CELEX: 51978PC0532
Language: en
Date: 1978-10-26
Title: PROPOSITION OF COUNCIL REGULATION (EEC) ON COMMUNITY AID FOR INDUSTRIAL RESTRUCTURING AND CONVERSION OPERATIONS (Submitted by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 532
Vol. 1978/0194
 ---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
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
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,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   COM(78)532 final
                                                   Brussels . 26 October 1978
                       PROPOSITION' OP COUNCIL REGULATION (EEC )
                       ON COMMUNITY AID FOR INDUSTRIAL RESTRUC­
                       TURING AND CONVERSION OPERATIONS
                          (Submitted "by the Commission to the Council)
                     xv                   VK
                A                         VA
                ^
                fs .    S
                            "• vV   -r* )     *1
                _       *. -, -
                                \ *         ~ –* ,
                :                          §3
                                           ^ **1
                "%                    ^ .7
 COM ( 78 ) 532 final
 ---pagebreak---                                    EXPLANATORY MEMORANDUM
" Aityis .      .
  1 . The existence of excess production capacity together with the
         emergence of a new international division of labour have led certain
        sectors of industry in the Community to undertake restructuring
        programmes in order to establish , at a stabilized or reduced level
         of production , a degree of competitiveness which will enable the
        undertakings concerned to face up to international competition
        without special protection®                                                ,
        In most cases , the state of the market is such that these undertakings
        cannot themselves find the necessary resources for restructuring#
      . This is. particularly the case in the sectors of shipbuilding , and textile
        and synthetic fibres , In other sectors , such as refining, the necessary
   - redevelopment operations , encounter difficulties of,- financement .
  2® The Community's financial aid has a twofold aim : firstly , it is
        directed at restructuring programmes which invest in rationalization
        research , modernization of equipment and of production and management
        and sales techniques ; secondly , it is aimed at conversion programmes
        which will help to ensure that jobs are maintained either in the
        sector itself or in any other activity, where this is justified by
        the employment situation in the region where the undertaking to
        be. restructured is situated® '     In both cases ., Community aids must ,
        serve the common objectives defined at Community level (Article 2)®
  3". The Community is able to support restructuring and conversion operations
        from the appropriations entered in the Budget for restructuring and con­
        version measures on behalf of certain industrial sectors in crisis only
        where the national authorities contribute to such operations through
        their existing aid schemes or through procedures which permit recourse
        to other Community instruments (Article 2).
 ---pagebreak--- METHODS AND PROCEDURES
1 . Aids take the form of interest rebates or investment premiums in accor­
    dance with the method.8 set out in Article 3 «  They complement national
    aid measures and aid available through ether Community instruments ,
    in particular the ERDF ( Article 2 ).
2 . Interest rebates are a^ailbale in principle on loans financed by the
    EIB ^/and "by Community loans/ (Article 2 ),
3 » The Commission , acting in accordance with the provisions of this Regu­
    lation ( Article ll ) and consulting the Committee set up for this
    purpose ( Article 7 )? defines the procedure for granting aid ana examines
    applications for aid « First of all , the sectors eligible for aid are
    designated by a decision, of the Council , acting on a qualified majority .
4 . The use of Community funds is subject to the rules on the financial
    control of the implementation of the Budget ( Article 5)'
 ---pagebreak---                                         Draft
                     • - COUNCIL REGULATION (EEC) No      /78
                                  of  .        1978
           ON COMMUNITY AID FOR INDUSTRIAL RESTRUCTURING AND
                        ' "CONVERSION OPERATIONS   "
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to "the Treaty establishing the European Economic' Community ,
and in particular Article 235 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 ,
Whereas the European Council , ~.at its meeting held on 5 and 6 December 1977
in Brussels , decided that , in order to adapt the European production
machine to the new conditions prevailing on the Community and world
markets , solutions to the structural problems common to all Member
States should increasingly he sought at Community level ; whereas , at
its meeting held on J and 8 April 1978 in Copenhagen, the European
 Council stressed that the main aim of the Community 's structural policy
 should "be to restore the competitiveness of undertakings ;
      .1.                    '                      ■
Whereas it is generally recognized "thai; structural changes are facilitated
"by sustained economic growth and "by the expansion of international trade
 in a free market system ; whereas it has also been recognized that for
 economic and social reasons public intervention is justified in special
 cases in order that structural" changes caitbe carried out rationally ;
 whereas such aotion must be considered case by case ;
 Whereas , in certain sectors , the financial situation of the undertakings
 in question and the social and regional consequences of restructuring
 are such "that structures' cannot "be adapted -without assistance from the
 ---pagebreak---                                     - 2 -
 public sector } and whereas the Community dimension of the problems and
 the fact that the Community' s responsibilities in trade relations are
bound up with the reestablishment of the competitiveness of these sectors
mean that restructuring must be integrated intio Community policies }
Whereas , therefore , there is a need both for selective Community aids to
stimulate undertakings by investment in accordance with these policies and
for Community aids for conversion investments linked with restructuring ,
such as to create , in the areas concerned , jobs for redundant workers in
the sectors in question }
Whereas , since the Treaty does not provide the Community with the necessary
powers , action must be taken under Article 235 of the Treaty ;
Whereas a broad framework must be defined for the scope of intervention
and for the criteria and procedures for the Community aids which could be
introduced in each of the sectors designated by the Council and for which
restructuring plans will be drawn up at Community level }
Whereas this general framework must be complemented by guidelines specifying
the procedures for and the criteria governing the grant of aids in
accordance with the aims , situation and characteristics of each sector ;
Whereas the Community aids granted on the basis of these guidelines must
also be consistent with the measures on state aids adopted both by the
Council and by the Commission ;
Whereas it is essential to ensure consistency and coordination between
aid measures carried out pursuant to this Regulation and aid carried
 out under the other financial instruments of the Community , be they in
the same sector or in the same region, so that all the available means
 can be rationally combined to achieve maximum efficiency ; whereas
 suitable coordination must also be ensured to the same end between all
types of Community aid and national aid ; whereas , "to achieve this , the
 Community may act under "this Regulation only to the extent that the      /
 ---pagebreak--- national authorities themselves are making every effort to achieve the
Community objectives in the sector in question ;                                *
Whereas the Commission must ensure , in conjunction with the Member States ,
the proper administration of investments "benefiting from Community aid «wH .
effectively monitor the operation ,
HAS ADOPTED THIS REGULATION :
                                    Article 1
                                                    . +                . .
1 . The purpose of the aids granted shall be to assist , in each of the sectors
      referred to in paragraph 2,' the effort deployed by industry to finance
      investments for the restructuring of industrial undertakings .
2 . The Council , acting on a proposal, from the Commission , shall decide , by
    ' a qualified majority on those sectbrs to which aid may be granted .
3 « The aids may also , under the conditions laid down in Article 2 ( 2 ), be
      directed towards investments for conversion to other sectors , i.e. in­
      vestment to help undertakings change to other types of activity , or
      to create in the areas concerned and in other fields of activity , new
      jobs intended primarily for workers made redundant by restructuring
      operations or by the total or partial closure of such undertaking .
                                            ■            ,      • r' '     . -  .
4 « The investment projects eligible for aid under this Regulation must not
   ~ have invloved the commencement of any construction work .
                                    Article 2
 1 . As regards restructuring operations , priority shall be given , within the
      means available , to projects which serve Community objectives and contri­
      bute to stable employment , having due regard to the scale of the financial
       effort required , the financing potential of the undertaking , access to
      other sources of finance and to national aids and , where applicable , the
       possibility of aid from other Community financial sources , this with a
      View to the combined and most efficient use of all resources .
 ---pagebreak---                                           - 4 -
 2 . .However , if the employment situation in the area or region of the
      undertaking to "be restructured is so serious as to justify Community
       aid and if jobs have not been found for the labour made redundant , the   '
      budgetary resources governed by this Regulation may be used for aids
       to investment projects for conversion to other sectors , provided that no
      other assistance has been provided from other Community financial in­
       struments , in particular the European Regional Development Fund . In
      extremely serious situations , however , aid under article 1 § 3 , may be
      granted in respect of projects receiving other forms of Community aid .
3 . The Community may grant aid under this Regulation only if the Member "
      Atates concerned by the investment operation which may be eligible for
      financial aid under this Regulation has implemented its own systems of
      aid and has taken the necessary steps to obtain aid from Community
     Funds .                                                             '
                                       Article 3
1 . The aid referred to in Article 1 may taice the form of investment
                  -
     premiums or interest rebates on all or part of loans . Interest rebates
      shall , in principle , be gra.nted only financing operations carried out
     with the help of laons from Community bodies .
2 . Interest rabates shall be granted for a part of loans not exceeding 50 %
      o»f the cost of eligible investment , and in the case of conversion , the
      said part shall nob exceed 25,000 EUC par job created . The rabate shall
            \
     be for a period of 5 years and amount to 3 percentage points , but shall ,
      in any case , not exceed 40 fo of the rate of interest payable on the
      loan . Exceptionally , the rebate may be raised to the lower of 5 percen­
      tage points or two thirds of the relevent rate of interest for the same
      period of 5 years for conversion investment undertaken :
      a . in the least favoured regions or in regions or zones particularly
           affected by restructuring ;
      b . by small and medium sized entreprises
 ---pagebreak--- Investment grants shall not exceed the grant-equivalent of the maximum interes
that could have Jbeen granted under the terms of sub-paragraph 2 of this
article . The rata of discount and the reference rate which shall Toe used
for the purpose of this calculation shall bs the rate of interest which
would have "been charged by the EIB for a loan disposed in several currencies .
The Commission shall , in respect of each sector designated by the Council
pursuant to Article 1 , make a policy statement defining the criteria gover­
ning the grant of aid .
          *                       Article 4
The aids shall be decided upon by the Commission in accordance with the       -
procedure referred to in Article 8 . Applications to the Commission for
aid shall be made directly by the investors or through the intermediary
of the Member States . The Commission shall , in each case , seek the opinion
of the Member State concerned .
Requests for aid may also , where they are made' in conjunction with an
application for a loan , be submitted with the loan application through
the European. Investment Bank ,* which shall forward them to the Commission .
These applications shall state :               ...
     for the investments referred to in Article 2 :    .  '             - •
     - the name of the undertaking }
   / - the name and location of the plant j.                     .    ■
     - the sector of activity !                              "
     - the site , the amount , the nature and the implementation schedule
       of the investments ;
     - the effects on employment ;
     - the market, prospects ;                ■'
     - the cost of the investment necessary ;
     - the financing plan and conditions including the amount of and methods
       governing national aids and , where applicable , other Community aids .
 ---pagebreak--- • The investors shall supply any additional information which the
   Commission may deem necessary and shall accept the inspections required
  to ensure the proper implementation of the projects . A contract
  shall "be concluded to this effect "between the investor to whom the
    £ , .
  aid is granted and the Commission.    This contract shall also establish
  the procedures for payment of the aid.
                                  Article 5
 If an investment which has received aid has not "been carried out as'
 planned ,- or if the conditions of this Regulation are not fulfilled ,
 the aid may "be reduced or cancelled "by decision of the Commission ,
 taken after consulation of the Committee referred to in Article 7 »
 in accordance with the procedure set out in Article 8(3 ).
 Member States shall make available to the Commission all information
 required for the application of this Regulation and shall take all
 steps to facilitate such supervision as the Commission may consider
 useful , including on-the-spot checks .
 Notwithstanding verification carried out by Member States in
 accordance with national laws , regulations and administrative
 provisions , and without prejudice to the provisions of Article 206
  of the Treaty or to any inspection arranged pursuant to Article 209(c )
  of the Treaty , the competent authorities of the Member State shall ,
  at the request of the Commission and with the agreement of the Member
  State , carry out on–the–spot checks or enquiries about the operations
  financed.   The Commission may fix time limits for carrying out such
  checks .
 ---pagebreak--- 4* The objective of "these or>-the–spot checks or enquiries about operations
       financed shall "be to verify :
       ( a) the existence of supporting documentary evidence and its conformity
             with the operations financed ;
       ( b ) the conditions under which the operations financed are executed
             and checked ;
    , ( c ) the conformity of the projects implemented with the operations
             financed .
5 . The Commission may suspend payment of aid for a particular project if
       an inspection reveals either irregularities or a substantial change
       in the character dr conditions of the project for which the Commission'
       approval had not been sought#                             . .     _
                                        Article o
The measures necessary for the implementation of this Regulation shall
be adopted by the Commission in accordance with the procedure laid down
in Article 8 ( 4) •
                ν                        -  ' . '    -     '                   ' ' '
                                       Article 7
!• An Advisory Committee is hereby set up composed of representatives of .
       the Member States and chaired by a representative, of the. Commission .
2 . Within the Committee the votes of Member States shall be weighted in
       accordance with Article 148(2 ) of the Treaty# The Chairman shall not
       vote .      ,
                                        Article 8
1# Where *the procedure laid down in "this Article is "to "be followed ^ "the
     ; Chairman shall refer the matter to the Committee either on his own
        initiative or at the request of the representative of a Member
  -     State . ;
 ---pagebreak---    2# The representative of the Commission shall submit drafts of the
       decisions to "be taken# The Committee shall deliver its Opinion on
       the drafts within the time limit which the Chairman may fix according
      to the urgency of the questions under consideration# To "be adopted
      an Opinion must receive 41 votes#
  3# Where a request aid is submitted under Article 4 * the Commission shall"*
      consult the Committee ; if the Committee delivers an Opinion opposing the
      Commission 's draft , the Commission shall re–examine its draft in the
      light of the arguments adduced by the Committee . The Commission may
      withdraw , amend or confirm the draft : it shall adopt the decision accor­
      dingly .
  4# For questions relating to measures in implementation of this Regulation
      or to the policy statement referred to in Article 3(4 ), the Commission
      shall consult the Committee . The Commission decisions shall apply im­
      mediately . However , if a decision is not in accordance with the Opinion
     ^of the Committee , it shall forthwith be communicated by the Commision
      to the Council . In that event the Commission shall defer the application
Λ
      of the decision which it has adopted for not more than two months from
      the date of such communication . The Council , acting by qualified majority ,
      may take a different decision within this period .
                 /"                                                            •
                                     .. Article 9
 The list of projects which have received aid shall be published in the
 Official Journal of the European Communities#
                                        Article 10
  The provisions of this Regulation shall not prejudice the application
  of Articles 92 to 94 of the Treaty , in particular Article 93(3)#
                         ~              Article 11
  Before 1 July each year , the Commission shall present a report to the
  European Parliament and to the Council on the implementation of this
  Regulation during the preceding year#
 ---pagebreak---                                  Article 12
This Regulation shall enter into foroe on the day following its publication
in the Official Journal of the European Communities .