ECSC financial report for the year 1958

Abstract

The slackening ·in the ·rate of economic expansion, the first signs of which appeared towards the end of 1957, ·continued, in the United States, during the first half of the year under review. in the second half of the yeal"the situation improved and this improvement has since continued provokifig renewed discussion of the danger of inflationary trends. · · · In the Community countries, on the other hand, it was not untilthe sec()nd half-year that economic activity began to fall off, primarily in the basic industries. This development, however, did not have a corresponding effect on . the actual amounts ilivested in the· Community industries ; it would, nevertheiess; appear that the pattern of capital expenditure· is beginning to change somewhat. The Community .. enterprises' demand for long-term capital continued during 1958 to exceed the supply. This was indicated by, among other things, the volume of applications to the High Authority for credits throughout the year. The High Authority accordingly continued, as in previous years, to do its best, within the possibilities open to it, to raise long-term funds for the enterprises on advantageous terms. As interest rates in the Community countries were high, and their money markets not yet ready to take up international bond issues, the High Authority was once again obliged to have recourse to the American capital market. This it did at the end of the first half-year, shortly before a change iri that market once again hardened interest rates. A detailed account of this issue (which is, incidentally, the High Authority's third public loan) will be found in the chapter «Borrowing Operations».