CELEX: 31974D0614
Language: en
Date: 1974-10-16 00:00:00
Title: 74/614/ECSC: Commission Decision of 16 October 1974 approving additional aid to be granted by the Kingdom of Belgium for the benefit of undertakings in the coal industry in respect of the calendar year 1972 and aid to be granted by the Kingdom of Belgium to that industry in respect of the calendar year 1973

No L 335/36                             Official Journal of the European Communities                                  14. 12 . 74
                                                  COMMISSION DECISION
                                                     of 16 October 1974
              approving additional aid to be granted by the Kingdom of Belgium for the benefit of
              undertakings in the coal industry in respect of the calendar year 1972 and aid to be
              granted by the Kingdom of Belgium to that industry in respect of the calendar year 1973
                                        (Only the French and Dutch texts are authentic)
                                                         (74/614/ECSC)
THE COMMISSION OF THE EUROPEAN                                     amount of aid to cover operating losses up to Bfrs
COMMUNITIES ,                                                      5 237-2 million ; whereas the total amount can be
                                                                   broken down as follows between the coalfields :
Having regard to the Treaty establishing tshe                                                                    (in Bfrs 1 000 000)
European Coal and Steel Community, and in                                                                Southern
                                                                                              Campine                     Total
particular Articles 2, 3, 4 and 5 thereof;                                                               coalfields
Having regard to Commission Decision No 3/71 /                     Original amounts           1 731-5    3 077-0         4 808-5
ECSC ( 1 ) of 22 December 1970 on Community rules                  Additional amounts           401-5        27-2           428-7
for interventions by Member States for the benefit of
the coal industry;
                                                                                   Total      2 133-0    3 104-2         5 237-2
Having regard to Decision No 73/287/ECSC (2) of
25 July 1973 on coking coal and coke, and in par­                               Increase      + 23-2%    + 0-9%          + 8-9%
ticular Article 9(1 ) thereof;
Having consulted the Council;
Whereas on 14 November 1973 the Commission of                      Whereas the Belgian Government also informed the
the European Communities adopted Decision No 73/                   Commission that the aid towards the cost of pumping
395 /ECSC (3); whereas this Decision approved the                  underground water out of pits had been reduced by
                                                                   Bfrs 17-6 million from Bfrs 50 million to Bfrs 32-4
aid proposed by the Belgian Government for the
benefit of the coal industry in respect of 1972 to                 million, and the aid for vocational training by Bfrs
the extent that it had been included, and examined                 8-1 million from Bfrs 12-9 million to Bfrs 4-8 million ;
by the Commission, in the 'supplementary report on
financial intervention by Member States in 1972 for
the benefit of the coal industry' (4); ,                           Whereas, considering the total amount of aid for the
                                                                   benefit of the Belgian coal industry, the net increase
Whereas, as explained in that report (5), the Belgian              for 1972 therefore amounts to Bfrs 403 million ;
Government had asked the Commission to approve                     whereas the additional Belgian aid is almost
aids amounting to Bfrs 4 808-5 million to cover                    exclusively for the benefit of the Campine coalfield
operating losses, to be granted within the framework               as opposed to the southern coalfields ; whereas the
of Article 9 of Decision No 3/71 /ECSC;                            increase in aid for the southern coalfields amounts
                                                                   to only 0-9% ;
Whereas in a letter of 11 July 1973 the Belgian
Government asked the Commission to approve the                     Whereas in the case of the Campine coalfield a
grant of an additional Bfrs 428-7 million, i.e. an                 further 23% increase in the amount of aid was
increase of approximately 9% to bring the total                    required because the original estimates of the aid
                                                                   to be granted would have been sufficient to cover
                                                                   only 55% oif the operating losses ; whereas the
                                                                   increase in the amount of aid to be granted means
O OJ No L 3 , 5. 1 . 1971 , pp. 7 et seq.                          that 66% of the operating losses can now be covered,
(2) OJ No L 259 , 15. 9. 1973 , p. 41 .                            so that the only productive undertaking in the Cam­
(3) OJ No L 346, 17 . 12. 1973 , pp. 11 et seq .
il) Doc. SEC (73) 2272 fin., pp . 13 et seq.                       pine coalfield (Kempense Steenkolenmijnen) is in a
(5) Doc. SEC(73) 2272 fin., p. 16.                                 position to meet its current financial commitments ;
 ---pagebreak---  14. 12. 74                          Official Journal of the European Communities                          No L 335 /37
Whereas, although provision was originally made                 Whereas the Commission is therefore of the opinion
for a total of Bfrs 323 per metric ton (= 6-46 u.a.)            that the proposed increase in aids for the benefit of
in direct aid to be paid in respect of the Campine              the Belgian coal industry to cover losses in respect
coalfield (*), the amount has now been increased to             of 1972 can be regarded as compatible with the
Bfrs 369 per metric ton (= 7-38 u.a.);                          proper functioning of the common market;
Whereas this increase of approximately one unit of
account per metric ton does not require further points          Whereas, furthermore, the Belgian Government has
to be examined in addition to those already examined            informed the Commission, pursuant to Article 2 of
in Document SEC(73 ) 2272 final ; whereas the                   Decision No 3 /71/ECSC, of the direct and indirect
regional and social problems in that coalfield remain           aid which it proposes to grant for the benefit of the
unchanged; whereas the aid offsets only part of the             coal industry for 1973 ; whereas the aids listed below
 difference between costs and revenue ;                         require authorization pursuant to the aforementioned
                                                                Decision ;
Whereas these findings indicate that the increase in
aid to cover operating losses proposed by the Belgian
Government in respect of 1972 is not contrary to the            Whereas the Belgian Government proposes to grant
provisions of Article 9 of Decision No 3/71 /ECSC ;             aid amounting to Bfrs 218-1 million towards the
                                                                financing of investments for 1973 ; whereas this
                                                                amount should enable those undertakings not due
Whereas the additional increase in aid provided for              for closure in 1973 to make the necessary investments ;
by the Belgian Government for 1972 is not such as
to impair the proper functioning of the common
market, although the total amount to be calculated
in accordance with Articles 6 to 9 of Decision                  Whereas the Belgian Government also proposes to
No 3/71/ECSC now yields a figure of Bfrs 533                    grant the undertaking Esperance et Bonne Fortune
( 10-68 u.a.) per metric ton produced and is thus the           aid amounting to Bfrs 50 million; whereas that
highest in comparison with the other Community                  undertaking has been involved in additional expen­
coal producers ;                                                diture for the removal of underground water which
                                                                entered their mine as a result of the closure of shaft 2
                                                                of the Gosson-Kessales mining company in
Whereas these conclusions are based on the following            Montegnee and of the Bure-aux-Femmes shaft of the
findings :                                                      Patience at Beauj one undertaking;
Whereas an investigation carried out by the
Commission revealed that the level of prices for                Whereas the Belgian Government has also made
Belgian coal for domestic use is determined primarily           provision for payments amounting to Bfrs 7-6 million
by the prices of Russian anthracite, and for Belgian            to enable the undertakings in the coal industry to be
coking coal by the equivalent US prices ; whereas               reimbursed in respect of their expenditure on the
light heating oil plays no significant role in the              vocational training of miners ; whereas this aid will
formation of prices of domestic coal ; whereas Russian          enable approximately 19% of the expenditure by the
anthracite plays an important part in the formation             Belgian coal industry in this connection in 1973 to
of prices in northern France, Belgium and the Nether­           be covered ;
lands ; whereas the annual quantities sold in those
areas are based on the coal import policies im­
plemented by the governments concerned; whereas
the problems in this connection therefore fall within           Whereas the Belgian Government has also made
the scope of the general energy and coal policy and             provision for payments amounting to Bfrs 5 158-7
can be dealt with only within that framework;                   million in order to ensure that the closure programme
whereas on account of the import of cheap Russian               is executed at what the Belgian Government considers
anthracite and low-price Australian and American                to be a suitable rate ; whereas that amount is designed
coking coal , Belgian producers are obliged to adjust           to cover the operating losses set out in a standard
their prices ; whereas the Commission has not ob­               book of charges relating to all subsidized pits ;
served any cases of Belgian producers undercutting
the prices of imported products ;
                                                                Whereas the aforementioned aids are in accordance
                                                                with the criteria laid down in Articles 6, 7 and 9 of
                                                                Decision No 3 /71 /ECSC for the admissibility of such
i1) Doc . SEC(73) 2272 fin ., p. 24.                            state aid ;
 ---pagebreak---   No L 335 /38                      Official Journal of the European Communities                                 14. 12. 74
  Whereas the purpose of the aid to finance investment          Whereas , in the case of the Campine coalfield, the
 projects in the undertakings benefiting from the aid          Belgian Government has pointed out that five large
 is in accordance with the provisions of Article 7 (2 )         undertakings are still operating in that coalfield ;
  of Decision No 3 /71 /ECSC ; whereas such aid is to be        whereas, since those undertakings cannot be closed
 used to cover part of the expenditure on concen­               down gradually, large numbers of employees will
 tration, mechanization and automation of mine                  have to be made redundant at one time ; whereas
 workings, in order to enable the coal to be more              production was reduced by one million metric tons
 intensively upgraded and better cleaned ; whereas the         in 1973 , so that approximately 2 000 underground
 information given to the Commission also reveals              workers were made redundant ; whereas, according
 that the undertakings benefiting from the aid will            to the Belgian Government, suitable conditions do
 not be applying for loans at a reduced rate of interest       not yet exist to cope with larger numbers of redun­
  under Article 54 of the ECSC Treaty ;                        dancies ; whereas regional and social difficulties must
                                                               be avoided at all costs ;
                                                               Whereas, in view of these social conditions in the
 Whereas the reimbursement of the cost of pumping              regions of Belgium in which the coalfields are
 underground water out of the closed pits is a measure         situated, the aid to be granted in respect of 1973 to
 of the type described in Article 6 ( 1 ) (2) of Decision      cover operating costs can be considered, from a
 No 3 /71 /ECSC ; whereas the removal of the under­            purely formal point of view, as being in accordance
 ground water was necessitated by the closure of the           with the provisions of Article 9 ( 1 ) ( 1 ) of Decision
 Gosson-Kessales and Bure-aux-Femmes pits ; whereas            No 3 /71 /ECSC ;
 the amount of the aid does not exceed the actual
pumping costs incurred by the additional operations
 to remove underground water;                                  Whereas it must be pointed out, furthermore, that
                                                               the amounts of aid to cover losses on mine operation
                                                               do not exceed the estimated actual operating losses ;
                                                               whereas they are therefore in accordance with the
                                                               provisions of Article 9 ( 2 ) of Decision No 3 /71 /ECSC ;
 Whereas the aids to undertakings in the coal industry
 for the vocational training of miners are in accord­
 ance with the criteria laid down in Article 7 (3 ) of         Whereas the aid proposed by the Belgian Government
 Decision No 3 /71 /ECSC ; whereas that aid is designed        for 1973 is not such as to impair the proper
to contribute towards covering expenditure on the              functioning of the common market, although the
 training of miners ;                                          total amount of aid as calculated in accordance with
                                                               Articles 6, 7 and 9 of Decision No 3 /71 /ECSC yields
                                                               a figure of Bfrs 615 ( 12-54 u.a .) per metric ton
                                                               produced and is thus the highest in comparison with
                                                               the other Community coal producers ;
Whereas the other aids amounting to Bfrs 5 158-7
million for which provision has been made by the
Belgian Government for 1973 can be regarded as                 Whereas these conclusions are based on the following
being in accordance with the provisions of Article 9           findings :
of Decision No 3 /71 /ECSC ; whereas the Belgian coal
                                                               — the amount of the aid is consistent with the
industry 's financial situation deteriorated in 1972
 compared to 1971 ; whereas in 1972 revenue covered                tonnage forecasts drawn up for 1973 for each
63-7% of the pits ' total costs ; whereas a further                Belgian coalfield or undertaking, having regard
deterioration of the revenue situation can be expected             to the Community's overall supply position in
 in 1973 ;                                                         respect of coke and coal, so that the requirements
                                                                   of the first subparagraph of Article 3 ( 1 ) of
                                                                   Decision No 3/71 /ECSC are satisfied ;
                                                              — no adverse effect on trade in coal between
Whereas the Belgian Government has decided to close                Belgium and the other Member States was
four pits in the southern coalfield so that only 12 pits           observed in 1973 ;
would still be in operation by the end of 1973 ;              — in the formation of prices for Belgian coal, no
whereas approximately 4 000 persons have been                      prices were aligned to equal those of cheaper coal
affected by those closures ; whereas, compared to                  produced in the Community in 1972 and no such
previous years in which an annual reduction of 2 000               price adjustments are expected to have been made
to 3 000 in the number of staff had been achieved,                 in 1973 ;
the closures made in the southern coalfield for 1973
involve a larger number of redundancies, which seems          — industrial consumers of boiler coal receive no
both expedient and necessary in view of the very                   indirect aid as a result of artificially low prices for
high amount of aid required by that coalfield ;                    Belgian coal ;
 ---pagebreak---  14. 12 . 74                        Official Journal of the European Communities                         No L 335 /39
— the closure of unprofitable pits will lead to ration­        The amount of Bfrs 428-7 million provided for 1972
     alization and the concentration of production on          shall be for the purpose of covering losses on mine
     pits where productivity is highest;                       operation.
Whereas it may therefore be concluded that the aid             The amount of Bfrs 5 434-4 million provided for 1973
proposed by the Belgian Government for 1973 will               shall include Bfrs 218-1 million to finance investment
not impair the proper functioning of the common                projects, Bfrs 7-6 million for the vocational training
market;                                                        of mines and Bfrs 50 million for the removal of
                                                               underground water which has entered the Esperance,
Whereas this also applies if account is taken of the           Bonne Fortune pit.
aids granted to the coal mines pursuant to Decision
No 72./287/ECSC; •                                                                    Article 2
Whereas, pursuant to Article 11 ( 1 ) of Decision No           The Government of the Kingdom of Belgium shall
3/71 /ECSC, the Commission must satisfy itself that            notify the Commission by 30 November 1974 of
the approved aid is used for the purposes set out in           details of the aids granted pursuant to this Decision,
Articles 6 to 9 of that Decision ; whereas in order            in particular as regards the amounts paid and the
to do so the Commission must be informed in par­               manner in which such amounts are apportioned.
ticular of the amount of the aid of the manner in
which it is apportioned,
                                                                                      Article 3
HAS ADOPTED THIS DECISION :                                    This Decision is addressed to the Kingdom of
                                                               Belgium.
                        Article 1
                                                               Done at Brussels, 16 October 1974.
The Government of the Kingdom of Belgium is                                                    For the Commission
hereby authorized to grant to the Belgian coal                                                     The President
industry additional aid in respect of the calendar
year 1972 in an amount of Bfrs 428-7 million.                                                 Francois-Xavier ORTOLI