 2001 financial
year and shall forward the information pursuant to Article 9 of
Decision No 3632/93/ECSC.

This Decision is addressed to the Federal Republic of Germany.

Article 7

Done at Brussels, 21 December 2000.

For the Commission

Loyola DE PALACIO

Vice-President