Brussels, 20/12/2006 (Agence Europe) - Despite the delicate situation in 2005 marked by decreased sales and prices compared to the previous year due to the unprecedented production growth in China and India (which pushed world steel output up by 6% to 1.129 billion tonnes in 2005) and with crude steel production in the EU being 3.2% lower than in 2004, operational benefits of Czech and Polish steel companies remained high and the mills were generally able to reduce their indebtedness and speed up investments. This information was welcomed by the Commission in its third report on the steel industry sector in Poland and the Czech Republic (which account for 3% and 5 % respectively of EU steel production). It also expressed its satisfaction that the remaining public shares in both countries have now been passed on to the private sector. The Commission insists that the new investors should now concentrate all their efforts on implementing the remaining restructuring benchmarks, such as cost reduction, investment, and productivity increase. These measures need to be fully implemented so as to make the companies more resistant to a possible economic downturn. The most recent economic and industrial surveys for 2006 indicate that the expected recovery in the economy and steel consuming sectors should translate into further improvement in steel market conditions in the EU. Many steel companies in the Czech Republic and Poland have only been able to remain viable with financial support from their governments. This exemption from the EU rules on state aid is conditional on the fulfilment of certain obligations set out in a national restructuring programme and was agreed between the EU and the Czech Republic and Poland. The Commission will present a final evaluation of the restructuring of the Czech and Polish steel industries in 2007. (eh)