ABSTRACT
In Europe, massive public resources were committed to the construction of greenfield steel mills in southern France and southern Italy, far from their natural markets, in order to stimulate local employment and regional industrialization. In addition to national aid programs, the European Commission presided over the formation of a Community-wide system of market controls in conjunction with Eurofer, an association of the major steel producers. Japan possessed an enormous capacity surplus at the time the structural recession began. Loans to developing country steel projects, backed by the guarantees of the local government, were so attractive to foreign banks that credit was made available on a virtually unlimited basis. Worldwide, tens of billions of dollars in subsidies have been channeled into investments in modernization. Intervention by national governments and the European Commission prevented the collapse of large segments of the Community steel industry after 1975.
