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 (application EGF/2011/005 PT/Norte-Centro Automotive from Portugal)

23.11.2011 - (COM(2011)0664 – C7‑0334/2011 – 2011/2262(BUD))

Committee on Budgets
Rapporteur: Barbara Matera

Procedure : 2011/2262(BUD)
Document stages in plenary
Document selected :  
A7-0395/2011
Texts tabled :
A7-0395/2011
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 (application EGF/2011/005 PT/Norte-Centro Automotive from Portugal)

(COM(2011)0664 – C7‑0334/2011 – 2011/2262(BUD))

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2011)0664 – C7‑0334/2011),

–   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 as 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 (A7-0395/2011),

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 Portugal has requested assistance in respect of a case concerning 726 redundancies, all targeted for assistance, in three enterprises operating in the NACE Revision 2 Division 29 ('Manufacture of motor vehicles, trailers and semi-trailers')[3] in the NUTS II regions of Norte (PT11) and Centro (PT16) in Portugal,

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 improve procedural and budgetary arrangements in order to accelerate the mobilisation of the EGF; appreciates in this sense the improved procedure put in place by the Commission, following the 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 reached in the framework of the upcoming reviews of the EGF and that greater efficiency and transparency 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, in particular the most vulnerable and least qualified workers;

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; further stresses that the EGF assistance can co-finance only active labour market measures which lead to 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 compatibility and complementarity with actions funded by the Structural Funds; reiterates its call to the Commission to present a comparative evaluation of these data in its annual reports as well;

5. Notes the fact that following repeated requests from the Parliament, for the first time the 2011 budget shows payment appropriations of EUR 47 608 950 on the EGF budget line 04 05 01; reminds that the EGF was created as a separate specific instrument with its own objectives and deadlines and that therefore deserves a dedicated allocation, superseding transfers from other budget lines, as done in the past, which could be detrimental to the achievement of the various policies objectives;

6. Welcomes the foreseen reinforcement of the payment appropriations on the EGF budget line that will be requested through the Global Transfer. Appropriations from this budget line will be used to cover the amount of EUR 1 518 465 needed for the present application;

7.  Approves the Decision annexed to this resolution;

8.  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;

9.  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).

ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

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/2011/005 PT/Norte-Centro Automotive from Portugal)

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 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)      Portugal submitted an application on 6 June 2011 to mobilise the EGF in respect of redundancies in three enterprises operating in the NACE Revision 2 Division 29 (‘Manufacture of motor vehicles, trailers and semi-trailers’) in the NUTS II regions of Norte (PT11) and Centro (PT16), and supplemented it by additional information up to 18 July 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 1 518 465.

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

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2011, the European Globalisation Adjustment Fund (EGF) shall be mobilised to provide the sum of EUR 1 518 465 in commitment and payment appropriations.

Article 2

This Decision shall be published in the Official Journal of the European Union.

Done at [Brussels/Strasbourg],

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 the margin under the global expenditure ceiling from the previous year, and/ or from the cancelled commitment appropriations from the previous two years, excluding those related to Heading 1b. The appropriate amounts are entered into the budget as a provision as soon as the sufficient margins and/or cancelled commitments have been identified.

As concerns the procedure, in order to activate the Fund the Commission, in case of a positive assessment of an application, presents to the budgetary authority a proposal for mobilisation of the Fund and, at the same time, a corresponding request for transfer. In parallel, a trilogue could be organised in order to find an agreement on the use of the Fund and the amounts required. The trilogue can take a simplified form.

II. State of play: Commission's proposal

On 13 October 2011 the Commission adopted a new proposal for a decision on the mobilisation of the EGF in favour of Portugal in order to support the reintegration in the labour market of workers made redundant due to the global financial and economic crisis.

This is the twenty-second application to be examined under the 2011 budget and refers to the mobilisation of a total amount of EUR 1 518 465 from the EGF for Portugal. It concerns 726 redundancies in three enterprises operating in the NACE Revision 2 Division 29 ('Manufacture of motor vehicles, trailers and semi-trailers')[3] in the NUTS II regions of Norte (PT11) and Centro (PT16) during the nine-month reference period from 1 July 2010 to 1 April 2011. All of these redundancies were calculated in accordance with the second indent of the second paragraph of Article 2 of Regulation (EC) No 1927/2006.

The application, case EGF/2011/005 PT/Norte-Centro Automotive from Portugal was submitted to the Commission on 6 June 2011 and supplemented by additional information up to 18 July 2011. It was based on the intervention criterion of Art. 2 (b) of the EGF Regulation, which requires at least 500 redundancies over a nine-month period in enterprises operating in the same NACE Revision 2 Division in one region or two contiguous regions in NUTS II level in a Member State.

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, which in this particular case is related to the decreased demand for new motor vehicles in the European Union as a result of the global financial and economic crisis.

The fall in demand for electrical equipment for cars, which followed the decline in car manufacturing, combined with the impossibility of further reducing production costs and/or access to credit, resulted in the closure of Krombert & Schubert Portugal, Lda and the Lear production plant in Guarda. The closure of Leoni Wiring Systems Viana, Lda was due to the combination of a difficult economic situation due to the crisis and the relocation of the production plant to Morocco.

The arguments presented in previous cases[4]

concerning the automotive industry and in which the redundancies were a direct result of the crisis remain valid.

The co-ordinated package of personalised services to be funded, including its compatibility with actions funded by the Structural Funds, includes measures for:

· Information profiling and guidance: The information and profiling actions consist of updating all potential beneficiaries on the available measures, encouraging the workers to actively participate in them;

· Recognition, validation and certification of competences: The workers will identify the knowledge and skills acquired throughout their lives in formal and informal contexts;

· Vocational Training: The workers will receive the training most appropriate to their educational and skills levels, helping them to reintegrate rapidly into employment;

· Grant for training at personal initiative: This will enable workers to participate in suitable training courses, agreed as part of their personal employment plans and which are delivered by recognised training institutions;

· Support for self-placement: This is a grant awarded to workers who find themselves a new full time job;

· Hiring incentive: Financial support may be allocated to employer entities which sign full-time contracts with an EGF beneficiary worker;

· Entrepreneurial support: For those workers wishing to create their own businesses, training in specific knowledge will be organised;

· Support to business creation: Upon completion of the entrepreneurship training and preparation, the workers will be helped with a non-reimbursable subsidy of EUR 20 000 for each job created, including that of the promoter, up to a maximum of three;

· Integration plan: This will provide the workers with work experience of at least 30 hours per week during a period from six to twelve months.

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

•          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 Portugal has notified the Commission that the financial contribution will be managed and controlled by Instituto do Emprego e Formação Profissional, I.P. (IEFP, I.P.), the public employment service, The Instituto de Gestão do Fundo Social Europeu (IGFSE, I.P.), the European Social Fund Management Institute, will be responsible for auditing and control as regards this EGF application.

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 presents separately a transfer request in order to enter in the 2011 budget specific commitment appropriations, as required in Point 28 of the Interinstitutional Agreement of 17 May 2006.

The Rapporteur welcomes the foreseen reinforcement of the payment appropriations on the EGF budget line that will be requested through the Global Transfer. Appropriations from this budget line will be used to cover the amount of EUR 1 518 465 needed for the present application.

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 policies objectives.

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

This is the twenty-second proposal for the mobilisation of the Fund submitted to the Budget Authority in 2011. Therefore, deducing from the appropriations available the current amount requested (EUR 1 518 465) an amount of EUR 410.882.896 remains available until the end of 2011. This will leave more than 25% of the maximum annual amount earmarked for the EGF available for allocations during the last four month on 2011, as required by art. 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]               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).
  • [4]             EGF/2010/002 Cataluña Automoción, COM(2010)453 final, EGF/2010/004 Wielkopolskie, COM(2010)616 final,
    EGF/2010/031 GM Belgium COM(2011)212 final, and
    EGF/2011/003 Arnsberg and Düsseldorf COM(2011)447 final.

ANNEX: LETTER OF THE COMMITTEE ON EMPLOYMENT AND SOCIAL AFFAIRS

EK/jm

D(2011)56447

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/2011/005 PT/Norte-Centro Automotivo from Portugal (COM(2011)664 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/2011/005 PT/Norte-Centro Automotivo from Portugal 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 2 b) of the EGF regulation and targets all 726 workers made redundant in the NACE Revision 2 Division 29 in the contiguous NUTS II regions of Norte and Centro during the reference period between 1 July 2010 and 1 April 2011;

B)  Whereas the Portuguese authorities argue that the redundancies were caused by the economic and financial crisis which while causing serious drops in the demand for new cars in Europe has put under pressure the automotive sector and its suppliers world-wide; whereas the production of motor vehicles in the EU in 2009 deceased by 17%, and in 2008 was 23% below that of the same period in 2007;

C)  Whereas the drops in demand of motor vehicles was followed by falls in demand for electrical equipment for cars coupled with no access to credit or impossibility to reduce further the production or reduce the margins resulting in the closure of Kromberg & Schubert Portugal, Lda and the Delphi Automotive Systems, Portugal SA, and the relocation of the Leoni Wiring Systems Viana to Morocco;

D)  Whereas the Commission has already recognised in past applications concerning the automotive industry that the financial and economic crisis affected in particular the car producers and its suppliers given that 60 to 80% of new vehicles sold in Europe are bought on credit;

E)  Whereas the region of Norte has the lowest income per capita and the highest rate of unemployment in Portugal and whereas both the region of Norte and Centro depend mostly on traditional industries like textiles and footwear and both suffer from low qualified labour force;

F)  Whereas 65,81 % of the workers targeted by the measures are women and 34,16 % are men; whereas 97,66 % of the dismissed are workers between 25 and 55 years old; whereas 3 of the targeted workers are disabled or suffer from a long-term health problem;

G)  Whereas 78,93% of the redundant workers belongs to the category of plant and machine operators or technicians and associated professionals;

H)  Whereas 64,60 % of the workers have only basic education and 30,44% completed secondary level education;

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 Portuguese 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, Portugal is entitled to a financial contribution under this regulation;

2.  Notes that the Portuguese authorities submitted the application for EGF financial contribution on 6 June 2010 and that its assessment was made available by the European Commission on 13 October 2011;

3.  Notes that the EGF intervenes already in the regions of Centro and Norte with regard to redundancies in the footwear and textile industry as well as in electronics following the applications EGF/2009/001 Northe/Center/Portugal, EGF/2010/026 PT/Rohde and EGF/2009/023 PT/Qimonda.

4.  Reminds of the EGF support in case of the textile industry (EGF/2009/001) had some positive impact as one year after the implementation period of the coordinated package 27,7% of targeted workers were in employment[1];

5.  Welcomes that the fact that the social partners were involved in the creation of the coordinated package of measures;

6.  Notes that four out of eight measures proposed are allowances (grant for training at personal initiative, support for self-placement, hiring incentive and support for business creation) and that more than half of the EGF support will be spent on those measures;

7.  Reminds, in this context, of the importance of training and vocational education in improving the skills and competences of the labour force, in particular in regions suffering from low educational attainment like Centro and Norte; regrets that no information concerning the types of training sector-wise is provided;

8.  Reminds of the fact that lower co-financing rate available under EGF compared to the European Social Fund has a dissuasive effect on poorer regions, qualifying for structural funds support, as they tend to concentrate available national financial resources on the latter and, in result, are not able to benefit from targeted and tailored EGF support.

Yours sincerely,

Pervenche Berès

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

23.11.2011

 

 

 

Result of final vote

+:

–:

0:

31

2

3

Members present for the final vote

Alexander Alvaro, Reimer Böge, Lajos Bokros, Andrea Cozzolino, Jean-Luc Dehaene, James Elles, Göran Färm, José Manuel Fernandes, Eider Gardiazábal Rubial, Ivars Godmanis, Estelle Grelier, Monika Hohlmeier, Sidonia Elżbieta Jędrzejewska, Anne E. Jensen, Sergej Kozlík, Jan Kozłowski, Alain Lamassoure, Giovanni La Via, Vladimír Maňka, Barbara Matera, Nadezhda Neynsky, Dominique Riquet, László Surján, Helga Trüpel, Derek Vaughan, Angelika Werthmann

Substitute(s) present for the final vote

Antonello Antinoro, Maria Da Graça Carvalho, Frédéric Daerden, Derk Jan Eppink, Paul Rübig, Peter Šťastný, Georgios Stavrakakis

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

Arnaud Danjean, Matthias Groote, Bernadette Vergnaud