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

    6.10.2010 - (COM(2010)0451 – C7‑0222/2010 – 2010/2163(BUD))

    Committee on Budgets
    Rapporteur: Barbara Matera

    Procedure : 2010/2163(BUD)
    Document stages in plenary
    Document selected :  
    A7-0270/2010
    Texts tabled :
    A7-0270/2010
    Debates :
    Texts adopted :

    MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

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

    (COM(2010)0451 – C7‑0222/2010 – 2010/2163(BUD))

    The European Parliament,

    –   having regard to the Commission proposal to the European Parliament and the Council (COM(2010)0451 – C7‑0222/2010),

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

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

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

    –   having regard to the report of the Committee on Budgets (A7-0270/2010),

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

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

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

    D.  whereas Denmark has requested assistance in respect of cases concerning 951 redundancies in 45 enterprises operating in the NACE Revision 2 Division 28 (manufacture of machinery and equipment) sector in the NUTS II region of Nordjylland;

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

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

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

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

    4.  Notes that the information provided on the coordinated package of personalised services to be funded from the EGF includes detailed information on the complementarity with actions funded by the Structural Funds; reiterates its call to present a comparative evaluation of these data in its annual reports as well;

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

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

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

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

    9.  Approves the decision annexed to this resolution;

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

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

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

    ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

    of xxx

    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/2010/001 DK/Nordjylland from Denmark)

    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[3],

    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)      Denmark submitted an application to mobilise the EGF, in respect of redundancies in the manufacturing of machinery and equipment sector in the Nordjylland region, on 22 January 2010 and supplemented it by additional information up to 28 April 2010. This application complies with the requirements for determining the financial contributions as laid down in Article 10 of Regulation (EC) No 1927/2006. The Commission, therefore, proposes to mobilise an amount of EUR 7 521 359.

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

    HAVE DECIDED AS FOLLOWS:

    Article 1

    For the general budget of the European Union for the financial year 2010, the European Globalisation Adjustment Fund (EGF) shall be mobilised to provide the sum of EUR 7 521 359 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.
    • [3]               OJ C […], […], p. […].

    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 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 2 September 2010 the Commission has adopted three new proposals for a decision on the mobilisation of the EGF in favour of Spain, Portugal and Denmark 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 fifteen application to be examined under the budget 2010 and refers to the mobilisation of a global amount of EUR 7.521.359 from the EGF for Denmark. It concerns 951 redundancies occurred in 45 enterprises operating in the NACE Revision 2 Division 28 (manufacture of machinery and equipment) sector in the NUTS II region of Nordjylland during the nine-month reference period from 15 February 2009 to 14 November 2009.

    The application, case EGF/2010/001 DK/Nordjylland from Denmark was submitted to the Commission on 22 January 2010 and supplemented by additional information up to 28 April 2010. The application was based on the intervention criterion of Art. 2 (b) of the EGF Regulation - which requires at least 500 redundancies over a nine-month period in enterprises operating in the same NACE revision 2 division in one region or two contiguous regions at NUTS II level in a Member State - and was submitted within the deadline of 10 weeks (Art. 5 of the Regulation).

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

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

    In order to mobilise the Fund, the Commission has submitted to the Budget Authority a transfer request (DEC 21/2010) for a global amount of EUR 7.521.359 from the EGF reserve (40 02 43) in commitments and from the budget line "Competitiveness and Innovation Framework Programme - Entrepreneurship and Innovation Programme" (01 04 04) in payments to the EGF budget lines (04 05 01).

    For the first time, the Commission has identified an alternative sourcing of payment appropriations other than unused ESF Funds in accordance with the frequent requests from the European Parliament.

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

    Art. 12 (6) of the EGF Regulation requests that on 1st September at least 25% of the annual maximum amount of the EGF shall remain available in order to cover needs arising until the end of the year.

    In 2010, the Budget Authority has already approved eight proposals for the mobilisation of the Fund and a transfer for the Technical assistance, for a total amount of EUR 20.991.554, leaving an amount of EUR 481.228.446 available.

    III. Procedure

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

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

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

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

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

    • [1]  OJ C 139, 14.6.2006, p. 1.
    • [2]  OJ L 406, 30.12.2006, p. 1.
    • [3]  DEC 21/2010 of .........2010

    ANNEX: LETTER OF THE COMMITTEE OF EMPLOYMENT AND SOCIAL AFFAIRS

    ES/sg

    D(2010)46646

    M. Alain Lamassoure

    President of the Committee on budgets

    ASP 13E158

    Subject: Opinion on the mobilisation of the European Globalisation Adjustment Fund (EGF) for the case EGF/2010/001 DK/Nordiylland (COM(2010)451 final)Dear Mr Lamassoure,

    The Committee on Employment and Social Affairs (EMPL) as well as its Working Group on the EGF examined the mobilisation of the EGF for the case EGF/2010/001 DK/Nordiylland and adopted the following opinion.

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

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

    A)  Whereas this application is in accordance with Article 2b of the EGF regulation and includes 1.122 redundancies that occurred during the reference period of 9 months between 15 February and 14 November 2009 in 45 firms mostly involved in producing machinery and equipment for the shipbuilding sector.

    B)  Whereas this sector was severely hit by several effects of the financial crisis resulting in an almost complete halt of new orders and cancellations of existing orders to up to 40% (MAN Diesel) related to the expectation that in the framework of globalisation the shipbuilding industry will move to low cost areas, mainly in Asia, which have been increasing their market share spectacularly in the years leading up to the crisis.

    C)  Whereas Nordiylland is the smallest region in Denmark with the lowest population density where employment levels and income are lagging behind compared to the rest of Denmark. Whereas the region is particularly dependent upon the industrial sector.

    D)  Whereas the occupational structure features numerous small and medium-sized enterprises with a poor tradition of hiring highly educated employees with a large share of unskilled peopled in the labour force.

    E)  Whereas the proposal for the co-ordinated package of personalized services aims to reconvert the redundant workers to the new fields of more efficient energy solutions, both in shipping and in housing, as well as equipping them for the knowledge and the services sectors.

    F)  Whereas 40% of the redundant workers were active in manual, metal- and machining jobs and whereas 33% provided unskilled labour.

    G)  Whereas 92% of the redundant workers are men and whereas nearly 84% of the workers are between 25 and 54 years old.

    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 Danish application:

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

    2.  Welcomes the approach to use the support of the EGF to provide the workers with skills necessary for an employment in future oriented jobs in the energy saving sector, the knowledge and the service industry.

    3.  Welcomes the possibility for workers that can quickly be reintegrated into the labour market to receive nevertheless training to fill any gaps in qualifications.

    4.  Is particular supportive of the measure aiming at attracting and retaining young people who want to embark on an out-of school or further education.

    5.  Points, however, to the fact that financial incentives for setting up a business, even in regions of the same country, will be granted in very different ways; expects, therefore, that the Commission would have a proper evaluation to ensure that everyone who wishes to become an entrepreneur will be entitled to the same offers.

    Yours sincerely,

    Pervenche Berès

    RESULT OF FINAL VOTE IN COMMITTEE

    Date adopted

    5.10.2010

     

     

     

    Result of final vote

    +:

    –:

    0:

    36

    2

    0

    Members present for the final vote

    Damien Abad, Alexander Alvaro, Reimer Böge, Lajos Bokros, Giovanni Collino, Andrea Cozzolino, Isabelle Durant, Göran Färm, José Manuel Fernandes, Eider Gardiazábal Rubial, Salvador Garriga Polledo, Jens Geier, Ingeborg Gräßle, Estelle Grelier, Carl Haglund, Lucas Hartong, Jutta Haug, Jiří Havel, Sidonia Elżbieta Jędrzejewska, Anne E. Jensen, Ivailo Kalfin, Jan Kozłowski, Alain Lamassoure, Giovanni La Via, Barbara Matera, Claudio Morganti, Nadezhda Neynsky, Miguel Portas, Dominique Riquet, László Surján, Helga Trüpel, Angelika Werthmann, Jacek Włosowicz

    Substitute(s) present for the final vote

    François Alfonsi, Frédéric Daerden, Peter Šťastný, Georgios Stavrakakis

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

    Sabine Verheyen