Information from the Commission – Financial statements of the European Coal and Steel Community at 31 December 2000
Date: 2001-06-30
Institutions: European Commission
Subjects: ECSC, balance sheet, financial management, financial year

C 185/2

EN

Official Journal of the European Communities

30.6.2001

FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY AT
31 DECEMBER 2000

(2001/C 185/02)

The ECSC’s balance sheet, profit-and-loss account and statement of the allocation of profit for the year
ending 31 December 2000 were submitted to the Commission for approval under written procedure No
E/306/2001 of 20 June 2001 and are shown in this financial report as approved by the Commission.

ECSC financial statements at 31 December 2000

(Amounts in euro)

(cid:151) Before allocation of surplus (cid:151)

ASSETS

31 December 2000

31 December 1999

Balances with central banks (Note C.1)

84 650

95 385

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

notice (Note C.2.1)
(cid:151) loans (Note C.2.2)

8 331 435

25 381 261
611 297 253

4 975 072

71 316 975
931 643 446

Total

645 009 949

1 007 935 493

Loans and advances to customers (Note C.3)
(cid:151) loans
(cid:151) levy
(cid:151) fines
(cid:151) interest subsidies repayable

1 459 488 702
61 041
38 950 716
3 304 216

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

Total

1 501 804 675

1 583 067 740

Bonds and other fixed-income securities (Note
C.4)
(cid:151) issued by public bodies
(cid:151) issued by other borrowers
Shares and other variable-income securities (Note
C.5)

973 765 678
705 940 156

44 040 538

1 214 680 318
503 230 250

50 318 525

Total

Land and buildings (Note C.6)

Other assets (Note C.7)

Prepayments and accrued income (Note C.8)

TOTAL ASSETS

Off-balance-sheet commitments (Note C.23)

1 723 746 372

0

5 170 347

96 173 610

3 971 989 603

430 881 628

1 768 229 093

710 287

9 025 480

106 529 763

4 475 593 241

427 969 333

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LIABILITIES

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

Amounts owed to credit institutions (Note C.9)

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

notice

Total

Debts evidenced by certificates (Note C.10)
Other liabilities (Note C.11)
Accruals and deferred income (Note C.12)

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

ECSC OPERATING BUDGET (Note C.13)

PROVISIONS FOR LIABILITIES AND CHARGES

(cid:151) Before allocation of surplus (cid:151)

31 December 2000

31 December 1999

352 822

981 277 746

0

1 408 815 543

981 630 568

1 062 076 396
7 494 034
91 947 305

2 143 148 303

835 516 282

1 408 815 543

1 027 547 730
23 630 708
89 402 188

2 549 396 169

949 154 370

Guarantee Fund (Note C.14.1)
Provisions for major exposures (Note C.14.2)
Other provisions (Note C.14.3)

565 000 000
17 000 000
158 663 347

553 000 000
18 000 000
155 196 643

Total provisions

740 663 347

726 196 643

RESERVES AND SURPLUS (Note C.15)

Special Reserve
Former Pension Fund

Surplus brought forward
Surplus for the financial year (Note C.16)

176 055 284
74 577 321

213 454
1 815 612

176 055 284
72 959 662

666 841
1 164 272

Total reserves and surplus

TOTAL LIABILITIES

Off-balance-sheet commitments (Note C.23)

252 661 671

3 971 989 603

426 626 265

250 846 059

4 475 593 241

415 913 293

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Official Journal of the European Communities

30.6.2001

Profit-and-loss account for the year ending 31 December 2000

(Amounts in euro)

CHARGES

Interest payable and similar charges (Note C.17)

Commission paid

Net losses on financial operations
(cid:151) exchange difference (Note B.2)
and other
(cid:151) losses on bonds

securities

fixed-income

(cid:151) value adjustments for bonds and other fixed-

income securities (Note C.4)
adjustments

for

(cid:151) value

shares

and other

variable-income securities (Note C.5)

Total

Administrative overheads (Note C.18)

Value adjustments for land and buildings (Note
C.6)

Other operating charges (Note C.19)

Value adjustments for loans and advances and
provisions for liabilities and commitments:
(cid:151) value adjustment for loans and advances
(cid:151) allocation to the Guarantee Fund (Note C.14.1)
(cid:151) allocation to other provisions for liabilities

and charges (Notes C.13 and C.14.3)

Total

Extraordinary charges
Legal commitments for the financial year (Note
C.13)
Allocation to the provisions for financing the
ECSC operating budget (Note C.13)

TOTAL CHARGES

Surplus for the financial year (Note C.16)

TOTAL

Financial year 2000

Financial year 1999

170 536 669

439 219

179 314 809

439 353

1 429 678

3 940 390

36 720 808

0

13 479 465
23 000 000

2 874 287

862 006

6 703 555

2 960 265

13 920 110

12 590 342
12 000 000

17 134 135

24 445 936

5 000 000

166 180

315 884

41 724 477

270 668

129 942 347

0

372 841 380

1 815 612

374 656 992

42 090 876

5 000 000

328 378

308 312

39 353 752

2 984 370

145 553 799

34 000 000

449 373 649

1 164 272

450 537 921

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INCOME

Interest receivable and similar income (Note C.20)
(including interest on fixed-income securities:
73 696 657 in 2000 and 64 332 666 in 1999)

Commissions received

Net profit on financial operations
and other
(cid:151) profit on bonds

fixed-income

securities

(cid:151) withdrawal of value adjustments for bonds

and other fixed-income securities

(cid:151) withdrawal of value adjustments for shares
(Note

and other variable-income securities
C.5)

Financial year 2000

Financial year 1999

248 795 316

93 400

254 449 772

0

2 158 217

16 334 306

7 951 984

17 405 532

0

7 483 752

Total

26 444 507

24 889 284

Withdrawals of value adjustments for loans and
advances and from the provisions for liabilities
and commitments:
(cid:151) withdrawal of value adjustments for loans and

advances
(cid:151) withdrawal

from the provision for major

exposures (Note C.14.2)

(cid:151) withdrawal from the provision for budgetary

contingencies (Note C.14.3)

(cid:151) withdrawal from other provisions for liabilities

and charges (Note C.14.3)

Total

Other operating income (Note C.21)
Extraordinary income

Income relating to the ECSC operating budget
(Note C.22)
Withdrawal from the provision for financing the
ECSC operating budget

TOTAL INCOME

13 155 711

1 000 000

0

0

13 760 280

5 000 000

21 000 000

26 131 467

14 155 711

2 122 461
2 427 191

74 618 406

6 000 000

374 656 992

65 891 747

455 630
14 166

104 837 322

0

450 537 921

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Official Journal of the European Communities

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Allocation of the surplus for the year ending 31 December 2000

(Amounts in euro)

Financial year 2000

Financial year 1999

Surplus brought forward at 1 January

Surplus for the year to be allocated

213 454

1 815 612

Total

2 029 066

Allocation to the former Pension Fund (Note C.15)

Surplus brought forward at 31 December

0

2 029 066

666 841

1 164 272

1 831 113

1 617 659

213 454

NOTES RELATING TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2000

A. THE ECSC

(Amounts in euro)

The European Coal and Steel Community (ECSC) was established 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 discon-
tinued 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.

All ECSC assets and liabilities will be transferred to the European Community after 23 July 2002. The net
value will be regarded as funds (referred to as the assets of the (cid:145)ECSC in liquidation(cid:146)) intended for research
in the sectors connected with the coal and steel industry.

B. ACCOUNTING PRINCIPLES AND METHODS

1. Presentation of the financial statements

The financial statements are drawn up in accordance with generally recognised accounting principles.

The accounting principles and evaluation methods used for the items in the financial statements take
account of the constraints imposed on and resolutions applicable to the ECSC under the Treaties and other
ECSC-related decisions adopted by the institutions of the European Communities.

The accounting methods used also take account of the fact that the ECSC will not operate after 23 July
2002, when the ECSC Treaty expires.

They are presented in accordance with Council Directives 78/660/EEC and 86/635/EEC (1) on the annual
accounts and consolidated accounts of banks and other financial institutions wherever these are applicable
and subject to the abovementioned necessary adjustments.

2. Conversion of foreign currency

The currency used by the ECSC for its annual accounts is the euro (EUR).

All foreign currency transactions carried out by the ECSC are converted into euro at the monthly rate
communicated by the European Central Bank.

(1) OJ L 222, 14.8.1978 and OJ L 372, 31.12.1986.

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The value of non-financial assets/liabilities is converted into euro at the monthly rate applicable on the
date on which they were acquired or on which their value was last adjusted.

On the balance sheet date, financial assets/liabilities are converted into euro at the monthly rate applicable
on that date. Negative differences are entered under (cid:145)charges(cid:146) in the profit-and-loss account, while positive
differences are deferred and entered under (cid:145)accruals and deferred income(cid:146) on the liabilities side.

2.1. Conversion rates

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

Euro zone

Belgian and Luxembourg francs

German mark

French franc

Finnish markka

Dutch guilder

Irish pound

Italian lira

Austrian schilling

Spanish peseta

Danish krone

Swedish krone

Greek drachma

Pound sterling

Swiss franc

United States dollar

Japanese yen

Non-euro zone

40,3399

1,95583

6,55957

5,94573

2,20371

0,787564

1936,27

13,76030

166,386

31 December

2000

7,46310

8,83130

340,750

0,624100

1,5232

0,93050

106,92

1999

7,44330

8,56250

330,300

0,621700

1,60510

1,00460

102,730

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2.2. At 31 December 2000, the various currencies listed above, together with the euro, made up the

ECSC’s balance sheet as follows:

Currency

Assets

Liabilities

(euro)

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 krone

Pound sterling

Swiss franc

United States dollar

Japanese yen

1 650 343 022

1 796 054 968

69 192 651

26 208 740

364 261 435

407 062 393

151 882 376

471 465 894

682 910

2 331 523

403 488

136 507 645

453 751 385

0

1 038 635

0

117 079 036

115 868 453

169 856 195

106 701 393

7 998 709

33 017 931

3 702 982

30 475 906

Sub-total

3 038 515 170

3 077 372 500

735 979

1 235 840

298 417

0

0

0

633 165 746

594 608 120

411 929

413 535

297 097 329

194 347 999

529 193

105 247 449

Total

3 971 989 603

3 971 989 603

3. Treasury investment and valuation of bonds and other securities

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

Bonds and other fixed-income securities and shares and other variable-income 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, which are valued
at the average purchase price or the redemption value, whichever is the lower.

4. ECSC operating budget

Part of the ECSC’s funds are made available to the ECSC operating budget, which is adopted annually by
the Commission after informing the Council and consulting the European Parliament.

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The commitments entered into by the operating budget vis-(cid:224)-vis third parties and the provisions for
financing the operating budget are shown under the heading (cid:145)ECSC operating budget(cid:146) (see Note C.13).

5. Fines and interest subsidies

Fines and interest subsidies whose repayment has been requested are not regarded as ECSC resources until
they have actually been paid. Fines imposed but not yet paid and interest subsidies whose repayment has
been requested are therefore allocated to provisions (see Note C.14.3.a).

6. Presentation of comparative figures for 1999

Following a change in the presentation of the 2000 financial statements, the 1999 figures have been
reprocessed to make them comparable.

C. EXPLANATORY NOTES TO THE HEADINGS IN THE BALANCE SHEET AND THE PROFIT-AND-LOSS

ACCOUNTS

1. Balances with central banks

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

2. Loans and advances to credit institutions

2.1. With agreed maturity dates or periods of notice

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

(euro)

31 December

2000

1999

25 381 261

(cid:151)

60 700 922

10 616 053

Total

25 381 261

71 316 975

Up to three months

Three months to one year

2.2. Loans

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

31 December

2000

1999

(euro)

40 095 286

215 609 298

284 383 600

71 209 069

60 655 213

250 263 601

538 569 222

82 155 410

Total

611 297 253

931 643 446

Up to three months

Three months to one year

One to five years

Over five years

3. Loans and advances to customers

3.1. Loans

The loans granted to credit institutions are shown under (cid:145)Loans and advances to credit institutions(cid:146) (see
Note C.2).

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The other loans break down as follows:

1. Loans disbursed from borrowed funds

(cid:151) amounts outstanding

(cid:151) value adjustments

31 December

2000

1999

(euro)

1 546 451 118

1 622 783 270

(cid:150) 143 192 092

(cid:150) 143 847 841

Sub-total

1 403 259 026

1 478 935 429

2. Loans from the special reserve for financing subsidised

housing

19 509 794

21 862 834

Interim total

1 422 768 820

1 500 798 263

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

(cid:151) Up to three
months

(cid:151) Three months
to one year

(cid:151) One to five

years

2000

1999

131 767 190

41 007 561

315 397 548

63 949 913

593 899 440

1 015 442 411

(cid:151) Over five years

524 896 734

524 246 220

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

36 087 234

39 218 203

4. Loan repayments overdue and interest on arrears

632 648

1 252 796

Grand total

1 459 488 702

1 541 269 262

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

3.2. Levy

The 1998, 1999 and 2000 levy rate was 0 %, so the claims at 31 December 2000 therefore relate to
previous years.

This item breaks down as follows:

Gross amount

Value adjustments

31 December

2000

1999

5 621 065

(cid:150) 5 560 024

6 061 793

(cid:150) 5 998 576

Net amount

61 041

63 217

It includes in particular EUR 5 551 715 subject to legal proceedings (EUR 5 281 288 at 31 December
1999).

3.3. Fines

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

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After value adjustment it amounts to EUR 38 950 716 (EUR 37 195 283 at 31 December 1999).

This item has two main components.

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 judgement 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 judgement 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 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.

3.4. 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.

4. Bonds and other fixed-income securities

4.1. Composition

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

Value adjustments
on bonds and other
fixed-income
securities
Allocation
(withdrawal)

(euro)

31 December

2000

1999

995 016 008

1 223 352 880

(10 670 434)

(cid:150) 21 250 330

(cid:150) 31 920 764

973 765 678

1 191 432 116

(111 469)

0

0

0

23 359 671

(cid:150) 111 469

23 248 202

710 521 782

510 404 016

(2 592 140)

(cid:150) 4 581 626

(cid:150) 7 173 766

705 940 156

503 230 250

1 705 537 790

1 757 116 567

(13 374 043)

(cid:150) 25 831 956

(cid:150) 39 205 999

1 679 705 834

1 717 910 568

Issued by public bodies:

Gross value

Value adjustments

Net value

Own-debt securities:

Gross value

Value adjustments

Net value

Issued by other borrowers:

Gross value

Value adjustments

Net value

Total bonds:

Gross value

Value adjustments

Net value

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

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4.2. Maturities in 2001

Securities in the portfolio reaching final maturity during 2001 represent the following amounts:

(cid:151) Issued by public bodies

(cid:151) Issued by other borrowers

(euro)

170 282 570

177 832 751

Total

348 115 321

4.3. Financial fixed assets (see Note B.3)

Financial fixed assets are defined as securities that will remain in the portfolio until their final maturity.
They comprise mainly short- or meduim-term paper and own-debt securities repurchased for servicing
ECSC borrowings.

At 31 December 2000, financial fixed assets totalled EUR 48 519 675.

The redemption value of these securities is EUR 1 548 471 less than the average acquisition price.

4.4. Return on investment

Treasury investments take account of the maturity dates and liquidity requirements applicable to ECSC
the
financial operations. They are subject
counterparty.

to strict criteria with regard to the financial standing of

The return on investment (calculated by the method of the Association of Investment Management and
Research) was 4,72 % in 2000.

5. Shares and other variable-income securities

Shares and other variable-income securities break down as follows:

Value adjustments
on shares and other
variable-income
securities
Allocation
(withdrawal)

(euro)

31 December

2000

1999

98 139 651

98 449 511

5 968 127

(cid:150) 54 099 113

(cid:150) 48 130 986

44 040 538

50 318 525

Gross amount

Value adjustments

Net value

These shares and other variable-income securities were received by the ECSC as part of the restructuring
plan of a defaulting debtor (see Note B.3).

A part of one of these securities, representing a net value of EUR 8 287 500, was the subject of a loan
contract with a credit institution (maturity date 1 July 2004 with call option 1 July 2002).

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6. Land and buildings

Date of
acquisition

Acquisition
price

Net value at
31.12.1999

Acquisitions

Net book value
of disposals

Value
adjustments

Operations during the year

Lisbon building

1986-1993

2 670 796

590 301

Lease on Milan building

1986

879 882

119 986

459 114

84 993

131 187

34 993

Total

710 287

544 107

166 180

(euro)

Net value at
31.12.2000

0

0

0

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 buildings in Lisbon and Milan was completed in 2000.

For the ECSC, this transaction generated a capital gain of EUR 1 987 121, this being the difference between
the transfer price (EUR 2 531 228) and the net book value (EUR 544 107) at the date of transfer entered
under (cid:145)other operating income(cid:146) in the profit-and-loss account.

7. Other assets

Other assets break down as follows:

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

(cid:151) Loans to officials

(cid:151) Miscellaneous

31 December

(euro)

2000

2 374 098

2 763 544

32 705

1999

2 530 182

6 467 479

27 819

Total

5 170 347

9 025 480

8. Prepayments and accrued income

Prepayments and accrued income break down as follows:

(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

31 December

(euro)

2000

74 306 162

25 819 166

2 750 794

102 876 122

(cid:150) 6 702 512

1999

76 126 468

30 998 437

4 743 361

111 868 266

(cid:150) 5 338 503

Total

96 173 610

106 529 763

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9. Amounts owed to credit institutions

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

(euro)

31 December

2000

352 822

1999

0

59 539 460

374 269 101

543 151 231

4 317 954

100 388 336

293 297 086

976 419 166

38 710 955

Total

981 277 746

1 408 815 543

Repayable on demand

With agreed maturity dates or periods of notice:

(cid:151) Borrowings

Up to three months

Three months to one year

One to five years

Over five years

10. Debts evidenced by certificates

This item comprises loan securities.

EUR 240 430 841 of the borrowings outstanding at 31 December 2000 is due to reach maturity during
the 2001 financial year.

11. Other liabilities

Other liabilities break down as follows:

Current account, ECSC operating budget

Advance payments for transfer of buildings (1)

Other

31 December

(euro)

2000

7 431 189

0

62 845

1999

20 542 964

2 531 228

556 516

(1) In accordance with the possibility offered under the 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 C.6).

Total

7 494 034

23 630 708

12. Accruals and deferred income

Accruals and deferred income break down as follows:

Interest on borrowings and credit lines

Commissions on loans

Issuing premiums

Deferred positive exchange differences

31 December

2000

1999

(euro)

76 202 004

132 307

3 684 239

11 928 755

79 638 283

146 412

4 739 972

4 877 521

Total

91 947 305

89 402 188

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13. ECSC operating budget

This item comprises commitments for the operating budget totalling EUR 434 516 282 (EUR 556 154 370
at 31 December 1999) and provisions associated with financing the operating budget
totalling
EUR 401 000 000 (EUR 393 000 000 at 31 December 1999).

In 2000, commitments for the ECSC operating budget were as follows:

Amounts at 31.12.1999 New legal commitments

Payments

Cancellations

Amounts at 31.12.2000

(euro)

Redeployment

Research

Interest subsidies (Article 54)

Interest subsidies (Article 56)

Social measures steel industry

Social measures coal industry
(Rechar)

151 518 884

194 306 352

2 172 448

85 175 105

49 858 038

30 766 000

80 464 744

(cid:151)

(cid:151)

(cid:151)

37 348 300

88 184 208

332 579

11 191 524

14 811 683

14 035 007

130 901 577

1 983 944

1 702 324

33 467 792

15 129 714

184 602 943

137 545

40 515 789

19 916 641

73 123 543

18 711 603

28 084 535

5 308 824

58 441 787

Total

556 154 370

129 942 347

179 952 830

71 627 605

434 516 282

The provision for financing future operating budgets and the provision for budgetary contingencies were as
follows:

Amount at 31.12.1999

Allocation

Withdrawal 2000

Amount at 31.12.2000

(euro)

Provision for financing future operating budgets (1):

334 000 000

6 000 000

(cid:151) provision for the 2001 operating budget (2)

(cid:151) provision for

and
provision for the system for priming/smoothing the
Coal and Steel Research Fund

the 2002 operating budget

Provision for budgetary contingencies (3)

59 000 000

14 000 000

108 000 000

220 000 000

73 000 000

Total

393 000 000

14 000 000

6 000 000

401 000 000

(1) This provision was constituted by the budgetary authority when it approved the 1997 ECSC operating budget. 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 budgets until 2002.
In addition, the mechanism for financing the Coal and Steel Research Fund to be set up after 23 July 2002 provides for a system for priming and smoothing the Fund
which will use this provision (Commission Decision of 6 September 2000 (COM(2000) 518 final and 519 final).

(2) Commission Decision No 2749/2000 of 13 December 2000.
(3) This provision is intended to guarantee the planned ECSC commitments to the resources of the 2001 and 2002 operating budgets.

C 185/16

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Official Journal of the European Communities

30.6.2001

14. Provision for liabilities and charges

14.1. Guarantee Fund

The Guarantee Fund is intended to cover lending and borrowing operations. After allocation of EUR 12
million, the Guarantee Fund totalled EUR 565 million at 31 December 2000. This reinforcing of the
Guarantee Fund is connected with the forthcoming expiry of the ECSC Treaty.

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 the government of a Member
State. This means that the Guarantee Fund must be gradually increased to approximately EUR 572 million
(calculated at the conversion rate applicable on 31 December 2000). At 31 December 2000, this coverage
was 98,8 % on condition that there is no default on the loans due to mature before 23 July 2002.

The Guarantee Fund increased as follows:

31.12.1999

553 000 000

Allocation 2000

12 000 000

(euro)

31.12.2000

565 000 000

14.2. Provision 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 2000 according to a
procedure recommended by a firm of international experts, totals EUR 17 million (EUR 18 million at
31 December 1999).

14.3. Other provisions

This item comprises provisions for fines and interest subsidies repayable totalling EUR 42 272 249
EUR 116 391 098
and
at
(EUR 41 735 261
(EUR 113 461 382 at 31 December 1999).

31 December

provisions

totalling

1999)

other

(a) Provisions for fines and interest subsidies repayable (Note B.5):

31 December 1999

Change in 2000
balance sheet

31 December 2000

(euro)

Provision for
payment to be paid

fines and surcharges

for

late

37 195 283

1 755 433

38 950 716

Provision for interest subsidies repayable

4 539 978

(cid:150) 1 218 445

3 321 533

Total

41 735 261

42 272 249

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Official Journal of the European Communities

C 185/17

(b) Other provisions:

31 December
1999

Operations in 2000

Allocation

Withdrawal

Exchange-rate
movement

(euro)

31 December
2000

Provision for interest-rate
risk (1)

Provision for special costs
relating to banking
activities (2)

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

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

53 157 495

484 115

200 000

(cid:151)

51 598 263

2 342 351

8 505 624

307 669

Total

113 461 382

3 134 135

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:150) 204 419

53 437 191

(cid:151)

200 000

(cid:151)

53 940 614

(cid:151)

8 813 293

(cid:150) 204 419

116 391 098

(1) Following the default of one borrower, long-term securities issued by the ECSC (i.e. with a maturity date after 2002) are no
longer paired with asset 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 judgement of the Court of First Instance of 11 March 1999 (Note C.3.3).

(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 C.3.3).

15. Reserves

Special reserve

Former Pension Fund

Reserves at
31.12.1999
after allocation

176 055 284

74 577 321

Total

250 632 605

Allocation
(withdrawal)

Reserves at
31.12.2000
before allocation

Allocation at
31.12.2000

0

0

0

176 055 284

74 577 321

250 632 605

0

0

0

(euro)

Reserves at
31.12.2000
after allocation

176 055 284

74 577 321

250 632 605

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

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.

16. Analysis of the result for the financial year

Overall ECSC performance is influenced by both the result of non-budgetary operations (lending/
borrowing (cid:151) treasury investment (cid:151) exchange-rate variations) and the out-turn of the ECSC operating
budget.

C 185/18

EN

Official Journal of the European Communities

30.6.2001

16.1. Non-budgetary operations

Result

Gross operating margin before changes in provisions

(cid:151) Lending/borrowing operations

(cid:151) Interest on bank accounts

(cid:151) Transactions concerning portfolio securities

(cid:151) Exchange-rate difference

(cid:151) Miscellaneous

31 December

2000

1999

(euro)

2 179 046

2 604 998

78 095 255

(cid:150) 862 006

1 691 025

Total

83 708 318

2 065 277

6 319 306

50 243 418

(cid:150) 1 429 678

(cid:150) 2 855 568

54 342 755

23 257 179

5 000 000

280 815

Net changes in provisions

(cid:151) Provision for liabilities and charges (1)

(cid:151) Provision for major exposures (2)

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

(cid:150) 3 134 135

1 000 000

565 369

Result of non-budgetary operations

82 139 552

82 880 749

Amount allocated to financing the operating budget (3)

(cid:150) 54 323 940

(cid:150) 79 716 477

Result after deducting the net balance allocated to the operating
budget

27 815 612

3 164 272

(1) Note C.14.3.b.
(2) Note C.14.2.
(3) 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 C.16.2).

16.2. Out-turn of the ECSC operating budget

31 December

2000

1999

(euro)

Out-turn of the budget

Expenditure

(cid:151) Administrative expenditure (Note C.18)

(cid:151) Legal commitments (Note C.11)

(cid:151) Financing of future operating budgets

Revenue (net amounts)

(cid:151) Levy (Note C.22)

(cid:151) Fines (Note C.22)

(cid:151) Repayment of interest subsidies (Note C.22)

(cid:151) Miscellaneous (Note C.22)

(cid:151) Cancellations of legal commitments (Note C.22)

(cid:151) Financing of future operating budgets

(cid:151) Net balance for the year (Note C.16.1)

5 000 000

129 942 347

0

5 000 000

145 553 799

34 000 000

Total

134 942 347

184 553 799

(cid:151)

(cid:151)

1 955 203

1 035 599

71 627 605

6 000 000

54 323 940

(cid:151)

16 605 836

2 557 049

320 008

85 354 429

(cid:151)

79 716 477

Total

134 942 347

184 553 799

Budget out-turn

0

0

30.6.2001

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Official Journal of the European Communities

C 185/19

16.3. Result for the financial year

31 December

2000

1999

(euro)

Result from non-budgetary operations after deducting the net
balance allocated to the operating budget (Note C.16.1)

Out-turn of the budget (Note C.16.2)

27 815 612

3 164 272

0

0

Total

27 815 612

3 164 272

Allocation to/withdrawal
operating budget/budgetary contingencies (Note C.14.3a)

from provisions

for

financing the

Allocation to the Guarantee Fund (Note C.14.1)

(cid:150) 14 000 000

(cid:150) 12 000 000

21 000 000

(cid:150) 23 000 000

Result before allocation

1 815 612

1 164 272

17. Interest and similar charges

31 December

2000

1999

(euro)

Interest on borrowings and swaps

168 492 330

177 112 390

Bank interest

Issuing costs and redemption premiums

51 772

1 992 567

44 317

2 158 102

Total

170 536 669

179 314 809

18. Administrative overheads

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.

19. Other operating charges

Borrowing costs

SWIFT/Reuters charges

Other

20. Interest received and other income

Interest on loans and swaps

Payment and redemption premiums

Bank interest

Interest on bonds and other fixed-income securities

Interest on shares and other variable-income securities

31 December

(euro)

2000

128 969

158 354

28 561

315 884

Total

1999

98 417

192 031

17 864

308 312

(euro)

31 December

2000

1999

168 699 495

179 588 983

2 072 568

2 696 044

73 603 257

1 723 951

2 208 051

6 637 370

64 332 665

1 682 703

Total

248 795 316

254 449 772

C 185/20

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Official Journal of the European Communities

30.6.2001

21. Other operating income

Lapsed coupons and bonds

Other income from lending activities

Miscellaneous

31 December

(euro)

2000

5 456

1 961

2 115 044

Total

2 122 461

1999

12 681

(cid:151)

442 949

455 630

22. Income relating to the operating budget

Levy (1)

Fines (2)

Miscellaneous

Cancellation of legal commitments (Note C.13)

Repayment of interest subsidies (Note B.5 and C.3.4) (3)

31 December

2000

1999

(euro)

(cid:151)

(cid:151)

1 035 598

71 627 605

1 955 203

(cid:151)

16 605 836

320 008

85 354 429

2 557 049

Total

74 618 406

104 837 322

(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 of the various products concerned. The European Commission
decided to set the levy rate for the 1998, 1999 and 2000 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.

23. Off-balance-sheet commitments

23.1. Commitments received

31 December

2000

1999

Commitments arising from swaps

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

229 991 973

222 436 108

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

swaps

200 889 655

205 533 225

Total

430 881 628

427 969 333

23.2. Commitments given

31 December

2000

1999

(a) Commitments

arising

from swaps Notional

capital

commitments relating to interest-rate swaps

(b) Capital commitments relating to interest-rate and currency

swaps

229 991 973

222 436 108

196 628 836

193 464 504

(c) Receipts from lapsed coupons and bonds

5 456

12 681

Total

426 626 265

415 913 293

(euro)

(euro)

30.6.2001

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Official Journal of the European Communities

C 185/21

The ECSC has always been keen to meet the commitments it has entered into and therefore has tradi-
tionally honoured coupons even after they have lapsed.

24. Changes in the financial situation for the year ending 31 December 2000

Origin of funds

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 (withdrawals)

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

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

2000

1999

(million euro)

1,8

2,0

(cid:150) 7,4

0,2

0,7

1,2

2,2

29,2

0,3

15,7

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

(cid:150) 121,6

(cid:150) 139,5

(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 provision for major exposures

(cid:151) Allocation to (withdrawal from) the provision for changes in the

euro rate

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

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

8,5

(cid:150) 4,5

7,0

(cid:150) 12,1

7,4

2,9

(cid:150) 1,0

(cid:150) 0,7

(cid:150) 12,6

12,0

(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) 117,4

(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/increase in loans and advances

(cid:151) Redemption of borrowings

Total resources

Total uses

(cid:151)

425,4

0,5

94,8

403,3

3,8

399,5

403,3

(cid:151)

463,5

0,3

91,8

511,1

(cid:151)

511,1

511,1