WRITTEN QUESTION E-2193/03 by Glenys Kinnock (PSE) to the Commission. The future of the steel industry in the UK.
Date: 2003-07-02
Institutions: European Parliament, Provisional data
Subjects: State aid, United Kingdom, accession to the European Union, aid for restructuring, aid to undertakings, control of State aid, industrial restructuring, iron and steel industry

C 51 E/222

Official Journal of the European Union

EN

26.2.2004

(2004/C 51 E/242)

WRITTEN QUESTION E-2193/03

by Glenys Kinnock (PSE) to the Commission

(2 July 2003)

Subject: The future of the steel industry in the UK

Is the Commission aware of the claims from Corus UK Ltd that whilst steel production capacity in other
EU Member States has been cut in recent years, much of this capacity was severely under-utilised and
actual output levels have changed very little? Furthermore, it is claimed that significant amounts of state
aids were used to encourage these capacity changes, many of which were accompanied by new plant
investment in the facilities that remained. Does this not contravene state aid rules?

Also, what is the Commission planning to do to encourage the rationalisation of steel production in
accession countries? Does the Commission agree that the steel-producing accession countries have failed to
act quickly enough in restructuring their capacity? It is Corus UK’s opinion that what restructuring will
take place before 2007 will be too little, too late.

Answer given by Mr Liikanen on behalf of the Commission

(6 August 2003)

The Commission is not aware of recent claims from Corus United Kingdom Ltd along the lines indicated
by the Honourable Member. However,
it would like to point out that during the period from the
beginning of the 1980s until the mid 1990s, steel production capacity has been reduced by some
60 million tonnes. The fact that output has remained steady at about 160 million tonnes is a reflection of
improved productivity linked to continuing investments and technical improvements. All such investments
have been carried out within the framework of a specific state aid regime, which has limited eligible aid to
clearly defined conditions which are strictly controlled. As part of this process, the Commission, following
a unanimous decision by all Member States, authorised national authorities to grant necessary restructuring
aid under strict conditions. A strict control regime was set in place to monitor the aid granted. At the time,
the Commission and the Council agreed that no further decisions of this nature would be taken to rescue
or restructure Community steel firms.

The United Kingdom took part in this exercise at the same level as other Member States. Since 1995, there
has been no new restructuring programmes supported by public funds and individual companies must take
their strategic decisions in full autonomy. Steel companies have been acting on the market on the
assumption that no further restructuring aid was available to them. The Commission considered that if this
state of affairs was to change in the future, there was no guarantee that steel firms would not relax their
efforts towards cost reduction and increased competitiveness, thereby endangering the enormous efforts
already made. This is why on 19 March 2002, the Commission decided that the prohibition of rescue and
restructuring aid for steel companies in difficulties should continue after the expiry of the ECSC Treaty on
23 July 2002 (1).

The Commission also decided that regional
expiry of the ECSC Treaty (2).

investment aid should continue to be prohibited after the

The restructuring of the steel industry in the new Member States remains to be completed. This was
acknowledged during the accession negotiations by all parties involved. As a result of the negotiations,
transitional periods have been agreed for the Czech Republic and Poland until the end of 2006, in order to
allow these countries to complete the restructuring of their steel sector and to make the companies that
are still publicly owned more attractive for private investors.

The Commission has been actually involved in the assessment of national restructuring plans in the new
Member States and will continue its involvement in the future. This has permitted strict conditions to be
set concerning the maximum amounts of restructuring aid that may be granted to beneficiary companies,
as well as the closure of non-viable and obsolete facilities. The new Member States committed themselves
to fulfilling these conditions, which have been enshrined in the Treaty of Accession.

26.2.2004

EN

Official Journal of the European Union

C 51 E/223

For Slovakia, which privatised its steel industry in 2000, a temporary period has been agreed during which
the beneficiary company may benefit from a tax exemption scheme to compensate for maintaining
employment. During this period, which will
terminate by the end of 2008, Slovakia has made a
commitment to respect ceilings for production and sales of steel products into the market of the enlarged
Union.

Detailed monitoring conditions are specified in the Accession Treaties and the Commission will report on
the progress achieved on a regular basis.

(1) Communication from the Commission on rescue and restructuring aid and closure aid to the steel sector, OJ C 70,

19.3.2002.

(2) Communication from the Commission on the Multisectoral

framework on regional aid for large investment

projects, OJ C 70, 19.3.2002.

(2004/C 51 E/243)

WRITTEN QUESTION P-2203/03

by Véronique Mathieu (EDD) to the Commission

(27 June 2003)

Subject: Drought

For several months now, a large number of regions in Europe, and especially in France, have been
suffering from an exceptional rainfall shortage. In Lorraine, the shortage began as long ago as February.
In some areas, no more than 50 mm of rain has fallen since February, although, in a normal year, the
average rainfall is 50 mm per month. Farmers have been forced to start using the fodder stocks which they
had set aside for next winter.

The scorching temperatures of the last few days have further exacerbated the situation. Every crop has now
been affected.

Current legislation does not permit set-aside land to be used for fodder. However, given the exceptional
circumstances which are threatening livestock, that resource must not be neglected.

What measures will the European Commission propose so that all fodder and straw resources may be fully
utilised and every possibility of mutual assistance be exploited?

What provisions will the European Commission propose to cope with what might become an economic
disaster?

Answer given by Mr Fischler on behalf of the Commission

(23 July 2003)

The Commission is aware of the fact that the drought became worse in several regions of the Community
in June 2003 and, following a favourable opinion of the Management Committee for Cereals delivered on
3 July 2003, has decided to authorise the use of set-aside land for fodder in the regions concerned in the
2003/04 marketing year.

The French authorities have requested that the measure be applied in 54 departments. In addition to
France, several regions of Germany, Italy and Austria are also taking advantage of the scheme.

This exceptional measure applies from 4 July 2003.