§ 48. Mr. Kaufmanasked the Secretary of State for Industry if, in order to assist the House in the debate on EEC document 4627/79 on State aids to the steel industry, he will on or before 23 October lay before the House a statement of the legal position with regard to this matter.
§ Mr. Adam ButlerThe decision as originally drafted was objectionable on legal grounds, firstly because it could have had the effect of altering the existing balance of power between the institutions of the Community and the member States. 15W EEC document 4627/79 as amended now provides that any action by the Commission to enforce the decision must be taken through article 88 of the ECSC treaty and this, combined with the deletion of the provision which previously gave the Commission power to require repayment of any aid of which it did not approve, means that the existing balance of power is not effectively altered.
Secondly, earlier drafts of the decision purported to authorise as lawful those aids which, by virtue of article 4 of the ECSC treaty, are recognised as incompatible with the Common Market for coal and steel and accordingly are prohibited within the Common Market. EEC document 4627/79 is so drafted that it authorises only what it calls "Community aids". The Commission's lawyers have argued strongly that such Community aids are not covered by the prohibition imposed by article 4, and this argument has been accepted by the majority of the member States. I am advised that, although this argument could rightly be challenged, there is no authority to prove it is wrong; it is acceptable as a basis for our consent to the decision but only on a strictly temporary basis and I have made it clear to the Council that any renewal or extension of the decision would necessitate proceeding by way of treaty amendment.