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Treaty establishing the European Coal and Steel Community, ECSC Treaty

The ECSC Treaty was signed in Paris in 1951 and brought France, Germany, Italy and the Benelux countries together in a Community with the aim of organising free movement of coal and steel and free access to sources of production. In addition to this, a common High Authority supervised the market, respect for competition rules and price transparency. This treaty is the origin of the institutions as we know them today.

CREATION

The first Community organisation was created in the aftermath of the Second World War when reconstructing the economy of the European continent and ensuring a lasting peace appeared necessary.

Thus the idea of pooling Franco-German coal and steel production came about and the European Coal and Steel Community (ECSC) was formed. This choice was not only economic but also political, as these two raw materials were the basis of the industry and power of the two countries. The underlying political objective was to strengthen Franco-German solidarity, banish the spectre of war and open the way to European integration.

The French Foreign Minister, Robert Schuman, in his famous declaration of 9 May 1950, proposed that Franco-German coal and steel production be placed under a common High Authority within the framework of an organisation in which other European countries could participate.

France, Germany, Italy, Belgium, Luxembourg and the Netherlands accepted the challenge and began negotiating a treaty. This development went against the original wish of Jean Monnet, the senior French civil servant who had inspired the idea, whose original proposal had been for a simpler, more technocratic mechanism. However, the six founding States were not ready to accept a simple outline and agreed on around one hundred articles making up a complex whole.

At last, the Treaty establishing the European Coal and Steel Community was signed in Paris on 18 April 1951 and entered into force on 23 July 1952, with a validity period limited to 50 years. The Treaty expired on 23 July 2002.

The common market advocated by the Treaty opened on 10 February 1953 for coal, iron ore and scrap and on 1 May 1953 for steel.

OBJECTIVES

The aim of the Treaty, as stated in Article 2, was to contribute, through the common market for coal and steel, to economic expansion, growth of employment and a rising standard of living. Thus, the institutions had to ensure an orderly supply to the common market by ensuring equal access to the sources of production, the establishment of the lowest prices and improved working conditions. All of this had to be accompanied by growth in international trade and modernisation of production.

In the light of the establishment of the common market, the Treaty introduced the free movement of products without customs duties or taxes. It prohibited discriminatory measures or practices, subsidies, aids granted by States or special charges imposed by States and restrictive practices.

STRUCTURE

The Treaty was divided into four titles. The first dealt with the European Coal and Steel Community, the second with the institutions of the Community, the third with economic and social provisions and the fourth with general provisions. It also included two protocols, one on the Court of Justice and the other on relations of the ECSC with the Council of Europe, and a convention on the transitional provisions, which dealt with the implementation of the Treaty, relations with third countries and general safeguards.

INSTITUTIONS

The ECSC Treaty is the origin of the institutions as we know them today. It established a High Authority, an Assembly, a Council of Ministers and a Court of Justice. The Community had legal personality.

The High Authority was the independent collegiate executive with the task of achieving the objectives laid down by the Treaty and acting in the general interest of the Community. It was made up of nine members (of whom not more than two of any one nationality) appointed for six years. It was a truly supranational body with power of decision. It supervised the modernisation and improvement of production, the supply of products under identical conditions, the development of a common export policy and the improvement of working conditions in the coal and steel industries. The High Authority took decisions, made recommendations and delivered opinions. It was assisted by a Consultative Committee made up of representatives of producers, workers, consumers and dealers.

The Assembly was made up of 78 deputies, who were representatives of the national Parliaments. There were 18 each for Germany, France and Italy, 10 for Belgium and the Netherlands and 4 for Luxembourg. The Treaty assigned supervisory power to this Assembly.

The Council consisted of six representatives of the national governments. The Presidency of the Council was held by each Member State in turn for a period of three months. The role of the Council was to harmonise the activities of the High Authority and the general economic policy of the governments. Its approval was required for important decisions taken by the High Authority.

The Court of Justice consisted of seven judges nominated for six years by common agreement between the governments of the Member States. It ensured that the law was observed in the interpretation and implementation of the Treaty.

TASKS

The Treaty provided for action by the High Authority on the basis of information which undertakings were obliged to provide it and forecasts of coal and steel production. In pursuance of its goal, the ECSC had means of information, powers of consultation and the power to make checks. In the event that undertakings did not respect these powers, the High Authority could impose punishments such as fines (maximum of 1 % of annual turnover) and penalty payments (5 % of the average daily turnover for each day's delay).

On the basis of this information, forecasts were made to guide the activities of those involved and determine how the ECSC would act. To supplement the information received from undertakings and associations, the ECSC carried out its own studies on price trends and market behaviour.

The ECSC was funded by levies on coal and steel production and by contracting loans. The levies were intended to cover administrative expenditure, non-repayable aid towards readaptation, and technical and economic research (which needed to be encouraged). The funds received from borrowing could only be used to grant loans.

In the field of investment, in addition to granting loans, the ECSC could guarantee loans contracted by undertakings with third parties. Furthermore, the ECSC had the power to provide guidance on investments which it did not fund.

With regard to production, the ECSC played a mainly indirect, subsidiary role through cooperation with governments and intervention in relation to prices and commercial policy. However, in the event of any decline in demand or shortage, it could take direct action by imposing quotas with the aim of limiting production in an organised manner or, for shortages, by drawing up production programmes establishing consumption priorities, determining how resources should be allocated and setting export levels.

In relation to price fixing, the Treaty prohibited practices which discriminated according to price, unfair competitive practices and discriminatory practices involving the application of dissimilar conditions to comparable transactions. These rules also applied to transport.

Furthermore, in certain circumstances, such as a manifest crisis, the High Authority could fix maximum or minimum prices either within the Community or in relation to the export market.

So as to ensure that free competition was respected, the High Authority had to be informed of any action by Member States which was liable to endanger it. Furthermore, the Treaty dealt specifically with the three cases which could distort competition: agreements, concentrations and the abuse of dominant positions. Agreements or associations between undertakings could be cancelled by the High Authority if they directly or indirectly prevented, restricted or distorted normal competition.

Another chapter of the Treaty concerned wages and movement of workers. Although wages remained within the jurisdiction of the Member States, the High Authority could intervene, under certain conditions set out in the Treaty, in the event of abnormally low wages and wage reductions.

The High Authority could grant financial aid to programmes which had the aim of offsetting the possible negative effects of technological advances in the industry on the workforce (compensation, allowances and vocational retraining).

As far as the movement of skilled workers was concerned, the Treaty provided for the removal by Member States of restrictions on employment based on nationality. For the other categories of workers, and in the event of shortages of that type of labour, Member States were called upon to make the necessary adjustments to immigration rules to facilitate the employment of workers from other Member States.

The Treaty also dealt with the commercial policy of the ECSC towards third countries. Although the powers of national governments remained in place, the Community had a number of powers such as setting maximum and minimum rates for customs duties and supervising the granting of import and export licences, as well as the right to be kept informed of commercial agreements relating to coal and steel.

Furthermore, the power of the High Authority prevailed in the fields of dumping, the use by undertakings outside the jurisdiction of the Community of means of competition contrary to the Treaty and substantial increases in imports which could seriously threaten Community production.

ACHIEVEMENTS

The overall achievements of the ECSC were positive. The Community was able to deal with crises, ensuring balanced development of the production and distribution of resources and facilitating the necessary industrial restructuring and redevelopment. Steel production increased fourfold as compared to the 1950s and steel is now better, cheaper and cleaner. Coal production declined, as did the number of people employed in the sector, but it reached a high level of technological development, safety and environmental quality. The ECSC's systems of social management (early retirement, transitional allowances, mobility grants, training, etc.) were of great importance in dealing with crises.

EXPIRY OF THE ECSC TREATY

Fifty years after entering into force, the Treaty expired as planned on 23 July 2002. Before its expiry, it had been amended on various occasions by the following treaties: Merger Treaty (Brussels 1965), Treaties amending certain financial provisions (1970 and 1975), Treaty on Greenland (1984), Treaty on European Union (TEU, Maastricht, 1992), Single European Act (1986), Treaty of Amsterdam (1997), Treaty of Nice (2001) and the Treaties of Accession (1972, 1979, 1985 and 1994).

At the beginning of the 1990s, following extensive debate, its expiry was considered the best solution as opposed to renewing the Treaty or a compromise solution. Thus, the Commission proposed a gradual transition of these two sectors into the Treaty establishing the European Community. The rules of this Treaty have applied to the coal and steel trade since the expiry of the ECSC Treaty.

A protocol on the financial consequeneces of the expiry of the ECSC Treaty and on the research fund for coal and steel is annexed to the Treaty of Nice. This protocol provides for the transfer of all assets and liabilities of the ECSC to the European Community and for the use of the net worth of these assets and liabilities for research in the sectors related to the coal and steel industry.

Some decisions of February 2003 contain the necessary measures for the implementation of the provisions of the protocol, the financial guidelines and the provisions relating to the research fund for coal and steel.

AMDENDMENTS TO THE TREATY

The ECSC Treaty was amended by the following Treaties :

  • Treaty of Brussels, known as the "Merger Treaty" (1965)
    This Treaty replaced the three Councils of Ministers (EEC, ECSC and Euratom) on the one hand and the two Commissions (EEC, Euratom) and the High Authority (ECSC) on the other hand with a single Council and a single Commission. This administrative merger was supplemented by the institution of a single operative budget.
  • Treaty amending Certain Budgetary Provisions (1970)
    This Treaty replaced the system whereby the Communities were funded by contributions from Member States with that of own resources. It also put in place a single budget for the Communities.
  • Treaty amending Certain Financial Provisions (1975)
    This Treaty gave the European Parliament the right to reject the budget and to grant a discharge to the Commission for the implementation of the budget. It established a single Court of Auditors for the three Communities to monitor their accounts and financial management.
  • Treaty on Greenland (1984)
    This Treaty meant that the Treaties would no longer apply to Greenland and established special relations between the European Community and Greenland modelled on the rules which applied to overseas territories.
  • Single European Act (1986)
    The Single European Act was the first major reform of the Treaties. It extended the areas of qualified majority voting in the Council, increased the role of the European Parliament (cooperation procedure) and widened Community powers. It set the objective of achieving the internal market by 1992.
  • Treaty on European Union, known as the "Maastricht Treaty" (1992)
    The Maastricht Treaty brought the three Communities (Euratom, ECSC, EEC) and institutionalised cooperation in the fields of foreign policy, defence, police and justice together under one umbrella, the European Union. The EEC was renamed, becoming the EC. Furthermore, this Treaty created economic and monetary union, put in place new Community policies (education, culture) and increased the powers of the European Parliament (codecision procedure).
  • Treaty of Amsterdam (1997)
    The Treaty of Amsterdam increased the powers of the Union by creating a Community employment policy, transferring to the Communities some of the areas which were previously subject to intergovernmental cooperation in the fields of justice and home affairs, introducing measures aimed at bringing the Union closer to its citizens and enabling closer cooperation between certain Member States (enhanced cooperation). It also extended the codecision procedure and qualified majority voting and simplified and renumbered the articles of the Treaties.
  • Treaty of Nice (2001)
    The Treaty of Nice was essentially devoted to the "leftovers" of Amsterdam, i.e. the institutional problems linked to enlargement which were not resolved in 1997. It dealt with the make-up of the Commission, the weighting of votes in the Council and the extension of the areas of qualified majority voting. It simplified the rules on use of the enhanced cooperation procedure and made the judicial system more effective.
  • Treaty of Lisbon (2007)
    The Treaty of Lisbon makes sweeping reforms. It brings an end to the European Community, abolishes the former EU architecture and makes a new allocation of competencies between the EU and the Member States. The way in which the European institutions function and the decision-making process are also subject to modifications. The aim is to improve the way in which decisions are made in an enlarged Union of 27 Member States. The Treaty of Lisbon also reforms several of the EU’s internal and external policies. In particular, it enables the institutions to legislate and take measures in new policy areas.

The ECSC Treaty was also amended by the following Treaties of Accession:

  • Treaty of Accession of the United Kingdom, Denmark and Ireland (1972), which increased the number of Member States of the European Community from six to nine.
  • Treaty of Accession of Greece (1979).
  • Treaty of Accession of Spain and Portugal (1985), which increased the number of Member States of the European Community from ten to twelve.
  • Treaty of Accession of Austria, Finland and Sweden (1994), which increased the number of Member States of the European Community to fifteen.
  • Treaty of Accession of Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Czech Republic, Slovakia and Slovenia (2003), which increased the number of Member States in the European Community from fifteen to twenty-five.
  • Treaty of Accession of Bulgaria and Romania (2005), which increased the number of Member States in the European Community from twenty-five to twenty-seven.

REFERENCES

TreatiesDate of signatureEntry into forceOfficial Journal

Treaty establishing the European Coal and Steel Community

18.4.1951

23.7.1952
Expired on 23.07.2002

Not published

Merger Treaty

8.4.1965

1.7.1967

OJ 152 of 13.7.1967

Treaty amending Certain Budgetary Provisions

22.4.1970

1.1.1971

OJ L 2 of
2.1.1971

Treaty amending Certain Financial Provisions

22.7.1975

1.6.1977

OJ L 359 of 31.12.1977

Treaty on Greenland

13.3.1984

1.1.1985

OJ L 29 of 1.2.1985

Single European Act

28.2.1986

1.7.1987

OJ L 169 of 29.6.1987

Treaty on European Union (Maastricht Treaty)

7.2.1992

1.11.1993

OJ C 191 of 29.7.1992

Treaty of Amsterdam

2.10.1997

1.5.1999

OJ C 340 of 10.11.1997

Treaty of Nice

26.2.2001

1.2.2003

OJ C 80 of 10.3.2001

Treaty of Lisbon

13.12.2007

1.12.2009

OJ C 306 of 17.12.2007

Treaties of AccessionDate of signatureEntry into forceOfficial Journal

Treaty of Accession of the United Kingdom, Ireland and Denmark

22.1.1972

1.1.1973

OJ L 73 of 27.3.1972

Treaty of Accession of Greece

28.5.1979

1.1.1981

OJ L 291 of 19.11.1979

Treaty of Accession of Spain and Portugal

12.6.1985

1.1.1986

OJ L 302 of 15.11.1985

Treaty of Accession of Austria, Finland and Sweden

24.6.1994

1.1.1995

OJ C 241 of 29.8.1994

Treaty of Accession of the ten new Member States

16.4.2003

1.5.2004

OJ L 236 of 23.9.2003

Treaty of Accession of Bulgaria and Romania

25.4.2005

1.1.2007

OJ L 157 of 21.6.2005

These fact sheets are not legally binding on the European Commission. They do not claim to be exhaustive and do not represent an official interpretation of the text of the Treaty.

Last updated: 15.10.2010
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