Communication from the Commission — Rescue and restructuring aid and closure aid for the steel sector (notified under document No C(2002) 315) (Text with EEA relevance)
Date: 2002-03-19
Institutions: European Commission
Subjects: State aid, aid for restructuring, aid system, cessation of trading, control of State aid, iron and steel industry

19.3.2002

EN

Official Journal of the European Communities

C 70/21

COMMUNICATION FROM THE COMMISSION

Rescue and restructuring aid and closure aid for the steel sector

(notified under document No C(2002) 315)

(2002/C 70/05)

(Text with EEA relevance)

1. RESCUE AND RESTRUCTURING AID FOR FIRMS IN

DIFFICULTY

In its Communication to the Council, the European Parliament,
and the ECSC Consultative Committee on (cid:145)The state of the
industry in the EU(cid:146) (1) adopted
competitiveness of the steel
on 5 October 1999,
is
important that strict rules are maintained for the steel sector
after the expiry of the ECSC Treaty on 23 July 2002. The
European Parliament, Member States, the ECSC Consultative
Committee and steel companies and their associations have
also requested strict rules for State aid to the steel industry.

the Commission stated that

it

The Commission considers that this objective may be attained
by focusing on the types of State aid that, from the experience
of the past and taking into account the features of the steel
industry, have most distortive effects on competition in this
investment aid and rescue and
sector. This is the case of
restructuring aid.

As for investment aid, the revised multisectoral framework on
regional aid for large investment projects (2) ((cid:145)the multisectoral
framework(cid:146)) provides for a prohibition of this type of aid to the
steel sector.

As for rescue and restructuring aid, the Commission bears in
mind the fact that, in the last decisions adopted in 1993 on the
basis of Article 95 of the ECSC Treaty, the Commission and the
Council agreed that no further decisions of this nature would
be taken to rescue Community steel firms. Following this, steel
companies have been acting on the market on the assumption
that no further restructuring aid was available to them. If this
state of affairs were to change in future, there is no guarantee
firms would not relax their efforts towards costs
that steel
reduction and increased competitiveness, thereby endangering
the enormous efforts already made.

considered to be compatible with the common market. The
Commission considers that, taking into account the existing
overcapacities at European and world level and the consequent
inefficiencies as well as the prohibition of rescue and restruc-
industry, aid to facilitate structural
turing aid to the steel
adjustment can contribute to the development of a healthier
steel industry. Therefore, the following aid for firms in the steel
industry as defined in Annex B of the multicultural framework
may be regarded as compatible with the common market:

2.1. Aid to cover payments payable by steel firms to workers
made redundant or accepting early retirement provided
that:

(cid:151) the payments actually arise from the partial or total
closure of steel plants which have not already been
taken into account for approval of aid,

(cid:151) the payments do not exceed those customarily granted
under the rules in force in the Member States, and

(cid:151) the aid does not exceed 50 % of those payments.

2.2. Aid to steel firms which permanently cease production of

steel products, provided that:

(cid:151) the firms became legal entities before 1 January 2002,

(cid:151) they regularly produced steel products up to the date

of notification of the aid concerned,

(cid:151) they have not reorganised their production or plant

structure since 1 January 2002,

In these circumstances, the Commission considers that rescue
aid and restructuring aid for firms in difficulty in the steel
sector as defined in Annex B of the multisectoral framework,
are not compatible with the common market.

(cid:151) they close and scrap the installations used to manu-
the
facture steel products within six months of
cessation of production or approval of
the aid by
the Commission, whichever is the later,

2. CLOSURE AID

By virtue of Article 87(3)(c) of the EC Treaty, aid to facilitate
the development of certain economic activities may be

(1) COM(1999) 453 final.
(2) OJ C 70, 19.3.2002.

(cid:151) the closure of their plants has not already been taken

into account for approval of aid, and

(cid:151) the amount of the aid does not exceed the residual
book value of the plants to be closed, ignoring that
portion of any revaluation since 1 January 2002 which
exceeds the national inflation rate.

C 70/22

EN

Official Journal of the European Communities

19.3.2002

2.3. Aid to steel firms which satisfy the conditions set out in
point 2.2 but which are directly or indirectly controlled
by, or which themselves directly or indirectly control, a
firm that is itself a steel firm may be deemed compatible
with the common market provided that:

(cid:151) the firm to be closed has been effectively and legally
separated from the corporate structure for at least six
months before payment of the aid,

(cid:151) the accounts of the firm to be closed have been inde-
pendently certified, by an auditor accepted by the
Commission, to be a true and accurate account of
the assets and liabilities of that firm, and

(cid:151) there

is

a genuine

and verifiable

reduction in
production capacity such as to yield an appreciable
benefit over time for the industry as a whole in
terms of a reduction in the production capacity for
steel products over a period of five years following
the date of the aided closure or the date of the last
payment of aid approved under this point, if later.

4. APPROPRIATE MEASURES

4.1. The Commission proposes as an appropriate measure
pursuant to Article 88(1) of the EC Treaty, to exclude
from the scope of
their existing schemes for rescuing
and restructuring firms in difficulties, as defined by the
rescuing and
Community guidelines on State aid for
firms
restructuring
belonging to the steel sector, as defined by Annex B to
the multisectoral framework, as from 24 July 2002.

difficulty (1),

firms

aid

to

in

4.2. Member States are invited to give their explicit agreement
to the proposed appropriate measures within 20 working
days from the date on which the letter is notified to them.
In the absence of any reply, the Commission will assume
that the Member State in question does not agree with the
proposed measures.

5. APPLICATION OF THIS COMMUNICATION

This Communication will be applicable from 24 July 2002 for
a period ending on 31 December 2009.

3. NOTIFICATION OBLIGATION

All plans to grant aid for rescuing and restructuring firms in
difficulty belonging to the steel industry and for closure aid to
that sector shall be notified individually.

6. NON-NOTIFIED AID GRANTED TO THE STEEL INDUSTRY

The Commission will examine the compatibility with the
common market of aid granted to the steel industry without
its authorisation on the basis of the criteria in force at the time
the aid was granted.

(1) OJ C 288, 9.10.1999, p. 2.