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 (application EGF/2011/006 ES/Comunidad Valenciana Construction of buildings from Spain)

(COM(2012)0053 – C7-0044/2012 – 2012/2023(BUD))

The European Parliament,

–    having regard to the Commission proposal to Parliament and the Council (COM(2012)0053 – C7-0044/2012),

–    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 trilogue procedure provided for in point 28 of the IIA of 17 May 2006,

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

–    having regard to the report of the Committee on Budgets (A7-0066/2012),

A. whereas the European 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 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 Spain has requested assistance for 1138 redundancies, all targeted for assistance, in 513 enterprises operating in the NACE Revision 2 Division 41 ('Construction of buildings')(3) in the NUTS II region of Comunidad Valenciana (ES52) in Spain,

E.   whereas the application fulfils the eligibility criteria laid down by the EGF Regulation,

1.   Requests the institutions involved to make the necessary efforts to improve procedural and budgetary arrangements in order to accelerate the mobilisation of the EGF; appreciates the improved procedure put in place by the Commission, following Parliament's request for accelerating the release of grants, aimed at presenting to the budgetary authority the Commission's assessment on the eligibility of an EGF application together with the proposal to mobilise the Fund; hopes that further improvements in the procedure will be integrated in the new Regulation on EGF and that greater efficiency, transparency and visibility of the Fund will be achieved;

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 long-term 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 information on the complementarity with actions funded by the Structural Funds; reiterates its call to the Commission to present a comparative evaluation of those data in its annual reports as well;

5.   Welcomes the fact that following repeated requests from Parliament, the 2012 budget shows payment appropriations of EUR 50 000 000 on the EGF budget line 04 05 01; recalls that the EGF was created as a separate specific instrument with its own objectives and deadlines and, therefore, it deserves a dedicated allocation, which will avoid there being transfers from other budget lines, as happened in the past, which could be detrimental to the achievement of the policy objectives of the EGF;

6. Welcomes the fact that the package of coordinated measures includes an ‘Equal opportunities supervisor’ scheme aimed at ensuring that no personal or family constraints prevent the workers targeted from benefiting from the measures;

7.  Regrets the decision of the Council to block the extension of the "crisis derogation", allowing the increase in the rate of Union co-financing to 65 % of the programme costs, for applications submitted after the 31 December 2011 deadline, and calls on the Council to reintroduce this measure without delay;

8.   Approves the decision annexed to this resolution;

9.   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;

10. 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. (3) Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC regulations on specific statistical domains (OJ L 393, 30.12.2006, p. 1).

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on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2011/006 ES/Comunidad Valenciana Construction of buildings from Spain)

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)      Spain submitted an application on 1 July 2011 to mobilise the EGF in respect of 1138 redundancies in 513 enterprises operating in the NACE Revision 2 Division 41 ('Construction of buildings') in the NUTS II region of Comunidad Valenciana (ES52), and supplemented it by additional information up to 25 November 2011. 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 1 642 030.

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

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2012, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 1 642 030 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 trialogue could be organised in order to find an agreement on the use of the Fund and the amounts required. The trialogue can take a simplified form.

II. State of play: Commission's proposal

On 15 February 2012 the Commission adopted a new proposal for a decision on the mobilisation of the EGF in favour of Spain 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 first application to be examined under the 2012 budget and refers to the mobilisation of a total amount of EUR 1.642.030 from the EGF for Spain. It concerns 1138 redundancies, all targeted for assistance, in 513 enterprises operating in the NACE Revision 2 Division 41 ('Construction of buildings') in the NUTS II region of Comunidad Valenciana (ES52) during the nine-month reference period from 25 July 2010 to 25 April 2011.

Of these 1138 redundancies, 747 were calculated in accordance with the second indent of the second paragraph of Article 2 of Regulation (EC) No 1927/2006. A further 391 redundancies were calculated in accordance with the third indent of the same paragraph. The Commission has received the confirmation required under the third indent of the second paragraph of Article 2(2) that this is the actual number of redundancies effected.

The application was presented to the Commission on 1 July 2011 and supplemented by additional information up to 25 November 2011.

Comission concluded that the application meets the conditions for deploying the EGF as set out in Article 2(b) of Regulation (EC) No 1927/2006, and was submitted within the deadline of 10 weeks referred to in Article 5 of that Regulation.

One of the criteria for Commission's assessment was the evaluation of the link between the redundancies and major structural changes in world trade patterns or the financial crisis. In this respect, the Spanish authorities argue that the construction sector has been severely affected by the crisis. Loans to the construction sector and to individuals have been drastically reduced and the demand for new houses decreased due to declining consumer confidence and the lack of cash.

The Commission recognised in its Economic Recovery Plan that the construction industry in the EU had seen demand plummet as a result of the crisis. Available data confirms the significant downturn in the construction sector, which fell in the EU-27 for eight consecutive quarters (Q1/2009 to Q4/2010) compared with the same period of the previous year, mainly due to the decrease in private investment in the residential sector.

The Spanish authorities argue that in 2009 construction output in Spain followed the same negative trend as the EU-27 average. However, in 2010 and the first quarter of 2011 the downturn in the Spanish construction sector was further exacerbated. Other indicators, such the number of building permits or the number of buildings started, give further evidence of the decline in demand for buildings (houses) in Spain. The number of building permits granted in Spain decreased by 75,6 % in 2009 and 82,8 % in 2010 compared with 2007, the last pre-crisis year. The number of buildings started decreased by 52,2 % in 2009 compared with 2008 and by 76,7 % compared with 2007.

Furthermore, according to the Spanish authorities, the financial and economic crisis and its impact on the sector could not have been foreseen.

Commission's assessment was also based on a description of the region and the authorities and stakeholders concerned. Spain in its application submitted to Commission observes that unemployment in Comunidad Valenciana increased in 2010 by 12,2 % compared to 2009 and by 309 % compared to the pre-crisis year 2007. In 2010, workers laid off in the construction sector accounted for 28,18 % of total layoffs in the region, while in 2007 they only accounted for 6,3 %.

The employment situation in the affected area, according to Spanish authorities, seems particularly fragile, given the impact of the crisis on traditional sectors such as the textile sector, or on sectors related to construction such as the ceramic sector or the sector of cutting, shaping and finishing of stone, as these sectors are very important for the region's economy. Following redundancies in the Comunidada Valenciana in sectors mentioned above, Spain submitted applications(3) for financial contributions from the EGF in September 2009 and March 2010.

The co-ordinated package of personalised services to be funded, including its compatibility with actions funded by the Structural Funds, includes measures for the reintegration of the 1138 targeted workers into employment. These personalised services started on 30 September 2011.

According to Spanish authorities, all the following measures combine to form a co-ordinated package of personalised services aimed at re-integrating the workers into the labour market: guidance, job-search support, promotion of entrepreneurship, training, retraining and vocational training; and training for trainers, monitor on equal opportunities, participation incentive, contribution to commuting expenses and entrepreneurship incentive.

As regards the criteria contained in Article 6 of Regulation (EC) No 1927/2006, the Spanish authorities in their application:

· confirmed that the financial contribution from the EGF does not replace measures which are the responsibility of companies by virtue of national law or collective agreements;

· demonstrated that the actions provide support for individual workers and are not to be used for restructuring companies or sectors;

· confirmed that the eligible actions referred to above do not receive assistance from other EU financial instruments.

Concerning management and control systems, Spain has notified the Commission that the financial contribution will be managed and controlled by the same bodies that manage and control the ESF. The General Directorate European Projects and Funds of the Regional Ministry of Finance and Government of the Comunidad Valenciana(4) will be the intermediate body for the managing authority.

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 for a global amount of EUR 1.642.030 from the EGF reserve (40 02 43) in commitments to the EGF budget line (04 05 01).

The Rapporteur welcomes the fact that, following repeated requests from the Parliament, 2012 budget shows payment appropriations (EUR 50.000.000) on the EGF budget line 04 05 01.

She reminds, in fact, that the EGF was created as a separate specific instrument with its own objectives and deadlines and that as such deserves a dedicated allocation, which will avoid transfers from other budget lines - as happened in the past - which could be detrimental to the achievement of the various policy objectives.

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

This is the first proposal for the mobilisation of the Fund submitted to the Budget Authority in 2012. Therefore, deducing from the appropriations available the current amount requested (EUR 1.642.030) an amount of EUR 498.357.970 remains available until the end of 2012. This will leave more than 25% of the maximum annual amount earmarked for the EGF available for allocations during the last four months of 2012, as required by Article 12(6) of the EGF Regulation.

III. Procedure

The Commission has presented a transfer request in order to enter specific commitment appropriations in the 2011 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, 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 will give its view on the mobilisation of the Fund, which will be attached as letter 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) Applications EGF/2009/0014 ES/Comunidad Valenciana – Ceramic; EGF/2010/005 ES/Comunidad Valenciana – Natural Stone and EGF/2010/009 ES/Comunidad Valenciana – Textile. (4) Dirección General de Proyectos y Fondos Europeos de la Consellería de Hacienda y Administraciones Públicas de la Generalitat Valenciana.

EK/jm

D(2012)13066

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/2011/006 ES/Comunidad Valenciana Construction of buildings from Spain (COM(2012)53 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/2011/006 ES/Comunidad Valenciana Construction of buildings 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 2b) of the EGF regulation and targets for support 1 138 workers of the total of 1 138 workers dismissed in 513 enterprises operating in the NACE Revision 2 Division 41 ("Construction of buildings") within the reference period between 25 July 2010 and 25 April 2011 in the NUTS II region of Comunidad Valenciana (ES52).

B)  Whereas the Spanish authorities argue that the redundancies were caused by the global financial and economic crises that hit Spain and affected seriously its construction sector;

C)  Whereas in result of the crisis, the loans for the construction sector and to individuals have been dramatically cut and the demand for new housing declined, which is reflected in the decline in the building permits of more then 75% in 2009 and by 80% in 2010 compared to 2007;

D)  Whereas the Commission already recognised in its Economic and Recovery Plan that the EU construction sector has been drastically affected by the crisis; whereas the EGF has already intervened in several cases of dismissals in the construction industries;

E)  Whereas 82 % of the workers targeted by the measures are men and 18 % are women; whereas 79 % of the workers are between 25 and 54 years old and 17% of workers are older than 54 years;

F)  Whereas the occupational structure of the dismissed labour force is diverse and among others consists of 43% of specialised craft workers, 17% of craft worker assistants and 9% of elementary occupations;

G)  Whereas 74% of the dismissed workers has only basic education, 10% finished upper secondary education, further 11% is graduated from tertiary education and 5% of the workers is defined as uneducated;

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 Spanish application:

1.  Agrees with the Commission that the conditions set out in Article 2 b) of the EGF regulation (1927/2006) are met and that, therefore, Spain is entitled to a financial contribution under this regulation;

2.  Notes that the Spanish authorities submitted the application for EGF financial contribution on 1 July 2011 and that its assessment was made available by the European Commission on 15 February 2012; regrets the lengthy evaluation period;

3.  Notes that the EGF has already supported workers made redundant in the construction sector: EGF/2009/017 LT/Construction of buildings, EGF/2010/019 IE/Construction 41, EGF/2011/002 IT/Trentino-Alto Adige/Südtirol Construction;

4.  Notes that the construction sector was an important contributor to Spanish GDP and that the current contraction in its activity has also serious secondary effects on the other sectors of the Spanish economy; notes that in this particular region the decline in construction will affect the ceramic sector and services sector linked to construction, which are important sources of employment in the region;

5.  Notes that the employment situation in the region is difficult as the unemployment rates soared by 309% compared to the pre-crisis year 2007 and that the region already applied for the EGF support and is implementing coordinated packages in the textile, ceramic and natural stone sectors (Applications EGF/2009/0014 ES/Comunidad Valenciana; EGF/2010/005 ES/Comunidad Valenciana and EGF/2010/009 ES/Comunidad Valenciana )

6.  Notes that the Spanish authorities inform that in their assessment based on the experience with previous EGF applications, only 400 of the workers targeted for the EGF support will choose to participate in the measures; calls on the Spanish authorities to use the EGF support to its full potential;

7.  Notes the fact that in order to provide workers with speedy assistance, the Spanish authorities decided to start the implementation of the measures ahead of the final decision on granting the EGF support for the proposed coordinated package;

8.  Welcomes the fact that the coordinated package includes a module "Monitor on equal opportunities" to ensure that no personal or family barriers prevent the targeted workers from accessing the measures; recalls its concerns regarding the respect of article 7 of the regulation1927/2009 in the past applications; expects that the practice of developing a specific measure supporting equal opportunities will be disseminated among Member States and included in the future EGF applications;

9.  Notes that the coordinated package foresees "Participation incentive", which amounts to 400 euro per worker (lump sum) to encourage participation in the measures; notes that this financial incentive will be accompanied by financial aid (ranging from 50 to 300 euro) covering partly the commuting expenses incurred by the workers participating in the measures;

10.  Recalls that the fund should be primarily allocated to training and job search as well as training programs instead of contributing directly to unemployment benefits which are the responsibility of national institutions;

11.  Welcomes the fact that beside the regional government the social partners were the main stakeholders involved in the discussion on the application and that they are involved in the implementation and monitoring of the measures through the so-called "Interest Group";

12.  Stresses that the Commission proposal does not mention if and how the educational establishments were involved in the design and the implementation of the coordinated package; welcomes the statement by the European Commission clarifying that the training will be offered in innovative areas within the construction sector (for example energy efficiency) and will incite establishing new businesses; inquires if the coordinated package co-financed by the EGF fits in the regional economic and employment strategy and addresses the needs of the local labour market; suggests that the future investments towards the economic recovery of the region, including the use of European funds, are oriented also towards more value-added and sustainable business activities;

13.  Considers that the current situation is also partly consequence of a previous excessive(1) building activity in the region of Comunidad Valenciana involving legal entities from Spain and other EU Member States;

14.  Notes that the case at hand typically reflects the social and economic landscape of the specific region which could in the future be addressed by extending the scope of the EGF to self-employed workers (as proposed by the Commssion in the proposal for the EGF 2014-2020).

Yours sincerely,

Pervenche Berès

(1) P6_TA(2009)0192