31.12.90 Official Journal of the European Communities No L 380/27 COUNCIL DIRECTIVE of 21 December 1990 on aid to shipbuilding (90/684/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Articles 92 (3) (d) and 113 thereof Having regard to the proposal from the Commission ('), Having regard to the opinion of the European Parliament {(2), : Having regard to the opinion of the Economic and Social Committee (3), Wheres Council Directive 87/167/EEC of 26 January 1987 on aid to shipbuilding (*) will expire on 31 December 1990; Whereas the aid policy laid down in that Directive has in general met the objectives set out at its introduction; Whereas although since 1989 there have been significant improvements in the world market for shipbuilding, a satisfactory equilibrium between supply and demand has still not been established and the price improvements which have taken place are still insufficient in the overall context to restore a normal market situation within the sector, allowing prices to reflect full production costs and a reasonable return on invested capital; Whereas the positive international trend is likely to lead to a normalization of the market, provided the consequences of the Gulf crisis are faced properly and the reasons behind the symptoms of crisis in the world economy are understood; Whereas, parallel to his market amelioration, international efforts are being deployed within the Organization for Economic Cooperation and Development (OECD) framework to reach a multilateral agreement between the world’s most important shipbuilding nations on a rapid phasing-out of all direct and indirect public support measures to shipbuilding, ship conversion and ship repair and of other (1) O] No C 223, 7. 9. 1990, p. 4. (2) Opinion delivered on 23 November 1990 (not yet published in the Official Journal). (3) OJ No C 332, 31. 12. 1990. (*) O] No L 69, 12. 3. 1987, p. 55. obstacles to re-establishing normal and fair competition conditions in the sector; Whereas this agreement must ensure fair competition at an international level among shipyards through a balanced and equitable elimination of all existing impediments to normal competition conditions and must provide a suitable instrument for counteracting all illegal practices and forms of assistance inconsistent with the agreement; Whereas the provisions of this Directive are without prejudice to the amendments necessary to comply with international obligations entered into by the Community; Whereas a competitive shipbuilding industry is of vital interest to the Community and contributes to its economic and social development by providing a substantial market for a range of industries, including those using advanced technology; whereas it contributes also to the maintenance of employment in a number of regions, including some which are already suffering a high rate of unemployment; whereas this is also true of ship conversion and ship repair; Whereas a complete abolition of aid to the sector is still not possible in view of the present market situation and in view of the need to encourage restructuring in many yards; whereas a tight and selective aid policy should be continued in order to support the present trend in production towards more technologically-advanced ships and in order to ensure fair and uniform conditions for intra-Community competition; whereas such. a policy constitutes the most appropriate approach in terms of ensuring the maintenance of a sufficient level of activity in European shipyards and, thereby, the survival of an efficient and competitive European shnpbuxldmg industry; Whereas the basic aid policy laid down in Directive 87/167/EEC, differentiating between, on the one hand, production aid based on a common ceiling and, on the other, restructuring aid supporting desirable structural changes, remains the most appropriate way of ensuring that the industry is competitive in the long term; Whereas, although it is proposed to treat ship conversion in the same way as shipbuilding to a certain extent, aid to the ship-repair sector should not be permitted, in view of the continuing overcapacity in this sector, except for investments, closure and research and development aid;