History repeats itself for Europe’s first community

Date: 26/10/1995

THE steel industry has always been a subject of special concern to the European Union. The first of the European Communities was the European Coal and Steel Community of 1953, which aimed to ensure competition and allowed price and output control at times of “manifest crisis”.

In 1977, the European Commission set prices for certain products but a voluntary output restraint agreement collapsed in 1980 and governments bailed out industries with state aids. In 1985, a new state aid code was introduced.

Falling prices caused by an excess of production in the early 1990s led the Commission to encourage steel manufacturers to get together and reduce capacity by 19 million tonnes.

After months of trying to arrange the capacity cuts, the Commission gave up in October 1994 when cuts of only 11 million tonnes were found.

EU steel production in 1994 was 139 million tonnes, up from 132 million tonnes in 1993, as a general recovery in the economy fed through.

After three years of decreasing consumption, demand picked up by 5&percent; in 1994 with the strongest gains in the second half of the year. Demand was strongest from companies involved in mechnical engineering, domestic appliances and the car industry.

Third country imports soared in 1994, rising 50&percent; over the previous year to a historic high of 14 million tonnes.

EU exports were 26 million tonnes in 1994, down from the record high of 28 million tonnes in 1993.

Europe's biggest steel companies are, in order of size: Usinor-Sacilor in France; British Steel in the UK; Thyssen in Germany; Ilva in Italy; Hoogovens in the Netherlands; Arbed in Luxembourg; Riva in Italy; and Krupp Hoesch in Germany.