REPORT on the proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund (application from Sweden – EGF/2015/009 SE/Volvo Trucks)

6.4.2016 - (COM(2016)0061 – C8‑0033/2016 – 2016/2022(BUD))

Committee on Budgets
Rapporteur: Victor Negrescu

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 (application from Sweden – EGF/2015/009 SE/Volvo Trucks)

(COM(2016)0061 – C8‑0033/2016 – 2016/2022(BUD))

The European Parliament,

–  having regard to the Commission proposal to the European Parliament and the Council (COM(2016)0061 – C8‑0033/2016),

–  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 (A8-0077/2016),

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 of 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 order to facilitate the redeployment and reinsertion of workers made redundant, 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 set the 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 the time for assessment and approval, to widen eligible actions and beneficiaries by introducing self-employed persons and young people and to finance incentives for setting up own businesses;

D.  whereas Sweden submitted application EGF/2015/009 SE/Volvo Trucks for a financial contribution from the EGF, following redundancies in the economic sector classified under the NACE Revision 2 Division 29 (Manufacture of motor vehicles, trailers and downstream producers) mainly in the NUTS level 2 region of Upper Norrland (SE33), and whereas 500 out of 647 redundant workers eligible for the EGF contribution are expected to participate in the measures; whereas 470 of those workers were made redundant in Volvo Group Truck Operation EMEA following reductions in its Umeå plant, and 177 others in 4 suppliers and downstream producers (IL Logistics AB, Lemia, Caverion and Isringhausen);

E.  whereas the application was submitted under the intervention criteria of point (a) of Article 4(1) of the EGF Regulation, which requires at least 500 workers being made redundant over a reference period of four months in an enterprise in a Member State, including workers made redundant by suppliers and downstream producers and / or self-employed persons whose activity has ceased;

F.  whereas the financial control of the actions supported by the EGF is the responsibility of the Member State, as laid down in Article 21(1) of the EGF Regulation;

1.  Agrees with the Commission that the conditions set out in point (a) of Article 4(1) of the EGF Regulation are met and that, therefore, Sweden is entitled to a financial contribution of EUR 1 793 710 under that Regulation, which represents 60 % of the total cost of EUR 2 989 518;

2.  Notes that the Swedish authorities submitted the application for a financial contribution from the EGF on 16 September 2015, and that its assessment was finalised by the Commission on 16 February 2016 and notified to Parliament that day;

3.  Expresses its regret that the Commission was unable to comply with the deadline for the completion of the assessment of this application due to an exceptional shortage of staff; recalls that in the interest of the beneficiaries, assistance should be made available as quickly and efficiently as possible; calls on Member States and the Union institutions involved in the EGF decision-making process to do their utmost to reduce processing time and to simplify procedures so as to ensure the smooth and rapid adoption of decisions on the mobilisation of the EGF;

4.  Notes that the manufacture of commercial vehicles is no longer dominated by European and North American manufacturers, due to newly emerging Asian truck manufacturers; points out that the heavy truck production in the Union decreased in 2014, as well as exports of heavy commercial vehicles, buses and coaches (a decrease of EUR 6.3 billion, or -11 %) while overall imports of commercial vehicles into the Union increased (+10 %); notes that the truck industry has found it difficult to embrace major transformation and the need to adjust while becoming ever more global; notes that the Swedish authorities argue that the partial relocation of the Volvo Umeå plant is driven by the need to increase efficiency and decrease cost to meet existing and expected global competition, as part of Volvo´s optimisation program;

5.  Points out that the redundancies represent a challenge in the region of the county of Västerbotten (of which Umeå is the capital) as the region's job vacancies are in highly qualified fields while most of the targeted workers have only secondary education; notes that the application refers to a recent report claiming that 40 000 new workers will be needed in the Västerbotten region; welcomes the measures targeting workers who need specialised education;

6.  Calls on the Member States to prepare, together with the social partners, strategies to anticipate the projected labour market changes and to protect Union jobs and skills on the basis of comprehensive trade impact assessments made by the Commission for each trade agreement;

7.  Notes that young people not in employment, education or training (NEETs) are not included in the application, because this region is not eligible for such intervention under the Youth Employment Initiative;

8.  Welcomes the fact that the Swedish authorities started providing the personalised services to the affected workers on 30 January 2015, well ahead of the decision on the granting of EGF support for the proposed coordinated package;

9.  Notes that Sweden is planning nine types of measures for redundant workers covered by this application: (i) in-depth assessment and individual planning; (ii) various job-search activities and coaching; (iii) motivation and health measures; (iv) entrepreneurship and business creation; (v) education and training; (vi) validation of competences; (vii) job-search assistance with private service providers; (viii) travel expenses and related costs; (ix) job search allowances;

10.  Welcomes the measures targeting motivation and health of the workers; considers such actions necessary to strengthen motivation and provide help for those whose health was damaged by being made redundant; appreciates furthermore measures for the validation of competences of the participants;

11.  Notes the high amount to be spent on allowances and incentives; notes also that the funding of these actions is limited to a maximum amount of 35 % of the total costs for the coordinated package of personalised measures, as set out in the EGF Regulation, and that those actions are conditional on the active participation of the targeted beneficiaries in job-search or training activities;

12.  Awaits the answer from the Commission confirming that the proposed job search allowance is not a substitute for the obligation of the Member State with regard to active labour market or social protection measures; furthermore expects an analysis of the complementarity of the measures supported by the EGF;

13.  Notes that the coordinated package of personalised services has been drawn up in consultation with the targeted beneficiaries and their representatives as well as local public actors;

14.  Reminds 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;

15.  Recalls the importance of improving the employability of all workers by means of adapted training and the recognition of skills and competences gained throughout a worker's professional career; expects the training on offer in the coordinated package to be adapted not only to the needs of the dismissed workers but also to the actual business environment and the prospective future of professional sectors;

16.  Asks the Commission to further detail, in future proposals, the sectors in which the workers are likely to find employment and whether the training on offer is aligned to the future economic prospects and labour market needs in the regions concerned by the dismissals;

17.  Notes that the Swedish authorities confirm that the eligible actions do not receive assistance from other Union financial instruments; reiterates its call on the Commission to present a comparative evaluation of those data in its annual reports in order to ensure full respect for existing regulations and that no duplication of Union-funded services can occur;

18.  Notes that, to date, the Manufacture of motor vehicles, trailers and semi-trailers sector has been the subject of 22 EGF applications, including this one, 12 of which were based on trade related globalisation and 10 on the global financial and economic crisis;

19.  Calls on the Commission to carefully assess cases where EGF funding is requested for redundancies resulting from delocalisation strategies of enterprises and ensure that these enterprises fully complied with mandatory responsibilities towards the redundant workers, by virtue of national law or pursuant to collective agreements and that EGF is used as a complimentary measure;

20.  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 for restructuring companies or sectors;

21.  Appreciates the improved procedure put in place by the Commission, following the Parliament's request for the accelerated release of grants; notes the time pressure that the new timetable implies and the potential impact on the effectiveness of case instruction;

22.  Reminds the Commission of its responsibility and obligation to provide in due time detailed information confirming that the proposed job search allowance does not substitute the obligation of the Member State with regard to active labour market or social protection measures and a detailed analysis showing the complementarity of these EGF measures;

23.  Asks the Commission to assure public access to all the documents related to EGF cases;

24.  Approves the decision annexed to this resolution;

25.  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;

26.  Instructs its President to forward this resolution, including its Annex, to the Council and the Commission.

ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund (application from Sweden – EGF/2015/009 SE/Volvo Trucks)

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[4], and in particular Article 15(4) 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[5], and in particular point 13 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)  The European Globalisation Adjustment Fund (EGF) aims 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, 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 is not to exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/2013[6].

(3)  On 16 September 2015, Sweden submitted an application EGF/2015/009 SE/Volvo Trucks for a financial contribution from the EGF, following redundancies in Volvo Trucks (Volvo Group Truck Operation, EMEA) and four suppliers and downstream producers in Sweden. It was supplemented by additional information provided in accordance with Article 8(3) of Regulation (EU) No 1309/2013. The 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 EUR 1 793 710 in respect of the application submitted by Sweden.

(5)  In order to minimise the time taken to mobilise the EGF, this decision should apply from the date of its adoption,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2016, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 1 793 710 in commitment and payment appropriations.

Article 2

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply from [the date of its adoption]^[7]*.

Done at ,

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[8] and of Article 15 of Regulation (EU) No 1309/2013[9], 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[10], 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.  Volvo Trucks application and the Commission's proposal

On 16 February 2016, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of Sweden to support the reintegration in the labour market of workers made redundant in 5 enterprises operating in the NACE Rev. 2 division 29 ('Manufacture of motor vehicles, trailers and semi-trailers’) mainly in the NUTS[11] level 2 region of Upper Norrland (SE33) in Sweden.

This is the second application to be examined under the 2016 budget and the 22nd for the manufacture of motor vehicles, trailers and semi-trailers sector and refers to the mobilisation of a total amount of EUR 1 793 710 from the EGF for Sweden. It concerns 500 workers made redundant.

The application was sent to the Commission on 16 September 2015 and supplemented by additional information up to 11 November 2015. 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 Swedish authorities state that the event giving rise to the redundancies are the developments affecting the European commercial vehicles, and in particular the truck industry in recent years, namely with emerging Asian truck manufacturers, and the difficulties of the truck industry to adjust, forcing it to increase efficiency and decrease cost.

The personalised services which are to be provided to workers made redundant consist of nine types of measures: application: (i) in-depth assessment and individual planning, (ii) various job-search activities and coaching, (iii) motivation and health measures, (iv) entrepreneurship and business creation, (v) education and training, (vi) validation of competences, (vii) job-search assistance with private service providers, (viii) travel expenses and related costs, (ix) job search allowance.

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 Swedish 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,

–  Volvo Trucks, which has continued its activities after the lay-offs, has complied with its legal obligations governing the redundancies and provided for their 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.

Sweden has notified the Commission that the EGF measures are co-funded by the Swedish government through Arbetsförmedlingen (the Swedish Public Employment Service) budget.

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 1 793 710 from the EGF reserve (40 02 43) to the EGF budget line (04 04 01).

This is the second transfer proposal for the mobilisation of the Fund transmitted to the Budgetary Authority to date during 2016.

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/jb D(2015)12392

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/2015/009 SE/Volvo Trucks from Sweden (COM(2016) 61 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/2015/009 SE Volvo Trucks 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 647 workers made redundant in Volvo Trucks operating in the NACE Revision 2 Division 29 (Manufacture of motor vehicles, trailers and semi-trailers) and four of its suppliers and downstream producers located mainly in NUTS level 2 region of SE33 Upper Norrland in Sweden within the reference period from 24 February 2015 to 24 June 2015;

B)  Whereas in order to establish the link between the redundancies and major structural changes in world trade patterns due to globalisation Sweden argues that the manufacture of commercial vehicles, a relatively small segment within the large automotive industry, is no longer dominated by European and North American manufacturers; whereas the newly emerging Asian truck manufacturers in China and India have gained access to new technology from joint ventures with established market leaders in the West;

C)  Whereas in 2014 the heavy truck production segment within the commercial vehicles market registered a negative trend compared to 2013; whereas a serious shift in EU trade was recorded in 2014 with EU manufacturers' exports declining and an increase in the import of vehicles;

D)  Whereas the majority (77.4%) of the workers targeted by the measures are men and 22.6% are women; whereas 60% of the workers are between 30 and 54 years old, 15% between 25 and 29 years old and 12.2% between 55 and 64 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 Swedish 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, Sweden is entitled to a financial contribution under this Regulation;

2.  Expresses its regret that the Commission was unable to comply with the deadline for the completion of the assessment of this application  ; notes that the reasons for the delay was an exceptional shortage of staff; considers that if the delay is the result of recent staff cuts in the Commission, then it should be recalled that in the interest of the beneficiaries, assistance should be made available as quickly and efficiently as possible. The Member States and the Union institutions involved in the EGF decision-making process should do their utmost to reduce processing time and simplify procedures so as to ensure the smooth and rapid adoption of decisions on the mobilisation of the EGF;

3.  Notes that young people not in employment, education or training (NEETs) are not included in the application, because this region is not eligible for such intervention under the Youth Employment Initiative;

4.  Calls on the Commission to carefully assess cases where EGF funding is requested for redundancies resulting from delocalisation strategies of enterprises and ensure that these enterprises fully complied with mandatory responsibilities towards the redundant workers, by virtue of national law or pursuant to collective agreements and that EGF is used as a complimentary measure;

5.  Awaits the answer from the Commission confirming that the proposed job search allowance does not substitute the obligation of the Member State with regard to active labour market or passive social protection measures and a detailed analysis showing the complementarity of these EGF measures;

6.  Notes that the application refers to a recent report claiming that 40 000 new employees will be needed in the Västerbotten region; welcomes the measures targeting workers who regard their educational level as insufficient for the vacancies identified in the region, which require specialised education;

7.  Welcomes measures targeting motivation and health of the workers; considers such actions necessary to strengthen motivation and provide help for those whose health was damaged by becoming redundant; appreciates furthermore measures validating the competences of the participants;

8.  Notes the high amount to be spent on allowances and incentives, notes that the funding of these actions is limited to a maximum amount of 35% of the overall package of personalised measures, as set out in the Regulation; and that they are conditional on the active participation of the targeted beneficiaries in job-search or training activities;

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.

Yours sincerely,

Thomas HÄNDEL

EMPL Chair

ANNEX: LETTER OF THE COMMITTEE ON REGIONAL DEVELOPMENT

Mr Jean ARTHUIS

Chairman

Committee on Budgets

European Parliament

Subject:  Mobilisation of the European Globalisation Adjustment Fund

Dear Mr. Arthuis,

A Commission proposal for a decision to mobilise the European Globalisation Adjustment Fund (EGF) has been referred for opinion to the Committee on Regional Development. I understand that it is intended that a report on this will be adopted in the Committee on Budgets on 4 April 2016:

-  COM(2016)0061 proposes an EGF contribution of EUR 1 793 710 for 470 workers made redundant in Volvo Trucks and 177 in 4 suppliers and downstream producers. The primary enterprise operates in the economic sector classified under the NACE Revision 2 Division 29 (Manufacture of motor vehicles, trailers and semi-trailers). The redundancies made by the primary enterprise are mainly located in the NUTS level 2 region of SE33 (Upper Norrland), Sweden.

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.

The Committee coordinators have assessed this proposal, and asked me to write to you reporting that the majority of this Committee has no objection to this mobilisation of the European Globalisation Adjustment Fund to allocate the above-mentioned amount as proposed by the Commission.

Yours sincerely,

Iskra MIHAYLOVA

RESULT OF FINAL VOTE IN COMMITTEE RESPONSIBLE

Date adopted	4.4.2016
Result of final vote	+: –: 0:	17 4 0
Members present for the final vote	Jean Arthuis, Lefteris Christoforou, Gérard Deprez, José Manuel Fernandes, Jens Geier, Iris Hoffmann, Bernd Kölmel, Ernest Maragall, Clare Moody, Younous Omarjee, Eleftherios Synadinos, Indrek Tarand, Auke Zijlstra
Substitutes present for the final vote	Anneli Jäätteenmäki, Pavel Poc, Alfred Sant
Substitutes under Rule 200(2) present for the final vote	Isabella Adinolfi, Jonás Fernández, Arne Gericke, Edouard Martin, Emilian Pavel

• [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]  OJ L 347, 20.12.2013, p. 855.
• [5]  OJ C 373, 20.12.2013, p. 1.
• [6]  Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884).
• [7] ^* Date to be inserted by the Parliament before the publication in OJ.
• [8]  OJ L 347, 20.12.2013, p. 884.
• [9]  OJ L 347, 20.12.2013, p. 855.
• [10]  OJ C 373, 20.12.2013, p. 1.
• [11]  Commission Regulation (EU) No 1046/2012 of 8 November 2012 implementing Regulation (EC) No 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) as regards the transmission of the time series for the new regional breakdown (OJ L 310, 9.11.2012, p. 34).