CELEX: 52005PC0140
Language: en
Date: 2005-04-14
Title: Proposal for a Council Decision on the fulfilment of the conditions laid down in Article 3 of the Additional Protocol to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and Romania, of the other part, with regard to an extension of the period foreseen in Article 9(4) of Protocol 2 to the Europe Agreement {SEC(2005)477}

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                        Brussels, 14.04.2005
                                                        COM(2005)140 final
                                           Proposal for a
                                     COUNCIL DECISION
     on the fulfilment of the conditions laid down in Article 3 of the Additional Protocol to
    the Europe Agreement establishing an association between the European Communities
   and their Member States, of the one part, and Romania, of the other part, with regard to
   an extension of the period foreseen in Article 9(4) of Protocol 2 to the Europe Agreement
                                  (presented by the Commission)
                                         {SEC(2005)477}
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 ---pagebreak---                            EXPLANATORY MEMORANDUM
   1.  According to Article 9(4) of Protocol 2 of the Europe Agreement with Romania,
       during the first five years after the entry into force of the Agreement, and by
       derogation from paragraph 1 (3) of the same Article, Romania could exceptionally,
       as regards steel products, grant public aid for restructuring purposes, provided that
       this leads to the viability of the benefiting firms under normal market conditions at
       the end of the restructuring period, the amount and intensity of such aid are strictly
       limited to what is absolutely necessary in order to restore such viability and are
       progressively reduced and the restructuring programme is linked to a global
       rationalisation and reduction of overall production capacity in Romania.
   2.  This initial period expired on 31 December 1997 for Romania.
   3.  Romania requested an extension of the above-mentioned period in December 1997.
   4.  A realistic restructuring programme, including individual company business plans,
       respecting the criteria set out in Article 9(4) of Protocol 2 of the Europe Agreement,
       are the necessary basis for agreeing the requested extension of the period during
       which Romania may grant state aid for restructuring purposes.
   5.  In May 2002, the Commission proposed an extension of the period during which
       Bulgaria, the Czech Republic, Poland and Romania may grant aids to restructure
       their steel sector, in view of the urgent need to find an acceptable solution to move
       forward the steel restructuring process in the candidate countries concerned.
   6.  This extension would provide the legal basis for granting restructuring aid in the
       period before accession in the framework of the required restructuring plans (i.e. the
       aid provided should be limited and proportional to capacity reduction); it would also
       have the effect of retroactively legalising aid that may have been granted illegally
       since the entry into force or the Europe Agreement.
   7.  The extension will come into effect only after the adoption and assessment of a
       restructuring plan and individual business plans, which fulfil the criteria of Protocol
       2 of the Europe Agreements.
   8.  With a view to achieving this aim, an Additional Protocol to the Europe Agreement
       with Romania was drawn up.
   9.  The Additional Protocol to the Europe Agreement was signed by the Community and
       Romania on 23 October 2002. A provisional application before entry into force, as
       envisaged by Article 300 (2) of the Treaty establishing the European Community is
       in place, as foreseen by Article 1 of Council Decision of 29 July 2002 on the
       signature and provisional application of an Additional Protocol to the Europe
       Agreement.
   10. The Additional Protocol provides for extension of the period foreseen by Protocol 2
       by a further eight years starting on 1 January 1998, subject to the fulfilment of
       certain conditions.
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 ---pagebreak---    11. The first condition has been fulfilled by Romania, by submitting to the Commission
       a restructuring programme and business plans for the companies concerned, which
       have been assessed and agreed by its National State Aid Authority (the Competition
       Council).
   12. The second condition is the final assessment of the restructuring programme and
       business plans by the Commission, with a view to determining whether the
       requirements of Article 9(4) of Protocol 2 of the Europe Agreement are met.
   13. The Commission services have made a final assessment which concludes that the
       restructuring programme and plans submitted by Romania meet the requirements of
       Article 9(4) of Protocol 2 of the Europe Agreement.
   14. The Commission is proposing a Council Decision approving the Commission's final
       assessment, as foreseen in Article 3 of the Additional Protocol. Once the Council has
       granted its approval, the conditions laid down in Articles 2 and 3 of the Additional
       Protocol will have been met and the extension of the period foreseen by Protocol 2
       will take effect.
   15. The Council is therefore requested to approve the attached draft proposal for a
       Decision on the fulfilment of the conditions laid down in Article 3 of the Additional
       Protocol to the Europe Agreement establishing an association between the European
       Communities and their Member States, of the one part, and Romania, of the other
       part, with regard to an extension of the period foreseen in Article 9(4) of Protocol 2
       of the Europe Agreement.
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 ---pagebreak---                                              Proposal for a
                                        COUNCIL DECISION
      on the fulfilment of the conditions laid down in Article 3 of the Additional Protocol to
     the Europe Agreement establishing an association between the European Communities
   and their Member States, of the one part, and Romania, of the other part, with regard to
   an extension of the period foreseen in Article 9(4) of Protocol 2 to the Europe Agreement
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Additional Protocol to the Europe Agreement establishing an association
   between the European Communities and their Member States, of the one part, and Romania,
   of the other part, with regard to an extension of the period foreseen in Article 9(4) of
   Protocol 2 to the Europe Agreement, and in particular Article 3 thereof;
   Having regard to the proposal from the Commission1,
   Whereas:
   (1)     A Europe Agreement establishing an association between the European Communities
           and their Member States, of the one part, and Romania, of the other part2, came into
           force on 1 February 1995.
   (2)     Article 9(4) of Protocol 2 to the Europe Agreement with Romania lays down that
           during the first five years after entry into force of the Agreement, and by derogation
           from paragraph 1 (3) of the same Article, Romania may exceptionally, as regards steel
           products, grant public aid for restructuring purposes, provided that this leads to the
           viability of the benefiting firms under normal market conditions at the end of the
           restructuring period, the amount and intensity of such aid are strictly limited to what is
           absolutely necessary in order to restore such viability and are progressively reduced
           and the restructuring programme is linked to a global rationalisation and reduction of
           overall production capacity in Romania;
   (3)     The initial period of five years expired on 31 December 1997;
   (4)     Romania requested an extension of the above-mentioned period in December 1997;
   (5)     It seemed appropriate to grant an extension of this period for an additional period of
           eight years starting on 1 January 1998;
   1
           OJ C […], […], p. […].
   2
           OJ L 357, 31.12.1994, p. 3.
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 ---pagebreak---    (6)     To this effect, an Additional Protocol to the Europe Agreement was signed by the
           Community and Romania on 23 October 2002 and is provisionally applied from that
           date;
   (7)     Under Article 2 of the Additional Protocol, the extension of the above-mentioned
           period is made conditional on the submission by Romania to the Commission of a
           restructuring programme and business plans that meet the requirements of Article 9(4)
           of Protocol 2 to the Europe Agreement and have been assessed and agreed by its
           National State Aid Authority (the Competition Council);
   (8)     In December 2004, Romania submitted to the Commission a restructuring programme
           and business plans for those companies having benefited or benefiting from state
           support for restructuring;
   (9)     Under Article 3 of the Additional Protocol, the extension of the above-mentioned
           period is made conditional on a final assessment of the restructuring programme and
           business plans by the Commission;
   (10)    The Commission has made a final assessment of the restructuring programme and the
           business plans submitted by Romania. This assessment indicates that the
           implementation of the restructuring programme and the business plans will allow the
           companies concerned to reach viability under normal market conditions. It also shows
           that the amount of State aid for restructuring purposes as specified in the plans is
           strictly limited to what is necessary to allow the companies concerned to reach
           viability and has been progressively reduced and stopped by the end of 2004. The
           assessment provides also that a global rationalisation and reduction of excess capacity
           of the beneficiary companies will be reached. The assessment therefore concludes that
           the restructuring programme and the business plans meet the requirements of Article
           9(4) of Protocol 2 to the Europe Agreement,
   HAS DECIDED AS FOLLOWS:
                                              Article 1
   The restructuring programme and business plans submitted to the Commission by Romania
   pursuant to Article 2 of the Additional Protocol to the Europe Agreement establishing an
   association between the European Communities and their Member States, of the one part, and
   Romania, of the other part, with regard to an extension of the period laid down in Article 9(4)
   of Protocol 2 to the Europe Agreement are in compliance with the requirements of
   Article 9(4) of Protocol 2.
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 ---pagebreak---                                               Article 2
   The period during which Romania may exceptionally, as regards steel products, grant public
   aid for restructuring purposes in accordance with the provisions of Article 9(4) of Protocol 2
   is hereby extended by an additional period of eight years starting on 1 January 1998, as
   foreseen by Article 1 of the Additional Protocol.
   Done at Brussels,
                                                For the Council
                                                The President
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