Commission Decision of 23 May 2001 authorising France to grant aid to the coal industry for 2001 (Text with EEA relevance) (notified under document number C(2001) 1481)
Date: 2001-05-23
Institutions: European Commission
Subjects: France, State aid, application of EU law, coal industry, control of State aid, production quota

7.9.2001

EN

Official Journal of the European Communities

L 239/35

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 23 May 2001

authorising France to grant aid to the coal industry for 2001

(notified under document number C(2001) 1481)

(Only the French text is authentic)

(Text with EEA relevance)

(2001/678/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

— aid to cover exceptional losses for 2001 amounting

to FRF 4 213 million.

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
to the coal industry (1), and in particular Article 9(4) thereof,

Whereas:

(1)

(2)

I

By letter of 6 March 2001, France notified the Commis-
sion,
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 2001.

In accordance with Decision No 3632/93/ECSC and
having regard to the information sent by France, the
Commission is required to take a decision on the
following financial aid:

(4)

— aid for

the reduction of activity amounting to
FRF 2 090 million to cover operating losses for
2001,

— aid for

the reduction of activity amounting to
FRF 210 million. This aid is intended to cover the
interest due for 2001 on the part of the loan issue
floated by Charbonnages de France in 1997, 1998
and 1999 to cover the balance of the losses for those
years which are not covered by direct subsidies and
capital

injections,

(3)

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(4), 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 were
approved by the Commission in its Decision 95/465/
ECSC (2).

II

is
sum of FRF 2 090 million which France
The
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.

(5)

This aid forms part of the plan for the reduction of
activity by the company, which plans to cease all mining
activities by 2005. Coal production was cut from 4,9

(1) OJ L 329, 30.12.1993, p. 12.

(2) OJ L 267, 9.11.1995, p. 46.

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Official Journal of the European Communities

7.9.2001

million tce (1) in 1997 to 2,9 million tce in 2000 and
should be cut further to around 2 million tce in 2001, a
new reduction of about 30 % in one year. As regards
personnel employed, the number of miners employed
was reduced from 5 000 in 1997 to 3 400 in 2000, and
should decrease to 2 800 during 2001. Having regard to
the exceptional social and regional consequences derived
from the reduction of activity in the coal industry, the
French Government has decided, in agreement with the
social partners, to stagger the closures up until 2005.

The Commission considers that the sum of aid which
settled at FRF 806 per tce in 2000, should amount to
FRF 1 033 per tce in 2001. Following significant reduc-
tions in production during the last few years, this very
reduced volume of production makes it no longer
possible to optimise production costs which rose from
FRF 1 103 per tce in 2000 to FRF 1 361 per tce in
2001.

In accordance with Article 3(1), first indent, of Decision
No 3632/93/ECSC, the Commission checked that the aid
notified per
tonne does not exceed the difference
between production costs and foreseeable revenue for
2001.

In accordance with Article 2(1), second indent, of the
Decision, this aid helps to resolve the social and regional
problems created by total or partial reductions in the
activity of production units. Furthermore, the Commis-
sion has checked that the aid meets the requirement of
Article 4(2) of Decision No 3632/93/ECSC.

On the basis of the information provided by France, it
seems that, in accordance with Article 3(1), third indent,
of Decision No 3632/93/ECSC, the amount of operating
aid per
tonne may not cause delivered prices for
Community coal to be lower than those of coal of a
similar quality from third countries.

Except for the sum of FRF 10 million, on the basis of
the information provided by France, the aid proposed
for 2001 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 10 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
had been lodged by five French companies,
including
Thion et Cie.

(6)

(7)

(8)

(9)

(10)

(11)

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

(12)

(13)

(14)

(15)

(16)

The sum of FRF 210 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 2001 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 not
covered by direct subsidies and capital

injections.

In its Decision 2001/85/ECSC (2) authorising France to
grant aid to the coal industry for 1997, 1998 and 1999,
the Commission 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. The interest due for 2001
is accessory to the part of the loans covering the balance
of the operating losses for 1997, 1998 and 1999;
it
must therefore be regarded as aid under 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
activity by 2005. The Commission has checked that the
aid notified does not exceed the costs for 2001 for the
part of the loans covering the balance of the operating
costs for 1997, 1998 and 1999. The Commission there-
fore believes that the aid notified fulfils the requirements
laid down in Article 3(1) of Decision No 3632/93/ECSC.

In accordance with Article 2(1), second indent, this aid
helps to solve the social and regional problems created
by total or partial reductions in the activity of produc-
tion units.

In the light of the above and on the basis of information
provided by France, the aid proposed for the year 2001
is compatible with the objectives of Decision No 3632/
93/ECSC and with the proper
the
common market.

functioning of

IV

(17)

The aid amounting to FRF 4 213 million that France
proposes to grant to its coal
industry is intended to
cover the exceptional costs due to modernisation, ratio-
nalisation and restructuring of the coal industry which
are not related to the current production (inherited
liabilities).

(1) tce = tonne coal equivalent.

(2) OJ L 29, 31.1.2001, p. 45.

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(18)

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 1 021 million towards the cost of paying social
welfare benefits resulting from the pensioning-off of
workers before they reach statutory retirement age,

— FRF 91 million as other exceptional expenditure on
workers losing their jobs as a result of restructuring
and rationalisation,

— FRF 84 million towards residual costs resulting from

administrative,

legal or tax provisions,

— FRF 382 million towards additional work resulting

from restructuring,

— FRF 10 million towards mining damage attributable

to pits previously in service,

communicate the amounts of aid effectively paid during
2001 and shall declare any corrections made to the
amounts originally notified, no later than 30 September
2002. Any information required to check that
the
criteria laid down in Article 4 have been respected shall
be provided along with this annual breakdown.

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

France will take care to ensure that aid does not distort
competition or produce discrimination between coal
producers or between coal buyers and users in the
Community,

(21)

(22)

— FRF 1 million towards exceptional

ciation resulting from the restructuring of
industry,

intrinsic depre-
the

the drop,

— FRF 2 624 million towards the increase in contribu-
tions, outside the statutory system, to cover social
security costs as a result of
following
restructuring, in the number of contributors. This aid
mainly covers benefits for former miners, and in
particular benefits granted in addition to statutory
retirements. Due to the continuous drop in coal
mining in France, the number of miners receiving
these benefits tends to remain stable, meaning that
the sum of these benefits has also remained stable in
relation to previous years.

(19)

rationalisation and restructuring of

In accordance with Article 5(1) of Decision No 3632/
93/ECSC, this aid may be regarded as compatible with
the common market if the sum does not exceed the
costs arising from or having arisen from the modernisa-
tion,
coal
industry which are not related to current production.
Having checked the data communicated, the Commis-
sion concludes that this requirement has been fulfilled.
In the light of the above and on the basis of information
provided by France, the aid proposed for the year 2001
is compatible with the objectives of Decision No 3632/
93/ECSC and the proper functioning of the common
market.

the

HAS ADOPTED THIS DECISION:

Article 1

France is authorised to apply the following measures in favour
of its coal

industry for 2001:

(a) aid for the reduction of activity, amounting to FRF 2 080
million, intended to cover operating losses for 2001. The
Commission will take a decision on a balance of FRF 10
million at a later date;

(b) aid for the reduction of activity, amounting to FRF 210
million, intended to cover the interest due for 2001 on the
part of the loan issue floated by Charbonnages de France in
1997, 1998 and 1999 to cover the balance of operating
losses for those years not covered by direct subsidies and
capital

injections;

(c) aid to cover exceptional costs for 2001, amounting to

FRF 4 213 million.

Article 2

France will ensure that the aid granted is only used for the
purposes stipulated in the Article and that any unused, overes-
timated or misused expenditure in relation to any items
referred to in this Decision is repaid to France.

V

(20)

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

France shall communicate the amounts of aid actually paid
during 2001, without prejudice to its obligations under Article
9(1), (2) and (3) of Decision No 3632/93/ECSC, no later than
30 September 2002.

Article 3

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The Decision is addressed to the French Republic.

Article 4

Done at Brussels, 23 May 2001.

For the Commission

Loyola DE PALACIO

Vice-President