CELEX: 51977PC0561
Language: en
Date: 1977-11-08
Title: DRAFT FOR A DECISION by the representatives of the Governments of the Member States of the European Coal and Steel Community, meeting within the Council, allocating additional revenue to this Community (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (77) 561
Vol. 1977/0184
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak---   COMMISSION OF THE EUROPEAN COMMUNITIES
                                                       COM(77)561 final.
                                                       Brussels , 11 November 1977 *
                             DRAFT FOR A DECISION
           by the representatives of the Governments of the Member States
           of the European Coal and Steel Community , meeting within the
           Council , allocating additional revenue to this Community
                   ( submitted to the Council by the Commission)
COM(77 ) 561 final .
 ---pagebreak---  FINANCIAL TRANSFER TO THE ECSC OF THE CUSTOMS DUTIES ON ECSC PRODUCTS
 I.  The delicate "balance of "the ECSC budget
 The ECSC operational "budget (which apart from the contribution made to the
general budget to cover administrative expenditure involves resettlement
and research aids , interest subsidies for investment and redevelopment
projects in the ECSC sector and aid for the marketing of coking coal and
metallurgical coke ) is financed from interest on investments and loans
granted out of non-borrowed funds , the sums made available by the cancelling
of commitments and , in particular , by the weight–based levies on ECSC products
fixed every year by the High Authority/Commission.
In the last six years the rate of levy adopted - which according to Article 50(2 )
of the ECSC Treaty may not exceed 1% of the average value of the products
concerned without previous authorization by the Council - has remained
at 0.2% ,
During this period and in particular in 1975» 1976 and 1977 » "the ECSC funds
have stagnated as , despite a slight annual increase at current prices , the
real value of the budget has fallen. At the same time , operating recn?demerits
have increased considerably , in particular because of the problem? Effecting
the steel sector .
                                                                 .'j
 ---pagebreak---                                   - 2 -
The Commission has not wished to cover the increase in financing requirements
by increasing the levy rate ;  this seemed to be an economically inappropriate
measure in the conditions prevailing in the ECSC industries and in partioular
the steel industry .
It seems that the time has now come to abandon the policy consisting of
reducing requirements and learning to live on the stagnating resources *
Because of the financial requirements arising from the steel crisis , which
the ECSC cannot avoid , this body must have the means to bear its responsibilities
in respect of the rationalization and restructuring of this industry .
II . The steel crisis
The serious and persistent imbalance between world supply of and demand for
steel puts the Community 's industry , traditionally a net exporter , into a
position which is made even more difficult by the fact that part of the
European production apparatus is not sufficiently competitive vis-fir-vis
the new steel–producing countries *
The restructuring of the steel sector , with a view to modernizing and
stabilizing it , is the only solution likely to ensure its survival and
guarantee the jobs of the remaining workers .
Any attempt to divide up the Community market or to close it to imports
would prejudice the Community steel industry 's prospects of long-term
economic viability – either because jobs and orders would be ensured only
by means of publio aids to production or because protectionist measures
would gradually lead to an extremely damaging trade war *
 ---pagebreak--- Nonetheless , this double risk is real and a vigorous Community policy , in
olose coordination with the polioies of the Member States , will be needed
to obviate it .
The plan for international measures must take account of the fact that the
steel crisis is worldwide , and that the first step must be to approaoh the
central problem of adjusting world structures to the aotual requirements .
Hew market disturbances must be avoided . At Community level , the success
of the recovery plan presupposes a reduced level of imports and a stable
level of exports .
By taking measures on the internal market involving both voluntary restriction
of deliveries , and the introduction of guide prices for the main rolled
products and minimum prices for concrete reinforcing bars , the Community
is helping :   to align selling prices on the production costs ;  to reduce
the loss of financial returns – or , more often, the considerable losses –
suffered by Community producers on their sales ;   and to create the conditions
for undertaking the more basic operation of restructuring .
Finally , by means of a structural policy based on the General Objectives
Steel 1985-1990, revised in agreement with the producers , workers , oonsumers
and the Governments , the Community intends , with the assistance of the
Governments to make a contribution towards :
    (i)  modernizing steel plant ;
  ( ii ) creating alternative jobs in the steel-making areas where restructuring
         has reduced the number of jobs existing ;
( iii )  guaranteeing the incomes and bringing about the resettlement of workers
         forced to leave or change their jobs .
 ---pagebreak---                                  - 4 -
The scale of restructuring, redevelopment and resettlement is considerable :
 it involves an unavoidably large number of steel workers and a large number
of others in secondary and tertiary activities linked with steel ;  the
successful conclusion of this operation demands far greater funds than the
Community policy has so far made available in normal times .
But failure to make this exceptional effort at Community level would eventually
be far more costly for each Member State individually .
Finding the requisite funds for this policy entails maintaining the contribution
made by the sector itself via the levy , applying a market policy based on
restoring price levels and introducing a new factor , namely the allocation
to the Community of the customs duties on coal and steel imports .
III .  Increasing the budgetary funds
Under the Decision of 21 April 1970 on own resources , the duties of the common
customs tariff were allocated to the Communities as own resources from
1 January 1971 *
This allocation was not extended to the customs duties on coal and steel
products covered by the EC3C Treaty , as the common customs tariff adopted
on the basis of Article 9 of the EEC Treaty does not apply to products coming
under the ECSC Treaty .
True , the customs duties on ECSC produots may have been standardized in
accordance with the decisions taken under Article 72 of the Treaty of Paris ,
but they are still allocated to each Member State whioh collects the amounts
when the goods are imported on to its territory *
                                                                                 I
                                                                                 /
 ---pagebreak---  According to the estimates available at the Commission, these customs
 duties amount to around 50-60 m EUA .
As regards the ECSC 's "budgetary requirements for 1978 , the Council has ,
during the study of the revision of the ECSC administrative budget , already
"been notified of some of the foreseeable budgetary problems . The Commission
 stated then that the extra uncovered financing requirements would be between
32 and 65 m EUA . This assessment was based on the assumption that the ECSC levy
rate would be maintained at 0»29fo and that administrative expenditure would
be reduced from 18 to 5 m EUA *
COREPER gave its agreement to the second assumption at its meeting on 26. 10.77,
                 •   -     ■
                   1
In its draft budget for 1978 , the Commission inoluded allocations of 152 m EUA
which it considers irreducible and which, moreover , represent only 56f0 of
requirements .
                                                                    in m EUA
     Category of expenditure        Requirements       Draft budget
  1.  Administrative expenditure        5                    5
  2.  Resettlement aid                 81.5                 60
  3.  Research aid                     82.5                 41
  4.  Interest relief                  85                   40
  5.  Aids to coking coal and           6                    6
      metallurgical coke
                                      273                  152
 ---pagebreak---                                    «• o ••
 The steel crisis has thus led , in particular , to increased requirements
 for resettlement aid amounting to 60 m EUA ( compared with 25 m EUA in
 1977 ) ar|d interest subsidies amounting to 40 m EUA ( compared with 15 m EUA
 in the initial budget and 21 »8 m EXJA in the amending budget for the
 financial year 1977 )*
On the revenue side , this budget will be 32 m EUA in deficit if it is
assumed that the levy rate is maintained at 0.29fo »    As it is evidently
not -advisable to take any decision to increase the rate and as other
possibilities exist for obtaining the necessary resources , the Commission
proposes, to the Council that the deficit of 32 m EUA should be covered by
transferring to the ECSC some of customs duties collected on coal and steel
in 1978 .
This transfer may be conducted on the legal basis of the second paragraph
of Article 49 of the ECSC Treaty , and would amount to a gif$ from the
Member States to the Community *
TV .   Conclusion
The Commission proposes to the Council that the neoessary procedures be set
in motion for allocating the ECSC customs duties to the ECSC operational
budget as soon as possible *    In the meantime , and in part anticipation
of a decision along these lines , the Commission considers that the
exceptional financial requirements of the steel sector in 1978 ®nd the
major economic and social interest of pursuing an effeotive Community policy
for the restructuring and redevelopment of the steel sector and the
resettlement of the workers involved fully justify a deoision by the
Member States to transfer to the European Coal and Steel Community a
voluntary contribution of 32 m EUA from the revenue from the ouBtoms
duties which they collect on goods whioh they import from non-member countries
and which oome under the Treaty establishing this Community *
 ---pagebreak---                                   - 7 -
A draft Decision "to this effect is contained in the annex .
If this proposal meets with insurmountable difficulties , the Commission
will not accept a situation in which the volume of the ECSO operational
budget falls to the level corresponding to a levy rate of 0.29/S , since
this would not form an adequate "basis for a rational and effective policy#
In this case the Commission would immediately submit a new draft "budget
inoreasing the levy to the extent required to achieve "budgetary equilibrium#
 ---pagebreak---                                   Draft
                                Décision
       by the representatives of the Governments of the Member States
       of the European Coal and Steel Community , meeting within the
       Council , allocating additional revenue to this Community .
THE REPRESENTATIVES OP THE GOVERNMENTS OP THE MEMBER STATES OP THE
EUROPEAN COAL AND STEEL COMMUNITY, MEETING WITHIN THE COUNCIL ,
Whereas , in the present economic situation of the coal and steel industry ,
it is neoessary to increase the financial means at the Commission's
disposal for accomplishing the task assigned to it by the Treaty establishing
the European Coal and Steel Community ;   whereas under Article 49 of this
Treaty , the Commission "may receive gifts";   whereas the Member States
should now grant it gifts of additional revenue , the most appropriate
being the revenue from the customs duties whioh they collect on ooal and
steel in the course of trade with non-member countries ;
in agreement with the Commission,
HAVE DECIDED :
                               Article 1
The Member States shall transfer to the European Coal and Steel Community
for the financial year 1978 a voluntary contribution of 32 m EUA from the
revenue from the customs duties which they collect on goods which they
import from non-member countries and whioh come under the Treaty . ,
establishing this Community *
 ---pagebreak---                                Article 2
The Member States shall, in olose collaboration with the Commission, take
all appropriate measures to ensure the implementation of the provisions
of Article 1 ; they shall in particular fix the common conditions for
making available to the Community the sums referred to in this Article ,
                              Article 3
The Member States shall take all the measures to implement this Deoision.
Done at
                                                The President