RESOLUTION OF THE ECSC CONSULTATIVE COMMITTEE ON THE CONTINUATION OF THE ECSC READAPTATION MEASURES UNDER ARTICLE 56 OF THE ECSC TREATY AFTER 2002 AND THE REVISION OF THE STRUCTURAL FUNDS (AGENDA 2000) (98/C 155/06) (Text with EEA relevance)

(adopted unanimously during the 339th session of 2 April 1998)

Having taken note of a number of relevant documents, including the Commission document (1) on the application of the decision taken by the European Council in Amsterdam concerning the use of ECSC reserves, the European Parliament proposals relating in particular to the application to the CEECs of the restructuring expertise gained under the ECSC Treaty (2), and the Presidency conclusions following the European Employment Council held in Luxembourg (3), THE CONSULTATIVE COMMITTEE OF THE EUROPEAN COAL AND STEEL COMMUNITY draws attention to the opinions it has so far delivered in connection with the expiry of the ECSC Treaty, and in particular the following:

- its memorandum adopted on 28 June 1995 on matters connected with the expiry of the ECSC Treaty in 2002 (4);

- its memorandum of 10 October 1996 on social aspects connected with the expiry of the ECSC Treaty in 2002 (5).

A. In the past it was possible to implement measures for the socially defensible readaptation of the workforce in the European coal and steel industry by granting readaptation aid under Article 56 of the Treaty and, as part of the accompanying social policy measures, by granting low-interest loans for the implementation of investment programmes and by creating replacement jobs under Articles 51, 54 and 56(2)(a) of the ECSC Treaty, so that even in times of high unemployment it was to a very large extent unnecessary to resort to operational redundancies in the two sectors. However, the legal basis for all types of aid which have so far been granted under this Treaty, including readaptation aid under Article 56(2)(b), will cease with the expiry of the ECSC Treaty on 23 July 2002. Nor will the remaining assets of the ECSC still be available for such aid payments, since they are to be used for research purposes (creation of a financial mechanism, for example a foundation, to promote technical and social research) as stated in the Commission document (6) concerning the implementation of the decision taken on this subject at the European Council in Amsterdam.

B. It will, however, be necessary to provide social cushioning for the job losses which are expected to occur in the Community coal and steel industry in the future and to use public funds for this purpose. In 1996 about 16 000 steel-sector jobs were lost in the European Union. In the next few years there will be further readaptation measures, since in the course of the further concentration of the branch it is intended to take full advantage of considerable synergy effects and to improve the competitiveness of undertakings by further cost reductions. The introduction of new technologies (e.g. thin strip casting) in the steel sector will alone lead to a considerable reduction in the workforce. For 1998 to 2003, it can be assumed that over 30 000 more jobs will be shed.

For the coal sector, as well, even more radical, overall job shedding is planned. In 1997 alone, around 6 500 jobs were lost in the coal sector. For the period after 1998, further losses of around 40 000 jobs, mainly in the German coal industry, as well as several tens of thousands in France and Spain, may be assumed.

C. Undertakings will be unable on their own to bear the financial burdens of these job losses without seriously undermining their international competitive position. Of the standard measures co-financed by the ECSC and designed as aid for reinsertion, the early retirement scheme has mainly been used in the past. This is an extremely expensive measure, which it will be impossible to finance in future without public financial participation, and only in so far as this participation is compatible with EU legislation.

D. The continuing structural changes in the coal and steel industries will mean that efforts to restructure the regions affected must continue at the same level. Appropriate account must be taken of this in connection with EU Structural Fund assistance. The 1999 reform of the Structural Funds must not lead to a situation where a large part of the coal and steel regions ceases to be assisted by Structural Funds when the ECSC Treaty expires. In the future, as well, the coal and steel regions affected must be helped by the European Structural Funds (geographical objectives of readaptation and reindustrialisation) to find solutions to their structural problems.

E. In the opinion it issued for the Committee on Budgets, the European Parliament's Committee on Regional Policy reaffirmed the importance of the ECSC instruments for the coal and steel regions and for the industries and their workers. It calls for the bulk of the present measures, including redundancies, retraining/readaptation, regeneration, health and safety as well as socio economic measures, to be prolonged in an appropriate form beyond the expiry of the Treaty. In this, it attaches particular importance to the Structural Funds, especially Objective 2 and the horizontal Objectives 3 and 4, whereby there must be a targeted adjustment/extension to the aid measures and objectives under the phasing-in process.

Those regions which cease to be eligible for assistance under the European Structural Funds after 1999 must be given transitional help for long enough to enable them to consolidate the restructuring which they have already successfully completed. To the same end, the Committee urges that the Community initiatives Rechar II and Resider II, which provide the units of surplus manpower with the major portion of their financing requirements, be continued and that there be a substantial increase in funds up to 1999.

F. In addition, it will be necessary to contribute to the solution of readaptation problems in those Central and East European countries likely to join the European Union in the foreseeable future. The Consultative Committee considers expansion of the European Union to be a political opportunity for both the applicant countries and Europe as a whole. However, the EU accession process must be accompanied by extensive preparation directed towards increasing the economic competitiveness of specific sectors via an effective restructuring, upholding the principles of competition legislation, restructuring regions in a way that is socially defensible, modernising infrastructures and increasing environmental protection. The Consultative Committee has declared its willingness to support the Central and East European coal and steel regions as partners in these difficult tasks.

G. In connection with the assessment of the proven efficiency of the Rechar and Resider Community initiatives, and the specific evaluation of the integration policy approach (integrating municipalities, regions, industrial partners and social partners), it is essential that this kind of Community initiative be continued or even further developed. According to the conclusions of the CASTer conference and the RETI, a Community initiative is to be set up after 1999 to assist industrial changes in the coal and steel regions. This Community initiative should provide assistance for the regions, economic operators and employees affected by structural changes.

H. All these aspects should be taken into account in the discussion on the reform of the European Structural Funds which is in any case necessary for other reasons. The Presidency conclusions of the special session of the European Employment Council held in Luxembourg on 20 and 21 November 1997 (points 27 and 28 in particular) take up and lend support to this initiative.

I. Vocational training is an essential instrument to keep employees capable of adapting to the new technologies and to the continuing structural changes. The Consultative Committee therefore invites the Commission to provide sufficient funding for vocational training and to evaluate in this context the phasing-in of this ECSC measure into the European Social Fund.

THE ECSC CONSULTATIVE COMMITTEE

1. HOLDS THE VIEW that the European Social Fund and proven elements of the Community initiatives Rechar and Resider should, after the expiry of the ECSC Treaty, be used increasingly to co-finance redundancies in the Community coal and steel industry. The Consultative Committee bases its position on the following assumptions:

- adequate resources will be allocated to current and future funds and initiatives at least until viable alternatives take effect,

- in this context, a Community initiative is to be set up to promote the change in the coal and steel regions, either as a structural policy instrument in its own right or to supplement other initiatives (e.g. a new Community initiative to be known as Restruct),

- as part of the ongoing evaluation process the existing 13 Community initiatives could be merged, reducing administration to the benefit of real support and creating greater efficiency and transparency of administrative structures;

2. ASSUMES that the problems of readapting the workforce in the coal and steel industry could most readily be tackled and assisted under Objective 4 of the European Social Fund ('facilitating the adaptation of workers of either sex to industrial changes and to changes in production systems`).

The planned integration of the former Objective 4 into a blanket Objective 3 should not lead to the loss of the approach involving advance retraining in preparation for structural changes. If Objective 4 is not retained as a Structural Fund objective in its own right, there should, rather, be a guarantee that sufficient funds will be retained for these preventive workforce and labour-market policy measures, for the coal and steel regions in particular.

Appropriate solutions must be found for problems occurring in areas situated on the periphery of areas eligible for support;

3. IS OF THE OPINION that aid under Objective 2 of the European Social Fund ('converting the regions seriously affected by industrial decline`) applies to the coal and steel industry, since the industry clearly meets the requirement of Article 9(2) of framework Regulation (EEC) No 2081/93 that there must have been an observable fall in industrial employment;

4. PROPOSES that the following should be added to the list of European Social Fund activities set out in Article 3(2) of the Structural Fund framework Regulation for the next period of aid '(e) the re-employment of redundant workers`;

5. IS OF THE OPINION that the financial contribution of the European Social Fund could take the form of a single payment replacing all individual aid so far granted according to standard situations (e.g. transitional aid, 'tide-over` allowance) and graduated according to the age and length of service of the individual redundant worker;

6. THEREFORE CALLS ON THE COMMISSION, in the light of the revision of the Structural Funds by 31 December 1999, to amend the framework Regulation on the Structural Funds in line with the above points in time for this revision;

7. HOLDS THE VIEW that, besides Objectives 2 and 4 of the European Social Fund, the Community initiatives Rechar and Resider are also suitable for the purpose of incorporating sectoral provisions for assisting structural adaptation measures into European legislation since, although based on regional criteria, these aid programmes benefit only coal and steel areas, and these vital branch-specific components must be retained;

8. SEES A LINK between the Rechar/Resider aid list and the present readaptation aid under the ECSC Treaty in point 8(i) of the guidelines, according to which 're-employment aid under Article 56 of the ECSC Treaty` is eligible for support;

9. DRAWS ATTENTION TO THE FACT that aid eligible under the above point for retraining measures intended to provide workers in the coal and steel industries or unemployed workers formerly employed in these industries with knowledge which is geared to market requirements and facilitates their integration into a changing economy, is only a small sample of the range of re-employment aid under Article 56 of the ECSC Treaty;

10. THEREFORE CONSIDERS that in future, financial aid in respect of payments to redundant workers should either be incorporated into a new Community initiative with the same objectives (Restruct) or included, via an appropriate list of measures and criteria, in an enlarged Objective 2 or 3.

(1) Doc. COM(97) 506 final, entitled 'Expiry of the ECSC Treaty - Financial activities`.

(2) Schwaiger report, ref. EP 222.651.

(3) Ref. SN 300/97.

(4) OJ C 206, 11.8.1995, p. 7.

(5) OJ C 334, 8.11.1996, p. 3.