MEMORANDUM OF THE ECSC CONSULTATIVE COMMITTEE on social aspects connected with the expiry of the ECSC Treaty in 2002 (96/C 334/03)

(Adopted unanimously at the 331st Session of 10 October 1996)

THE ECSC CONSULTATIVE COMMITTEE,

- recalls the positions it has previously adopted on the expiry of the ECSC Treaty and, in particular, its memorandum on matters connected with the expiry of the ECSC Treaty in 2002 (1) adopted on 28 June 1995,

- while standing unreservedly by the statements made in the abovementioned memorandum, would nevertheless like to spell out certain details regarding the social aspects dealt with in point 2.7,

- welcomes the fact that its opinions set out in the abovementioned memorandum have met with a favourable reception from the competent European institutions,

- has taken account of the relevant documents published since then, in particular:

- the Court of Auditors' Annual Report concerning the ECSC for the financial year 1994 (2),

- the European Parliament's report on the communication from the Commission to the Council and the European Parliament entitled 'Fresh impetus for restructuring the steel industry in the Community` (Caudron report) (3).

In its memorandum of 28 June 1995, the Consultative Committee examined in detail various institutional rules of the Treaty and made specific recommendations connected with its expiry. It also proposed (point 2.9.5) 'that the balances of the reserves released until 2002 and not used to finance the operating budget [. . .] and the reserves released later in connection with the progressive reduction and ultimate phasing-out of the financial activities which justify them, should be allocated to a financial mechanism (e.g. a foundation) in a form to be determined, the Commission being duly involved in the management of this mechanism and in the use of its funds`. In its resolution, the Consultative Committee was thinking primarily of the technical and social research which has proved its worth and which does not have any satisfactory parallel in the EEC Treaty.

The social aspects of the Treaty need special consideration, over and above the questions of principle examined to date but without divergence from the broad outlines of reflection so far.

I. Social measures under Article 56 of the ECSC Treaty

The measures provided for in Article 56 (2) are and will remain of particular practical importance. This Article provides for social measures if fundamental changes, not directly connected with the establishment of the common market, in market conditions for the coal or the steel industry should compel some undertakings permanently to discontinue, curtail or change their activities.

Non-repayable aid may be provided for the following measures:

(a) tideover or early retirement allowances to workers;

(b) allowances to undertakings to enable them to continue paying such of their workers as may have to be temporarily laid off as a result of the undertakings' change of activity;

(c) resettlement allowances to workers;

(d) vocational retraining for workers having to change their employment.

The Commission makes the provision of this non-repayable aid conditional upon payment by the Member State concerned of a special contribution of not less than the amount of that aid.

II. Coverage and effectiveness of readaptation aid

The Consultative Committee has noted that the Commission, in its working document on the future of the ECSC Treaty, No SEC(91) 407 final of 15 March 1991, which was in preparation for a Decision on the future of the ECSC, compared these ECSC social measures with those which came under the EEC Treaty. It emphasized:

- that the ECSC had acquired invaluable experience which had repeatedly proved its worth in the coal and steel sectors,

- that in particular the sharing of the cost of financing these measures between the undertakings and the Member States had proved to be a form of solidarity between the public and private sectors.

The Consultative Committee points out that readaptation aid under Article 56 is a sectoral instrument inextricably bound up with ECSC industrial policy. The main idea behind it is that the adjustment measures resulting from positive structural changes in the industry should, in so far as they affect the workers, be made socially defensible.

The Consultative Committee recalls that since 1980 around 900 000 ECSC workers have benefited from measures financed under Article 56 in order to prevent job losses or, at least, to cushion their social effects. Measures under Article 56 (2) (b) have been particularly important, whereas measures under Article 56 (1) (c), designed for cases of job losses resulting from new technical processes and equipment, have only been applied since 1989 and have recently become less important.

The ECSC measures are, on average, restricted to a maximum amount per sector and Member State. Individual measures may, however, deviate from this principle. In this way, account could be taken of the special features of the individual problem areas in a properly targeted and flexible manner. At the same time, different strategies could be chosen in the individual Member States to deal with the social consequences of structural adaptation within a harmonized framework.

In recent years ECSC readaptation aid for the coal and steel sectors has remained very important. Early retirement is still a very appropriate and socially defensible measure, since older workers release jobs for younger workers. The change in the age structure of those employed in mining and in the steel industry has, however, necessitated a shift in emphasis away from individual measures. Thus, many Member States have in the past few years implemented substantial programmes to promote vocational training and re-employment.

III. Developments up to 2002

The gradual reduction in the levy and its total abolition after 1998 are leading to a noticeable drop in ECSC budget funds. The Commission has announced its intention of granting higher priority to social measures as budgetary funds become scarcer.

The ECSC Consultative Committee:

- therefore requests the Commission to provide it regularly with detailed information on the annual commitments of expenditure for social measures up to 2002,

- trusts that the Commission will continue to consult it in good time before drawing up the operating budget and to take due note of its recommendations,

- recalls the statement made in its memorandum of 28 June 1995 (point 2.9.2) that it 'would like to see, until the expiry of the Treaty in 2002, adequate resources provided for by the ECSC operating budget to finance the desired social measures [. . .] and to assist technical and social research [. . .]`,

- therefore trusts that, when drawing up the annual budget, the Commission will show sufficient flexibility to ensure that full account can be taken of the requirements for readaptation aid,

- is disappointed to note that in two specific cases - retraining and aid for subsidized housing - the ECSC measures have been discontinued without any provision being made for continuing them under the general budget. The counterproductive phasing out of vocational training sounds a warning bell: there is an urgent need for action forthwith.

In the document referred to above, SEC(91) 407 final, the Commission pointed out that the experience of the ECSC with social flanking measures for the Community's sectoral policies and policies to strengthen economic and social cohesion was useful. Since then, however, nothing has been done to examine which provisions could be phased in and how this could be done.

In this context, reference should also be made to the Paul Finet Foundation, set up under a decision of the then High Authority on 22 June 1965 following a spate of serious mining accidents. The purpose of this Foundation is to award study grants to the orphans of victims of industrial accidents or occupational diseases in the ECSC sector. Steps should be taken to ensure that this Foundation continues to exist.

IV. Thoughts on the post-2002 era

The ECSC Consultative Committee welcomes:

- the efforts by the European institutions to find solutions to the social challenges of our time,

- the proposals on employment policy aims contained in the Commission's White Paper on 'Growth, competitiveness, employment - The challenges and ways forward into the 21st century` (1),

- the European Commission's proposal for a confidence pact for employment.

The Consultative Committee therefore recommends the implementation, as part of a Community employment strategy, of the sectoral approach of the ECSC readaptation measures, the efficiency and effectiveness of which are as undisputed as their positive impact on the social climate in coal and steel regions.

This instrument would not have to be introduced across the board, but could be applied - for the readaptation period only - to those industries which have similar adaptation problems to those encountered by coal and steel. A financial contribution from the undertakings concerned would be useful in this context.

The Consultative Committee therefore trusts that the Commission will put before it as soon as possible specific proposals regarding the continuation of the social measures. These proposals should be aimed in particular at:

- incorporating into Community legislation the social instruments of the ECSC, which - as also recognized by the Commission - have proved their worth,

- providing for adequate funds for those social measures based on the ECSC model which are to be continued under the general budget,

- incorporating, in view of the revision of the Structural Funds by 31 December 1999, a sectoral dimension for the coal and steel industries and for all other industries with comparable readaptation problems,

- ensuring that the Paul Finet Foundation continues to exist,

- continuing the subsidized housing programme in a suitable form, while at the same time improving the socio-cultural environment of the housing estates.

The Consultative Committee is convinced that these measures could be part of a European strategy to combat social problems in the countries of the European Community and, at the same time, a model for restructuring in the applicant countries of central and eastern Europe.(1) OJ No C 206, 11. 8. 1995, p. 7.

(2) OJ No C 329, 7. 12. 1995.

(3) PE 214.031/final.

(1) Supplement 6/93 to the Bulletin of the European Communities.