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Tuesday, 7 September 2010 - Strasbourg
Funding and functioning of the European Globalisation Adjustment Fund

European Parliament resolution of 7 September 2010 on the funding and functioning of the European Globalisation Adjustment Fund (2010/2072(INI))

The European Parliament,

–  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 20 December 2006 on establishing the European Globalisation Adjustment Fund(2) (EGF Regulation),

–  having regard to Regulation (EC) No 546/2009 of the European Parliament and of the Council of 18 June 2009 amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund(3),

–  having regard to its resolutions on the proposals for decisions 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, that have been adopted since 23 October 2007(4),

–  having regard to the Commission communications of 2 July 2008 (COM(2008)0421) and 28 July 2009 (COM(2009)0394) to the European Parliament and the Council on European Global Adjustment Fund activities in 2007 and 2008,

–  having regard to Rule 48 of its Rules of Procedure,

–  having regard to the report of the Committee on Budgets and the opinions of the Committee on Employment and Social Affairs and the Committee on Economic and Monetary Affairs (A7-0236/2010),

A.  whereas, with a view to countering the adverse impact of globalisation on workers affected by collective redundancies and to showing its solidarity towards such workers, besides increasing their re-employment, the European Union set up a European Globalisation Adjustment Fund (hereinafter ‘EGF’) to provide financial support for personalised programmes to reintegrate redundant workers into the labour market; whereas the EGF has a maximum annual amount of EUR 500 million, drawn either from any margin existing under the global expenditure ceiling of the previous year or from cancelled commitment appropriations for the two previous years, excluding those relating to Heading 1b of the Financial Framework; whereas the EGF was established as a flexible, specific support instrument that was meant to respond more quickly and effectively to the reintegration of workers affected by redundancies resulting from changes in world trade patterns,

B.  whereas, in response to the increase in unemployment resulting from the economic and financial crisis and to the lessons learned from the experience gained in 2007 and 2008, the European Union amended the rules governing the use of the EGF in June 2009; whereas that amendment concerned all applications to be submitted before 31 December 2011 and consisted in broadening the scope of the EGF, relaxing and clarifying the intervention criteria, raising the cofinancing rate and extending the period during which Member States may use the financial contributions provided,

C.  whereas an analysis of the funds mobilised under the EGF between 2007 and the end of the first half of 2009 highlights modest implementation of the allocated resources, with only EUR 80 million having being mobilised, out of a total of EUR 1.5 billion available, for 18 applications submitted on behalf of 24 431 workers by eight Member States for a very limited number of sectors (notably textiles and the car industry); whereas those shortcomings are also reflected in the differences between the amounts initially allocated and those finally implemented, with EUR 24.8 million (39,4% of the appropriations mobilised) having subsequently been paid back in the case of the first 11 applications,

D.  whereas, although EGF operations under the revised regulation cannot as yet be assessed owing to the fact that the applications submitted since May 2009 are still awaiting a decision or being acted on, there can already be said to have been a marked increase in the number of applications for EGF support, which confirms the pertinence of the changes made; whereas between May 2009 and April 2010 the number of applications submitted rose from 18 to 46, the total contributions requested from EUR 80 million to EUR 197 million and the number of Member States submitting applications from 8 to 18, while the number of workers requiring support almost doubled (36 712 more workers than before) and the applications concerned a much broader range of economic sectors,

E.  whereas, however, 9 Member States have yet to make use of the EGF, the amounts mobilised remain well below the maximum annual amount of EUR 500 million available and most applications are for regions in which per capita GDP is above the EU average and where the unemployment rate is relatively low; whereas, in view of this, it may be concluded that, although the improvements made to the original regulation were substantial, they remain limited when set against the increase in the number of collective redundancies recorded over recent years,

F.  whereas the raising of the cofinancing rate from 50% to 65% during the 2009 revision would appear to be one of the factors behind the increase in the number of applications,

G.  whereas the limited use made of the EGF for the EU's poorest regions stems from varying national strategies and from the difficulties involved in establishing the precise status of potential beneficiaries before a decision is taken at European level,

H.  whereas, although the Joint Declaration of the European Parliament, the Council and the Commission of 17 July 2008 called for EGF financial support to be provided as swiftly and effectively as possible, some 12 to 17 months still elapse between the time when a collective redundancy takes place and the time when EGF funding is provided to the requesting Member State; whereas this is one of the reasons for the disparity between the number of workers for whom EGF funding is requested and the number of workers who actually receive support under the fund,

I.  whereas the draft interinstitutional agreement between the European Parliament, the Council and the Commission on cooperation in budgetary matters(5) alters the procedure for mobilising the EGF only slightly, by making the trilogue procedure optional, in line with standard practice; whereas this change is unlikely to make the procedure any less slow and cumbersome,

J.  whereas, according to the Commission's interim report on the functioning of the IIA(6), the need for the two arms of the budgetary authority to take a specific decision to mobilise the EGF is one of the factors behind the slowness of the procedure; whereas this should not prevent speeding up and simplification of decisions on the mobilisation of the EGF,

K.  whereas reliable and consistent data on the implementation of the EGF since its modification after 2009 is not yet available and taking the strong view that transparency and regular reporting duties need to be established,

L.  whereas the 27 decisions taken between 2007 and April 2010 were all favourable and the amounts authorised were the same as those proposed by the Commission,

M.  whereas the globalisation phenomenon and the effects of the economic crisis on employment will persist beyond 2013 and, as a consequence, it is probable that the tendency for the number of applications to rise will increase in the next years; whereas, however, the intention of the fund is not to be a substitute for lack of innovation,

1.  Takes the view that the EGF's added value as an EU social policy instrument lies in the fact that it provides visible, specific, targeted and temporary financial support for personalised programmes for the reskilling and reintegration into employment of workers affected by collective redundancies in sectors or regions undergoing severe economic and social disruption;

2.  Takes the view that the increase in the number of applications for EGF funding and the difficulties experienced in implementing the EGF mobilisation and deployment procedure call for improvements to be made to the fund's procedural and budgetary arrangements at the earliest opportunity; underlines that the Commission should improve information about, and the visibility of, the EGF among the Member States and the potential beneficiaries of the fund; calls, accordingly, on the Commission to bring the submission of its mid-term evaluation forward to 30 June 2011 and to submit at the same time a proposal for the revision of the EGF Regulation, in order to remedy the fund's clearest shortcomings before the end of the current Multiannual Financial Framework (MFF);

3.  Calls on the Commission to evaluate in its interim review the contributions granted with reference to the following qualitative aspects:

   (a) the rate of success in reintegration and assessment of the upgrading of the skills of the beneficiaries;
   (b) a comparative analysis of the measures financed in response to each EGF application and results on the basis of reintegration;
   (c) compliance with the non-discrimination criterion with reference to the contractual position of the workers made redundant and to workers who make use of their right to free movement within the EU;
   (d) the procedures for consulting the social partners that were or were not used when preparing applications and the checks carried out on their implementation;
   (e) the impact of the EGF on its beneficiaries' network and on the small and medium-sized enterprises potentially affected by the redundancy plan and whose employees could profit from the fund;
   (f) an analysis of the implications of the different EGF candidatures in terms of the national institution in charge of their management;
   (g) the impact of contributions from the EGF by age group in benefiting Member States and sectors;

4.  Calls on the Commission to evaluate in its interim review the contributions granted from the budgetary point of view, and reflect its findings with particular reference to:

   (a) the reasons for the large disparity between the resources requested from the EGF and the amounts reimbursed by the beneficiary Member States when the assistance is already concluded;
   (b) in the cases where Member States have made reimbursements, which were the financed programmes and measures not executed;
   (c) the reasons for the large disparities between Member States in terms of the funding provided per worker in the different EGF applications;
   (d) an analysis of coordination between the various European-financed programmes (including ESF assistance) which have been allocated to the same region where EGF applications are being considered and/or their consideration has been concluded;
   (e) an analysis of the proportion of overall funding that the Commission accounted for in relation to other national and company-specific support measures;

5.  Considers that, when the regulation is revised, due account should be taken of the findings of the evaluation of the EGF's functioning and of the experience gained, and measures that will substantially reduce the length of the EGF mobilisation procedure should be introduced;

6.  Calls on the Commission to propose the addition to the EGF Regulation of an obligation for Member States to support the participation of a workers' association during the implementation phase; calls on the Commission to organise exchanges of experiences and good practices concerning workers' involvement in the implementation of the EGF, so that workers in existing and new cases may benefit from the expertise gained in previous cases;

7.  Underlines that the time required to mobilise the EGF could be halved if the following measures are formulated and adopted:

   (a) applications for mobilisation of the EGF should be drawn up by Member States as soon as a collective redundancy has been announced, and not after it has taken place;
   (b) the Commission should inform Member States that an application could be presented from the first day when the intervention criteria have been fulfilled;
   (c) all means should be made available to ensure swift and enhanced communication with the Member State concerned in this process;
   (d) applications by Member States in their own language and one of the European institutions' working languages could help the Commission department responsible for scrutinising applications to do so without delay;
   (e) the Commission should have the necessary human and technical capacities, respecting the principles of budgetary neutrality, to effectively and swiftly process the applications submitted by Member States;
   (f) the Commission should take decisions on the mobilisation of the EGF within 3-4 months after having received the application, including all necessary information, from the Member State; in cases where the assessment of an application might take longer than 4 months, the Commission should inform the EP as soon as possible and state the reasons for such a delay;

8.  Calls on the Commission to provide the Member States with a set of guidelines for the design and implementation of applications for EGF funding geared to a fast application procedure and a broad consensus among stakeholders on the strategy to be applied and the measures to be put in place for effective reintegration of the workers into the labour market; calls on the Member States to accelerate the procedure by prefinancing the measures that should start from the day of the application so as to use to the maximum the implementation period of the EGF for the benefit of the workers concerned;

9.  Reminds the Member States that they are obliged, on the one hand, to involve the social partners right from the outset in the task of preparing applications in accordance with Article 5 of the EGF Regulation and, on the other hand, to comply with Article 9 of the Regulation, which requests Member States to provide information on and publicise the funded actions, information that has also to be addressed to the workers concerned, the local and regional authorities and the social partners, and to standardise procedures; calls on the Member States to ensure that works councils are involved before any programme begins so as to guarantee that the social partners genuinely help to formulate conversion plans which meet the needs of employees and not of undertakings;

10.  Requests the Member States to put in place a communication and administration structure for the EGF at national level, in consultation with all stakeholders, particularly the social partners, and to exchange good practice at European level, which will allow the EGF to take rapid and effective action in cases of large-scale redundancies;

11.  Points out that Regulation (EC) No 1927/2006 allows countries to submit joint requests for assistance from the EGF where the workers affected in a geographical area or a given sector are not concentrated in a single Member State;

12.  Considers that, in order to speed up and simplify procedures, more effective coordination between the Commission and the European Parliament must be ensured, so that the time limit for decision-making could be reduced, without detriment to the evaluation of the applications made by the relevant committees of the EP, and therefore:

   (a) the Commission must take due account of the EP calendar, with regard to the parliamentary committee meetings as well as the part-sessions, submitting its proposals in due time, in order to speed up the decision-making procedure;
   (b) the Commission must inform the EP in due time on difficulties and/or blockages encountered while assessing the Member States' applications;
   (c) on the other hand, the Committee on Employment and Social Affairs and the Committee on Budgets will do everything they can to ensure that decisions are taken at the next plenary session following adoption in committee;

13.  Considers that these immediate steps to simplify and give added flexibility to the EGF mobilisation procedure could, if warranted in the light of the experience gained by then, be incorporated into the regulation when it is revised; takes the view that any of these steps should not in any way limit or decrease the power of Parliament as one arm of the budgetary authority while deciding on the mobilisation of the fund;

14.  Takes the view that, over and above these improvements to the procedure, the period of validity of the derogation inserted in 2009 with a view to assisting workers who lose their jobs as a result of the economic and financial crisis should be extended until the end of the current MFF and that the cofinancing rate should, therefore, be maintained at 65%, given that the underlying causes on which their approval was based are far from having been removed;

15.  Notes the inclusion, for the first time, in the Commission's Draft Budget 2011 of payment appropriations for the EGF and considers this an important element in the overall reflection on the management and visibility of this fund; considers, however, that these payment appropriations might not be sufficient to cover the amounts necessary for EGF applications in 2011; reiterates, therefore, its demand not to finance EGF applications exclusively through transfers from ESF lines and calls on the Commission to identify and use without further delay different budget lines for this purpose;

16.  Stresses that the future of the EGF will be determined in the framework of negotiations on the next MFF; considers that for this purpose several options could be examined; considers that particular attention should be given to examining the option of establishing an independent fund with its own commitment and payment appropriations and calls on the Commission to come forward with proposals for resourcing such a fund; believes that any future reform of the EGF should maintain its flexibility, which currently represents a comparative advantage in relation to the EU Structural Funds;

17.  Stresses that the conversion of the current EGF measures into a permanent means of support for active job-seeking measures would show a political will to develop a European social pillar that would be complementary to Member States' social policies and capable of revitalising the European approach to professional training; with this in mind, points out that the EGF should remain distinct in its objectives from the ESF and the European lifelong learning programmes, given that the EGF focuses on enhancing the abilities of each of the workers assisted, rather than on providing a response to the concerns of businesses or on the delivery of across-the-board services to training establishments;

18.  Calls on Member States using the EGF to create synergies between the EGF, ESF and micro-finance so as to identify the measure best suited to the individual case;

19.  Urges the Member States to use the EGF to implement European objectives, to promote new skills, for new, sustainable, green, high-quality jobs in a given region and to promote entrepreneurship and lifelong learning, so as to allow workers to develop their individual careers and to contribute to improving the competitiveness of the EU in the context of globalisation;

20.  Calls on the Commission to improve its reporting on the use of the EGF by substantially fleshing out its annual reports and regularly forwarding to Parliament information on Member States' implementation of financial contributions;

21.  Instructs its President to forward this resolution 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) OJ L 167, 29.6.2009, p. 26.
(4) Texts adopted of 25.3.2010 (P7_TA(2010)0071 and P7_TA(2010)0070), 9.3.2010 (P7_TA(2010)0044, P7_TA(2010)0043 and P7_TA(2010)0042), 16.12.2009 (P7_TA(2009)0107), 25.11.2009 (P7_TA(2009)0087), 20.10.2009 (P7_TA(2009)0049), 15.09.2009 (OJ C 224 E, 19.8.2010, p. 46), 5.5.2009 (OJ C 212 E, 5.8.2010, p. 165), 18.11.2008 (OJ C 16 E, 22.1.2010, p.84), 21.10.2008 (OJ C 15 E, 21.1.2010, p.117), 10.4.2008 (OJ C 247 E, 15.10.2009, p.75), 12.12.2007 (OJ C 323 E, 18.12.2008, p.260) and 23.10.2007 (OJ C 263 E, 16.10.2008,p.155).
(5) COM(2010)0073 of 3 March 2010.
(6) COM(2010)0185 of 27 April 2010.

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