By Alex MacDonald

The European Parliament Thursday called on the European Commission to urgently implement an action plan to help the ailing EU steel industry safeguard its competitiveness and jobs as it undergoes restructuring to remove excess steel production capacity amid anemic steel demand.

The parliament passed a resolution Thursday that called on the commission to include the EU steel industry in its current review of EU state rules.

Over the past several years, the EU steel industry has faced the twin challenges of protracted weakness in regional steel demand due to the economic crisis and stiff competition from abroad stemming in part from stringent EU environmental rules that make it cheaper to produce basic steel products abroad.

European steelmakers have responded to the protracted weakness--EU steel demand is still at least 28% below the levels seen in 2007--by idling blast furnaces and in some cases permanently shutting them down. ArcelorMittal (MT), Europe's largest steelmaker, is currently operating only 14 out of its 25 European blast furnaces and plans to permanently shut down four blast furnaces, two in Liege, Belgium, and two in Florange, France.

Members of the European Parliament said they "welcome the commission's promise to deliver an action plan for the steel sector by June 2013 but stress the need to have it as soon as possible."

Parliament called on the commission to ensure that the restructuring or relocation of steel plants is carried out in compliance with EU competition law and to monitor potential abuses of dominant market positions.

It also called on the commission to monitor imports of steel products and steel pipes beyond the end of the year.

EU lawmakers said the steel industry remains a strategic EU sector and the commission should provide a wide range of tools to help the industry, including increased funds for research, development and innovation from the European Investment Bank, a skills policy, and EU financial instruments, such as the European Social Fund and the European Globalization Fund.

Wolfgang Eder, the CEO of Austrian specialty steelmaker Voestalpine AG (VOE.VI) and president of the European Steel Association, or Eurofer, previously estimated that EU crude steel production capacity in the EU bloc of 27 member states will drop to around 50 million tons a year by 2030 from around 210-215 million tons annually at the moment after falling significantly from three decades ago. Meanwhile, the number of EU steel industry jobs has dropped to 369,000 in 2012 from 1 million in 1970, according to the EU parliament.

Eurofer Director General Gordon Moffat welcomed the resolution, noting that it "clearly defines most, though not all, political issues that have to be worked on urgently to keep our industry competitive on the global markets."

Write to Alex MacDonald at alex.macdonald@dowjones.com

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