REPORT on the proposal for a decision of the European Parliament and of the Council on mobilisation of the European Globalisation Adjustment Fund, in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management

on the proposal for a decision of the European Parliament and of the Council on mobilisation of the European Globalisation Adjustment Fund, in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management

(COM(2010)0568 – C7‑0332/2010 – 2010/2241(BUD))

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2010)0568 – C7‑0332/2010),

–   having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management[1] (IIA of 17 May 2006), and in particular point 28 thereof,

–   having regard to Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund[2] (EGF Regulation),

–   having regard to the letter of the Committee on Employment and Social Affairs,

–   having regard to the report of the Committee on Budgets (A7-0337/2010),

A. whereas the European Union has set up the appropriate legislative and budgetary instruments to provide additional support to workers who are suffering from the consequences of major structural changes in world trade patterns and to assist their reintegration into the labour market,

B.  whereas the scope of the EGF was broadened for applications submitted from 1 May 2009 to include support for workers made redundant as a direct result of the global financial and economic crisis,

C. whereas the Union’s financial assistance to workers made redundant should be dynamic and made available as quickly and efficiently as possible, in accordance with the Joint Declaration of the European Parliament, the Council and the Commission adopted during the conciliation meeting on 17 July 2008, and having due regard for the IIA of 17 May 2006 in respect of the adoption of decisions to mobilise the EGF,

D. whereas Germany has requested assistance in respect of cases concerning 1 181 redundancies distributed over the four production sites of the enterprise Heidelberger Druckmaschinen in Baden-Württemberg, which operates in the manufacturing of printing machinery sector,

E.  whereas the application fulfils the eligibility criteria set up by the EGF Regulation,

1.  Requests the institutions involved to make the necessary efforts to accelerate the mobilisation of the EGF;

2.  Recalls the institutions’ commitment to ensuring a smooth and rapid procedure for the adoption of the decisions on the mobilisation of the EGF, providing one-off, time-limited individual support geared to helping workers who have suffered redundancies as a result of globalisation and the financial and economic crisis; emphasises the role that the EGF can play in the reintegration of workers made redundant into the labour market;

3.  Stresses that, in accordance with Article 6 of the EGF Regulation, it should be ensured that the EGF supports the reintegration of individual redundant workers into employment; reiterates that assistance from the EGF must not replace actions which are the responsibility of companies by virtue of national law or collective agreements, nor measures restructuring companies or sectors;

4.  Notes that the information provided on the coordinated package of personalised services to be funded from the EGF includes detailed information on the complementarity with actions funded by the Structural Funds; reiterates its call to present a comparative evaluation of these data in its annual reports as well, including an evaluation of the effects these temporary and personalised services have on the long-term reintegration into the labour market of the redundant workers;

5.  Welcomes the fact that, in the context of mobilising the EGF, an alternative source of payment appropriations to unused European Social Fund has been proposed by the Commission, following the frequent reminders by the European Parliament that the EGF was created as a separate specific instrument with its own objectives and deadlines and that appropriate budget lines for transfers must therefore be identified;

6.  Notes that, in order to mobilise the EGF for this case, payment appropriations will be transferred from a budget line dedicated to the support of SMEs and innovation; regrets the severe shortcomings of the Commission when implementing the framework programmes on competitiveness and innovation, particularly during an economic crisis which should significantly increase the need for such support;

7.  Recalls that the functioning and the added value of the EGF should be evaluated in the context of the general assessment of the programmes and various other instruments created by the IIA of 17 May 2006 within the process of the 2007-2013 Multiannual Financial Framework mid-term review;

8.  Welcomes the new format of the Commission’s proposal, which presents in its explanatory memorandum clear and detailed information on the application, analyses the eligibility criteria and explains the reasons which led to its approval, which is in line with Parliament’s requests;

9.  Approves the decision annexed to this resolution;

10. Instructs its President to sign the decision with the President of the Council and to arrange for its publication in the Official Journal of the European Union;

11. Instructs its President to forward this resolution, including its annex, to the Council and the Commission.

• [1]  OJ C 139, 14.6.2006, p. 1.
• [2]  OJ L 406, 30.12.2006, p. 1.

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on mobilisation of the European Globalisation Adjustment Fund, in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2010/018 DE/Heidelberger Druckmaschinen from Germany)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

having regard to the Treaty on the Functioning of the European Union,

having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management[1], and in particular point 28 thereof,

having regard to Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 establishing the European Globalisation Adjustment Fund[2], and in particular Article 12(3) thereof,

having regard to the proposal from the European Commission,

Whereas:

(1)      The European Globalisation Adjustment Fund (EGF) was established to provide additional support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation and to assist them with their reintegration into the labour market.

(2)      The scope of the EGF was broadened for applications submitted from 1 May 2009 to include support for workers made redundant as a direct result of the global financial and economic crisis.

(3)      The Interinstitutional Agreement of 17 May 2006 allows the mobilisation of the EGF within the annual ceiling of EUR 500 million.

(4)      Germany submitted an application to mobilise the EGF, in respect of redundancies in the enterprise Heidelberger Druckmaschinen on 27 May 2010, and supplemented it by additional information up to 1 July 2010. This application complies with the requirements for determining the financial contributions as laid down in Article 10 of Regulation (EC) No 1927/2006. The Commission, therefore, proposes to mobilise an amount of EUR 8 308 555.

(5)      The EGF should, therefore, be mobilised in order to provide a financial contribution for the application submitted by Germany.

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2010, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 8 308 555 in commitment and payment appropriations.

Article 2

This Decision shall be published in the Official Journal of the European Union.

Done at ,

For the European Parliament                      For the Council

The President                                                The President

• [1]               OJ C 139, 14.6.2006, p. 1.
• [2]               OJ L 406, 30.12.2006, p. 1.

I. Background

The European Globalisation Adjustment Fund has been created in order to provide additional assistance to workers suffering from the consequences of major structural changes in world trade patterns.

According to the provisions of point 28 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management[1] and of the Article 12 of Regulation (EC) No 1927/2006[2], the Fund may not exceed a maximum amount of EUR 500 million, drawn from any the margin under the global expenditure ceiling from the previous year, and / or from the cancelled commitment appropriations from the previous two years, excluding those related to Heading 1b. The appropriate amounts are entered into the budget as a provision as soon as the sufficient margins and / or cancelled commitments have been identified.

As concerns the procedure, in order to activate the Fund the Commission, in case of a positive assessment of an application, presents to the budgetary authority a proposal for mobilisation of the Fund and, at the same time, a corresponding request for transfer. In parallel, a trilogue could be organised in order to find an agreement on the use of the Fund and the amounts required. The trilogue can take a simplified form.

II. State of play: Commission's proposal

On 15 October 2010 the Commission has adopted a new proposal for a decision on the mobilisation of the EGF in favour of Germany in order to support the reintegration in the labour market of workers made redundant due to the global financial and economic crisis.

This is the twenty-fourth application to be examined under the budget 2010 and refers to the mobilisation of a global amount of EUR 8.308.555 from the EGF for Germany. It concerns 1181 redundancies distributed over the four production sites of the enterprise Heidelberger Druckmaschinen AG in Baden-Württemberg, which operates in the manufacturing of printing machinery sector, during the fourth-month reference period from 26 January to 26 May 2010.

The application, case EGF/2010/018 DE/Heidelberger Druckmachinen , was submitted to the Commission on 27 May 2010 and supplemented by additional information up to 1 July 2010. It was based on the intervention criterion of Art. 2 (a) of the EGF Regulation, which requires at least 500 redundancies over a four-month period in an enterprise, including its suppliers and downstream producers, and was submitted within the deadline of 10 weeks (Art. 5 of the Regulation).

Commission's assessment was based on the evaluation of the link between the redundancies and major structural changes in world trade patterns or the financial crisis, the unforeseen nature of the concerned redundancies, demonstration of number of redundancies and compliance with the criteria of Article 2 (a), explanation of the unforeseen nature of those redundancies, identification of dismissing enterprises and workers targeted for assistance, the territory concerned and its authorities and stakeholders, the impact for the redundancies as regards the local, regional or national employment, co-ordinated package of personalised services to be funded, including its compatibility with actions funded by the Structural Funds, dates on which the personalised services to affected workers were started or planned to start, procedures for consulting the social partners, management and control systems.

In accordance with Commission's assessment, the application fulfils the eligibility criteria set up by the EGF Regulation and recommends to the Budget Authority to approve the applications.

In order to mobilise the Fund, the Commission has submitted to the Budget Authority a transfer request (DEC 38/2010) for a global amount of EUR 8.308.555 from the EGF reserve (40 02 43) in commitments and from the budget line "Competitiveness and innovation Framework Programme - Entrepreneurship and Innovation Programme" (01 04 04) in payments to the EGF budget lines (04 05 01).

The Rapporteur is pleased to observe that the Commission has identified an alternative source of payment appropriations to unused ESF Funds, in accordance with the frequent requests from the European Parliament.

However, she considers that the choice made in this case (budget line dedicated to the support of entrepreneurship and innovation) is not satisfactory given the severe shortcomings that the Commission encounters when implementing the programmes on competitiveness and innovation. In a period of economic crisis these appropriations should be in fact rather increased. She invites therefore the Commission to continue in her effort to identify more appropriate budget lines for payments in the future.

The IIA allows the mobilisation of the Fund within the annual ceiling of EUR 500 million.

In 2010, the Budget Authority has already approved fifteen proposals for the mobilisation of the Fund and a transfer for the Technical assistance, for a total amount of EUR 47.432.497, which added to the additional amount of EUR 26.254.726 related to the other proposals under discussion (including the present one), leaves an amount of EUR 426.312.777 available until the end of 2010.

III. Procedure

The Commission has presented a transfer request[3] in order to enter specific commitment and payment appropriations in the 2010 budget, as required in Point 28 of the Interinstitutional Agreement of 17 May 2006.

The trilogue on the Commission's proposal for a Decision on the mobilisation of the EGF could take a simplified form (an exchange of letters), as provided for in Article 12(5) of the legal base, unless there is no agreement between the Parliament and the Council.

According to an internal agreement, the Employment and Social Affairs Committee (EMPL) should be associated to the process, in order to provide constructive support and contribution to the assessment of the applications from the Fund.

Following its evaluation, the EMPL committee of the European Parliament gave its view on the mobilisation of the Fund, as expressed in the opinion attached to the present report.

The Joint Declaration of the European Parliament, the Council and the Commission, adopted during the conciliation meeting on 17 July 2008, has confirmed the importance of ensuring a rapid procedure with due respect of the Interinstitutional Agreement for the adoption of decisions on the mobilisation of the Fund.

• [1]  OJ C 139, 14.6.2006, p. 1.
• [2]  OJ L 406, 30.12.2006, p. 1.
• [3]  DEC 38/2010 of 15 October 2010

ES/jm

D(2010)54536

M. Alain Lamassoure

President of the Committee on budgets

ASP 13E158

Subject: Opinion on the mobilisation of the European Globalisation Adjustment Fund (EGF) for the case EGF/2010/018 DE/Heidelberger Druckmaschinen (COM(2010)568 final)

Dear Mr Lamassoure,

The Committee on Employment and Social Affairs (EMPL) as well as its Working Group on the EGF examined the mobilisation of the EGF for the case EGF/2010/018 DE/Heidelberger Druckmaschinen and adopted the following opinion.

The EMPL committee and the Working Group on the EGF are in favour of the mobilisation of the Fund concerning this request. In this respect, the EMPL committee presents some remarks without, however, putting into question the transfer of the payments.

The deliberations of the EMPL committee are based on the following considerations:

A)  Whereas this application is in accordance with Article 2a of the EGF regulation and includes 1.263 redundancies that occurred during the reference period of 4 months between 26 January 2010 and 26 May 2010 in different dependencies in Germany of one firm manufacturing printing machinery;

B)  Whereas 1.800 workers of Heidelberger Druckmaschinen in Germany and 1.140 workers abroad were dismissed on the basis of social plans already before the reference period for the EGF application started;

C)  Whereas this sector was severely hit directly by the financial and economic crisis following the general trend of the machine construction sector resulting in April 2009 in a decline of orders in Germany of 52,6% below the level of April 2008. Whereas for "Heidelberger Druckmaschinen AG" the total sales dropped by 22 % in the second quarter of 2009 compared to the same period in 2008 and by 33 % compared to the same period in 2007;

D)  Whereas the financial and economic crisis also negatively influenced the developments indirectly by causing a decrease of expenditure for advertising material of more than 9% in Europe compared with the same period of 2008. For the printing sector, this decrease resulted in a lower degree of capacity utilisation and an increase in the idle time of the equipment. As a consequence, the printing industry reacted with drastic cuts in capital expenditure, which in turn affected the manufacturers of printing equipment;

E)  Whereas "Heidelberger Druckmaschinen AG" tried to meet the crisis with two adaptation programmes, firstly with reduction of costs of EUR 100 million per year and later with additional cost cutting measures of EUR 200 million per year;

F)  Whereas most of the redundancies occurred in Baden-Württemberg (870 redundancies, or 70% of all dismissed workers) and a smaller number at other production sites in Brandenburg and Nordrhein-Westfalen. The 870 redundancies represent a reduction of 7 % of all workers involved in the manufacturing of machinery equipment and subject to social security contributions in the greater Heidelberg area and a significantly higher increase of unemployment rates in this part of Baden-Württemberg than during the same period for Germany as a whole;

G)  Whereas the EGF regulation states in recital 4 that it should be "ensured that the financial contribution from the EGF is concentrated on workers in the most seriously affected regions and economic sectors of the Community";

H)  Whereas 86,6% of the redundant workers are men and whereas nearly 81,9% of the workers are between 25 and 54 years old;

I)  Whereas 64,9% of the dismissed workers are plant and machine operators and assemblers and whereas 25% of the dismissed workers are clerks, technicians and associate professionals;

J)  Whereas the application states that the category of industrial workers, where most job losses occurred, have a good qualification level;

K)  Whereas the job search allowance: Short time allowance will only be paid for periods within which the dismissed workers are actively participating in active labour market policy measures provided within the framework of the transfer company;

L)  Whereas workers participating in measures on their own initiative are also eligible for the job search/short time allowance;

M)  Whereas the EGF measures complement and extend the measures in terms of content and time that are supported by the ESF and that depend on co-financing of the dismissing company;

Therefore, the Committee on Employment and Social Affairs calls on the Committee on Budgets, as the committee responsible, to integrate the following suggestions in its motion for a resolution concerning the German application:

1.  Agrees with the Commission that the conditions for a financial contribution under the EGF regulation are met;

2.  Welcomes the fast reaction of the Social Partners and the German Government to the mass redundancies that will enable the adoption of the request for EGF support by the budgetary authority about 6 months after the date of application;

3.  Welcomes the setting up of a so called Transfer Company that, according to the German model, is supported by the Social Partners and financed for a large part by the dismissing company;

4.  Wonders if the cost cutting measures applied by "Heidelberger Druckmaschinen AG" prior to the dismissals already resulted in redundancies that are not included in the application;

5.  Welcomes the possibility for workers to participate in measures at their own initiative. Requests more information from Germany on the relation of these measures with the measures included in the coordinated package of personalised services;

6.  Welcomes the workshop/peer group measure aiming at apprentices and providing practical advice for their working life and for the further development of their vocational perspectives;

7.  Notes that Germany proposes also activities for the more traditional target groups as workers over 40 and over 50 years of age. Calls in this respect upon the Commission to encourage the Member States to design and implement innovative measures that will enhance longer working lives and contributing to reaching the targets set by the EU2020 strategy;

8.  Welcomes the measures promoting trans-border mobility. Points, however, to the deteriorated labour market of the printing industry in the Netherlands (see EGF applications EGF/2009/24-30);

9.  Welcomes the measures using the time of unemployment for updating and consolidation of professional competences;

10.  Calls for the Commission to enquiry more in depth the sectors towards which the workers are reoriented in terms of training or setting-up a business of their own. The aim of this in depth analysis should be to ensure the sustainability of the workers' reintegration on the labour market and hence the good-use made of the EGF. This assessment should be undertaken with a view to the aims set out in the EU 2020 strategy.

Yours sincerely,

Pervenche Berès