Report - A7-0236/2010Report
A7-0236/2010
European Parliament

REPORT on the funding and functioning of the European Globalisation Adjustment Fund

26.7.2010 - (2010/2072(INI))

Committee on Budgets
Rapporteur: Miguel Portas
Rapporteur for the opinion(*):
Elisabeth Morin-Chartier, Committee on Employment and Social Affairs
(*) Associated committees: Rule 50 of the Rules of Procedure

Procedure : 2010/2072(INI)
Document stages in plenary
Document selected :  
A7-0236/2010
Texts tabled :
A7-0236/2010
Debates :
Votes :
Texts adopted :

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the funding and functioning of the European Globalisation Adjustment Fund

(2010/2072(INI))

The European Parliament,

–   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 20 December 2006 on establishing the European Globalisation Adjustment Fund[2] (EGF Regulation),

–   having regard to Regulation (EC) No 546/2009 of the European Parliament and of the Council of 18 June 2009 amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund[3],

–   having regard to its resolutions on the proposals for decisions 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, that have been adopted since 23 October 2007[4],

–   having regard to the Commission communications of 2 July 2008 (COM(2008)0421) and 28 July 2009 (COM(2009)0394) to the European Parliament and the Council on European Global Adjustment Fund activities in 2007 and 2008,

–   having regard to Rule 48 of its Rules of Procedure,

–   having regard to the report of the Committee on Budgets and the opinions of the Committee on Employment and Social Affairs and the Committee on Economic and Monetary Affairs (A7-0236/2010),

A. whereas, with a view to countering the adverse impact of globalisation on workers affected by collective redundancies and to showing its solidarity towards such workers, besides increasing their re-employment, the European Union set up a European Globalisation Adjustment Fund (hereinafter 'EGF') to provide financial support for personalised programmes to reintegrate redundant workers into the labour market; whereas the EGF has a maximum annual amount of EUR 500 million, drawn either from any margin existing under the global expenditure ceiling of the previous year or from cancelled commitment appropriations for the two previous years, excluding those relating to Heading 1b of the Financial Framework; whereas the EGF was established as a flexible, specific support instrument that was meant to respond more quickly and effectively to the reintegration of workers affected by redundancies resulting from changes in world trade patterns,

B.  whereas, in response to the increase in unemployment resulting from the economic and financial crisis and to the lessons learned from the experience gained in 2007 and 2008, the European Union amended the rules governing the use of the EGF in June 2009; whereas that amendment concerned all applications to be submitted before 31 December 2011 and consisted in broadening the scope of the EGF, relaxing and clarifying the intervention criteria, raising the cofinancing rate and extending the period during which Member States may use the financial contributions provided,

C. whereas an analysis of the funds mobilised under the EGF between 2007 and the end of the first half of 2009 highlights modest implementation of the allocated resources, with only EUR 80 million having being mobilised, out of a total of EUR 1.5 billion available, for 18 applications submitted on behalf of 24 431 workers by eight Member States for a very limited number of sectors (notably textiles and the car industry); whereas those shortcomings are also reflected in the differences between the amounts initially allocated and those finally implemented, with EUR 24.8 million (39.4% of the appropriations mobilised) having subsequently been paid back in the case of the first 11 applications,

D. whereas, although EGF operations under the revised regulation cannot as yet be assessed owing to the fact that the applications submitted since May 2009 are still awaiting a decision or being acted on, there can already be said to have been a marked increase in the number of applications for EGF support, which confirms the pertinence of the changes made; whereas between May 2009 and April 2010 the number of applications submitted rose from 18 to 46, the total contributions requested from EUR 80 million to EUR 197 million and the number of Member States submitting applications from 8 to 18, while the number of workers requiring support almost doubled (36 712 more workers than before) and the applications concerned a much broader range of economic sectors,

E.  whereas, however, 9 Member States have yet to make use of the EGF, the amounts mobilised remain well below the maximum annual amount of EUR 500 million available and most applications are for regions in which per capita GDP is above the EU average and where the unemployment rate is relatively low; whereas, in view of this, it may be concluded that, although the improvements made to the original regulation were substantial, they remain limited when set against the increase in the number of collective redundancies recorded over recent years,

F.  whereas the raising of the cofinancing rate from 50% to 65% during the 2009 revision would appear to be one of the factors behind the increase in the number of applications,

G. whereas the limited use made of the EGF for the EU's poorest regions stems from varying national strategies and from the difficulties involved in establishing the precise status of potential beneficiaries before a decision is taken at European level,

H. whereas, although the Joint Declaration of the European Parliament, the Council and the Commission of 17 July 2008 called for EGF financial support to be provided as swiftly and effectively as possible, some 12 to 17 months still elapse between the time when a collective redundancy takes place and the time when EGF funding is provided to the requesting Member State; whereas this is one of the reasons for the disparity between the number of workers for whom EGF funding is requested and the number of workers who actually receive support under the fund,

I.   whereas the draft interinstitutional agreement between the European Parliament, the Council and the Commission on cooperation in budgetary matters[5] alters the procedure for mobilising the EGF only slightly, by making the trilogue procedure optional, in line with standard practice; whereas this change is unlikely to make the procedure any less slow and cumbersome,

J.   whereas, according to the Commission's interim report on the functioning of the IIA[6], the need for the two arms of the budgetary authority to take a specific decision to mobilise the EGF is one of the factors behind the slowness of the procedure; whereas this should not prevent speeding up and simplification of decisions on the mobilisation of the EGF,

K. whereas reliable and consistent data on the implementation of the EGF since its modification after 2009 is not yet available and taking the strong view that transparency and regular reporting duties need to be established,

L.  whereas the 27 decisions taken between 2007 and April 2010 were all favourable and the amounts authorised were the same as those proposed by the Commission,

M. whereas the globalisation phenomenon and the effects of the economic crisis on employment will persist beyond 2013 and, as a consequence, it is probable that the tendency for the number of applications to rise will increase in the next years; whereas, however, the intention of the fund is not to be a substitute for lack of innovation,

1.  Takes the view that the EGF's added value as an EU social policy instrument lies in the fact that it provides visible, specific, targeted and temporary financial support for personalised programmes for the reskilling and reintegration into employment of workers affected by collective redundancies in sectors or regions undergoing severe economic and social disruption;

2.  Takes the view that the increase in the number of applications for EGF funding and the difficulties experienced in implementing the EGF mobilisation and deployment procedure call for improvements to be made to the fund's procedural and budgetary arrangements at the earliest opportunity; underlines that the Commission should improve information about, and the visibility of, the EGF among the Member States and the potential beneficiaries of the fund; calls, accordingly, on the Commission to bring the submission of its mid-term evaluation forward to 30 June 2011 and to submit at the same time a proposal for the revision of the EGF Regulation, in order to remedy the fund's clearest shortcomings before the end of the current Multiannual Financial Framework (MFF);

3.  Calls on the Commission to evaluate in its interim review the contributions granted with reference to the following qualitative aspects:

(a) the rate of success in reintegration and assessment of the upgrading of the skills of the beneficiaries;

(b) a comparative analysis of the measures financed in response to each EGF application and results on the basis of reintegration;

(c) compliance with the non-discrimination criterion with reference to the contractual position of the workers made redundant and to workers who make use of their right to free movement within the EU;

(d) the procedures for consulting the social partners that were or were not used when preparing applications and the checks carried out on their implementation;

(e) the impact of the EGF on its beneficiaries' network and on the small and medium-sized enterprises potentially affected by the redundancy plan and whose employees could profit from the fund;

(f) an analysis of the implications of the different EGF candidatures in terms of the national institution in charge of their management;

     (g) the impact of contributions from the EGF by age group in benefiting Member States and sectors;

4.  Calls on the Commission to evaluate in its interim review the contributions granted from the budgetary point of view, and reflect its findings with particular reference to:

(a) the reasons for the large disparity between the resources requested from the EGF and the amounts reimbursed by the beneficiary Member States when the assistance is already concluded;

(b) in the cases where Member States have made reimbursements, which were the financed programmes and measures not executed;

(c) the reasons for the large disparities between Member States in terms of the funding provided per worker in the different EGF applications;

(d) an analysis of coordination between the various European-financed programmes (including ESF assistance) which have been allocated to the same region where EGF applications are being considered and/or their consideration has been concluded;

     (e) an analysis of the proportion of overall funding that the Commission accounted for in relation to other national and company-specific support measures;

5.  Considers that, when the regulation is revised, due account should be taken of the findings of the evaluation of the EGF's functioning and of the experience gained, and measures that will substantially reduce the length of the EGF mobilisation procedure should be introduced;

6.  Calls on the Commission to propose the addition to the EGF Regulation of an obligation for Member States to support the participation of a workers’ association during the implementation phase; calls on the Commission to organise exchanges of experiences and good practices concerning workers’ involvement in the implementation of the EGF, so that workers in existing and new cases may benefit from the expertise gained in previous cases;

7.  Underlines that the time required to mobilise the EGF could be halved if the following measures are formulated and adopted:

(a) applications for mobilisation of the EGF should be drawn up by Member States as soon as a collective redundancy has been announced, and not after it has taken place,

(b) the Commission should inform Member States that an application could be presented from the first day when the intervention criteria have been fulfilled;

(c) all means should be made available to ensure swift and enhanced communication with the Member State concerned in this process;

(d) applications by Member States in their own language and one of the European institutions' working languages could help the Commission department responsible for scrutinising applications to do so without delay;

(e) the Commission should have the necessary human and technical capacities, respecting the principles of budgetary neutrality, to effectively and swiftly process the applications submitted by Member States;

(f) the Commission should take decisions on the mobilisation of the EGF within 3-4 months after having received the application, including all necessary information, from the Member State; in cases where the assessment of an application might take longer than 4 months, the Commission should inform the EP as soon as possible and state the reasons for such a delay;

8.  Calls on the Commission to provide the Member States with a set of guidelines for the design and implementation of applications for EGF funding geared to a fast application procedure and a broad consensus among stakeholders on the strategy to be applied and the measures to be put in place for effective reintegration of the workers into the labour market; calls on the Member States to accelerate the procedure by prefinancing the measures that should start from the day of the application so as to use to the maximum the implementation period of the EGF for the benefit of the workers concerned;

9.  Reminds the Member States that they are obliged, on the one hand, to involve the social partners right from the outset in the task of preparing applications in accordance with Article 5 of the EGF Regulation and, on the other hand, to comply with Article 9 of the Regulation, which requests Member States to provide information on and publicise the funded actions, information that has also to be addressed to the workers concerned, the local and regional authorities and the social partners, and to standardise procedures; calls on the Member States to ensure that works councils are involved before any programme begins so as to guarantee that the social partners genuinely help to formulate conversion plans which meet the needs of employees and not of undertakings;

10. Requests the Member States to put in place a communication and administration structure for the EGF at national level, in consultation with all stakeholders, particularly the social partners, and to exchange good practice at European level, which will allow the EGF to take rapid and effective action in cases of large-scale redundancies;

11. Points out that Regulation (EC) No 1927/2006 allows countries to submit joint requests for assistance from the EGF where the workers affected in a geographical area or a given sector are not concentrated in a single Member State;

12. Considers that, in order to speed up and simplify procedures, more effective coordination between the Commission and the European Parliament must be ensured, so that the time limit for decision-making could be reduced, without detriment to the evaluation of the applications made by the relevant committees of the EP, and therefore:

(a) the Commission must take due account of the EP calendar, with regard to the parliamentary committee meetings as well as the part-sessions, submitting its proposals in due time, in order to speed up the decision-making procedure;

(b) the Commission must inform the EP in due time on difficulties and/or blockages encountered while assessing the Member States' applications;

(c) on the other hand, the Committee on Employment and Social Affairs and the Committee on Budgets will do everything they can to ensure that decisions are taken at the next plenary session following adoption in committee;

13. Considers that these immediate steps to simplify and give added flexibility to the EGF mobilisation procedure could, if warranted in the light of the experience gained by then, be incorporated into the regulation when it is revised; takes the view that any of these steps should not in any way limit or decrease the power of Parliament as one arm of the budgetary authority while deciding on the mobilisation of the fund;

14. Takes the view that, over and above these improvements to the procedure, the period of validity of the derogation inserted in 2009 with a view to assisting workers who lose their jobs as a result of the economic and financial crisis should be extended until the end of the current MFF and that the cofinancing rate should, therefore, be maintained at 65%, given that the underlying causes on which their approval was based are far from having been removed; 15.  Notes the inclusion, for the first time, in the Commission's Draft Budget 2011 of payment appropriations for the EGF and considers this an important element in the overall reflection on the management and visibility of this fund; considers, however, that these payment appropriations might not be sufficient to cover the amounts necessary for EGF applications in 2011; reiterates, therefore, its demand not to finance EGF applications exclusively through transfers from ESF lines and calls on the Commission to identify and use without further delay different budget lines for this purpose;

16. Stresses that the future of the EGF will be determined in the framework of negotiations on the next MFF; considers that for this purpose several options could be examined; considers that particular attention should be given to examining the option of establishing an independent fund with its own commitment and payment appropriations and calls on the Commission to come forward with proposals for resourcing such a fund; believes that any future reform of the EGF should maintain its flexibility, which currently represents a comparative advantage in relation to the EU Structural Funds;

17. Stresses that the conversion of the current EGF measures into a permanent means of support for active job-seeking measures would show a political will to develop a European social pillar that would be complementary to Member States' social policies and capable of revitalising the European approach to professional training; with this in mind, points out that the EGF should remain distinct in its objectives from the ESF and the European lifelong learning programmes, given that the EGF focuses on enhancing the abilities of each of the workers assisted, rather than on providing a response to the concerns of businesses or on the delivery of across-the-board services to training establishments;

18. Calls on Member States using the EGF to create synergies between the EGF, ESF and micro-finance so as to identify the measure best suited to the individual case;

19. Urges the Member States to use the EGF to implement European objectives, to promote new skills, for new, sustainable, green, high-quality jobs in a given region and to promote entrepreneurship and lifelong learning, so as to allow workers to develop their individual careers and to contribute to improving the competitiveness of the EU in the context of globalisation;

20. Calls on the Commission to improve its reporting on the use of the EGF by substantially fleshing out its annual reports and regularly forwarding to Parliament information on Member States' implementation of financial contributions;

21. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

This own initiative report is being tabled more than three years after the EDF first came into operation under the regulation of 20 December 2006[1], as substantially amended by the regulation of 18 June 2009[2]. Drawing on the experience gained over that period and on the opinions of national experts heard on 28 April 2010, it reviews the funding and functioning of the fund before and after the revision of its legal basis. In view of the structural increase in unemployment and the rise in the number of collective redundancies in the European Union, it recommends that, from the start of the next multiannual financial framework, the fund be made a permanent means of providing support for workers affected by collective redundancies. It also proposes that, in the more immediate future, less far-reaching changes be made with a view to remedying its most obvious faults. Some of the proposed changes may be made immediately. Others will need to be included in a revision of the EGF Regulation, following its mid-term evaluation. To that end, the Commission is asked to bring the date of that evaluation forward to 31 July 2011.

The approach outlined above is based on a detailed analysis of the legislation governing mobilisation of the EGF1 and of its actual mobilisation between 2007 and April 20102.

I. CONDITIONS GOVERNING MOBILISATION OF THE EGF

· Basic conditions

The EGF was initially intended solely as a means of countering the adverse impact of globalisation on the most vulnerable and least qualified workers in certain sectors who lose their jobs as a result of major changes in world trade patterns that cause severe economic disruption. In June 2009 its scope was extended to include workers who lose their jobs as a direct result of the economic and financial crisis, in respect of whom applications may be made for support between 1 May 2009 and 31 December 2011.

Should the purpose of the EGF be rethought in view of the structural rise in unemployment and the increase in the number of collective redundancies in the European Union? Is the derogation included in June 2009 an adequate response to the crisis?

Member States may apply for a contribution under the EGF in cases where one of the following three intervention criteria is met:

– at least 500 (1000 prior to 2009) redundancies over a period of four months in an enterprise in a Member State, including workers made redundant in its suppliers or downstream producers (Article 2(a))[3];

– at least 500 (1000 prior to 2009) redundancies, over a period of nine months, particularly in small or medium-sized enterprises, in a NACE 2 sector in one region or two contiguous regions at NUTS II level (Article 2(b));

– redundancies with a serious impact on employment and the local economy, even if neither of the above criteria are met, in small labour markets or in exceptional circumstances that are duly substantiated (Article 2(c)).

Is it enough to lower the threshold from 1000 to 500 workers? Are the time periods and geographical parameters used in determining eligibility appropriate?

The EGF helps to fund active labour market measures that form part of a coordinated package of personalised services designed to re-integrate redundant workers into the labour market. These active measures include assistance in seeking employment, training, travel allowances and incentives for disadvantaged or elderly workers to remain on or return to the labour market. Passive social protection measures are not funded under the EGF.

How is the EGF's innovative approach, which focuses on the abilities and wishes of each worker in receipt of support, to be maintained and carried over to other measures?

EGF support is intended to complement, rather than take the place of, action by Member States. In view of this complementarity requirement, co-financing covers no more than 50% of the cost of the proposed measures; in 2009 that rate was raised to 65% for applications submitted before 31 December 2011.

Is this temporary increase in the EGF co-financing rate sufficient?

Action under the EGF must be coordinated with action under other EU policies. In view of this coordination requirement, no measures receiving a contribution under the EGF may receive assistance under other EU financial instruments. In this connection, Member States must ensure, in particular, that measures supported under the EGF are not also in receipt of funding under the ESF, given that one of the guidelines applying to the ESF provides for improving the 'adaptability of workers and enterprises and the flexibility of the labour markets'[4].

Is the coordination requirement fully met?

· Procedural conditions

The EGF has a maximum annual amount of EUR 500 million, drawn either from any margin existing under the global expenditure ceiling of the previous year or from cancelled commitment appropriations from the previous two years, excluding those relating to heading 1b of the financial framework.

Commitment appropriations are entered in the general budget of the European Union as a provision (line 40 02 43) under the normal budgetary procedure as soon as the Commission has identified sufficient margins and/or cancelled commitments. The corresponding payment appropriations may be entered in the reserve, drawn from under-utilised budget lines or entered against the EGF budget line (04 05 01).

Should the EGF remain an unfunded fund?

There are four stages in the EGF mobilisation procedure:

– a Member State submits an application for an EGF contribution to the Commission within a period of 10 weeks from the date on which the EGF intervention conditions are met; the application may be supplemented subsequently by the Member State;

– the application is scrutinised by the Commission, in consultation with the Member State, following which, if necessary, the budgetary procedure is initiated by means of a proposal for a decision to mobilise the EGF, stipulating the size of the financial contribution to be made, and a request for the transfer of the relevant amount is drawn up;

– the proposal for a decision to mobilise the EGF and the request for transfer is considered by the two arms of the budgetary authority; where appropriate, they are adopted with or without amendments;

– following the budgetary authority's adoption of the decision to mobilise the EGF, the financial contribution granted to the Member State is paid in a single instalment, in principle within 15 days.

Is it always essential for the budgetary authority to take mobilisation decisions on a case-by-case basis? Are the deadlines necessary and/or met? How could the scrutiny of applications by the Commission be made more predictable for Member States?

There are three stages in the EGF implementation procedure:

– the Member State must use the financial contribution within 24 months of the date on which the application was made or the date on which the measures covered began, provided that the latter date is no later than three months after the date on which the application was made (within 12 months of that date prior to 2009);

– the Member State must submit a report on the implementation of the financial contribution no later than six months after the expiry of the designated utilisation period;

– the Commission winds up the financial contribution no later than six months after the implementation report has been received.

Is the doubling of the period during which the financial contribution may be used by the Member State sufficient? Is the procedure for verification by the Commission of the use made of the financial contribution as effective as it could be?

II. MOBILISATION OF THE EGF BETWEEN 2007 AND APRIL 2010

· Analysis of EGF mobilisation decisions and applications

The number of applications submitted and the size of the contributions requested are not linked to the relative wealth of or unemployment rate in the Member States that have applied for funding, of which there has been only a limited number.

Between 2007 and April 2010, 27 EGF mobilisation decisions were adopted, and 58 applications were submitted. The decisions covered 13 Member States, and the applications 17 Member States. This means that 10 Member States have not yet wished or been able to make use of the EGF.

The five Member States that requested the highest contributions (France, Italy, Spain, Ireland and Germany) accounted for around 70% of the total appropriations requested, while the five Member States that requested the lowest contributions (Czech Republic, Poland, Malta, Finland and Lithuania) accounted for some 2%.

The EGF mobilisation decisions covered NUTS II regions with an average per capita GNI of 109.3% of the EU average and an average unemployment rate of no more than 5.9%[5].

Why does the bulk of EGF contributions go to regions with a per capita GNI that is higher than the EU average and with a relatively low unemployment rate, and how can this situation be remedied?

Although increased use is being made of the EGF, the overall amounts involved account for only a limited proportion of the appropriations available.

Only 16 decisions were adopted prior to the June 2009 revision; these concerned eight Member States, and the overall amount mobilised was EUR 80 million.

However, a comparison of the figures for the financial years to date shows that increased use is being made of the EGF, owing in particular to the relaxation of the eligibility requirements in 2009 and to the economic and financial crisis. The rate of utilisation of appropriations rose from 3.7% in 2007 (EUR 18.6 million) to 9.8% in 2008 (EUR 49 million) and 10.5% in 2009 (EUR 52 million). This trend would appear to have continued into 2010. Between June 2009 and April 2010, 42 applications were approved, scrutinised or submitted; these covered 36 712 more workers and nine more Member States, and the overall amount involved was EUR 197 million.

Is this substantial increase in the number of applications and the size of the contributions requested likely to continue, and if so, what are its causes and what is the appropriate response?

The size of the contributions requested varies sharply from Member State to Member State.

The decisions adopted cover 29 292 workers made redundant and the applications submitted cover 54 867 workers requiring support.

The average contribution requested stands at EUR 5 253 per worker. There is a ratio of around 1 to 40 between the lowest contribution requested per worker (EUR 511)[6] and the highest (EUR 22 031)[7].

Are the differences between the Member States in terms of the funding provided per worker fully justified, and if not, what should be done about it?

The applications for EGF support are based on all three intervention criteria, although the breakdown between them is uneven.

The Member States base their applications on the intervention criterion laid down in Article 2(b) of the EGF Regulation in 57.7% of cases, on the Article 2(a) criterion in 36.5% of cases and on the Article 2(c) criterion in 5.8% of cases. Only one only Member State (Lithuania) has used all three different criteria in its applications.

Since June 2009, the Article 2(b) criterion has been cited more often than during the previous period (60% of applications as against 50% previously).

What are the reasons for the differences between Member States in terms of the criteria cited?

To date, EGF contributions have been granted in respect of only a small number of economic sectors, although that number is now growing.

While the 16 decisions adopted under the original regulation were confined to textiles (50%) motor vehicles (31%) and mobile telephony (19%), applications submitted under the amended regulation have covered new sectors such as the mechanical, electronics, printing and construction sectors.

Are all of the sector-specific applications warranted on the basis of factors relating to globalisation or the economic and financial crisis?

· Analysis of the EGF mobilisation and implementation procedure

Although, to date, the EGF has not been allocated its own payment appropriations, that situation could change in 2011.

All of the payment appropriations used to meet commitments have been drawn from budget lines likely to be under-utilised. 97.6% of requirements have been met using appropriations from ESF budge lines, with the remaining appropriations being drawn from the budget chapter 'Justice in criminal and civil matters'. Although the option of entering payment appropriations in the reserve alongside the corresponding commitment appropriations has not yet been taken up, the draft budget for 2011 provides for the first time for the entry of EUR 50 million in payment appropriations against the EGF budget line.

What impact will the entry of payment appropriations against the EGF budget line have on mobilisation times?

The EGF mobilisation procedure is excessively long, which makes the scheme less effective and less attractive to Member States.

On average, following the submission of an application for a financial contribution under the EGF, it takes more than nine months for the contribution to be paid.

That time period may be broken down as follows:

– six months between the submission of the application by the Member State and the adoption by the Commission of the proposal for a decision to mobilise the EGF;

– two months between the adoption by the Commission of the proposal for a decision to mobilise the EGF and its adoption by the budgetary authority;

– one month and one week between the adoption by the budgetary authority of the decision to mobilise the EGF and the payment of the financial contribution by the Commission[8].

This makes the EGF less attractive to Member States, because they are obliged to pre-finance active labour market measures before the outcome of the procedure is known. This goes some way towards explaining the disparity between the number of workers for whom an EGF contribution is requested and the number of workers that actually receive support, given that some of the workers made redundant may decide to leave the labour market altogether or may find a new job during that period. Such disparities can even result in Member States being required to reimburse all of the contribution they have been granted, because the criterion relating to the number of workers is no longer met by the time the procedure has been completed.

How can the EGF mobilisation procedure be shortened in order to make the fund more attractive to Member States?
  • [1]     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]     Regulation (EC) No 546/2009 of the European Parliament and of the Council of 18 June 2009 amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund.
  • [3]     The articles quoted appear in Regulation (EC) No 1927/2006.
  • [4]    Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion.
  • [5]    Source: Eurostat – 2007 per capita GNI figures and 2008 unemployment figures.
  • [6]          EGF/2010/010, Unilever (Czech Republic).
  • [7]          EGF/2010/007, Steiermark-Niederösterreich (Austria).
  • [8]    The figures given for the overall time period and the time taken to pay the contribution granted are based on the first 15 EGF mobilisation decisions, since no information on later decisions is available. The two other time periods were calculated on the basis of all the decisions adopted.

OPINION of the Committee on Employment and Social Affairs (*) (25.6.2010)

for the Committee on Budgets

on the funding and functioning of the European Globalisation Adjustment Fund
(2010/2072(INI))

Rapporteur(*): Elisabeth Morin-Chartier

(*) Procedure with associated committees: Article 50 Rules of Procedure

SUGGESTIONS

The Committee on Employment and Social Affairs calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

A. whereas the European Globalisation Adjustment Fund (EGF) does not impose any active labour market measures on a Member State that have to be implemented in the framework of an application for the fund but requires the putting in place of a coordinated package of personalised services designed to reintegrate workers into the labour market in accordance with Article 3 of the EGF regulation[1] which preserves fully the flexibility of the Member States to adapt the measures targeting the redundant workers to the local and individual needs of each application,

1.  Notes that social and employment policies are national powers coordinated using the open method of coordination and exploiting all possible synergies in order to ensure positive development in the European Union in the face of globalisation and to meet the challenge of social and labour market reintegration in and between the Member States; notes also that the European Globalisation Adjustment Fund (EGF) is an instrument that was set up in order to support this objective and to assist workers in cases of large-scale redundancies;

2.  Asks for the continuation of the EGF in the future and for it to be clearly coordinated, in its revised version of 2009, with the revision of the ESF beyond the next mid-term financial framework to enable it to respond as an emergency tool to crisis situations;

3.  Calls on the European Commission to propose changes to the EGF regulation to speed up the application procedure as much as possible in the short term, working towards the goal of making the funds available within 6 months after redundancy, including by looking into possible ways to start the application procedure the moment the redundancies are announced instead of when they are already effected and by streamlining decision-making of the European Commission as much as possible and to standardise procedures; furthermore calls on the European Commission to develop ideas for the next financial framework to achieve the goals of on the one hand cooperating with Member States to facilitate future-oriented fundamental changes towards a sustainable economy and labour market, and on the other hand facilitating rapid and flexible assistance for redundant workers due to unexpected shocks to the economy;

4.  Reminds Member States of the importance of taking immediate labour market intervention measures in parallel with their application to the EGF;

5.  Asks the Commission to provide the Member States with a set of guidelines for the design and implementation of applications for EGF funding seeking a fast application procedure and a broad consensus of stakeholders on the strategy to be applied and the measures to be put in place for an effective reintegration of the workers into the labour market; calls on the Member States to accelerate the procedure by prefinancing the measures that should start from the day of the application so as to use to the maximum the implementation period of the EGF for the profit of the workers concerned;

6.  Reminds the Member States that they are obliged, on the one hand, to involve the social partners right from the outset in the task of preparing applications in accordance with Article 5 of the EGF regulation and, on the other hand, to comply with Article 9 of the regulation which requests Member States to provide information on and publicise the funded actions, information that has also to be addressed to the workers concerned, the local and regional authorities and the social partners, and to standardise procedures; calls on the Member States to ensure that works councils are involved before any programme begins so as to guarantee that the social partners genuinely help to formulate conversion plans which meet the needs of employees and not of undertakings;

7.  Urges the Commission to enforce correctly Directive 2002/14/EC on informing and consulting employees and Directive 94/45/EC on the European works council in order to give the social partners all the tools to analyse the proposed redundancy or restructuring plan before it is announced and thus to enable them to play their full role;

8.  Calls on the European Commission to propose the addition to the EGF regulation of an obligation for Member States to support the participation of a workers’ association during the implementation phase; calls on the European Commission to organise the exchange of experiences and good practices concerning workers’ involvement in the implementation of the EGF, so that workers in existing and new cases may benefit from the expertise gained in previous cases;

9.  Requests the Member States to put in place a communication and administration structure for the EGF at national level, in consultation with all stakeholders, particularly the social partners, and to exchange good practice at European level, which will allow the EGF to take rapid and effective action in cases of large-scale redundancies;

10. Points out that Regulation (EC) No 1927/2006 allows countries to submit joint requests for assistance from the EGF where the workers affected in a geographical area or a given sector are not concentrated in a single Member State;

11. Asks the Commission to present a proposal on how the EGF regulation should be amended in order to allow the inclusion, across sectors and regions, of all workers made redundant because of the same event;

12. Calls on the European Commission to look into possible solutions to overcoming the segregation between redundant workers who are eligible for measures under an EGF application and other redundant workers in the same area;

13. Calls on the Member States benefitting from the EGF to improve implementation efficiency and to adopt a personalised and social approach to assistance for redundant workers and to promote further training and retraining, particularly in cases of large-scale redundancies, so as to improve workers’ opportunities on a labour market that is undergoing profound restructuring; calls for care to be taken that the regulations for national implementation do not make the application of the fund more restrictive; calls on the Member States and local authorities to do everything possible to revitalise places which have suffered from the impact of relocation in order to maintain economic activity in the area, bearing in mind that the EGF is geared solely to employees; to this end, recommends that the Member States step up their exchanges of good practice, especially making use of Progress, and more particularly of the new microfinancing instrument;

14. Welcomes the Council conclusions on New Skills for New Jobs and underlines that the EGF provides the Member States with additional funding for the training of redundant workers for future-oriented jobs and increased mobility;

15. Urges the Member States to use the EGF to implement European objectives, to promote new skills, for new, sustainable, green, high-quality jobs in a given region and to promote entrepreneurship and lifelong learning, so as to allow workers to develop their individual careers and to contribute to improving the competitiveness of the EU in the context of globalisation;

16. Calls on Member States using the EGF to create synergies between the EGF, ESF and micro-finance so as to identify the measure best suited to the individual case;

17. Encourages Member States to take measures in line with the EGF regulation that promote mobility of workers if prospects of employment in the region are not favourable;

18. Points out that, in the context of globalisation, the EU’s future competitiveness can be guaranteed only if targeted efforts are made to create the greatest possible mass of skills among workers in the EU area; considers that the EGF must accordingly also help to bridge periods of unemployment in a constructive way through intensive further training and retraining measures;

19. Reminds undertakings of their social responsibility to do all they can to ensure that, before the start of their period of unemployment, workers can authenticate their experience and training acquired, so as to ensure that their retraining is as specific and as rapid as possible and that they obtain new, ‘good’ stable jobs with a promising future in a sector which will remain viable;

20. Takes note of a wide disparity between cases, arising from the diverse situations in each Member State; calls therefore on the Commission to draw up a proposal seeking greater flexibility in the intervention criteria applying to each Member State, so as to adapt them more closely to specific national economic situations, assessing the possibility of extending the reference period and the parameters of the undertakings concerned, while avoiding any inequality of access to this instrument between Member States;

21. Calls, in the implementation of the EGF, for Member States to be required to take measures to ensure that non-nationals among those eligible for funding have the chance to avail themselves of these funds;

22. Asks the Commission to provide assistance also to the Member States, the social partners and workers’ associations during the process of implementation of the measures;

23. Calls on the Commission to avoid creating distortions in competition, by encouraging the creation of a uniform set of obligations on undertakings relating to redundancies in the European Union;

24. Stresses especially that the European Commission and Member States have to collaborate closely to monitor effectively the support given to multinational companies and to establish a firm investment in the creation of jobs with rights in order to discourage social dumping;

25. Calls on the Commission to ensure that its policies and instruments are coherent, in order to preclude the possibility that the growth and competitiveness objectives might conflict with objectives of employment, cohesion and social inclusion;

26. Invites the Commission to present, in its annual report, statistics showing the effectiveness of the EGF and of training strategies aimed at getting people back to work, analysing the impact of the structure of the labour market on that effectiveness;

27. Stresses the need for the Commission, in times of scarce financial resources, to assess the effectiveness and sustainability of measures funded through the EGF, in cooperation with the Member States; notes that standardised criteria are to be developed for this purpose, such as completion of skills development measures, success in terms of finding a new job and duration of the new employment contract;

28. Requests the Commission to submit forthwith a report on the use made to date of the Globalisation Adjustment Fund, setting out in particular a detailed account of how the appropriations were used and what proportion of overall funding they accounted for by comparison with other national and company-specific support measures; calls on the Commission to draw initial conclusions from that report and rapidly submit proposals for the improvement of the fund.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

24.6.2010

 

 

 

Result of final vote

+:

–:

0:

34

1

7

Members present for the final vote

Edit Bauer, Pervenche Berès, Mara Bizzotto, Milan Cabrnoch, Alejandro Cercas, Ole Christensen, Derek Roland Clark, Sergio Gaetano Cofferati, Marije Cornelissen, Proinsias De Rossa, Frank Engel, Sari Essayah, Richard Falbr, Ilda Figueiredo, Thomas Händel, Marian Harkin, Roger Helmer, Nadja Hirsch, Liisa Jaakonsaari, Martin Kastler, Ádám Kósa, Jean Lambert, Veronica Lope Fontagné, Olle Ludvigsson, Elizabeth Lynne, Thomas Mann, Elisabeth Morin-Chartier, Csaba Őry, Rovana Plumb, Sylvana Rapti, Licia Ronzulli, Marie-Thérèse Sanchez-Schmid, Elisabeth Schroedter, Georgios Stavrakakis, Jutta Steinruck

Substitute(s) present for the final vote

Georges Bach, Raffaele Baldassarre, Julie Girling, Dieter-Lebrecht Koch, Jan Kozłowski, Ria Oomen-Ruijten, Csaba Sógor
  • [1]  Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2009 on establishing the European Globalisation Adjustment Fund as amended by regulation (EC) No 546/2009 of the European Parliament and of the Council of 18 June 2009.

OPINION of the Committee on Economic and Monetary Affairs (29.6.2010)

for the Committee on Budgets

on the funding and functioning of the European Globalisation Adjustment Fund
(2010/2072(INI))

Rapporteur: Sharon Bowles

SUGGESTIONS

The Committee on Economic and Monetary Affairs calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Calls on the Commission to submit forthwith a report on the use made to date of the Globalisation Adjustment Fund (EGF), setting out in particular a detailed account of the extent to which the appropriations have been used in support of redundancies caused by globalisation, as opposed to those resulting from the economic crisis, and the proportion of overall funding they accounted for in relation to other national and company-specific support measures; calls on the Commission to draw initial conclusions from that report and formulate proposals for the future of the fund;

2.  Stresses the important role that the EU Structural Funds, together with EIB loans and initiatives, play in providing investment capital for European firms, including SMEs, thus contributing in the first instance, and alongside the EGF, to the regeneration of the industrial base in the Union;

3.  Calls on the Commission to introduce criteria by means of which the granting of EGF assistance can be linked as a matter of priority to restructuring measures designed to secure and create employment, support lifelong learning (thereby making both workers and local economies more competitive), and encourage a return to ecologically sustainable and socially balanced development in the regions concerned; also calls on the Commission to revise the criteria in order to take into account the size of the working-age population in the region concerned, instead of only an absolute number of redundancies;

4.  Calls on the Commission to review the criteria for the mobilisation of the EGF, in keeping with the above-mentioned conditions, and to simplify, where necessary, the application procedures significantly;

5.  Calls on the Commission to evaluate the future needs of the financial framework of the EGF.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

28.6.2010

 

 

 

Result of final vote

+:

–:

0:

37

5

0

Members present for the final vote

Sharon Bowles, Udo Bullmann, Pascal Canfin, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Markus Ferber, Vicky Ford, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Liem Hoang Ngoc, Gunnar Hökmark, Othmar Karas, Jürgen Klute, Werner Langen, Astrid Lulling, Arlene McCarthy, Ivari Padar, Antolín Sánchez Presedo, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Kay Swinburne

Substitute(s) present for the final vote

Marta Andreasen, Sophie Auconie, Elena Băsescu, Pervenche Berès, Sari Essayah, Ashley Fox, Danuta Maria Hübner, Danuta Jazłowiecka, Philippe Lamberts, Olle Ludvigsson, Sirpa Pietikäinen

Substitute(s) under Rule 187(2) present for the final vote

Bendt Bendtsen, Gesine Meissner, Marit Paulsen, Britta Reimers, Joachim Zeller

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

14.7.2010

 

 

 

Result of final vote

+:

–:

0:

27

9

1

Members present for the final vote

Marta Andreasen, Reimer Böge, Lajos Bokros, Giovanni Collino, Andrea Cozzolino, Isabelle Durant, James Elles, Göran Färm, José Manuel Fernandes, Eider Gardiazábal Rubial, Salvador Garriga Polledo, Jens Geier, Ivars Godmanis, Ingeborg Gräßle, Carl Haglund, Jiří Havel, Monika Hohlmeier, Sergej Kozlík, Jan Kozłowski, Alain Lamassoure, Giovanni La Via, Vladimír Maňka, Barbara Matera, Claudio Morganti, Miguel Portas, Dominique Riquet, László Surján, Helga Trüpel, Derek Vaughan

Substitute(s) present for the final vote

François Alfonsi, Maria Da Graça Carvalho, Frédéric Daerden, Peter Jahr, Riikka Manner, Georgios Stavrakakis, Theodor Dumitru Stolojan

Substitute(s) under Rule 187(2) present for the final vote

Lucas Hartong
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