CELEX: 51982PC0684
Language: en
Date: 1982-11-15
Title: Proposal for a COUNCIL DIRECTIVE amending Directive 81/363/EEC on aid to shipbuilding (submitted to the Council by the Commission)

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COM (82) 684
Vol. 1982/0213
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                          COM(82)684 final
                                                          Brussels / 15 November 1982
                             Proposal for a
                            COUNCIL DIRECTIVE
          amending Directive 81 / 363 / EEC on aid to shipbuilding
             ( submitted to the Council by the Commission )
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 COM(82 ) 684 final
 ---pagebreak---                                                       Csn ^'vi
                   EXPLANATORY MEMORANDUM
1 . The Fifth Directive on aid to shipbuilding adopted by the Council on 28
      April 19^1 will expire on 31 December 1982 *  The Directive contains a Com­
      munity code for state aids to the shipbuilding industry based on Articles
      92(3)(d) and 113 of the EEC Treaty and designed to help the industry out of
      its severe crisis and to assist its restructuring .    As there has been no
      let-up in the crisis and it is necessary to support the efforts of Community
      shipbuilders to stabilize and consolidate their position and to limit the
      social and economio oonsequences of the restructuring, the subsidies oode
      needs to be kept in force .
2 * The market upturn has unfortunately not lived up to the forecasts made in
      1980 .  Although there was a slight inorease in output in 198l » the signs of
      livelier ordering disoerned in the first six months of 1981 were short–lived
      and in 1982 orders have fallen off sharply ( l ).  The medium–term outlook for
      new orders is not at all promising.   Estimates of shipbuilding oapacity and
      output in 1982 show substantial excess oapacity both within the Community
      and in the world at large :
             World t     capacity estimated at 21 million ogrt
                         output          "     14 million cgrt
             EEC t       capacity estimated ad 3.5 million cgrt
                         output          "     2,7 million ogrt
 3. Between 1976 and 1981 , and particularly Tinder the Fourth Directive ( 78/ 338/
      EEC ), the emphasis was on reducing overcapacity . Over this period oapacity
      was out by around 30 % and employment by 40 % whilst output fell by 48
 ( l ) Cf . Report on the State of the shipbuilding industry in the Community
        ( C0M(82)564).                                      7
 ---pagebreak--- Since then , more weight has gradually come to be attached in restructuring
plans to modernization measures , shipyard rationalization and productivity
improvements , aimed at consolidating the restructuring carried out in the
preceding years and allowing it to bear fruit , on the ground that it will
take time for the effeots of the previous round of cuts to work through to
produce a healthier and more competitive industry .
This approach is reflected in the seventh recital to the Fifth Directive ,
which states that " the restructuring effort is not confined to reduction of
production , employment and production capacity , but includes all other mea­
sures enabling the shipbuilding industry to become competitive ; .... in
assessing the reduction of production oapaoity it is appropriate to take
acoount of the effort already made ".
Hence , in a number of oases involving production aids , the Commission has
accepted consolidation without further capaoity reductions as ooming within
restructuring for the purposes of Artiole 6 , subject to the following condi­
tions , among others :
 ( a ) that the consolidation waa preceded by restructuring involving substan­
       tial capacity reductions in the form of closure of the least viable
       yards and resulting in proper utilization of the remaining capacity;
 ( b ) that it ia of relatively short durationj
 ( o ) that the subsidies proposed would ba sharply degressive .
 ---pagebreak--- In its scrutiny of aid notifications , the Commission has also borne in mind
that the fact that the restructuring process was proceeding at different
rates and according to different timetables in different Member States .    In
a persistently depressed economic environment , it has concentrated on ensuring
that the aid schemes were genuinly degressive and linked to the underlying
economio objective , whioh is rationalization of the industry .
The control of aids thus responds positively to the economic and social en­
vironment and backs up in a consistent manner Community polioies in the whole
maritime sector : shipping, ports ; fisheries , and shipbuilding and ship-
repairing.
In view of what has been aohieved under the Fifth Direotive and of the present
state of the Community industry , the Commission proposes that the Fifth Di-
reotive be extended for three years until 31 December 1985 *    To avoid uncer­
tainty among operators Bhould the aid again fall under the general regime of
Artiole 92 when the Fifth Directive expires , it is desirable that the Counoil
aoopt this proposal before 31 December 1982 .
 The Commission affirms its intention of tightening up and improving the con­
trol of shipbuilding subsidies .    To this end it intends to increase consults
tion with the Member States by holding more regular meetings with the natio­
nal experts during whioh all aid notifications , and in particular those in­
 volving indirect aid , would be scrutinized more thoroughly , by enforcing the
 Directive more strictly , with greater insistence on the prior notification
 requirment , and by improving the layout and quality of the half-yearly re­
 ports drawn up under Artiole 10 of the Directive .
 With regard to the ship-repairing industry , whioh ia in an extremely worrying
 situation , the Commission reaffirms the statement which it asked to be inser­
 ted in the Counoil 's minutes when the Fifth Direotive waa adopted on 28 April
 1981 i
 ---pagebreak--- ' Tha situation in the • hip–re pair aeotor ? however , appears to be of a cor–
tain degree of urgency in aom® M®mb ®r States and aid for restructuring th®
sector should therefore b® exarain®d sympathetically , taking accoujit of sub­
sidized competition froa shipyards outside the Community".
 ---pagebreak---                              Proposal for a
                           CQUNCIL_DIRECII\/ E
       amending Directive 81 / 363 / EEC on aid to shipbuilding
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Articles 92(3 ) ( d ) and 113 thereof ,
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ,
Having regard to the opinion of the Economic and Social Committee ,
                                                                        1
Whereas the Council adopted on 28 April 1982 Directive 81/36 3/CEE
which embodies a code for State aids with a view to promoting streamlining
and restructuring of the shipbuilding industry in a crisis situation ;
Whereas the state of the shipbuilding industry , both worldwide and in the Com­
munity , has deteriorated during the period of application of the said Direc­
tive ;
Whereas the said Directive expires on 31 December 1982 ;
Whereas a competitive shipbuilding industry is of vital interest to the Com­
munity and contributes to its economic and social wellbeing by providing a
 substantial market for a whole range of industries including those using ad­
vanced technology and also contributes to the maintenance of employment in a
number of regions including some which are already suffering a high rate of
unemployment ;
Whereas the app li cat ion by the Commission of Directive 81 / 363 / EEC allows for
restructuring and consolidating schemes so as to enhance the competitiveness
of the European industry by presenting escalation of aids * while maintaining a
 number of jobs ;
 OJ No L 137 - 23.5 . 1981 , p. 39
                                                                              • /2
 ---pagebreak---                                     - ? -
Whereas in the preseut continuing economic crisis Member States do not fore­
see in the medium term , that is not within three years , a genuine recovery
in maritime industries either at world or at Community levels and whereas
consequently the streamlining of the Community 's shipbuilding industry must
be pursued in order to obtain a lasting improvement of its competitiveness
through adaptation to market conditions ;
Whereas in view of the severe social and regional repercussions of the con­
tinuing crisis and in view of the efforts and sacrifices demanded by the
streamlining of this sector in this particular respect , it does not
appear possible immediately to abolish the aids granted by Member States
to the shipbuilding industry , whether directly or indirectly ;
Whereas it is therefore necessary to extend for a peri or*    of three years
the control of such aids as instituted by the Directive 81 / 363 / EEC ,
HAS ADOPTED THIS DIRECTIVE :
                               Article 1
 In Article 11 of Directive 81 / 363 / EEC 31 December 1982 is hereby replaced
by " 31 December 1985 ".
                               Article 2
This Directive is addressed to the Member States .