Sales at list rise during the boom quarters, 57/ The "Treaty of Paris

 moved cyclically: Sales at list rise during the boom quarters,
57/ The "Treaty of Paris" is a name for the treaty that
'established the European Coal and Steel Community. The High
Authority requires that alignment sales on the prices of a
foreign supplier may be made only on the basis of aß actal
offer to an EC steel b4yer. This latter point is explained in
detail by Hans Mueller' (19l.
TABLE 4.10
Percent of Member Countries' Deliveries to the ECSC Market at
Producers' Own List Pr ices
Quarter Germany Fr ance Italy 'toe Nether lands Belg ium Luxembourg ECSC
Source: Klaus Stegemann, . Pr ice Competition and
in the European Steel Market, 1954-75,.
OUtput .Adjustment
table 111-21, in
and sales at below list increase in the trough quarter. It is
interesting to note that the country with the most inflexible
list pr ices, Luxembourg, sells the least amount of its steel
at its own list prices,
Moreover, pr ice cutting below legal EC levels has occurred.
The major German steel producers aligned themselves into joint
sales agencies in 1966-67, after which the share of imports
into the German market rose from the 15.~o~0 percent level to
over 30 percent in 1968. There were widespread reports of
illegal price cutting in the German market; especially accused
of price cutting were the Belgian anã Italian producers. 58/
These illegal pr ice cuts led to the issuance of a ser ies of
"temporary rebates" by the German joint sales agencies.
During the recession of 1975,

 deep and significant price
cutting developed. Alignments on imports from Japan, Spain,
and Eastern Europe permitted significant legal price reductions, and the price competition was depicted by some as
severe. 59/ The French steel leader, Jacques Ferry, led a
move to have the European Communi ty declare a "manifest
cr is i s" and establ ish rnin imum pr ices along wi th product ion
cuts and import controls. However, the Germans maintained
58/ See Stegeman (30, ch. 3) for a detailed account of this
per iod.
59/ "On the Brink," Metal Bulletin, Nov. 18, 1975, p. 19,
TKor f Call s for Pr ice Disc ipl ine," Metal Bullet in, Oct. 10,
1975, p. 36.
strong opposition to Ferry's proposal and finally the market
began to improve in 1976. 60/
In table 4.11,

 unit value data for selected steel products
are presented. Similar data are published by the Statistical
Office of the European Community (SOECI for nine additional
steel products. While the series suffers some limitations as
a price index, it is the best publicly available indication
of steel transactions pr ices within the ~ûröpean Community. To
date these data are unavailable after 1973: however, the data
in table 4.12 roughly inòicate the trend in prices in recent
Table 4.12 presents data which depict internal and export
pr ices on three steel products of the EC. As the OECD report
stated, realized prices obtained by EC producers fell significantly after the 1974 boom, even though official list prices
were not marked down to any extent.
List prices of many of the major EC producers have been
sticky over the course of the business cycle. Through alignment sales, however, and sometimes illegal pr ice cutting,
transactions prices have fluctuated with demand over the cycle.

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