WRITTEN QUESTION E-1140/02 by Erik Meijer (GUE/NGL) to the Commission. Increasing dependence of the Polish economy on agriculture and international road transport following contraction of the steel industry.
Date: 2002-04-22
Institutions: European Parliament, Provisional data
Subjects: EU aid, Poland, accession to the European Union, competition, economic recession, industrial restructuring, iron and steel industry, job cuts

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The Commission will examine the recapitalisation under the principles explained in the guidelines to
3.
State aids in the aviation sector (3) and in the guidelines on State aids for rescuing and restructuring firms
in difficulty (4). These guidelines include the ‘one time last time’ rule, thus implying that any additional
State aid element will not be accepted.

The Parliament will, of course, be informed of the Commission’s position through the normal

4.
channels, as soon as a decision is adopted.

(1) OJ L 271, 12.10.2001.
(2) OJ L 322, 25.11.1997.
(3) OJ C 350, 10.12.1994.
(4) OJ C 288, 9.10.1999.

(2003/C 28 E/082)

WRITTEN QUESTION E-1136/02

by Glenys Kinnock (PSE) and Eluned Morgan (PSE) to the Commission

Subject: Trade in domestic dog and cat fur

(22 April 2002)

Would the Commission provide information on its policy concerning the importing into the European
Union of domestic cat and dog fur?

What plans does the Commission have to introduce a ban on the importing of these products into the
European Union?

Answer given by Mr Lamy on behalf of the Commission

(11 July 2002)

The Honourable Member is asked to see written question E-1203/02 on the same subject put by
Mr Whitehead (1) and the answer given on behalf of the Commission by the Member of the Commission
responsible for health and consumer protection.

(1) OJ C 301 E, 5.12.2002, p. 104.

(2003/C 28 E/083)

WRITTEN QUESTION E-1140/02

by Erik Meijer (GUE/NGL) to the Commission

(22 April 2002)

Subject: Increasing dependence of the Polish economy on agriculture and international road transport

following contraction of the steel industry

Can the Commission confirm that the conclusion of accession negotiations with Poland on the
1.
competition chapter was linked to Poland’s willingness to merge the four existing blast
furnace
undertakings into a single undertaking, Polskie Huty Stali (Polish steel and blast furnaces) in May 2002,
then to sell the undertaking to interested parties from EU Member States (Usinor, Thyssen Krupp, Salzgitter
or Corus) or India (Ispat) and to shed a quarter of the 40 000 jobs which remain after earlier restructuring,
all of which would lead to the Commission having to approve a consolidation plan?

2.
Is the Commission aware that the Polish steel industry has already contracted considerably over the
past 15 years, that this sector now yields only 1,69 % of national income and that unemployment has risen
to about 18 %?

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Can the Commission confirm that Poland has become increasingly dependent on imports because of
3.
the contraction of the steel industry, such that in 2001 40 % of national steel consumption had to be met
from imports and it is anticipated that this figure will increase to 50 % in 2002?

How can the Commission help to prevent the restructuring and the crisis in the steel

industry
4.
making the Polish economy increasingly dependent on an outdated agricultural sector, on cheap road
transport outside its own frontiers, on the export of prostitutes and on other activities which will
increasingly be viewed as problems in the EU?

5.
How does the Commission intend to prevent a situation where Poland, because of declining
industrial production, high unemployment and insufficient resources for cleaning up massive industrial
pollution (e.g. asbestos, unprocessed minerals residues, artificial fertilisers and pesticides) is unable for a
considerable period to meet the necessary requirements for membership of the European Union?

6.
Is the Commission prepared to support import restrictions on steel, which is how the Polish
government wishes to respond to the American import restrictions which have applied since 20 March
and which particularly affect Poland as the United States was its third largest export market worth $63,5
million in 2000, and to the influx into Europe of cheep Asian steel which was previously exported to
America?

Source: Financieel Dagblad, 25.3.2002

Answer given by Mr Verheugen on behalf of the Commission

(3 June 2002)

The Commission can not confirm that the conclusion of the accession negotiation with Poland was
furnace undertakings into a single

1.
linked to Polands willingness to merge the four existing blast
undertaking.

The Commission stresses that the necessity to demonstrate a ‘credible track record of enforcement’ with
respect to competition policy including both anti-trust and state aid is an important element in the
negotiations of the competition chapter for all the candidate countries.

A credible record of enforcement includes the respect of Protocol 2 of the Europe Agreement relating to
state aid in the steel sector. The Protocol sets out the criteria under which aid may be granted to the sector
for restructuring purposes. However,
it is for each candidate country to decide whether such aid is
necessary and, if so, the best approach to fulfil the criteria set out in Protocol 2. Whether the criteria have
been fulfilled is decided jointly by on the one side Poland and on the other the Community and its
Member States.

2. and 3.
The Commission is aware of the efforts that Poland undertook so far in order to develop a
modern and globally competetive steel industry. Moreover the Polish government and the individual steel
mills have long been aware of the need to restructure the sector and escape from the legacy of the
previous industrial system which left the steel sector ill-equipped to face the rigours of the market
economy. In particular, the Polish steel sector faces competition on two fronts: first and foremost from
cheaper products from the former Soviet Union at the bottom end of the market and secondly from high
quality imports from western producers at the top end of the market.

This challenge has long been recognised within the industry and the sector has, on an ad hoc, firm by
firm, basis been undergoing a transition along with the rest of the Polish economy.

The current steel restructuring plan devised by the Polish government is intended to put this ad hoc
restructuring on a firmer basis and to develop a clear strategy for the sector. The restructuring of the steel
sector is therefore an important element in the ongoing modernisation of the Polish economy, which has
undergone a massive transformation in the last decade and which defies the old stereotypes.

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The restructuring of the sector has had a social impact: over the last decade the steel sector has
4. and 5.
seen its direct workforce reduced by around 100 000 workers. Some are now employed in spin off
companies, others have found employment in different areas.

The Commission has sought to alleviate the social impact of these reductions, and those in the coal sector,
directly through PHARE funding to assist in retraining workers, the creation of business start up funds and
the like. Support for these actions amounts to some EUR 60 million.

In addition to this direct assistance to alleviate the social impact of restructuring, the Community, through
the Economic and Social cohesion envelope of the PHARE programme,
is providing around EUR 120
million annually to assist the most deserving regions in Poland as a pre-cursor to the structural funds. Such
funding supports not only job creation initiatives but also small scale environment projects at the local
level. At the national level the Instrument for Structural Policies for pre-accession (ISPA) programme is
allocated EUR 370 million a year for national environment and transport infrastructure projects in Poland.
Also the Special Accession Programme for Agricultural and Rural Development (Sapard) programme, with
a total allocation of EUR 170 million,
rural
infrastructure. In total the Community provides almost EUR 1 billion a year to Poland to assist in its
preparations for membership of the Union and to ensure that all parties are able to benefit fully from the
enlargement of the Union.

substantial assistance for modernisation of

includes

6.
The United States’ steel safeguard measures are unjustified and World Trade Organisation (WTO)
incompatible. Their destabilising impact on world steel markets presents a clear risk to the restructuring
process that Poland and other candidate countries are undertaking. However, any safeguard measure to
counter trade diversions from the United States market must strictly respect WTO rules.

(2003/C 28 E/084)

WRITTEN QUESTION P-1143/02

by Jonas Sjöstedt (GUE/NGL) to the Commission

(15 April 2002)

Subject: Future cost of pharmaceuticals

In its answer to Question No P-0234/02 (1), the Commission states that parallel imports of pharmaceuticals
may have a detrimental effect on the research and development industry.

According to Ian Senior (NERA special adviser), the loss of revenue to the pharmaceuticals industry as a
result of parallel imports is approximately equivalent to the cost of developing a new drug. In its decision
to prohibit Glaxo Wellcome’s dual pricing system, the Commission stated that the losses of revenue ‘are
too insignificant to affect these investments to a considerable extent’ and, indirectly, that they can be offset
by reducing marketing costs. Parallel imports account for approximately 2 % of total pharmaceutical sales
in the Union. On average, parallel importers buy pharmaceuticals at some 30 % less than the domestic sale
price.

How is it possible that an approximate 0,6 % loss of revenue can have a detrimental effect on the research
and development industry?

(1) OJ C 277 E, 14.11.2002.