Abstract

The european steel crisis is due to the steel production overcapacity in regard of a decline in demand, leading to a fierce price competition, with prices 15 to 20 % lower than in the USA and Japan. Measures were taken by the Commission of the European Communities and by the steel companies, consisting of imposing or proposing selling prices, limiting the deliveries, reducing import from third countries, closing down obsolete capacities, increasing productivity. Moreover, most governments have granted financial aid.In the second half of 1980, the market situation has deteriorated rapidly, which fact has led the Council of the European Communities to adopt Art. 58 of the ECSC-Treaty and to set obligatory production quotas. This has proved not to be sufficient. There is a strong tendency within the Commission towards a drastic reduction of overcapacity,as well as a decrease in state aid, the latter being considered as only allowed temporarily as a means of achieving the necessary restructuring and capacity reduction.It can be expected that, given the dramatic market situation, these measures wilt effectively be put into practice in the period to come. At the same time, voluntary agreements concerning production and prices are being discussed among steel producers.