EC MINISTERS AGREE NEED FOR BIG STEEL CLOSURES
European Community (EC) industry
ministers today declared there is a need for a massive round of
closures of steel plants to bring capacity in the 12-country
bloc into reasonable balance with demand.
    The ministers were meeting to discuss a plan for voluntary
plant closures drawn up by the industry lobby group Eurofer
which it calculates would cost around 22,000 jobs.
    Diplomats said that in their initial reactions to the
scheme, most ministers declared it was a useful basis for
discussion, but did not go nearly far enough.
    Eurofer says it has identified scope for the closure of
plants which have an annual capacity of 15.26 mln tonnes,
provided the companies concerned can be fully repaid by the EC
or national governments for redundancy and other social costs.
    But EC Executive Commission sources said Industry
Commissioner Karl-Heinz Narjes told ministers today that 30 mln
tonnes of annual capacity was excess to requirements and should
be closed by the end of 1990.
    He said the Eurofer plan in particular fails to pinpoint
the scope for closure in heavy hot-rolled wide-strip products,
typically produced in plants employing thousands of people.
    The sources said no minister challenged Narjes' analysis
that four or five hot-rolled wide-strip lines would have to
close.
    They said ministers agreed that the Eurofer plan should be
expanded and developed through meetings among the industry
body, the Commission and representatives of member states.
    However, diplomats said it was clear from today's
discussions that such meetings will be difficult.
    They said member states are split on whether to reduce the
scope of a quota production system, which at present protects
EC steelmakers from the full force of competition for 65 pct of
their products, while talks on the closure plan proceed.
    It was also clear that there will be tough talks on which
EC member states should bear the brunt of the closures and on
how much funding for help to those thrown out of work should
come from Community coffers.
    German minister Martin Bangemann said his country's steel
industry, the largest in the EC, should not suffer
proportionately more than others, German sources said.
    But British diplomats said their minister, Giles Shaw,
insists that the profitability of companies should be taken
into account.
    The state owned British Steel Corporation, benefitting from
massive recent write-offs of its accumulated debts, is
currently one of the few EC steel companies in the black.
    Ministers were this afternoon trying to agree a joint
statement on the Eurofer plan and the situation in the
industry.
 Reuter
