European Parliament 2014-2019 Committee on Budgets 2016/2214(BUD) 8.9.2016 DRAFT 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/2016 SE/002/Ericsson) (COM(2016)0554 C8-0355/2016 2016/2214(BUD)) Committee on Budgets Rapporteur: Esteban González Pons PR\1101069.docx PE587.430v01-00 United in diversity
PR_BUD_Funds CONTTS Page MOTION FOR A EUROPEAN PARLIAMT RESOLUTION... 3 ANNEX: DECISION OF THE EUROPEAN PARLIAMT AND OF THE COUNCIL... 7 EXPLANATORY STATEMT... 9 PE587.430v01-00 2/11 PR\1101069.docx
MOTION FOR A EUROPEAN PARLIAMT 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/2016/002 SE/Ericsson) COM(2016)0554 C8-0355/2016 2016/2214(BUD)) The European Parliament, having regard to the Commission proposal to the European Parliament and the Council (COM(2016)0554 C8-0355/2016), 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 2 December 2016), and in particular point 13 thereof, having regard to the trilogue procedure provided for in point 13 of the IIA 2 December 2016, 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 (A8-0000/2016), 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 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 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. PR\1101069.docx 3/11 PE587.430v01-00
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/2016/002 SE/Ericsson for a financial contribution from the EGF, following redundancies in the economic sector classified under the NACE Revision 2 Division 26 (Manufacture of computer, electronic and optical products) mainly in the NUTS level 2 regions of Stockholm (SE11), Östra Mellansverige (SE12), Sydsverige (SE22) and Västsverige (SE23) and whereas 918 out of 1556 redundant workers eligible for the EGF contribution are expected to participate in in the measures; 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 selfemployed persons whose activity has ceased; F. whereas facing stagnating growth and simultaneously harder competition with Asian producers, Ericsson has been scaling down telecom hardware production, a process that started two decades ago; 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 3 957 918 under that Regulation, which represents 60% of the total cost of EUR 6 596 531; 2. Notes that Sweden submitted the application for a financial contribution from the EGF on 31 March 2016, and that the assessment of that application was finalised by the Commission on 5 September 2016 and notified to Parliament thet same day; 3. Notes that the IT and telecommunication industries are dominated by Asian manufacturers which have become an outsourcing destination; points out that Ericsson has gradually been cutting staff in Sweden (from 21 178 in 2005 to 17 858 in 2014), but in the meantime been growing tremendously worldwide (from 56 055 in 2005 to 118 055 in 2014); 4. Points out that a relatively large group of older workers with similar backgrounds have been made redundant at the same time, with most of these workers not possessing the skills sought after on the local labour market; 5. Welcomes the fact that the Swedish authorities decided to focus possible EGF assistance especially on the Kista, Katrineholm and Kumla sites, as these face the biggest challenges; recalls that individualised help must be offered to workers made redundant at the other sites as well; 6. Recalls the diversity of employees, both blue- and white-collar, affected by the PE587.430v01-00 4/11 PR\1101069.docx
redundancies; and is concerned that some workers face a labour market with rather low demand in traditional manufacturing industries; acknowledges the opportunities for these workers in the public or private sector service industries, which would require major retraining efforts; 7. Notes that Sweden is planning four types of measures for redundant workers covered by this application: (i) counselling and career guidance devided in: in-depth assessment and individual planning, guidance counselling and motivation coaching and career planning, (ii) sheltered and supported employment and rehabilitation measures, (iii) education and training, (iv) job search allowance; 8. Notes that the coordinated package of personalised services has been drawn up in consultation with the targeted beneficiaries and their representatives as well as with local public actors; 9. Recalls that, in line with Article 7 of the EGF Regulation, the design of the coordinated package of personalised services supported by the EGF should anticipate future labour market perspectives and required skills and should be compatible with the shift towards a resource-efficient and sustainable economy; 10. 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; 11. Asks the Commission to further set out, in future proposals, the sectors in which the workers are likely to find employment and if the training on offer is aligned to the future economic prospects and labour market needs in the regions concerned by the dismissals; 12. Notes that Sweden confirms that the eligible actions do not receive assistance from other Union financial instruments; reiterates its call to 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; 13. Notes that the Manufacture of computer, electronic and optical products sector has been the subject of another 14 EGF applications, 11 of which have been based on trade related globalisation and threeon the global financial and economic crisis; 14. 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 of measures for restructuring companies or sectors; 15. 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; 16. Asks the Commission to assure public access to the documents related to EGF cases; PR\1101069.docx 5/11 PE587.430v01-00
17. Approves the decision annexed to this resolution; 18. 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; 19. Instructs its President to forward this resolution, including its Annex, to the Council and the Commission. PE587.430v01-00 6/11 PR\1101069.docx
ANNEX: DECISION OF THE EUROPEAN PARLIAMT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund (application from Sweden EGF/2016/002 SE/Ericsson) THE EUROPEAN PARLIAMT 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 1, 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 2, 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 3. (3) On 31 March 2016, Sweden submitted an application to mobilise the EGF, in respect of redundancies in Ericsson (Telefonaktiebolaget LM Ericsson) in Sweden. It was supplemented by additional information provided in accordance with Article 8(3) of Regulation (EU) No 1309/2013. That 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 3 957 918 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, 1 OJ L 347, 20.12.2013, p. 855. 2 OJ C 373, 20.12.2013, p. 1. 3 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). PR\1101069.docx 7/11 PE587.430v01-00
HAVE ADOPTED THIS DECISION: Article 1 For the general budget of the Union for the financial year 2016, the European Globalisation Adjustment Fund shall be mobilised to provide the amount of EUR 3 957 918 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]. Done at, For the European Parliament The President For the Council The President Date to be inserted by the Parliament before the publication in OJ. PE587.430v01-00 8/11 PR\1101069.docx
EXPLANATORY STATEMT 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 1 and of Article 15 of Regulation (EU) No 1309/2013 2, 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 3, 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. Ericsson application and the Commission's proposal On 5 September 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 to Telefonaktiebolaget LM Ericsson operating in the NACE Rev. 2 division 26 ('Manufacture of computer, electronic and optical products trailers ) mainly in the NUTS 4 level 2 regions of Stockholm (SE11), Östra Mellansverige (SE12), Sydsverige (SE22) and Västsverige (SE23). This is the eighth application to be examined under the 2016 budget and the 15th for the Manufacture of computer, electronic and optical products sectors and refers to the mobilisation of a total amount of EUR 3 957 918 from the EGF for Sweden. It concerns 918 workers made redundant. The application was sent to the Commission on 31 March 2016 and supplemented by additional information up to 2 May 2016. 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. 1 OJ L 347, 20.12.2013, p. 884. 2 OJ L 347, 20.12.2013, p. 855. 3 OJ C 373, 20.12.2013, p. 1. 4 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). PR\1101069.docx 9/11 PE587.430v01-00
The Swedish trade union Unione n states that Ericsson is still hiring in Europe, but only people with an entirely different set of skills. Employees with skills in hardware production and development are generally not reemployed by the company 1. Most of the company's growth nowadays is in software development. Even though some software development is done in Europe, most of the growth in this sector is also happening in Asia 2, where Ericsson is expanding its activities 3. The personalised services which are to be provided to workers made redundant consist of four types of measures: (i) counselling and career guidance declined in in-depth assessment and individual planning, guidance counselling and motivation coaching and career planning, (ii) sheltered and supported employment and rehabilitation measures, (iii) education and training, (iv) 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, Ericsson, 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 3 957 918 from the EGF reserve (40 02 43) to the EGF budget line (04 04 01). This is the eighth transfer proposal for the mobilisation of the Fund transmitted to the Budgetary Authority to date during 2016. 1 http://unionenopinion.se/analyser/varsel-pa-ericsson-och-sony-mobile-vad-hander-i-telekombranschenegentligen/ 2 http://cio.idg.se/2.1782/1.630340/sa-sourcar-svenska-cio-er-2015 3 http://www.forbes.com/sites/greatspeculations/2015/08/19/ericsson-can-overcome-challenges-in-the-mobileinfrastructure-business/#77e6e5cb128d PE587.430v01-00 10/11 PR\1101069.docx
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. PR\1101069.docx 11/11 PE587.430v01-00