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1 0(02 Brussels, 19 June 2002 ([SLU\ RI WKH (XURSHDQ &RDO DQG 6WHHO &RPPXQLW\ (&6&7UHDW\DQRYHUYLHZ 7KH(&6&LQDQXWVKHOO The European Coal and Steel Community (ECSC) Treaty was signed in Paris on 18 April 1951 by Belgium, France, Germany, Italy, Luxembourg and the Netherlands. It will expire on July 23, 2002, 50 years after its entry into force. ECSC Member States pledged to pool their coal and steel resources by providing a unified market for their coal and steel products, lifting restrictions on imports and exports, and helping create a single coal and steel market. The early post war challenge facing Western Europe was to find a framework for economic and industrial recovery that would not revive old national rivalries but instead establish the basis for permanent peace. The blueprint that the ECSC provided for an international organisation was to be the model for the European Community (now Union), created in Its High Authority, Council of Ministers, Assembly and Court of Justice foreshadowed today s institutions and established many of the now familiar principles associated with the Community method. The coal and steel industries were at the heart of this first taste of Europe because they had traditionally been the key drivers of national war machines. The ECSC fostered the revamping of these industries and helped successfully manage their adjustment to the many changes in technologies, markets and society over the last 50 years. The executive nine-member High Authority was chosen by Member State governments. Its independence was guaranteed by providing the authority with its own source of income. The ECSC s institutional structure also included the Council of Ministers and an indirectly elected Parliamentary Assembly. ECSC Institutions were merged with European Community and EURATOM Institutions in The ECSC Consultative Committee and several advisory bodies provided for an institutional forum for social dialogue; their task will be taken over by the European Economic and Social Committee. Economically, the Coal and Steel Community achieved early success; between 1952 and 1960 iron and steel production rose by 75% in the ECSC nations, and industrial production rose by 58%. When the competitiveness of the European coal industry was jeopardised by the availability of other fuels and imported coal after 1959, the ECSC helped reduce coal-producing capacity and made available programmes aiming at re-training miners and developing new industries.

2 :KDWDUHWKHPDLQYDOXHVSURPRWHGE\WKH(&6&" The ECSC fostered peace and reconciliation on the war-torn European continent, by bringing together two industries that had powered the military drive of European nations up until then: coal and steel. This was particularly true across the French- German border, where armies had clashed over the control of these key sectors blooming in Ruhr, Saar and Lorraine regions. The rationale of the ECSC s founding fathers was to promote political integration by starting with gradual economic integration, on a step-by-step basis. This eventually led to the launch of the European Community (Rome Treaty, 1957) and to the European Union (Maastricht Treaty, 1992). Structured dialogue played a key role within the ECSC. This dialogue was given an institutional forum, the ECSC Consultative Committee, that brought together representatives of producers, workers as well as consumers and dealers from both the steel and coal sectors. The Committee was consulted on all aspects of industrial policy, including research and competition issues. The Committee is the only ECSC institution still existing today. Following the expiry of the ECSC Treaty, the field of competence of the European Economic and Social Committee will extend to the coal and steel sectors. At its request the High Authority set up two mixed committees for the harmonisation of working conditions in the coal and steel industries that represent the oldest example of European social dialogue. In those bodies the cooperation between social partners has helped anticipate and solve problems and find the best practices to maintain competitiveness and workers' employability. 7KHFRDODQGVWHHOVHFWRUWRGD\ European steel today is better, cheaper and cleaner. EU steel research will head towards further improving steel products and production processes, and tackling the social and sustainability dimension. Health, work safety and quality are most relevant priorities. It can be highlighted that the average quality of European steel and steelmaking technologies is very high with some point of excellence at international level. The European coal sector has made impressive progress in mining techniques on safety and health conditions for workers and environmental performance in coal production and utilisation, both in the production of coke for the steel industry and in the production of electricity (clean coal technology). The industry has been forced to undertake restructuring processes, because mining activities are confronted with an ever-increasing deterioration of the geological conditions due to the great depth of European coal mines. A Community base of indigenous coal production can contribute to creating a share of EU internal primary energy resources. This in turn should lead to the security of energy supply in Europe and a new Council Regulation on State aid for the coal industry will be in force after the expiry of the ECSC Treaty. 2

3 The forthcoming enlargement of the EU will bring changes, in particular for the coal sector. The results of the ECSC scheme may once again provide a useful example to follow. Employment (evolution of the two sectors) (EUR-6) (EUR-9) (EUR-12) (EUR-15) Coal Steel Production of steel and coal (evolution in the two sectors) (= million t) (EUR-6) (EUR-9) (EUR-12) (EUR-15) Coal Crude steel %DFNJURXQG :KDWDUHWKHPDLQDFKLHYHPHQWVRIWKH(&6&",QGXVWULDOSROLF\ Under the ECSC Treaty the High Authority was to ensure that the objectives set out in the European Coal and Steel Community, founded upon a common market, common objectives and common institutions, were attained. The aim of creating a true internal market called for the removal of all internal customs tariffs on coal and steel. The High Authority could issue binding Decisions, Recommendations (binding as far as the results, but not the means, were concerned), and Opinions which had no binding force. However, under conditions of manifest crisis, the Council of Ministers could intervene with extensive powers. ECSC industrial policy was based on investment and state aid monitoring and control. The Treaty did not allow for the use of State aids. But crisis in the coal sector starting from the late 1950s and subsequent crises in the steel sector led the High Authority to propose production quotas. The High Authority was overruled by Member States, who concluded that some state aids were necessary, to be authorised by decisions based on Article 95 of the Treaty. Today, after a period of painful restructuring, the European steel industry has reverted to the original strict State aid discipline. On the contrary, the European coal industry still needs a certain amount of state subsidies. The Council of the Union and the European Parliament has supported the Commission proposal by which maintaining a reasonable level of domestic coal production will contribute to the security of energy supply. But thanks to the efforts of the ECSC, European industry has kept the leadership in the field of mining technology, and clean coal combustion with considerable spin-off effects for other industries. 3

4 )LQDQFLDOUHVRXUFHV The ECSC Treaty provided for the policies of the Community to be funded by its own resources, i. e. by a levy on coal and steel production, and not by contributions from Member States. The levy provided the Community with an independent source of finance and laid the basis for an active policy in terms of loans and investments. The total amount of loans granted by the ECSC was ¼ELOOLRQ 6RFLDOSROLF\ With the deepening crisis in both coal and steel industries, ECSC systems for social crisis management became more and more important with respect to market regulating mechanisms. Most common tools for re-adaptation aid included: early retirement and temporary allowances; compensation for loss of income (wage and salary allowances); financial aid to encourage geographical mobility compensation payments; training allowances for employees and reimbursement to companies of expenses involved in organising retraining; allowances for short-time working. A total of more than 1.7 million workers have benefited from ECSC re-adaptation aid. +RXVLQJSURJUDPPHV Until 1997, the ECSC implemented successful loan schemes for the improvement of workers housing. Over the years, about housing units have benefited from the scheme. Housing was traditionally provided by most of the coal and steel companies to their workers. Thanks to the ECSC scheme, it has been possible to improve the quality of housing even in those regions strongly hit by restructuring. The housing scheme thus contributed to the social cushioning of the restructuring programmes and to the economic redevelopment of former coal and steel regions. 7KH3DXO)LQHW)RXQGDWLRQ Alongside its ongoing remit to provide protection for workers the ECSC set up a fund to help the children of victims of serious accidents in the coal and steel industries with a scheme of scholarships. 1HWZRUNV Following the implementation of the RECHAR and RESIDER Community initiatives co-funded by the European Fund for Regional Development, networks of coal mining regions and communities on one hand (EUR-ACOM) and steel regions and communities on the other (CASTer) were set up. These networks try to defend the common industrial and cultural heritage of the regions concerned 0DLQFKDOOHQJHVIRUWKHIXWXUH $IWHUWKHH[SLU\RIWKH(&6&7UHDW\ Following the Protocol attached to the Nice Treaty, Member States of the European Coal and Steel Community will transfer the assets and liabilities of the ECSC to the European Union. The net worth of these assets, as they appear in the balance sheet of the ECSC as of 23 July 2002, will be allocated to the new Research Fund for Coal and Steel. 4

5 The total fund will amount to ¼ ELOOLRQ DW WKH GDWH RI WKH H[SLU\ RI WKH 7UHDW\ Annual interests on this amount will reach ¼PLOOLRQZLOOEHGHYRWHGWRVWHHO research, while 26.2% will go to coal research. Steel research will therefore receive more than ¼PLOOLRQLQDQG The post-ecsc programme will be consistent with the scientific, technological and political objectives of the European Union, and will complement the activities carried out in the Member States and within the existing EU Research Framework Programme. Co-ordination, complementarity and synergy between these programmes will be encouraged, as well as the exchange of information between projects financed under this programme and those that are financed under the Framework Programme. 7KH&RPPLVVLRQZLOODOVRNHHSZRUNLQJRQ,QGXVWULDOFKDQJHDQGHQODUJHPHQW The Council regulation on State aid to the coal industry contributes to the restructuring of this industry, taking into account the social and regional aspects of the sector s restructuring and the need of maintaining, as a precautionary measure, a minimum quantity of indigenous coal production to guarantee access to reserves. To promote industrial competitiveness and industrial change, where they are of concern to the coal and steel industries. The Commission will keep a close eye on the situation of the sector in Candidate Countries, to ensure viable and sustainable restructuring processes, and to smooth their inclusion into EU industrial policy after the enlargement. (QYLURQPHQWDOSROLF\DQGVXVWDLQDEOHGHYHORSPHQW A major challenge is the implementation of the EU environmental action programme, e.g. various new clean-air policy measures and environmental protection projects that also concern the coal and steel industries. Issues to be addressed include: - Energy policy: the Commission will present a White paper on the security of energy supplies; the white paper and the ensuing policy debate will particularly affect coal, as a source of energy, and steel, as an energy-intensive industry. - Overall EU energy policy initiatives, including: the follow-up to the multi-annual framework programme for energy measures (due to expire in 2002); the establishment of new common energy objectives; and the debate on the transferring of responsibility in the field of energy to the EU with the inclusion of an energy chapter in the EU Treaty. 7UDGHSROLF\ This concerns pre-accession Europe Agreements, Association Agreements and other EU trade agreements, insofar as they concern the coal and steel industries, but also trade protection measures relating to the coal and steel industries, e.g. to counter import restrictions imposed by other countries. The Commission will also address coal and steel aspects of the EU's position with regard to the forthcoming World Trade Organisation negotiating rounds. For further information : 5