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)0616 – C7‑0347/2010 – 2010/2253(BUD))

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2010)0616 – C7‑0347/2010),

–   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 (A7-0359/2010),

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 Poland has requested assistance in respect of cases concerning 590 redundancies in two enterprises operating in the NACE Revision 2 Division 29 (Manufacture of motor vehicles, trailers and semi-trailers) in the NUTS II region Wielkopolskie,

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;

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 however 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 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 the mobilisation of the European Globalisation Adjustment Fundin 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/2010/004 PL/Wielkopolskie Automotive from Poland)

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)      Poland submitted an application on 5 February 2010 to mobilise the EGF in respect of redundancies in two enterprises operating in NACE Revision 2 Division 29 (manufacture of motor vehicles, trailers and semi-trailers) in the NUTS II region of Wielkopolskie (PL41) and supplemented it by additional information up to 6 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 633 077.

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

HAVE DECIDED AS FOLLOWS:

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 633 077 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 29 October 2010 the Commission has adopted a new proposal for a decision on the mobilisation of the EGF in favour of Poland 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-eight application to be examined under the budget 2010 and refers to the mobilisation of a global amount of EUR 633.077 from the EGF for Poland. It concerns 1104 redundancies (of which 590 targeted for assistance) in two enterprises operating NACE Revision 2 Division 29, namely "Manufacture of motor vehicles, trailers and semi-trailers" during the nine-month reference period from 1 March to 30 November 2009.

The application, case EGF/2010/004 PL/Wielkopolskie Automotive, was submitted to the Commission on 5 February 2010 and supplemented by additional information up to 6 July 2010. It was based on the intervention criterion of Art. 2 (b) of the EGF Regulation which requires at least 500 redundancies over a nine-month period in enterprises operating in the same NACE Revision 2 Division in one region or two contiguous regions at NUTS II level in a Member State 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 42/2010) for a global amount of EUR 633.077 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 welcomes that the Commission keeps identifying alternative sources of payment appropriations to unused ESF Funds, in accordance with the frequent requests from the European Parliament.

However, she considers that the direction taken for the last cases (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 sixteen proposals for the mobilisation of the Fund and a transfer for the Technical assistance, for a total amount of EUR 54.878.360, which added to the additional amount of EUR 26.732.196 related to the other proposals under discussion (including the present one), leaves an amount of EUR 418.389.444 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 letter 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 42/2010 of 29 October 2010

ES/jm

D(2010)59717

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/2010/004 PL/Wielkopolskie Automotive (COM(2010)616 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/2010/004 PL/Wielkopolskie Automotive 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 2b of the EGF regulation and includes 590 out of 1.104 redundancies that occurred during the reference period of 9 months between 1 March 2009 and 30 November 2009 in the NUTS II region of Wielkopolskie in Poland in the NACE Revision 2 Division 29 (manufacture of motor vehicles, trailers and semi-trailers);

B)  Whereas the financial and economic crisis caused a serious decline in the first half of 2009 regarding the production of cars in Poland that fell by 51,3% compared to the corresponding period of 2008; whereas this drop in production was even more important in the truck sector with 73% compared to the corresponding period of 2008;

C)  Whereas the Commission states that the fall in sales and orders reduced employment also in many subcontractors;

D)  Whereas the Commission states that some of the manufacturers of car components are considering the possibility of transferring their production to African countries due to the loss of competitive advantage by Poland, which will result in a further reduction in employment in the automotive industry;

E)  Whereas the Commission further states that employers were reluctant to dismiss workers, fearing that after the crisis they will have difficulty in re-recruiting highly qualified personnel; whereas, therefore, Polish entrepreneurs preferred sending them on holidays and training during the period of reduced production, which allowed the preservation of work for a large part of their staff, but also allowed for a rapid increase in production when demand grew again;

F)  Whereas, however, less qualified workers and particularly those on short-term contracts were more likely to be dismissed when production was temporarily ceased;

G)  Whereas at the end of the first half of 2009, the number of employees in the industry was 16,4% lower than in the same period in 2008;

H)  Whereas it is not clear if really 590 workers will be targeted by the measurs as the total number of workers included in the calculation for assistance is only 583;

I)  Whereas 75,4% of the redundant workers are women and whereas 71,2% of the workers are between 25 and 54 years old;

J)  Whereas 87,5% of the dismissed workers are metal, machinery and related trades workers;

K)  Whereas the Commission argues that the EGF support was also offered to all the workers made redundant; whereas, however, some of them had already found jobs, retired or did not express interest in participating in the measures; whereas the Commission further argues that, additionally, the implementation system of the EGF in Poland requires that workers receiving the assistance must be formally registered as unemployed at the Poviat Labour Offices and whereas, therefore, there might be a small margin of people who do not fall into any of the groups mentioned, as they decided not to register at the Labour Offices and will therefore not participate;

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 Polish application:

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

2.  Notes that the Polish authorities offered the coordinated package of personalised services to all workers but that due to various reasons only a part of the redundant workers eventually participated in the measures;

3.  Recalls application EGF/2010/006 PL/H.Cegielski-Poznan that covers 658 redundancies in the same region of one enterprise manufacturing two-stroke diesel engines used for ships and power plants and four of its suppliers;

4.  Regrets that, seen the difference in treatment of qualified employees and unqualified personnel with fixed short-term contracts, the application does not indicate the level of education of the redundant workers;

5.  Wonders whether the workers do not profit from any general job search assistance;

6.  Requests more information about the tailor-made training and retraining measures regarding the objectives of the training, its duration and the nature of the certificates, diplomas and licences that can be obtained;

7.  Wonders whether the entrepreneurship promotion and aid for self-employment includes any other than financial support like mentoring or counselling.

Yours sincerely,

Pervenche Berès