Aspects of the Steel Crisis in Europe, with Particular Reference to Belgium and Luxembourg

Abstract

The international steel industry has experienced severe recession since 1974. Heavy investment during previous years has resulted in considerable excess capacity, reduced output, declining prices, and serious unemployment. Acute financial losses and a diminution in investment have also occurred. The crisis is especially grave in Belgium and Luxembourg, where the steel industry is relatively more important per inhabitant than in any other country in the world, whilst a largely inland location exacerbates those structural deficiencies exposed by the recession itself. Recourse has been had to several European instruments of policy to help alleviate the social consequences of contraction and to assist in the modernization and rationalization ofthe industry. The Davignon 'plan' seeks to protect the industry in the short term while encouraging such restructuring. In Belgium and Luxembourg, there will be essentially two large groupings for future development, i.e. Cockerill and ARBED, other companies remaining independent and much smaller. Rationalization will occur within and between these poles, the state will play an increased role in their development, and regional industrial reconversion will balance as far as possible the contraction in iron and steel.