CELEX: 31973D0397
Language: en
Date: 1973-11-14 00:00:00
Title: 73/397/ECSC: Commission Decision of 14 November 1973 approving new aids from the Federal Republic of Germany for the year 1972 for the benefit of the undertakings in the coal industry

17. 12. 73                          Official Journal of the European Communities                           No L 346/15
                                                 COMMISSION DECISION
                                                   of 14 November 1973
                approving new aids from the Federal Republic of Germany for the year 1972 for the
                                     benefit of the undertakings in the coal industry
                                             (Only the German text is authentic)
                                                       (73/397/ECSC)
  THE COMMISSION OF THE EUROPEAN                                 therefore became       necessary     which,   with    one
  COMMUNITIES,                                                   exception, relate specifically to RAG;
  Having regard to the Treaty establishing the                   Whereas the Government of the Federal Republic of
  European Coal and Steel Community and in                       Germany informed the Commission, pursuant to
  particular Articles 2, 3, 4 and 5 thereof;                     Article 2 of Decision No 3/71/ECSC, of the new or
                                                                 supplementary interventions which it proposes to
 Having regard to Commission Decision No 3/71/                   implement directly or indirectly for the benefit of
 ECSC (*) of 22 December 1970 on Community rules                 the coal industry in respect of the year 1972;
  for intervention by Member States for the benefit of           whereas, of these interventions, the following aids
 the coal industry;                                              require approval pursuant to the aforementioned
                                                                 Decision :
 Having regard to the Decision No 70/1/ECSC (2) of
 19 December 1969 on coking coal and coke, and in                                                         Millions of DM
 particular Article 9 (1) thereof;
                                                                 The transfer during the years 1972
 Having consulted the Council ;                                  to 1975 of RAG's redemption
                                                                 moneys to the former proprietors'
 Having considered the following grounds;                        guaranteed claims account, with the
                                                                 effect of extinguishing pro rata the
 Whereas      the    Commission       of   the    European       amount of the guarantee                          53'7
 Communities adopted Decision No 72/372/ECSC (3)
 on 19 October 1972; whereas this Decision                       Grant of a debt register claim to
 approved for the aids intended by the Government               RAG                                 '          1 000-0
 of the Federal Republic of Germany to be granted
 for the benefit of the coal industry in respect of             Grant to the entire German coal
 1972 to the extent that they had been included and             industry of a guarantee for financing
examined by the Commission in the 'Memorandum                   pithead stocks                                   720*0
on financial interventions by Member States for the
  benefit of the coal industry in 1972' (4);                    Revolving utilization of the hitherto
                                                                existing guarantee limit for the joint
Whereas during the preparation for consultations                and several debts of RAG                         200*0
with the Council on 6 September 1972 concerning
  the Memorandum         on financial interventions in          Whereas the aforementioned aids are in accordance
 respect of 1972 by the Member States' Governments              with the criteria laid down in Articles 6 to 9 of
for the benefit of the coal industry, the                       Decision No 3/71/ECSC for the admissibility of such
 representative of the Commission was informed by               State assistance;
the Government of the Federal Republic of Germany
that new measures should be adopted for 1972 ~                  Whereas when RAG was founded in 1969, the
 because the situation on the German coal market                former colliery owners received claims against RAG
had deteriorated much further than expected during              for the fixed assets contributed; whereas the public
1972 owing to an appreciable drop in sales                      authorities took over the deficiency guarantee for
accompanied by rising costs; whereas as a result, the           this; whereas, because of the undertaking's
most important mining undertaking in the Federal                unfavourable financial situation, the losses in the
Republic of Germany, Ruhrkole AG (RAG), was                     financial years 1970 and 1971 greatly exceeded
faced with increasing difficulties as regards profits           RAG's share capital; whereas in 1972 the profit­
and liquidity; whereas intervention measures                    and-loss position again showed no improvement;
                                                                whereas, on the contrary, the financial losses
 (*) OJ No L 3, 5. 1. 1971, p. 7.                               increased even further;
 (2) OJ No L 2, 6. 1. 1970, p. 10.
 (3) OJ No L 256, 14. 11 . 1972, p. 13.                         Whereas the economic and social situation in Land
(<) Doc. No XVII/52/2/72.                                       of North Rhine-Westphalia, where RAG carries out
 ---pagebreak--- No L 346/ 16                         Official Journal of the European Communities                           17. 12. 73
the greater part of its activities, is at present              to improve the liquidity of the undertaking and to
relatively favourable, although there are still                provide it with an interest advantage;
problems in certain fields, mostly to do with coal­
mining (*) ; however, that this situation would change
if, in the event of discontinuance of the aids granted         Whereas the advantages of the improvement in
by the German authorities, RAG had to cease its                liquidity cannot be qualified as an aid; whereas
activities     and    dismiss    overnight    the   170 000    there are also no figures available for determining
employees whose jobs it at present provides;                   the interest advantage, since the debt register claim
whereas in the circumstances it follows that the               was only allocated to RAG on 14 November 1972
transfer of redemption moneys (DM 53 -7 million) is            by a decision of the German authorities ;
compatible with the provisions of point 1 ,
Article 9 ( 1 ), since the effect of this is to prevent a
drop in production due to market forces which                  Whereas for an appraisal of these interventions in
would      result   in   serious   economic     and   social   the context of Decision No 3 /71/ECSC, the same
difficulties in an area where, in the short term, there        observations apply as were made earlier with
are insufficient opportunities of employment for               reference to the transfer of redemption moneys to
such a large number of workers ;                               the guaranteed claims account and according to
                                                               which the interventions measures is compatible with
                                                               the provisions laid down in point 1 , Article 9 ( 1 ), of
Whereas, as regards the allocation of the aid                  Decision No 3/71 /ECSC; whereas this appraisal
according to the difference between production costs           applies only to the aforementioned case of
and revenue, it can be seen that the aid will cover            improvement in liquidity or granting of an interest
only about 10 °/o of the expected RAG operating                advantage; whereas where the RAG's 1972 debt
losses for 1972 ; whereas the operating losses stem            register claims is used to write off accumulated
almost exclusively from the collieries and are due to          operating losses, the covering of losses would have
the fact that on the one hand the revenue does not             be the object of fresh examination by the
cover the production costs and on the other hand               Commission ;
that high costs are incurred for the maintenance of
pithead stocks ; whereas the aids therefore comply
with the provisions of Article 9 (2) of Decision No            Whereas the guarantee for the financing of pithead
3 /71/ECSC; whereas it therefore follows from the              stocks enables the German coal industry to borrow
foregoing that the transfer of RAG's redemption                money from the banks against its stocks of coking
moneys by the public authorities to the guaranteed             coal and coke in order to increase its own liquidity;
claims account is consistent with the provisions of
Article 9 of Decision No 3 /71 /ECSC;                          Whereas    this   intervention  does   not  affect    the
                                                               production costs, revenue or results of the collieries;
                                                               whereas it has connection with the net costs of
Whereas, with the guarantee of a debt register claim           maintaining pithead stocks, which must be borne
about DM 1 000 million, the Federal Government                 entirely by the undertakings themselves; whereas if
and the Government of the Land of North Rhine­                 the coal industry receives bank loans against pithead
Westphalia are endeavouring to strengthen the basic            stocks, it has to pay the relevant interest itself;
capital and liquid assets of RAG ; whereas the                 whereas the advantages of improved liquidity as a
capital sum is not being paid out all at once, but the         form of aid cannot be quantified;
public authorities are paying RAG 8 °/o interest and
2 <Vo redemption annually; whereas for 1972 the
total amount of interest and redemption was DM                 Whereas for an appraisal of this intervention the
46'7 million ; whereas in order to pay interest and            same observations apply as were made earlier with
redemption on the total debt register claim, annual            reference to the transfer of redemption moneys to
payments are to be continued until 1997; whereas               the guaranteed* claims account and according to
provided that the total debt register claim is not             which the intervention measure is compatible with
eroded by operating losses, RAG is in a position to            the provisions laid down in point 1 , Article 9 (1 ), of
borrow money from the banks against the debt                   Decision No 3/71/ECSC;
register claim guaranteed by the public authorities,
but must then itself pay interest and redemption to
the banks ; whereas these terms show that interest­            Whereas in order to improve RAG's liquidity and to
free capital of DM 1 000 million was placed at the             ensure the undertaking's credit-worthiness at the
disposal of RAG by the German authorities in order             banks, the Federal Government has stated that it is
                                                               now prepared not to reduce the guarantee limit of
                                                               DM 3 700 million set in 1969 but to retain it
 (*) See Commission Decision of 17 December 1971 on            unchanged; whereas this means that if RAG were to
     investment premiums in the German coal-producing          reduce its previously incurred debts by making
     areas ( OJ No L 57, 10. 3. 1971, p. 19).                  redemption payments, it would be able to raise new
 ---pagebreak--- 17. 12. 73                         Official Journal of the European Communities                        No L 346/ 17
loans from the banks which would automatically be            Whereas in order to do so the Commission must be
guaranteed by the Federal Republic as long as they           informed in particular of the amount and the
did not exceed the limit of DM 3 700 million ;               apportionment of these aids.
whereas this utilization of revolving loans totals
 approximately DM 200 million in 1972 ;
                                                             HAS ADOPTED THIS DECISION :
"Whereas the advantages of improved liquidity as a
form of aid cannot be calculated ;
                                                                                     Article 1
Whereas for an appraisal of these interventions the
same observations apply as were made earlier with            The Government of the Federal Republic of
reference to the transfer of redemption moneys to            Germany shall be authorized to grant the following
the guaranteed claims account and according to               new aids for the benefit of the undertakings of the
which the intervention measure is compatible with            German coal industry :
the provisions laid down in point 1 , Article 9 ( 1 ), 1
 of Decision No 3 /71 /ECSC ;                                1 . Transfer of RAG's redemption moneys to the
                                                                 guaranteed claims of the former proprietors
Whereas for an examination of the compatibility of               against RAG for the value of the fixes assets
the new German aids with the proper functioning of               contributed to the undertaking, up to an
  the common market, it is only the transfer of                  amount of DM 53 7004)00 .
redemption moneys to the guaranteed claims
 account by the public authorities that can be               2. Transfer of a guarantee to the amount of DM
assessed quantitatively ; whereas all other new                  720 000 000 for the financing of pithead stocks.
interventions serve to increase liquidity or constitute
non-quantifiable interest advantage for the                  3 . Granting of a debt register claim amounting to
 undertaking ;                                                   DM 1 000 000 000 for the purpose of
                                                                 strengthening the base capital and the liquidity
Whereas an amount of DM 53*7 million is involved                 of RAG .
in the transfer of redemption moneys to the
guaranteed claims account; whereas if this amount is         4. Utilization of revolving credits up to an amount
added to the aids already approved for 1972, the                 of DM 200 000 000 for the purpose of improving
total aids to RAG in 1972 are increased by 0'65 DM               the liquidity and safeguarding the creditworthi­
 ( = 0-18 u.a./t); whereas in relation to the aids               ness of RAG at the banks .
received by coal producers in other Member States
those granted to RAG, per metric ton produced
would still be considerably less ;
                                                                                     Article 2
Whereas considering the low amount of 0'18 u.a. /t
no important effects are expected on the conditions of       The Federal Government shall notify the
                                                             Commission by 31 December 1973 of the details of
competition between RAG and the other German
                                                             the aids granted pursuant to this Decision, especially
coal-producing areas or between the former and the           as regards the amount and apportionment of the
Ruhr collieries which do not belong to it; whereas
                                                             payments made.
the new aid measure is designed to suit the specific
circumstances of RAG, which apply only to that
undertaking;
                                                                                     Article 3
Whereas the new measures proposed by the German
Government for 1972 are therefore not likely to be           This Decision is addressed to the Federal Republic
prejudicial to the proper functioning of the                 of Germany.
common market pursuant to Article 3 ( 1 ) of
Decision No 3 /71 /ECSC ;                                    Done at Brussels, 14 November 1973 .
Whereas the Commission in accordance with Article                                     For the Commission
11 ( 1 ) of Decision No 3 /71 /ECSC must ensure that                                      The President
the aids it has approved are used for the purpose
specified in Article 9 of that Decision ;                                           Francois-Xavier ORTOLI