A3-0261/94

Resolution on the draft notice to the Member States laying down guidelines for operational programmes or global grants which they are invited to establish in the framework of a Community initiative concerning the economic conversion of steel areas (RESIDER II) (COM(94)0046 - C3-0131/94)

The European Parliament,

-having regard to the Commission's draft notice to the Member States (COM(94)0046 - C3-0131/94),

-having regard to the amended Structural Funds Regulations, in particular Article 11 of Council Regulation (EEC) No. 2082/93 which is the legal basis for Community initiatives and states that the measures financed should be "of significant interest to the Community", and Article 3(2) of Regulation (EEC) No. 2083/93,

-having regard to Article 56 of the ECSC Treaty,

-having regard to the code of conduct on the implementation of structural policies by the Commission, in particular paragraph 2 which states that the Commission "will take Parliament's requests into consideration whenever possible in order to take them into account when deciding on each initiative",

-having regard to the Interinstitutional Agreement on budgetary discipline of 29 October 1993 and to the financial perspective annexed thereto,

-having regard to its resolution of 28 October 1993 on the draft general budget of the European Community for the 1994 financial year: section III -Commission, in particular to paragraph 8 thereof,

-having regard to the general budget for the European Union for the financial year 1994, and in particular to Article B2-140 and Chapter B0-40,

-having regard to the report of the Committee on Regional Policy, Regional Planning and Relations with Regional and Local Authorities and the opinions of the Committee on Budgets, the Committee on Economic and Monetary Affairs and Industrial Policy, the Committee on Social Affairs, Employment and the Working Environment and the Committee on Women's Rights (A3-0261/94),

A.whereas RESIDER II will continue the RESIDER programme adopted in 1988 which had a total financial envelope of ECU 1 395 million and where aid was allocated to 18 areas in 8 Member States, mainly within Objective 2 regions, but where nevertheless 2 areas outside Objective 1, 2 and 5b received assistance,

B.whereas the Commission proposes an indicative financial envelope of ECU 500 million for RESIDER II for 1994-97, of which 20% would go to Objective 1 regions,

C.whereas RESIDER II will finance projects exclusively in Objective 1, 2 and 5b regions,

D.whereas the Industry Council of the European Union, in its decision of 17 December 1993, sanctioned ECU 7 billion in subsidies to publicly owned steel works; whereas subsidies can only be sanctioned provided that they are in the Union's "common interest" (a term to be interpreted by the Commission) and form an element in restructuring of the industry; whereas additional subsidies might be forwarded for sanctioning by the Council at its forthcoming meeting,

E.whereas the Commission and the privately owned steel industry are reconsidering the restructuring scheme for the European steel industry, in view of the improved market outlook,

F.whereas employment in the iron and steel industry has been reduced from around 404 500 in 1988 to just over 355 000 in 1992 (in the new German Länder alone, employment in the iron and steel industry fell dramatically over the period 1990-1992 to a mere 25%); whereas a further 10% of jobs are expected to be lost in 1994 if presently planned restructuring is carried out; whereas crude steel production fell from over 136 million tonnes in 1990 to 129 million tonnes in 1992 and has fallen a further 4% since 1992; whereas the average capacity utilisation rate in the EU is 67-68%,

G.whereas the steel industry is very sensitive to cyclical economic fluctuations and has been hard hit by the present economic recession, particularly among customers from the primary processing, engineering, civil engineering, shipbuilding and motor industries, forcing cutbacks,

H.whereas these reductions should be added to those of the last decade, caused principally by increased competition on export markets from emerging steel producers, competition from steel substitutes, in particular aluminium, and indeed considerably improved product quality from new or already restructured steelmakers,

I.whereas considerable restructuring measures have already taken place on a large scale, in some Member States more than in others, which means that further goals in restructuring and increased competitivity can be met mainly through cuts in operating costs (production and employment),

1.Notes that the entire European steel industry has been receiving extensive public subsidies since 1987;

2.Fears that subsidies of the order accepted at the last Industry Council meeting in December could gravely jeopardize the restructuring measures which are deemed necessary by all parties and could even put the effectiveness of the Community's efforts into doubt, especially when comparing the subsidy amounts to the indicative amount of ECU 500 million for RESIDER II;

3.Recognizes that public subsidies for the European steel industry have recently been used to make the necessary investment to modernize undertakings and gear them to new market conditions by reducing their capacity and to meet the social costs arising from employment cuts (early retirement, compensation for dismissal) or the retraining of the workforce;

4.Considers that, given under-utilized production capacities, the surplus supply on the European market, cut-price competition from Eastern Europe, and the powerful long-term pressures exerted on market prices as a result of these factors, further reductions will be necessary;

5.Demands compliance with the criterion of additionality for the granting of RESIDER aid and asks that the operational programmes include appropriate reconversion measures, such as non-steel production investment, retraining redundant steelworkers for alternative industrial activities, reclaiming former sites and other infrastructures for new non-steel industry activities and the strict application of eligibility criteria listed in the Commission's invitation to Member States;

6.Insists that aid given under RESIDER should primarily be regarded as a regional development and regeneration instrument;

7.Stresses that, to determine the eligible regions, other indicators in addition to job losses or threats to jobs must be considered, such as the unemployment rate, economic dependence on the iron and steel industry and geographical remoteness;

8.Stresses that, to determine the criteria for eligibility, the main factor to be borne in mind is the relative capacity of each of the regions under consideration to absorb job losses;

9.Calls on the Commission to create the possibility of allocating 10% of RESIDER II funds for steel areas not covered by Objectives 1, 2 or 5b;

10.Agrees with the Commission's priorities as regards investment support, whereby it aims to help the integration of small and medium-sized firms into their economic environment;

11.Calls on the Commission, given that the ECSC is being gradually phased into the Community legal framework, to specify the nature of and arrangements for funding measures which could receive a contribution from the ECSC's operating budget for the RESIDER II initiative;

12.Insists that the Commission specify the amounts for these initiatives to come out of the ERDF and the ESF budgets respectively;

13.Calls on the Commission to extend point III(7)(g) of its draft notice to include existing vocational training institutes among the bodies eligible for assistance;

14.Recalls the additionality criterion, which is to be applied in full; points out that, since the steel industry has been functioning in an internal market for a long period and has therefore been closely monitored, verification of that criterion should pose no problem;

15.Recalls further the principle of partnership to be applied in the manner appropriate to each Member State;

16.Stresses the absolute necessity of an overall coordination and integrated plans where the different financial instruments of the European Union are invoked, a necessity which also applies to the overall coordination with national development plans as well as plans for restructuring, in particular within the coal sector, including RECHAR II projects;

17.Calls on the Commission to inform Parliament at regular intervals on the implementation of this initiative, including a breakdown of the sums allotted to each objective;

18.Approves the guidelines proposed by the Commission for the RESIDER II initiatives along with the amendments requested in this resolution;

19.Instructs its President to forward this resolution to the Commission and Council.