Annual report concerning the ECSC for the financial year 2000, together with the Commission's replies
Date: 2001-10-10
Institutions: European Court of Auditors
Subjects: ECSC, European Court of Auditors, activity report

20.12.2001

EN

Official Journal of the European Communities

C 366/1

I

(Information)

COURT OF AUDITORS

ANNUAL REPORT CONCERNING THE ECSC

for the financial year 2000, together with the Commission’s replies

(Article 45c(4) of the ECSC Treaty and Article 88 of the Financial Regulation of 21 December 1977,
as last amended by Council Regulation (EC, ECSC, Euratom) No 762/2001 of 9 April 2001)

(2001/C 366/01)

CONTENTS

Paragraph

Page

ECSC SOLVENCY AND DEVELOPMENTS CONCERNING THE MAIN ECSC ACTIVITIES . . . . .

1-15

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Solvency of the ECSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Solvency ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for large exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in the ECSC balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in applications of ECSC funds and in resources

. . . . . . . . . . . . . . . . . . . . . . . . . . .

THE LIQUIDATION OF THE ECSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FOLLOW-UP OF PREVIOUS OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Performance of liquid assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-2

3-8

3-6

7-8

9-12

13-15

16-18

19-23

19

Cancellation of dormant commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20-21

Loans to officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repayment of taxes levied at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STATEMENT OF ASSURANCE CONCERNING THE ECSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

23

24-25

26-30

Tables 1 to 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

2

2

2

2

2

3

3

4

4

4

4

4

4

5

6

The Commission’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

C 366/2

EN

Official Journal of the European Communities

20.12.2001

ECSC SOLVENCY AND DEVELOPMENTS CONCERNING THE
MAIN ECSC ACTIVITIES

2000. As was the case in the previous year, this change was due
partly to the increase in the Guarantee Fund, but mainly to the
decrease in the volume of outstanding loans to banks.

Introduction

1. This chapter relates, on the one hand, to the solvency of the
ECSC as at 31 December 2000 and, on the other hand, to devel-
opments concerning its main budgetary and financial activities
during the financial year.

2. Until recently, the solvency of the ECSC was of particular
importance for the following reasons:

— apart from some marginal lending from its own funds, ECSC
loans were financed by bank borrowings or bond issues. In
order to achieve the best possible financial market rating, the
ECSC had to have a very good solvency ratio,

— most ECSC loans are back-to-back with the corresponding
borrowings in terms of rates, currency and maturity. The main
banking risk is therefore the risk of non-recovery,

— the Treaty of Paris, which created the ECSC, expires in July
2002. Consequently, any changes in the level of funds needed
to guarantee the ECSC’s solvency must be monitored carefully,
right up to the expiry of the Treaty, and beyond that date, to
ensure that the remaining borrowings can be serviced.

ECSC solvency

Solvency ratio

3. The solvency ratio provided for in Directive 2000/12/EC of
the European Parliament and of the Council (1) is the main instru-
ment by which the ECSC’s solvency is assessed. The denominator
of the ratio comprises assets and off-balance-sheet items weighted
in accordance with the level of risk. For the numerator, the Com-
mission takes the guarantee fund and the unallocated surplus
items (see Table 1). The definition of own funds used in calculat-
ing the solvency ratio is the result of an interpretation of the
Directive which provides a prudent valuation.

4. According to Article 47(1) of Directive 2000/12/EC, credit
institutions must have a solvency ratio of at least 8 %. In the case
of the ECSC, which now only has a short-term future, the ratio
rose to 37,8 % at 31 December 1999 to 41,4 % at 31 December

(1) Directive 2000/12/EC of the European Parliament and of the Council
of 20 March 2000 relating to the taking up and pursuit of the busi-
ness of credit institutions (OJ L 126, 26.5.2000, p. 1).

5.
It should be noted that this ratio will continue to rise until the
liquidation of the ECSC. In fact, taking into account the gradual
repayment of outstanding loans and borrowings, the absence of
any new loans and borrowings, and the fact that the items taken
for the numerator will remain more or less stable (in view of the
outlook for the Guarantee Fund), the solvency ratio will continue
to increase.

6. The Commission has decided to adjust borrowing and lend-
ing policy in view of the expiry of the ECSC Treaty in 2002 (2).
At that point it expects to have achieved a level of reserves equal
to 100 % of the loans still outstanding that are not covered by a
State guarantee. At 31 December 2000, the coverage of these
loans, which should total 572 million euro at 23 July 2002, stood
at 98,8 %.

Provision for large exposures

7. Pursuant to Council Directive 92/121/EEC on the monitoring
and control of large exposures of credit institutions (3), the Com-
mission established a provision for large exposures in 1995. The
amount of the provision is calculated as a function of the amounts
by which the two limits set in Annex VI to Council Directive
93/6/EEC (4) have been exceeded. This provision concerns loans
which are not covered by first-rate guarantees and which exceed
25 % of the ECSC’s own funds. It is therefore intended to cover
the risks associated with this concentration of resources and to
enable the ECSC to weather any default. Although this Directive
is not legally applicable to the ECSC, it does result, if the ECSC
observes it, in a policy which is prudent as regards large expo-
sures resulting from past transactions.

8. This provision has continued to decrease, from 23 million
euro at 31 December 1998 to 18 million euro at 31 Decem-
ber 1999 and 17 million euro at 31 December 2000. This change
is due to the fall in the volume of assets in question following the
repayments made in recent years.

Changes in the ECSC balance sheet

9. The ECSC’s accounts are audited by a private-sector audit firm.
Between the financial years 1999 and 2000, the firm responsible
for carrying out this audit was replaced, at the end of a tendering

(2) Adjustment of borrowing and lending policy with a view to the expiry

of the Treaty (23 July 2002) (OJ C 175, 28.6.1994, p. 5).

(3) Council Directive 92/121/EEC of 21 December 1992 on the monitor-
ing and control of large exposures of credit institutions (OJ L 29,
5.2.1993, p. 1).

(4) Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy
of investment firms and credit institutions (OJ L 141, 11.6.1993, p. 1).

20.12.2001

EN

Official Journal of the European Communities

C 366/3

procedure. As a result of a change, in 2000, in the way the finan-
cial statements are presented, and of the publication of Directive
2000/12/EC, some of the figures in the tables relating to the
financial year 1999 given in the Annexes were restated. The main
changes concerned appropriations for the ECSC’s operating bud-
get (brought together, as from 2000, under a single heading
entitled ECSC operating budget’ in place of the two headings used
previously (‘commitments for the ECSC operating budget’ and
‘provisions for financing of the ECSC operating budget’) and the
entry in the accounts of currency swap transactions.

14. The decline in resources in 2000 was also more accentuated
than in 1999 (– 31,1 and – 28,3 million euro, respectively). This
was mainly due to the decrease in other resources (– 16,5 million
euro) and in cancellations of commitments (– 13,8 million euro).
The decrease in other resources was due to the fact that in 1999
the ECSC had collected an amount of 16,6 million euro in the
form of
to
Articles 58 and 65 of the ECSC Treaty and of surcharges relating
to these, whereas in 2000 there was no change in the items under
these headings.

fines imposed by the Commission pursuant

10. Until 1999, these commitments were entered in the accounts
not only as off-balance-sheet items but also as balance sheet items.
In fact, the balance between commitments received and commit-
ments given used to be included in the balance sheet, which had
the result of inflating the balance sheet (by around 12 million
euro in the financial year 1999). As from 2000, these commit-
ments are now only entered in the accounts as off-balance-sheet
items. In the financial statements for the ECSC concerning the
financial year 2000, the Commission indicates that there has been
a change in the way that the financial statements are presented,
but does not explain that change. This lack of explanation makes
it difficult to understand the changes made to the data for the
financial year 1999, depending on whether they were published
in the financial statements for that year or in those concerning the
financial year 2000.

11. The ECSC balance sheet total declined by 503,6 million euro
(11,25 %) between 31 December 1999 and 31 December 2000,
from 4 475,6 to 3 972 million euro (1) (see Table 2 for details). On
the assets side, this decrease was due, to the extent of 88 %, to the
decline in loans and advances to customers (– 363 million euro to
credit institutions and – 81 million euro to undertakings). On the
liabilities side the decline was due, to the extent of 85 %, to the
decrease in the amounts owed to credit institutions (– 427,2 mil-
lion euro).

12. The liquid asset accounts made up 44,3 % of the ECSC’s
assets and constituted the second largest item after loans. These
accounts had declined by 87 million euro (– 4,7 %). The accounts
concerned and the balancing items under liabilities are shown in
Table 3.

Changes in applications of ECSC funds and in resources

13.
In view of the forthcoming expiry of the ECSC Treaty, the
appropriations for the ECSC operating budget continued to fall in
2000 (– 15,7 million euro, see Table 4), by almost twice the
amount they had fallen in 1999. For the third consecutive year,
budgetary expenditure was significantly lower than estimated
(27,4 % in 1998, 23 % in 1999 and 24,2 % in 2000). As had been
the case in previous financial years, this was due to the fact that
actual requirements for rehabilitation aid, including social mea-
sures for the coal industry, were considerably lower than forecast
(30 % in 1998, 50 % in 1999 and 46 % in 2000). These forecasts
are made by the Commission on the basis of information sup-
plied by the Member States.

(1) As a result of the change, in 2000, in the way that the financial state-
ments are presented, the figures for 1999 have been restated to enable
a comparison.

15. The budget was in surplus for the fifth successive year, thus
allowing the Guarantee Fund to be increased to 565 million euro
(+ 12 million euro) and the provision for financing of the ECSC
operating budget to be raised to 401 million euro (+ 8 million
euro, see Table 5 for details). This provision will be used, in part,
to finance the ECSC in its last two financial years (2001 and 2002).
Allocations for the financial years 2003 and 2004, and for the
creation of a contingency provision (2) will at that point already
be made within the framework of the ‘Coal and Steel Research
Fund’, which is to be created after the liquidation of the ECSC, and
will come from the balance, at 23 July 2002, of the provision for
financing the operating budget.

THE LIQUIDATION OF THE ECSC

16. The various Community bodies began to examine the con-
sequences of the liquidation of the ECSC in the early 1990s. As a
result of the Nice Protocol, the assets of the ‘ECSC in liquidation’,
the main source of which is the levy on the production of coal
and steel established in Article 49 of the ECSC Treaty, will there-
fore be allocated to these two sectors of economic activity to fund
research activities to help these sectors, on the basis of an alloca-
tion formula of 27,2 % for coal and 72,8 % for steel (3). The net
revenue arising from the management of the assets of the ‘ECSC
in liquidation’ (the Commission estimates that this will stand at
45 million euro per year (4) will therefore be revenue allocated to
the general budget (5).

6

(2) Commission working paper concerning the procedures to be fol-
lowed to establish the amount of net revenue to be allocated to coal
and steel research, as set out in the Annex to the Draft Decision of the
representatives of the governments of the Member States of the
European Coal and Steel Community, meeting within the Council
(COM(2000)
(document
SEC(2000) 2207, 7 December 2000, p. 2).

September

2000)

final,

519

(3) SEC(1998) 1948, p. 11: ‘at 31 December 1997 values the percentage
contributions of the coal and steel industries were 27,2 % and 72,8 %
respectively’.

(4) For details of the calculation, see COM(2000) 518 final. This amount
of 45 million euro is estimated on the basis of a rate of yield of 4 %
for short-term investments and 5,5 % for medium and long-term
investments (for 2000, the rate of yield for the investments was 4,72 %
— see the financial statements of the ECSC at 31 December 2000,
page 17).

(5) The allocation of this revenue will therefore stand as an exception to
the principle of universality applicable to the general budget, which
is permitted under Article 4(2) of the Financial Regulation: ‘Total rev-
enue shall cover total appropriations for payments. Notwithstanding
the first subparagraph, and without prejudice to the specific provi-
sions of Title XI, certain revenues, provided that they are within the
limit of the authorised amounts shall not be used for any other pur-
pose, notably: ...’.

C 366/4

EN

Official Journal of the European Communities

20.12.2001

17. A ‘Coal and Steel Research Fund’ will be created in order to
implement the Council’s decisions. This Fund will draw on the
interest earned on the assets under management, which will ini-
tially belong to the ‘ECSC in liquidation’ and will then, after this
has been wound up, become part of the ‘Assets of the Coal and
Steel Research Fund’.

18. The Commission has submitted three proposals to the Coun-
cil with a view to putting in place the procedures for the liquida-
tion of the ECSC and the implementation of the research fund:

— the first concerns the laying down of the provisions required

to implement the Nice Protocol (1),

commitments that were still to be settled and which had remained
dormant for years. The Court estimates the additional amount
that could have been cancelled in 2000 to be in the order of
12 million euro.

21. When the Commission becomes aware that the number of
posts created or maintained is lower than that contractually agreed,
it revises the corresponding interest subsidies downwards and, if
needs be, also demands the repayment of the excess amounts
paid. The Commission could also cancel that part of the commit-
ment corresponding to the number of posts not created, which it
does not do. This cancellation only takes place several years later,
at the time the instalment for the corresponding loans is closed.

— the second regards the laying down of multiannual financial
guidelines for managing the assets of the ‘ECSC in liquida-
tion’ (2),

Loans to officials

— lastly, the third lays down the multiannual technical guidelines

for the research programme (3).

In the light of the approaching expiry of the ECSC Treaty, the
Court draws attention to the fact that the only decision taken so
far has come as a result of the Nice Protocol.

22. Under Article 11 of the implementing provisions concern-
ing the granting of loans to officials, the Commission has to draw
up an annual activity report. For several years now, this report has
been drawn up every two years. At present, the most recent report
available relates to the period 1994 to 1995. The Commission has
set up a working party to study loans policy and propose changes
to this, in the light of the fact that loans will only be granted up
to the time that the ECSC is liquidated. No proposals have yet
been put forward.

FOLLOW-UP OF PREVIOUS OBSERVATIONS

Performance of liquid assets

Repayment of taxes levied at source

19.
In its Annual Report on the ECSC concerning the financial
year 1999 (4), the Court recommended that the Commission
include, in the ECSC’s annual report, the ‘information needed to
assess whether these liquid assets are being managed in a finan-
cially efficient manner, taking account of market conditions’. In
its reply, the Commission undertook to indicate, as from the
financial year 2000, the average rate of yield on the liquid assets
managed. This rate was 4,72 % for the financial year 2000.

23. The ECSC balance sheet at 31 December 2000 (other assets)
shows a claim of 2,4 million euro relating to three applications
concerning tax levied at source between March 1989 and June
1996. These three applications were sent, on average, six years
and one month late. As a result of this delay, the ECSC has not
earned the legal interest to which it was entitled. No progress was
made concerning this matter in the financial year 2000.

Cancellation of dormant commitments

CONCLUSIONS

20. As a result of the corrective measures taken in the financial
year 2000, the Commission cancelled interest subsidies of a total
value of 35,2 million euro in 2000. The amount cancelled could
have been higher if the Commission had systematically cancelled

(1) Proposal for a Council decision establishing the measures necessary
for the implementation of the Protocol, annexed to the Treaty of Nice,
on the financial consequences of the expiry of the ECSC Treaty and
on the Research Fund for Coal and Steel (COM(2000) 519 final,
6 September 2000, as amended by COM(2001) 121 final of 7 March
2001).

(2) Proposal for a Council decision laying down multiannual financial
guidelines for managing the assets of the ‘ECSC in liquidation’
(COM(2000) 520 final of 6 September 2000, as amended by
COM(2001) 121 final of 7 March 2001).

(3) Proposal for a Council decision laying down the multiannual techni-
cal guidelines for the research programme of the ‘Coal and Steel
Research Fund’ (COM (2000) 521 final, 6 September 2000, as amended
by COM(2001) 121 final of 7 March 2001).

(4) Annual Report on the ECSC for the financial year 1999 (OJ C 347,

4.12.2000).

24. Budgetary and financial activity in the financial year 2000
was marked, as in the past, by the liquidation of the ECSC: the
budget for the financial year 2000 was in surplus for the fifth
consecutive year, due to cancellations of commitments and the
under-implementation of budgetary expenditure, especially reha-
bilitation aid. This surplus enabled the ECSC to increase its sol-
vency ratio and the level of the necessary provisions and value
adjustments.

25. Concerning the imminent liquidation of the ECSC, the Court
observes that, despite the proposals submitted by the Commis-
sion to the Council, the only decision taken to date has come as a
result of the Nice Protocol. This Protocol only deals with the prin-
ciples of:

— the legal basis,

— the transfer of the ECSC’s assets,

— allocation exclusively to research.

20.12.2001

EN

Official Journal of the European Communities

C 366/5

STATEMENT OF ASSURANCE CONCERNING THE ECSC

26. Pursuant to Article 45c of the Treaty establishing the Euro-
pean Coal and Steel Community (ECSC), the Court has examined
the ECSC’s accounts so as to provide the European Parliament and
the Council with a Statement of Assurance concerning the reli-
ability of the accounts and the legality and regularity of the under-
lying transactions.

27. The accounts concerned are the financial statements of the
ECSC at 31 December 2000, which were drawn up under the
responsibility of the Commission and published in the Official
Journal of the European Communities (1).

together with the financial statements concerned, the Court con-
cluded that the latter gave ‘a true and fair view of the assets and
financial situation of the European Coal and Steel Community at
31 December 2000, and of the result of its operations for the
financial year then ended’.

29. Furthermore, with a view to checking the legality and regu-
larity of the transactions underlying the ECSC’s accounts for the
financial year 2000, the Court carried out its audit in accordance
with generally accepted international auditing standards. In par-
ticular, the audit was based on an analysis of the systems and on
tests.

28.
In its report on the ECSC’s financial statements at 31 Decem-
ber 2000 (2), which incorporates the Statement of Assurance con-
cerning the reliability of the accounts and which is published

In the Court’s view, it obtained adequate assurance that the

30.
transactions, taken as a whole, are legal and regular.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 10 October 2001.

For the Court of Auditors

Jan O. KARLSSON

President

(1) Financial statements of the ECSC at 31 December 2000 (OJ C 185,

30.6.2001).

(2) Report on the financial statements of the ECSC at 31 December 2000
(OJ C 185, 30.6.2001; Corrigendum: OJ C 363, 19.12.2001).

C 366/6

EN

Official Journal of the European Communities

20.12.2001

Table 1

ECSC own funds in 2000

Items (after allocation of surplus)

31.12.1999

Allocation

Withdrawal

31.12.2000

(Mio EUR)

Guarantee fund (1)
Special reserve
Former pension fund
Surplus brought forward

Subtotal (reserves and surplus)

Provisions for large exposures
Available provision for financing the operating budget

553,0
176,1
74,6
0,2

803,9

18,0
393,0

(1) Own funds used by the Commission in the numerator of the ECSC solvency ratio.

Total

1 214,9

12,0
0,0
0,0
1,8

13,8

0,0
14,0

27,8

0,0
0,0
0,0
0,0

0,0

1,0
6,0

7,0

565,0
176,1
74,6
2,0

817,7

17,0
401,0

1 235,7

NB: As a result of the change, in 2000, in the way the financial statements are presented, the figures for 1999 have been restated to enable a
comparison. For this reason, differences exist between some of the figures in this table and those in the corresponding table in the Annual
Report on the ECSC concerning the financial year 1999. See paragraph 10.

20.12.2001

EN

Official Journal of the European Communities

C 366/7

Changes in the ECSC summary balance sheet, before allocation of the surplus,
between 31 December 1999 and 31 December 2000

Table 2

31.12.1999

31.12.2000

Mio EUR

%

Mio EUR

%

Assets

Loans (to banks and undertakings)
Liquid assets (bank balances and bonds)
ECSC operating budget (levy, fines and subsidies receivable)
Tangible and intangible assets
Other assets
Prepayments and accrued income

2 473
1 845
42
1
9
107

55,3
41,2
0,9
0,0
0,2
2,4

Total assets

4 476

100,0

Liabilities

Amounts owed (including bond issues)
Other liabilities
Accruals and deferred income
Provision for liabilities and charges
Provision for large exposures
ECSC operating budget (commitments and provisions)
— commitments
— provisions
Reserves and surplus

2 436
24
89
155
18
949

556
393

804

Total liabilities

4 476

54,4
0,5
2,0
3,5
0,4
21,2

12,4
8,8

18,0

100,0

2 071
1 758
42

—

5
96

3 972

2 044
7
92
159
17
836

435
401

818

3 972

52,1
44,3
1,1
—
0,1
2,4

100,0

51,5
0,2
2,3
4,0
0,4
21,0

11,0
10,1

20,6

100,0

NB: As a result of the change, in 2000, in the way the financial statements are presented, the figures for 1999 have been restated to enable a
comparison. For this reason, differences exist between some of the figures in this table and those in the corresponding table in the Annual
Report on the ECSC concerning the financial year 1999. See paragraph 10.

Source: Financial statements of the ECSC at 31 December 2000.

C 366/8

EN

Official Journal of the European Communities

20.12.2001

Changes in ECSC liquid assets and principal balancing items, 31 December 1999 to 31 December 2000

Table 3

31.12.1999

31.12.2000

Partial

Total

Partial

Total

(Mio EUR)

76,3

33,7

5,0
71,3

1 223,3
23,4
608,9

1 855,6

8,3
25,4

995,0
—
808,7

1 803,7

Total liquid assets

1 931,9

1 837,4

614,6

631,7

Balance sheet item

Liquid assets

Loans and advances to credit institutions
— repayable on demand
— with agreed maturity date

Bonds (1)
— public issuers
— ECSC bonds
— sundry items (2)

Balancing items

Reserves
— Guarantee fund
— Special reserve
— reserve
— utilisation (3)
— Former pension fund

— reserve
— utilisation (4)

553,0
27,8

176,1
– 148,3

33,8

73,0
– 39,2

59,0
334,0

143,8
87,3

565,0
42,1

176,1
– 134,0

24,6

74,6
– 50,0

73,0
328,0

143,1
79,9

556,2

393,0

113,5

18,0

231,1

5,6

1 931,9

434,5

401,0

116,4

17,0

223,0

13,8

1 837,4

Commitments for the operating budget

Provisions for financing the operating budget

— for budget imponderables
— for financing of future operating budgets

Provision for liabilities and charges

Provision for large exposures

Value adjustments

— on loans disbursed on loan capital
— on bonds

Sundry items

Total balancing items

(1) Before value adjustments.
(2) This item includes 98,1 Mio EUR of financial instruments issued by a defaulting debtor.
(3) Loans for the construction of social housing.
(4) Building loans granted to officials of the European Communities.

Source: Financial statements of the ECSC at 31 December 2000.

20.12.2001

EN

Official Journal of the European Communities

C 366/9

Changes in applications of funds and in resources during the period 1993 to 2000

Table 4

Item

1993

1994

1995

1996

1997

1998

1999
(a)

2000
(b)

(Mio EUR)

Variation
(b) – (a)

A. Application
Administrative expenditure
Commitments
Exceptional applications

5,0
531,2
7,1

5,0
386,4
32,5

5,0
277,9
—

5,0
201,2
—

5,0
180,9
—

5,0
154,0
—

5,0
145,6
—

5,0
129,9
—

0,0
– 15,7
—

Total applications (A)

543,3

423,9

282,9

206,2

185,9

159,0

150,6

134,9

– 15,7

B. Resources in the financial year
Results of non-budgetary operations
Levy
Other budgetary resources (fines, subsidies, etc.)
Cancellations of commitments
Exceptional resources

201,3
121,3

94,0
—

112,5
107,7
4,8
63,3
91,9

90,8
102,3
11,6
70,7
—

95,6
95,9
4,4
90,0
—

143,3
101,6
4,3
195,2
—

69,6
—
12,3
134,2
—

82,9
—
19,5
85,4
—

82,1
—
3,0
71,6
—

– 0,8
—
– 16,5
– 13,8
—

Total resources in the financial year (B)

416,6

380,2

275,4

285,9

444,4

216,1

187,8

156,7

– 31,1

B – A – 126,7

– 43,7

– 7,5

79,7

258,5

57,1

37,2

21,8

– 15,4

Transfer
financing the operating budget

from (+)/to (–)

the provision for

Transfer from (+)/to (–) the reserves

Surplus for the financial year

105,9

43,3

22,0

1,2

2,0

1,6

0,3

9,0

1,8

– 58,6

– 224,9

– 26

– 13

– 8

– 19,0

– 31,3

– 30,0

– 23,0

– 12,0

2,1

2,3

1,1

1,2

1,8

5

11,0

0,6

Source: Financial statements of the ECSC for the financial years in question.

C 366/10

EN

Official Journal of the European Communities

20.12.2001

Movements against the provision for financing the ECSC operating budget in 2000

Table 5

Items

Balance at
31.12.1999

Utilisation

Allocation

Net change

1. Available provision for financing the ECSC operat-

ing budget

393,0

– 6,0

14,0

2. Provision for fines and surcharges to be collected
subsequently and for subsidies to be recovered (1)

41,7

Total

434,7

– 1,2

– 7,2

1,8

15,8

8,0

0,6

8,6

(Mio EUR)

Balance at
31.12.2000

401,0

42,3

443,3

(1) Fines, surcharges and interest subsidies are considered to be ECSC resources only at the point when they have actually been paid. Until
then, an amount equivalent to these claims is included in this provision. As a result, the 42,3 Mio EUR in question is not yet available to
finance the operating budget.

Source: Financial statements of the ECSC at 31 December 2000, notes 13 and 14.3.

20.12.2001

EN

Official Journal of the European Communities

C 366/11

THE COMMISSION’S REPLIES

ECSC SOLVENCY AND DEVELOPMENTS CONCERNING THE
MAIN ECSC ACTIVITIES

4 to 6. Changes in the solvency ratio reflect the strategy adopted
by the Commission for the prudent financial management of the
ECSC until the expiry of the Treaty.

The system of monitoring loans allows the Commission to iden-
tify cases where there is a likelihood of the subsidy being recal-
culated or repaid. However, given the fact that cancellations are
irreversible, prudence dictates that the money should remain
available in case a sub-borrower produces additional documents
and belatedly requests payment of the subsidy.

10. The Commission has noted the Court’s remark about the
presentation of the financial statements and will provide a more
detailed explanation of any future changes in presentation.

Finally, the Commission would stress that the cancellation of these
commitments has no financial impact, in the sense that the out-
come of the cash operations (net balance) is not affected.

THE LIQUIDATION OF THE ECSC

18. The Commission would note that significant progress was
achieved at the Industry Council on 14 May 2001.

22. Despite staff shortages, the department responsible has tried
to make up the delay. In order properly to examine the available
data the department must check individual dossiers, working
backwards in time. The introduction of clearer management pro-
cedures for the departments involved in administering the loans
should enable the Commission to present the missing reports
before the end of 2001.

The final decision will be taken after ratification of the Nice Treaty
and the opinion of the European Parliament.

The working party has finished its study and concluded that there
was no other solution to be proposed.

FOLLOW-UP OF PREVIOUS OBSERVATIONS

20. From an accounting point of view, the legal commitments
are made at the level of tranches, as laid down by the accounting
procedures for ECSC loans. These require the procedures for can-
celling such commitments to be applied to specific ‘dormant’
accounts (connected with a financial tranche), i.e. accounts where
there has been no movement for more than two years. These pro-
cedures have been correctly followed. During previous visits the
Court of Auditors never made any specific remarks about the way
subsidies are entered in the budget at the level of tranches.

23. The Commission’s efforts to recover the tax levied at source
were unsuccessful in 2000. The Commission accordingly initiated
infringement proceedings against the Member State by sending a
letter of formal notice in 2001.

CONCLUSIONS

25. The Commission adopted amended proposals on this basis
on 7 March 2001, and significant progress was made at the Indus-
try Council on 14 May 2001.