# EUR-Lex - 52014PC0560 - EN

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# 52014PC0560

**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/2014/006 FR/PSA) /* COM/2014/0560 final */**

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EXPLANATORY MEMORANDUM

CONTEXT OF THE PROPOSAL

1.           The rules applicable to
financial contributions from the European Globalisation Adjustment Fund (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[1] (the 'EGF Regulation').

2.           The French authorities
submitted application EGF/2014/006 FR/PSA for a financial contribution from the
EGF, following redundancies in Peugeot Citroën
Automobiles (hereafter 'PSA') in
  France.

3.           This application contains
some deficiencies, which are set out in paragraphs 32 and 33 of this
Memorandum. Despite these deficiencies, the Commission could assess the
application from France. Following its assessment of this application, the
Commission has concluded, in accordance with all applicable provisions of the
EGF Regulation, that the conditions for awarding a financial contribution from
the EGF are met.

SUMMARY OF THE APPLICATION

EGF application: || EGF/2014/006 FR/PSA

Member State: || France

Region(s) concerned (NUTS level 2): || Ile de France (FR10) Bretagne (FR52)

Date of submission of the application: || 25 April 2014

Date of acknowledgement of receipt of the application: || 7 May 2014

Date of request for additional information: || 8 May 2014

Deadline of provision of the additional information: || 19 June 2014

Deadline for the completion of the assessment: || 11 September 2014

Intervention criterion: || Article 4(1)(a) of the EGF Regulation

Primary enterprise: || Peugeot Citroën Automobile (PSA)

Sector(s) of economic activity (NACE Rev. 2 division)[2]: || Division 29 ('Manufacture of motor vehicles, trailers and semi-trailers')

Number of subsidiaries, suppliers and downstream producers: || 0

Reference period (four months): || 1 October 2013 - 31 January 2014

Number of redundancies or cessations of activity during the reference period (a): || 1 989

Number of redundancies or cessations of activity before or after the reference period (b): || 4 131

Total number of redundancies (a + b): || 6 120

Total estimated number of targeted beneficiaries: || 2 357

Number of targeted young persons not in employment, education or training (NEETs): || 0

Budget for personalised services (EUR) || 21 133 946

Budget for implementing EGF[3] (EUR) || 40 396

Total budget (EUR) || 21 174 342

EGF contribution (60 %) (EUR) || 12 704 605

ASSESSMENT OF THE APPLICATION

Procedure

4.           The French authorities submitted
application EGF/2014/006 FR/PSA within 12 weeks of the date on which the
intervention criteria set out in paragraphs 6 to 8 below were met, on 25 April
2014. The Commission acknowledged receipt of the application within two weeks
of the date of submission of the application, on 7 May 2014 and requested
additional information from the French authorities on the following day (8 May
2014). Such additional information was provided within six weeks of the date of
the request. The deadline of 12 weeks of the receipt of the complete
application within which the Commission should finalise its assessment of the
application's compliance with the conditions for providing a financial
contribution expires on 11 September 2014.

Eligibility of the application

Enterprises and beneficiaries
concerned

5.           The application relates to
6 120 workers made redundant in PSA. This enterprise operates in the
economic sector classified under NACE Rev. 2 division 29 ('Manufacture of motor
vehicles, trailers and semi-trailers'). The redundancies are mainly located
around the Aulnay plant (being closed) in the NUTS[4] level 2 region of the
Ile de France (FR10) and the Rennes plant (where major redundancies occurred)
inthe Bretagne (FR52).

Intervention criteria

6.           The French authorities submitted
the application under the intervention criteria 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 in its suppliers and downstream producers.

7.           The
reference period of four months runs from 1 October 2013 to 31 January 2014.

8.           The
application relates to 1 989 workers made redundant[5] in PSA during the reference period of four months.

Calculation of redundancies and of
cessation of activity

9.           All 1 989
redundancies have been calculated from the date of the employer's individual
notice to lay off or to terminate the contract of employment of the worker.

Eligible beneficiaries

10.         In addition to the 1 989
workers already referred to,
the eligible beneficiaries include 4 131 workers made redundant before or
after the reference period of four months. These workers were made redundant
after the general announcement of the projected redundancies on 25 July 2012. A
clear causal link can be established with the event which triggered the
redundancies during the reference period.

11.         The total number of
eligible beneficiaries is therefore 6 120.

Link between the redundancies and major
structural changes in world trade patterns due to globalisation

12.         In order to establish the
link between the redundancies and major structural changes in world trade
patterns due to globalisation, France quotes "L'industrie Automobile
Francaise, Analyse et statistiques 2013[6]",
arguing that between the years 2000 and 2012, world production of vehicles grew
by 25 million units or 44 %. Despite the effects of the global financial and
economic crisis, production growth at global level continued (and still
continues) at above 3 % per annum.

13.         Within this continued
growth, major disparities have emerged between the countries where motor
vehicle production has long been established, and the more recent producers.
Thus, during the same period (2000 to 2012), production in the USA declined by 11 %, that in Western Europe by 25 % and that in Japan by 2 %. At the same time,
production in South Korea, China, Turkey, Indonesia, Iran, Malaysia, Thailand
and South America grew significantly and now constitutes 47 % of world vehicle
production (up from 15 % in 2000). According to OICA statistics[7], EU-27 manufactured
16.2 million vehicles in 2013, out of a world total of 87.3 million (18.54 %),
down from EU-15 producing 17.1 million vehicles in 2000, out of a world total
of 58.3 million (29.41 %).

14.         "L'industrie
Automobile Francaise, Analyse et statistiques 2013" further states that, on
the demand side, the EU is now a mature market with relatively slow growth,
while the share of the BRIC countries in total worldwide demand has increased
from 8.4 % in 2000 to 33.5 % in 2010. EU based manufacturers are not well
placed to benefit from this growth in demand. Even within the EU, third country
manufacturers are taking an ever increasing market share.

15.         To date, the automotive
sector has been the subject of 21 EGF applications, 12 of which based on trade
related globalisation and 9 on the global financial and economic crisis.

Events giving rise to the
redundancies and cessation of activity

16.         The events giving rise to
the redundancies in PSA are losses amounting to EUR 560 million within the
group in 2012, arising from a decline in demand, price pressure and the
suspension in March 2012 of PSA activities in Iran (necessitated by
international and EU sanctions). In 2011, sales in Iran had amounted to 12 % of
global sales, so this event had a significant negative impact on the group. The
earthquake and tsunami in North-East Japan in March 2011 also brought about
supply difficulties for inputs to some of the Group's diesel vehicles.

17.         The Group's action plan of
2009, to improve performance and gain competitiveness, was followed in 2012 by
a complementary plan aimed at cost reductions, including the dismissal of
personnel.

18.         The production plant in
Aulnay (Ile de France) is being closed entirely in 2014, while in Rennes (Brittany), staff cuts are taking place in conjunction with new investments. In
other plants, the company has called for voluntary redundancies.

Expected impact of the redundancies
as regards the local, regional or national economy and employment

19.         The redundancies have a significant
adverse impact on the local and regional economy in the affected areas. In
agreement with the relevant public authorities, the company has carried out
regional impact studies for the areas around the Aulnay and Rennes plants. In
its commune, the Aulnay plant was the 8th largest employer, and the
redundancies reduce the numbers employed in the area by 13.6 %. The reduction
is less steep in Rennes, but it must be noted that this area has already been
affected by a general economic decline, with the number of unemployed in Brittany as a whole doubling within the past five years.

20.         French law stipulates that
the dismissing company, if it fulfils certain minimal criteria, must undertake
a series of measures to ensure that the economic fabric of the affected regions
is revitalised with its help. A plan to this effect was signed on 27 September
2013 between the French State and Peugeot Citroën Automobiles (PSA). Thus, for instance, the company is hoping to attract
new employers to the sites it is vacating, with a view to enabling its former
workforce to find new jobs there. It is also helping workers to move residence
in order to take up job offers in other PSA production plants or with other
employers. It is making funds available for local and regional business
development, and also providing expert business advice and training. Some
support for its suppliers is furthermore being planned.

Targeted beneficiaries and proposed
actions

Targeted beneficiaries

21.         The breakdown of targeted workers
by sex, citizenship and age group is as follows:

Category || Number of targeted beneficiaries

Sex: || Men: || 1 896 || (80.44 %)

|| Women: || 461 || (19.56 %)

Nationality: || EU citizens: || 2 135 || (90.58 %)

|| non-EU citizens: || 222 || (9.42 %)

Age group: || 15-24 years: || 2 || (0.08 %)

|| 25-29 years: || 47 || (1.99 %)

|| 30-54 years: || 921 || (39.08 %)

|| 55-64 years: || 1 387 || (58.85 %)

|| over 64 years: || 0 || (0.00 %)

22.         The estimated number of
workers expected to participate in the measures is 2 357.

Eligibility of the proposed actions

23.         The
personalised services to be provided to the redundant workers consist of the
following actions.

– 
Reception centre and casework : The French authorities will be responsible for 23 "espaces de
mobilite et de developpement professionnel (EMDP)" and two "poles de
mobilite professionnel (PMP)" in Aulnay and Rennes. These centres will
guide and advise the workers and help them with their career plans. Their
function is to counsel the workers, provide them with the available options and
prepare them with the skills needed for job search. These centres are guided by
an overall structure ensuring that they function in a co-ordinated manner. An
internal web site will be developed, with various reference texts as well as
facts and figures.

– 
External experts and advisors to guide the workers in their specific plans.

– 
Thematic workshops, e.g. how to prepare a CV, interview techniques, etc.

– 
Regular information for the workers by the reception centres and the case handlers (web
sites and other means).

– 
Training costs :
With the help of the advice received, the workers will agree on a training
pathway to achieve their individual career plans and embark on this training.

– 
Training allowances : These allowances ("allocations dans le cadre du conge de
reclassement") are paid by the dismissing company alone for the first four
months and are part of the application to the EGF for the following months (from
the fifth month up to a total of 12 months). The Commission has verified that
these allowances remain within the ceiling of 35 % of the total costs for the
coordinated package of personalised services, as specified in Article 7(1) of
the EGF Regulation.

– 
Grants for business creation : The eligible worker can opt for the relevant advice, training and
guidance, followed by a business start-up, or s/he can start the business
without further advice and guidance, if a plan already exists and the worker is
sufficiently prepared. The grants are paid upon presentation of the relevant
documents showing business creation expenses.

– 
The French authorities also plan to award
interest free loans for the creation of new businesses. For possible support
with this, they may decide to make use of the European Microfinance Facility.

24.         The
proposed actions, here described, 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.

25.         The French authorities have
provided the required information on actions that are mandatory for the
enterprise concerned by virtue of national law or pursuant to collective
agreements. They have confirmed that a financial contribution from the EGF will
not replace any such actions.

Estimated budget

26.         The estimated total costs are
EUR 21 174 342, comprising expenditure for personalised services
of EUR 21 133 946 and expenditure for preparatory, management, information and
publicity, control and reporting activities of EUR 40 396.

27.         The
total financial contribution requested from the EGF is EUR 12 704 605
(60 % of total costs). In the table below, the
estimated cost per worker has been rounded to the nearest full Euro.

Actions || Estimated number of participants || Estimated cost per participant (EUR) || Estimated total costs (EUR)

Personalised services (Actions under Article 7(1)(a) and (c) of the EGF Regulation)

Reception centre and file treatment (structures d'accueil et traitement des dossiers) || 2 357 || 461 || 1 086 275

External experts and advisors (cabinets de conseil) || 2 041 || 982 || 2 003 278

Thematic workshops (ateliers thematiques) || 148 || 243 || 35 925

Regular information of the workers (information des salaries) || 2 357 || 11 || 26 600

Training costs (depenses des formations) || 1 075 || 3 129 || 3 363 675

Grants for business creation (aides a la creation d'entreprises -- primes) || 1 120 || 6 448 || 7 221 312

Sub-total (a): || – || 13 737 065

(65 %)

Allowances and incentives (Actions under Article 7(1)(b) of the EGF Regulation)

Training allowances || 1 075 || 6 881 || 7 396 881

Sub-total(b): || – || 7 396 881

(35 %)

Actions under Article 7(4) of the EGF Regulation

1. Preparatory activities || – || 0

2. Management || – || 10 396

3. Information and publicity || – || 0

4. Control and reporting || – || 30 000

Sub-total (c): || – || 40 396

(0.19 % )

Total costs (a + b + c): || – || 21 174 342

EGF contribution (60 % of total costs) || – || 12 704 605

28.         The costs of the actions
identified in the table above as actions under Article 7(1)(b) of the EGF
Regulation do not exceed 35 % of the total costs for the coordinated
package of personalised services. The French authorities confirmed that these actions
are conditional on the active participation of the targeted beneficiaries in
job-search or training activities.

29.         The French authorities
confirmed that the costs of investments for self-employment, business start-ups
and employee take-overs will not exceed EUR 15 000 per beneficiary.

Period of eligibility of expenditure

30.         The French authorities
started providing the personalised services to the targeted beneficiaries on 3
June 2013. The expenditure on the actions referred to in point 24 shall therefore
be eligible for a financial contribution from the EGF from 3 June 2013 to 25
April 2016.

31.         The French authorities started
incurring the administrative expenditure to implement the EGF on 2 January 2014.
The expenditure for preparatory, management, information and publicity, control
and reporting activities shall therefore be eligible for a financial
contribution from the EGF from 2 January 2014 to 25 October 2016.

Complementarity with actions funded
by national or Union funds

32.         The sources of national
pre-financing or co-funding have been communicated by the French authorities
neither in their application nor in response to the Commission's questions.

33.         The French authorities have
stated that, apart from the measures which the dismissing enterprise is obliged
to provide for the workers as a result of legal obligations or collective
agreements, the only other measures in support of the redundant workers will be
those provided with the support of the EGF. They have added information on the
various actions which the dismissing enterprise is undertaking in order to assist
with the industrial revitalisation of the affected regions.

Procedures for consulting the targeted
beneficiaries or their representatives or the social partners as well as local
and regional authorities

34.         The French authorities have
indicated that the co-ordinated package of personalised services has been drawn
up in consultation with the representatives of the targeted beneficiaries and
the social partners. Numerous meetings between the PSA management and trade
union representatives and works councils at various levels took place between
12 July 2012 and December 2013 concerning the measures to be taken to safeguard
the jobs.

Management and control systems

35.         The application contains a
description of the management and control system which specifies the
responsibilities of the bodies involved. France has notified the Commission
that the financial contribution will be managed by the Délégation générale à
l’emploi et à la formation professionnelle (DGEFP, General Delegation for
Employment and Vocational Training) of the Ministry of Labour, Employment and
Health. The payments will be managed by the Mission des Affaires Financieres
(MAFI -- Mission for Financial Matters) within the sub-directorate for Finance
and Modernisation of the same Ministry. Certification will be provided by the
Pôle de Certification (Certification Centre) of the Directorate-General for
Finances in Nantes.

Commitments provided by the Member State concerned

36.         The French 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 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.

Since PSA has continued its
activities after the lay-offs, the French authorities have also assured the
Commission that it has complied with its legal obligations governing the
redundancies and provided for its workers accordingly.

BUDGETARY IMPLICATION

Budgetary proposal

37.         The EGF shall not 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 of
2 December 2013 laying down the multiannual financial framework for the
years 2014-2020[8].

38.         Having examined the
application in respect of the conditions set out in Article 13(1) of the
EGF Regulation, and having taken into account the number of targeted beneficiaries,
the proposed actions and the estimated costs, the Commission proposes to
mobilise the EGF for the amount of EUR 12 704 605, representing 60 % of the total costs of the proposed actions, in order to provide a financial
contribution for the application.

39.         The proposed decision to
mobilise the EGF will be taken jointly by the European Parliament and the
Council, as laid down in 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[9].

Related acts

40.         At the same time as it presents
this proposal for a decision to mobilise the EGF, the Commission will present
to the European Parliament and to the Council a proposal for a transfer to the
relevant budgetary line for the amount of EUR 12 704 605.

41.         At the same time as it
adopts this proposal for a decision to mobilise the EGF, the Commission will
adopt a decision on a financial contribution, by means of an implementing act,
which will enter into force on the date at which the European Parliament and
the Council adopt the proposed decision to mobilise the EGF.

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/2014/006 FR/PSA)

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[10],
and in particular Article 15(4) thereof,

Having regard to the proposal from the
European Commission,

Acting in accordance with the procedure
laid down in 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[11],

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[12],
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 Council Regulation (EU, Euratom) No 1311/2013 laying
down the multiannual financial framework for the years 2014-2020[13].

(3)       France submitted an
application to mobilise the EGF, in respect of redundancies[14] in Peugeot Citroën Automobiles in France, on 25 April 2014 and supplemented it by additional
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 12 704 605 for the application submitted by France,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European
Union for the financial year 2014, the EGF shall be mobilised to provide the
sum of EUR 12 704 605 in commitment and payment appropriations.

Article 2

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

Done at Brussels,

For the European Parliament                        For
the Council

The President                                                 The
President

[1]               OJ L 347, 20.12.2013, p. 855.

[2]               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).

[3]               In accordance with the fourth paragraph of Article 7
of Regulation (EU) No 1309/2013.

[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).

[5]               Within the meaning of Article 3(a) of the EGF
Regulation.

[6]               http://www.ccfa.fr/IMG/pdf/ccfa_ra2012_fr_web-2.pdf

[7]               http://www.oica.net/category/production-statistics/

[8]               OJ L 347, 20.12.2013, p. 884.

[9]               OJ C 373, 20.12.2013, p. 1.

[10]             OJ L 347, 20.12.2013, p. 855.

[11]             OJ C 373, 20.12.2013, p. 1.

[12]             OJ L 167, 29.6.2009, p.26.

[13]             OJ L 347, 20.12.2013, p. 884.

[14]             Within the meaning of Article 3(a) of the EGF
Regulation.