EUROPEAN PARLIAMT 2014-2019 Committee on Budgets 17.10.2014 2014/2137(BUD) 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, in accordance with 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 (application EGF/2014/008 FI/STX Rauma, submitted by Finland) (COM(2014)0630 C8-0214/2014 2014/2137(BUD)) Committee on Budgets Rapporteur: Petri Sarvamaa PR\1037468.doc PE539.865v01-00 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 PE539.865v01-00 2/11 PR\1037468.doc
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, in accordance with 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 (application EGF/2014/008 FI/STX Rauma, submitted by Finland) (COM(2014)0630 C8-0214/2014 2014/2137(BUD)) The European Parliament, having regard to the Commission proposal to the European Parliament and the Council (COM(2014)0630 C8-0214/2014), 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 (A8-0000/2014), 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 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 for the IIA of 2 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\1037468.doc 3/11 PE539.865v01-00
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 increase 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 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 the Finnish authorities submitted application EGF/2014/00 FI/STX Rauma on 27 May 2014 following the dismissal of 577 workers in STX Finland Oy, an enterprise which operated in the economic sector classified under NACE Rev. 2 division 30 ('Manufacture of other transport equipment'), E. whereas the application fulfils the eligibility criteria set up by the EGF Regulation, 1. Notes that the Finnish authorities submitted the application under the intervention criterion of Article 4(1)(a) of the EGF Regulation, which requires at least 500 workers being made redundant or self-employed persons' activity ceasing, over a reference period of four months in an enterprise in a Member State, including workers made redundant or self-employed persons' activity ceasing in its suppliers and downstream producers; 2. Notes that the Finnish authorities submitted the application for EGF financial contribution on 27 May 2014, and that its assessment was made available by the Commission on 14 October 2014; welcomes the speedy evaluation of less than five months; 3. Notes that the Finnish authorities argue that the global maritime industry changed dramatically in recent years and that in this global context the EU market share in shipbuilding 1 has plummeted from 13% in 2007 to 5 % in the first three quarters of 2013, while the equivalent share of China, South Korea and Japan combined increased from 77% in 2007 to 86 % in the first three quarters of 2013; notes that in addition to this significant expansion by Asia in the shipbuilding market, reduced orders resulting from the economic crisis pushed the European sector into global overcapacity leading to tough competition; 4. Agrees that these factors are linked to major structural changes in world trade patterns due to globalisation and that Finland is therefore entitled to EGF an contribution; 5. Notes that to date, the shipbuilding sector in broad terms has been the subject of 6 EGF applications, with one based on trade related globalisation and the other five on the global financial and economic crisis; 6. Notes that these redundancies will further aggravate the unemployment situation in 1 measured by production volume PE539.865v01-00 4/11 PR\1037468.doc
Southwest Finland, as most of the dismissed workers have a poor standard of education in combination with relatively advanced age, which is likely to increase the risk of prolonged unemployment; is all the more concerned about the effects of this closure on the region as the shipyard and metal industry constitute core economic activities and have historic tradition, making the transition to new economic activities all the more difficult; 7. Notes that in addition to the 577 redundancies within the reference period, 57 workers dismissed after the reference period of four month are also included in the number of eligible beneficiaries, which amounts in total to 634 persons; the number of targeted beneficiaries of the EGF measures is of 565; 8. Notes that the total budget for implementing of EGF is EUR 2 378 000, out of which EUR 113 000 are dedicated to implementation, and that the financial contribution of the EGF amounts to EUR 1 426 800, which represents 60% of the total costs; 9. Welcomes the fact that, in order to provide workers with speedy assistance, the Finnish authorities decided to initiate the implementation of the personalised services to the affected workers on 15 January 2014, ahead of the final decision on granting the EGF support for the proposed coordinated package and even of the application for financial a contribution from the EGF; 10. Notes that the Finnish authorities have indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners concerned as well as various other stakeholders and welcomes that consultations continue in the form of a working group convened by the Ministry of Employment and the Economy specifically to address the redundancies at STX Finland; 11. Notes that the personalised services which are to be provided consist of the following three types of measures for the redundant workers covered by this application, (i) helping them to transfer to a new job, (ii) helping them to start their own business, and (iii) providing training or education; 12. Welcomes especially the measure entitled "Enterprise survey", by which a survey of jobs in the Rauma region is to be carried out together with business and industries in Rauma so as to produce up-to-date information on enterprises' personnel needs and to steer the targeted workers in the right direction and provide them with the necessary training; 13. Calls on the ESF measures planned within the new ESF programming period to complement the EGF plan and to facilitate the worker's reintegration in future-oriented and sustainable economic sectors; 14. Recalls that employability depends also on the level of integration in society and therefore calls for special attention to be put on the older and less qualified workers' social accompaniment; 15. Welcomes that the principles of equality of treatment and non-discrimination will be respected in the access to the proposed actions and their implementation; PR\1037468.doc 5/11 PE539.865v01-00
16. Approves the decision annexed to this resolution; 17. 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; 18. Instructs its President to forward this resolution, including its annex, to the Council and the Commission. PE539.865v01-00 6/11 PR\1037468.doc
ANNEX: DECISION OF THE EUROPEAN PARLIAMT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund, in accordance with 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 (application EGF/2014/008 FI/STX Rauma, submitted by Finland) 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 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 between the European Parliament, the Council and the Commission of 2 December 2013 on budgetary discipline, on cooperation in budgetary matters and on sound financial management 3, and in particular point 13 thereof, Having regard to the proposal from the European Commission, Whereas: (1) The European Globalisation Adjustment Fund (EGF) was established 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 addressed in Regulation (EC) No 546/2009 4, 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 shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Regulation (EU, Euratom) No 1311/2013. (3) Finland submitted an application to mobilise the EGF, in respect of redundancies 5 in STX Finland Oy in Rauma, on 27 May 2014 and supplemented it by additional 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 167, 29.6.2009, p.26. 5 Within the meaning of Article 3(a) of the EGF Regulation. PR\1037468.doc 7/11 PE539.865v01-00
information as provided by Article 8(3) of Regulation (EU) No 1309/2013. This 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 an amount of EUR 1 426 800 for the application submitted by Finland, HAVE ADOPTED THIS DECISION: Article 1 For the general budget of the European Union for the financial year 2014, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 1 426 800 in commitment and payment appropriations. Article 2 This decision shall be published in the Official Journal of the European Union. Done at, For the European Parliament The President For the Council The President PE539.865v01-00 8/11 PR\1037468.doc
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. The STX Rauma application and the Commission's proposal On 14 October 2014, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of Finland to support the reintegration in the labour market of workers made redundant in STX Finland Oy operating in the economic sector classified under NACE Rev. 2 division 30 ('Manufacturing of other transport equipment') due to major structural changes in world trade patterns due to globalisation. This is the sixteenth application to be examined under the 2014 budget and refers to the mobilisation of a total amount of EUR 1 426 800 from the EGF for Finland. It concerns a total of 565 beneficiaries. The application was sent to the Commission on 27 May 2014 and supplemented by additional information up to 22 July 2014. 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 Finnish authorities argue that the global maritime industry changed dramatically in recent years and that in this global context the EU market share has plummeted. Measured by production volume, the EU market share in shipbuilding was 5 % in the first three quarters of 2013, down from 13 % in 2007. The equivalent share of China, South Korea and Japan combined was 86 % in the first three quarters of 2013, while in 2007 this same share had been 77 %. 1 OJ L 347, 20.12.2013, p. 884. 2 OJ L 347, 30.12.2013, p. 855. 3 OJ C 373, 20.12.2013, p. 1. PR\1037468.doc 9/11 PE539.865v01-00
In many Asian countries, the shipyard industry has become an instrument for creating national employment and earning foreign currency. States there support the shipbuilding industry because of its global character and employment impacts. Europe, the birthplace of the modern shipbuilding industry, has thus to a great extent lost out to Asian countries with low labour costs. The Finnish authorities argue that after STX closes down, the unemployment rate in the Rauma region is expected to go up by over 2 percentage points from 11,1 to 13,1%. Moreover, a poor standard of education in combination with relatively advanced age is likely to increase the risk of prolonged unemployment. The personalised services which are to be provided to workers made redundant consist of the following actions which combine to form a co-ordinated package of personalised services: Coaching and other preparatory measures, Employment and business services at a Service Point, Training and re-training, Entrepreneurship promotion and training and expert services, Enterprise survey, Pay subsidies, Allowances for travel, overnight and removal costs. 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 Finnish 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; the dismissing enterprise has continued its activities after the lay-offs; it has complied with its legal obligations governing the redundancies and has provided for its workers accordingly; the proposed actions will provide support for individual workers and will not be used for restructuring companies or sectors; 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. PE539.865v01-00 10/11 PR\1037468.doc
Finland has notified the Commission that the sources of national pre-financing or co-funding come mainly from the public employment services line in the administrative branch of the Ministry of Employment and the Economy and that some services will be co-funded from the operating expenditure of the Centres for Economic Development, Transport and the Environment and the Employment and Economic Development Offices. 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 1 426 800 from the EGF reserve (40 02 43) to the EGF budget line (04 04 01). This is the sixteenth transfer proposal for the mobilisation of the Fund transmitted to the Budgetary Authority to date during 2014. 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\1037468.doc 11/11 PE539.865v01-00