Steel together with other major European industrial sectors recently met with Commission president José Manuel Barroso to urge him to do more to provide immediate assistance to industry in the present economic crisis.

“The European steel industry is heavily impacted by the lack of demand. What we now urgently need is short term measures to increase liquidity in the market, a level playing field on trade, and support for research and development in order to develop the technologies necessary to meet the EU’s climate change objectives”, says Gordon Moffat, EUROFER’s director general.

Since the last quarter of 2008 the European steel industry has seen a collapse of demand. Order levels fell by 57%, apparent consumption is forecast to decline by 30% in the first quarter of 2009 and 16% in quarter two. Production and capacity utilization is down by 30% in average. Steel prices have fallen by 50%, 72,000 jobs have been lost or are on short term working, representing 17% of the EU’s steel workforce.

"How can our customers' confidence be restored if lending is not possible? The emergence of a risk-averse attitude of credit insurers has become a major impediment to trade", says Moffat. "The restoration of financial market conditions is therefore the cornerstone for a sound recovery of the European economy. For this, the EU and the Member States must secure liquidity in the market and request the banks and the ECB to increase their credit facilities for steel customers so that orders can be placed, and introduce schemes to underwrite and increase the availability of credit insurance."

EUROFER welcomes the recent decision of the EU to open the way for VAT reductions in the Member States and urges the governments to act quickly. But this alone will not restore confidence and liquidity in the market.

EUROFER had already sent a letter to Barroso in the beginning of February which has now been taken up in a joint appeal by all sectors of industry, known as the Alliance for a Competitive European Industry.

Represented by EUROFER, the European steel industry is the world leader in its sector with a turnover of over EUR 160 billion and direct employment of 440 thousand people, producing over 200 million tons of steel per year.

Contact
Gordon Moffat, Director General +32 2 738 79 26 (g.moffat@eurofer.be)
Axel Eggert, Director Public Affairs +32 2 738 79 34 (a.eggert@eurofer.be)