asked the Minister for Foreign Affairs if the European Communities have arranged a loan of £150 million for the British Steel Corporation; and, if so, if he will indicate the terms of the loan and the conditions attached to it.
Written Answers. - EEC Loan.
24.
On 25th March, 1976, the Commission of the European Communities announced the approval of a loan of £150 million to the British Steel Corporation in order to finance a major investment programme at the Corporation's Redcar and South Teeside works.
Under Article 54, first paragraph, of the Treaty establishing the European Coal and Steel Community the Commission may facilitate the carrying out of investment programmes by granting loans to undertakings. It is under this provision that the Commission has made the present loan available to the British Steel Corporation. Loans to undertakings under this provision are solely a matter for the Commission and do not require approval by the Council.
The terms and conditions of the loan are of a confidential nature between the two parties in line with usual practice. It has, however, been announced that a portion of the loan— £2.5 million—will benefit from a reduction of 3 per cent in the interest rate for a period of five years, in view of the contribution of the project to coking capacity in the Community. It has also been disclosed that the loan will be paid out in instalments as the project progresses and the terms of each instalment will depend on market conditions at the time.