REPORT on the proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund, in accordance with point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (application EGF/2014/005 FR/GAD, from France)
21.11.2014 - (COM(2014)0662 – C8‑0226/2014 – 2014/2166(BUD))
Committee on Budgets
Rapporteur: Anneli Jäätteenmäki
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on the proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund, in accordance with point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (application EGF/2014/005 FR/GAD, from France)
(COM(2014)0662 – C8‑0226/2014 – 2014/2166(BUD))
The European Parliament,
– having regard to the Commission proposal to the European Parliament and the Council (COM(2014)0662 – C8‑0226/2014),
– having regard to Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006[1] (EGF Regulation),
– having regard to Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020[2], and in particular Article 12 thereof,
– having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management[3] (IIA of 2 December 2013), and in particular point 13 thereof,
– having regard to the trilogue procedure provided for in point 13 of the IIA of 2 December 2013,
– having regard to the letter of the Committee on Employment and Social Affairs,
– having regard to the letter of the Committee on Regional Development,
– having regard to the report of the Committee on Budgets (A8-0044/2014),
A. whereas the Union has set up legislative and budgetary instruments to provide additional support to workers who are suffering from the consequences of major structural changes in world trade patterns or the global financial and economic crisis and to assist their reintegration into the labour market,
B. 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 to the IIA of 2 December 2013 in respect of the adoption of decisions to mobilise the European Globalisation Adjustment Fund (EGF),
C. whereas the adoption of the EGF Regulation reflects the agreement reached between the Parliament and the Council to reintroduce the crisis mobilisation criterion, to increase Union financial contribution to 60% of the total estimated cost of proposed measures, to increase efficiency for the treatment of EGF applications in the Commission and by the Parliament and the Council by shortening time for assessment and approval, to widen the range of eligible actions and beneficiaries by introducing self-employed persons and young people and to finance incentives for setting up own businesses,
D. whereas the French authorities submitted application EGF/2014/005 FR/GAD on 6 June 2014 following the dismissal of 744 workers in GAD société anonyme simplifiée, an enterprise which operated in the economic sector classified under NACE Rev. 2 division 10 ('Manufacture of food products'),
E. whereas the application fulfils the eligibility criteria set up by the EGF Regulation,
F. whereas the local authorities in the Bretagne region were not involved in setting up the personalised services (Cellule de reclassement) to the affected workers, even though they are in charge of vocational training; whereas the local trade union representatives of the main sites concerned were not associated with the negotiation of the measures;
1. Notes that the French authorities submitted the application under the intervention criterion set out in Article 4(1)(a) of the EGF Regulation, which requires at least 500 workers being made redundant or self-employed persons' activity ceasing, over a reference period of four months in an enterprise in a Member State, including workers made redundant or self-employed persons' activity ceasing in its suppliers and downstream producers;
2. Agrees with the Commission that the intervention criteria set out in Article 4(1)(a) of the EGF Regulation are met and that, therefore, France is entitled to a financial contribution under that Regulation;
3. Notes that the French authorities submitted the application for EGF financial contribution on 6 June 2014, and that its assessment was made available by the Commission on 24 October 2014; welcomes the Commission's compliance with the tight deadline of 12 weeks laid down in the EGF Regulation;
4. Notes that the French authorities argue that GAD, as an abattoir and meat processing enterprise, was caught in the vice between two sets of price pressures, that of farmers struggling to cope with the increased price of feed and that of consumers struggling to cope with reduced income;
5. Agrees that reduced pig meat consumption in the wake of increased prices and lower purchasing power of consumers is linked to the global financial and economic crisis addressed in Regulation (EC) No 546/2009[4];
6. Takes the view that the increase of prices for pig feed, which the Union mostly imports from other continents recently plagued by droughts, could be attributed to globalisation;
7. Believes that other factors played an important role in the company's difficulties, such as unfair competition within the internal market from competitors making an abusive use of the Posting of Workers Directive[5] and the absence of a decent minimum wage in all Members States;
8. Calls on the Commission to ensure a level playing field within the internal market and the consistency of its legislation and instruments;
9. Concludes that the factors accounting for the financial difficulties of GAD are diverse, but nevertheless agrees that France is entitled to EGF financial contribution;
10. Notes that, to date, the 'Manufacture of food products' sector has been the subject of one other EGF application[6], also based on the global financial and economic crisis;
11. Notes that these redundancies will aggravate the unemployment situation in Bretagne, as employment in this region is dependent on the agro-agricultural sector to a higher extent than the average in France (11 % in Bretagne as opposed to 5 % on average in France);
12. Notes that, in addition to the 744 redundancies within the reference period, 16 workers dismissed after the reference period of four months are also included in the number of eligible beneficiaries, which amounts in total to 760 persons, the number of targeted beneficiaries of the EGF measures also being 760;
13. Notes that the total cost of this application is EUR 1 530 000, out of which EUR 30 000 is dedicated to implementation, and that the financial contribution from the EGF amounts to EUR 918 000, which represents 60 % of the total costs;
14. Welcomes the fact that, in order to provide workers with speedy assistance, the French authorities decided to initiate the implementation of the personalised services to the affected workers on 3 January 2014, ahead of the final decision on granting the EGF support for the proposed coordinated package and even of the application for a financial contribution from the EGF;
15. Notes that the French authorities have indicated that the coordinated package of personalised services has been drawn up after the Central Enterprise Committee of GAD had been informed on 28 June 2013 that it was planned to cut 889 jobs in the enterprise;
16. Regrets, however, the insufficient involvement of local political authorities and trade unions; suggests, in the framework of a future review of the EGF Regulation, to include a formal consultation with the local political authorities and trade unions in the file containing the mobilisation request submitted by national authorities to the Commission; deems it necessary to better integrate the EGF to the reconversion programmes and processes of local economic fabrics;
17. Welcomes that the workers are already being supported with various measures helping them to find new jobs, and that, by 20 May 2014, 108 of them had already found contracts for more than six months and another 66 for less than six months, while three had started their own businesses and almost all of them had opted to remain within the region;
18. Regrets that the personalised services which are to be provided consist of only one action: to be implemented by a one-stop-shop (Cellule de reclassement) which is run by two contracting agencies; notes that France requests only the funding of this one-stop-shop from the EGF; expresses its concerns with regard to the low amount of funds per worker (approximately EUR 1 200); calls on the French authorities to propose a more ambitious programme including a wider range of measures, such as a reception centre and casework, external experts guidance, thematic workshops, training, training allowances and grants for business creation, in its programmed EGF application for the remaining closing sites of GAD;
19. Expects the Commission and the French authorities to strictly follow the principle according to which payments to the agencies will be made by instalment and on the basis of results achieved;
20. Considers that the monitoring of the activity of the agencies by means of regular written reports ensures the appropriate use of the funds to provide participants a personalised career path, sufficient number of job offers and mentoring for business creation within the framework of the one-stop-shop system;
21. Recalls that the funds have to help the workers and not, in any case, support the agencies;
22. Welcomes that the contracted agencies are paid according to a scale defined on the basis of the results achieved;
23. Notes that 17,50 % of the dismissed workers are aged between 55 and 64 years; notes furthermore that this age group is at a higher risk of prolonged unemployment and exclusion from the labour market; considers, therefore, that these workers may have specific needs when it comes to providing them with personalised services;
24. Welcomes that the principles of equality of treatment and non-discrimination will be respected in the access to the proposed actions and their implementation;
25. Recalls that, in line with Article 7 of the EGF Regulation, the design of the coordinated package of personalised services should anticipate future labour market perspectives and required skills and should be compatible with the shift towards a resource-efficient and sustainable economy;
26. Notes that the French authorities did not request funding for preparatory activities, management and information and publicity;
27. Approves the decision annexed to this resolution;
28. Instructs its President to sign the decision with the President of the Council and arrange for its publication in the Official Journal of the European Union;
29. Instructs its President to forward this resolution, including its annex, to the Council and the Commission.
- [1] OJ L 347, 20.12.2013, p. 855.
- [2] OJ L 347, 20.12.2013, p. 884.
- [3] OJ C 373, 20.12.2013, p. 1.
- [4] 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 (OJ L 167, 29.6.2009, p. 26).
- [5] Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ L 18, 21.1.1997, p. 1)
- [6] EGF/2014/001 EL/Nutriart, which relates to bakery products.
ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on the mobilisation of the European Globalisation Adjustment Fund, in accordance with point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (application EGF/2014/005 FR/GAD, from France)
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 Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006[1], and in particular Article 15(4) thereof,
Having regard to Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020[2], and in particular Article 12 thereof,
Having regard to the Interinstitutional Agreement between the European Parliament, the Council and the Commission of 2 December 2013 on budgetary discipline, on cooperation in budgetary matters and on sound financial management[3], and in particular point 13 thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) The European Globalisation Adjustment Fund (EGF) was established to provide support for workers made redundant and self-employed persons whose activity has ceased as a result of major structural changes in world trade patterns due to globalisation, as a result of a continuation of the global financial and economic crisis addressed in Regulation (EC) No 546/2009[4], or as a result of a new global financial and economic crisis and to assist them with their reintegration into the labour market.
(2) The EGF shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Regulation (EU, Euratom) No 1311/2013.
(3) France submitted an application to mobilise the EGF, in respect of redundancies[5] in GAD société anonyme simplifiée in France, on 6 June 2014 and supplemented it by additional information as provided for in Article 8(3) of Regulation (EU) No 1309/2013. This application complies with the requirements for determining a financial contribution from the EGF as laid down in Article 13 of Regulation (EU) No 1309/2013.
(4) The EGF should, therefore, be mobilised in order to provide a financial contribution of an amount of EUR 918 000 for the application submitted by France,
HAVE ADOPTED THIS DECISION:
Article 1
For the general budget of the European Union for the financial year 2014, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 918 000 in commitment and payment appropriations.
Article 2
This decision shall be published in the Official Journal of the European Union.
Done at Brussels,
For the European Parliament For the Council
The President The President
EXPLANATORY STATEMENT
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 Article 12 of Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020[1] and of Article 15 of Regulation (EU) No 1309/2013[2], the Fund may not exceed a maximum annual amount of EUR 150 million (2011 prices). The appropriate amounts are entered into the general budget of the Union as a provision.
As concerns the procedure, according to point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management[3], 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 the event of disagreement, a trilogue shall be initiated.
II. The GAD application and the Commission's proposal
On 24 October 2014, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of France to support the reintegration in the labour market of workers made redundant in GAD société anonyme simplifiée operating in the economic sector classified under NACE Rev. 2 division 10 ('Manufacturing of food products') due to the global financial and economic crisis.
This is the seventeenth application to be examined under the 2014 budget and refers to the mobilisation of a total amount of EUR 918 000 from the EGF for France. It concerns a total of 760 beneficiaries. The application was sent to the Commission on 6 June 2014 and supplemented by additional information up to 4 August 2014. The Commission has concluded, in accordance with all applicable provisions of the EGF Regulation, that the application meets the conditions for a financial contribution from the EGF.
The French authorities argue that the global financial and economic crisis led to reduced pig meat consumption in Europe, which in turn caused a decline in the production of pig meat and throughput of abattoirs such as GAD. While pig meat consumption in 2007 was still 43 kg per annum per head of population, it had dropped to 39 kg per annum in 2013. This decline in consumption, caused by the global financial and economic crisis, affected other types of meat as well, but hit pork particularly hard, as its price had been increasing faster than that of other meats, particularly beef.
Pig feed consists mainly of a mix of various grains -- maize, wheat, barley and soya in particular. Much of this is imported from countries outside the EU, such as the United States, Australia and South America. These regions have been affected by drought in recent years, leading to considerable increases in the price of pig feed. Between 2006 and 2011, the price of a tonne of pig feed rose from EUR 150 to EUR 250, reaching EUR 300 in the second half of 2012 and remaining at an average of EUR 287 in France throughout 2013. The cost of pig feed must be recovered in the sale price of the finished pigs, and finally passed on to the consumer. At a time when the EU was still suffering from the effects of the crisis, consumers were unwilling or unable to buy the same amounts of pork which they had previously bought. GAD, as an abattoir and meat processing enterprise, was caught in the vice between the two sets of price pressures -- that of the farmers struggling to cope with the increased price of feed, and that of the consumers struggling to cope with reduced income. As this pressure lasted for five years and more, the enterprise ended up in serious financial difficulties.
The gross margin of GAD dropped from EUR 123 million in 2010 to EUR 107 million in 2012/13. While the enterprise had still achieved a profit of EUR 16 million in 2008, it became loss-making in 2009, finally making losses of EUR 20 million in both 2012 and 2013. Gross income had dropped from EUR 495,1 million in 2008 to EUR 445,8 million in 2009 and never recovered from this decline. on 27 February 2013, the company was placed into receivership, having made losses of EUR 65 million during the period 2010 to June 2013.
The personalised services which are to be provided to workers made redundant consist of only one action: Advice and guidance to the redundant workers provided by a team of expert consultants (Cellule de reclassement).
According to the Commission, the described measures constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation. These actions do not substitute passive social protection measures.
The French authorities have provided all necessary assurances regarding the following:
– the principles of equality of treatment and non-discrimination will be respected in the access to the proposed actions and their implementation;
– the requirements laid down in national and EU legislation concerning collective redundancies have been complied with;
– GAD, having continued its activities after the lay-offs, has complied with its legal obligations governing the redundancies and provided for its workers accordingly;
– the proposed actions will not receive financial support from other Union funds or financial instruments and any double financing will be prevented;
– the proposed actions will be complementary with actions funded by the Structural Funds;
– the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.
France has notified the Commission that the sources of national pre-financing or co-funding is the French State, which will also be funding various complementary measures not included in the EGF application.
III. Procedure
In order to mobilise the Fund, the Commission has submitted to the Budget Authority a transfer request for a global amount of EUR 918 000 from the EGF reserve (40 02 43) to the EGF budget line (04 04 01).
This is the seventeenth transfer proposal for the mobilisation of the Fund transmitted to the Budgetary Authority to date during 2014.
The trilogue procedure shall be initiated in the event of disagreement, as provided for in Article 15(4) of the EGF Regulation.
According to an internal agreement, the Employment and Social Affairs Committee should be associated to the process, in order to provide constructive support and contribution to the assessment of the applications from the Fund.
ANNEX: LETTER OF THE COMMITTEE ON EMPLOYMENT AND SOCIAL AFFAIRS
ZP/ch D(2014)53720
M. Jean Arthuis
Chair of the Committee on Budgets
ASP 09G205
Subject: Opinion on the mobilisation of the European Globalisation Adjustment Fund (EGF) for the case EGF/2014/005 FR/GAD (COM(2014)662 final)
Dear Chair,
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/2014/005 FR/GAD 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 based on Article 4(1)(a) of Regulation (EU) No 1309/2013 (EGF Regulation) and relates to 760 workers made redundant in GAD, operating in the NACE Rev. 2 division 10 ('Manufacture of food products') in the regions of Bretagne (FR52) and Pays de la Loire (FR51), who were made redundant or whose activity ceased within the reference period between 29 November 2013 to 28 March 2014;
B) Whereas the French authorities argue that the redundancies are linked to the global financial and economic crisis which led to reduced pork consumption in Europe (in 2007 43 kg per annum per head of population, to 39 kg per annum in 2013) and therefore consequently to a decline in production of pork products; whereas between 2006 and 2011, the price of a ton of pigfeed rose from EUR 150 to EUR 250, reaching EUR 300 in the second half of 2012 and remaining at an average of EUR 287 in France throughout 2013 and the cost of pigfeed must be recovered in the sale price of the finished pigs;
C) Whereas 64.08% of the workers targeted by the measures are men and 35.92% are women; whereas the majority (81.58%) of workers is between 25 and 54 years old and the 17.50% of the workers are between 55 and 64 years old;
D) Whereas the redundancies have a significant adverse impact on the regional economy in Brittany, whereas employment in Brittany is dependant on the agro-agricultural sector to a higher extent than the average in France (11% in Brittany as opposed to 5% on average in France).
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 French application:
1. Agrees with the Commission that the intervention criteria set out in Article 4(1)(a) of the Regulation (EU) No 1309/2013 are met and that, therefore, France is entitled to a financial contribution under this Regulation;
2. Welcomes that the workers are already being supported with the various measures helping them to find new jobs, and by 20 May 2014, 108 of them had already found contracts for more than six months and another 66 for less than six months, while three had started their own businesses and almost all of them had opted to remain within the region;
3. Notes that the personalised services to be provided consist of only one action to be implemented by a one-stop-shop (Cellule de reclassement) which is run by two contracting agencies; notes that France requests only the funding of this one-stop-shop from the EGF;
4. Expects the Commission and the French authorities to strictly follow the principle according to which payments to the agencies will be made by instalment and on the basis of results achieved;
5. Considers that the monitoring of the activity of the agencies by means of regular written reports ensures the appropriate use of the fund to provide participants a personalised career path, sufficient number of job offers and mentoring for business creation within the framework of the one-stop-shop system;
6. Reminds that the funds have to help the workers and not in any case to support the agencies;
7. Welcomes that the contracted agencies are paid according to a scale defined on the basis of the results achieved;
8. Notes that 17.50% of the dismissed workers are aged between 55 and 64 years; notes furthermore that this age group is at a higher risk of prolonged unemployment and exclusion from the labour market; considers therefore that these workers may have specific needs when it comes to providing them with personalised services;
9. Reminds that in line with Article 7 of the Regulation, the design of the coordinated package of personalised services should anticipate future labour market perspectives and required skills and should be compatible with the shift towards a resource-efficient and sustainable economy;
10. Notes that the French authorities did not request funding for preparatory activities, management and information and publicity.
Yours sincerely,
Marita ULVSKOG,
Acting Chair, 1st Vice-Chair
ANNEX: LETTER OF THE COMMITTEE ON REGIONAL DEVELOPMENT
Mr Jean ARTHUIS
Chairman
Committee on Budgets
European Parliament
ASP 09 G 205
1047 Brussels
Dear Mr. Arthuis,
Subject: Mobilisations of the European Globalisation Adjustment Fund
Three separate Commission proposals for decisions to mobilise the European Globalisation Adjustment Fund (EGF) have been referred for opinion to the Committee on Regional Development. I understand that it is intended that reports on each of these will be adopted in the Committee on Budgets in the course of one of its forthcoming meetings.
The rules applicable to financial contributions from the EGF are laid down in Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006; and in Point 13 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission of 2 December 2013 on budgetary discipline, on cooperation in budgetary matters and on sound financial management
- COM(2014)0630 proposes an EGF contribution of EUR 1 426 800 for active labour market measures aimed at re-integrating into employment 634 workers made redundant in in STX Finland Oy in Rauma, in Finland.
- COM(2014)0662 is a proposal for an EGF contribution of EUR 918 000 for active labour market measures aimed at re-integrating into employment 760 workers made redundant in in GAD société anonyme simplifiée, in France.
- COM(2014)0672 is a proposal for an EGF contribution of EUR 1 890 000 for active labour market measures aimed at re-integrating into employment 608 workers made redundant in Whirlpool Europe S.r.l. and five suppliers and downstream producers, in Italy.
- COM(2014)0699 proposes an EGF contribution of EUR 1 259 610 for active labour market measures aimed at re-integrating into employment 1 079 workers made redundant in Fiat Auto Poland and 21 of its suppliers, in Poland.
- COM(2014)0701 proposes an EGF contribution of EUR 25 937 813 for active labour market measures aimed at re-integrating into employment 5 213 workers made redundant in in Air France, in France.
- COM(2014)0702 proposes an EGF contribution of EUR 6 444 000 for active labour market measures aimed at re-integrating into employment 600 workers made redundant in Odyssefs Fokas S.A., in Greece.
The Committee coordinators have assessed these proposals, and asked me to write to you stating that this Committee has no objection to these mobilisations of the European Globalisation Adjustment Fund to allocate the above-mentioned amounts as proposed by the Commission.
Yours sincerely,
Iskra MIHAYLOVA
RESULT OF FINAL VOTE IN COMMITTEE
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Date adopted |
20.11.2014 |
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Result of final vote |
+: –: 0: |
24 3 0 |
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Members present for the final vote |
Jean Arthuis, Richard Ashworth, Jean-Paul Denanot, Gérard Deprez, José Manuel Fernandes, Eider Gardiazabal Rubial, Jens Geier, Heidi Hautala, Monika Hohlmeier, Bernd Kölmel, Zbigniew Kuźmiuk, Vladimír Maňka, Siegfried Mureşan, Victor Negrescu, Liadh Ní Riada, Patricija Šulin, Eleftherios Synadinos, Indrek Tarand, Marco Valli, Monika Vana, Daniele Viotti, Marco Zanni |
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Substitutes present for the final vote |
Charles Goerens, Anneli Jäätteenmäki, Alfred Sant, Ivan Štefanec, Tomáš Zdechovský |
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