# EUR-Lex - 52013PC0090 - EN

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# 52013PC0090

**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 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 (application EGF/2012/023 IT/Antonio Merloni SpA from Italy) /* COM/2013/090 final - 2013/ () */**

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EXPLANATORY MEMORANDUM

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[1] allows for the mobilisation of
the European Globalisation Adjustment Fund (EGF) through a flexibility
mechanism, within the annual ceiling of EUR 500 million over and
above the relevant headings of the financial framework.

The rules applicable to the contributions
from the EGF are laid down in Regulation (EC) No 1927/2006 of the European
Parliament and of the Council of 20 December 2006 on establishing the European
Globalisation Adjustment Fund[2].

On 29 December 2011, Italy submitted
application EGF/2011/023 IT/Antonio Merloni for a financial contribution from
the EGF, following redundancies in Antonio Merloni SpA in Italy.

After a thorough examination of this
application, the Commission has concluded in accordance with Article 10 of
Regulation (EC) No 1927/2006 that the conditions for a financial contribution
under this Regulation are met.

SUMMARY OF THE APPLICATION AND ANALYSIS

Key data: ||

EGF Reference no. || EGF/2011/023

Member State || Italy

Article 2 || (a)

Primary enterprise || Antonio Merloni SpA

Suppliers and downstream producers || 0

Reference period || 23.8.2011 – 23.12.2011

Starting date for the personalised services || 29.3.2012

Application date || 29.12.2011

Redundancies during the reference period || 1 517

Redundancies before and after the reference period || 0

Total eligible redundancies || 1 517

Redundant workers targeted for support || 1 517

Expenditure for personalised services (EUR) || 7 451 972

Expenditure for implementing EGF[3] (EUR) || 298 000

Expenditure for implementing EGF (%) || 3,84

Total budget (EUR) || 7 749 972

EGF contribution (65 %) (EUR) || 5 037 482

1.           The application was
presented to the Commission on 29 December 2011 and supplemented by additional
information up to 4 September 2012.

2.           The application meets the
conditions for deploying the EGF as set out in Article 2(a) of Regulation (EC)
No 1927/2006, and was submitted within the deadline of 10 weeks referred to in
Article 5 of that Regulation.

Link between the redundancies and major
structural changes in world trade patterns due to globalisation or the global
financial and economic crisis

3.           In order to establish the
link between the redundancies and the global financial and economic crisis, Italy
argues that the crisis had a serious impact on the market for domestic
appliances. Available data[4]
confirms the significant downturn in the manufacture of domestic appliances,
mainly due to the decrease in exports in particular to the United States (-30,5 %
in 2009 compared with 2008) and Japan (-11,40 % during the same period). Production
of domestic appliances fell in the EU-27 for three consecutive years (2007 to 2009)
compared with the relevant previous year and slightly recovered only in 2010.

Manufacture
of domestic appliances - Industry production index
(percentage change compared with the previous year)

|| 2006 || 2007 || 2008 || 2009 || 2010

EU27 || 5,5 || -3,1 || -8,8 || -17,6 || 1,2

Italy || 4,0 || -1,4 || -13,8 || -24,2 || -6,3

Source: Eurostat

4.           Output in Italy followed
the same negative trend as the EU-27 average and the downturn for exports was
higher than the EU-27 average. Exports to the United States fell by 44,59 %
in 2009 compared with 2008 and to Japan by 29,87 %. In 2010 the downward
trend continued for Italian domestic appliances.

5.           To maintain its market
share against competition from low labour cost countries such as China and
Turkey, Antonio Merloni SpA, the fifth largest manufacturer of appliances in
the EU in 2002, changed its sales strategy and in 2006 started selling its
products directly through its own brands. With the outbreak of the global
financial and economic crisis, the company got into financial difficulties,
which were further exacerbated by the sudden tightening of conditions for
access to financial credit. In 2007, with a turnover of almost EUR 900 million,
Antonio Merloni faced debts and liabilities of about EUR 500 million.
The downturn in production, which had been following the downward trend at
European level, combined with the financial constraints, resulted in a request
submitted to the Ministry of Economic Development for admission to the
administration proceedings for large firms in crisis and finally in the cessation
of the business activities of Antonio Merloni SpA. A total of 2 217
workers were made redundant, of whom 700 were taken over by company QA Group
SpA. This application therefore covers the 1 517 workers left jobless
through the closure of Antonio Merloni SpA.

6.           In its assessment on the
application EGF/2009/010 LT/Snaigė the Commission has already stated the
impact of the economic and financial crisis on the enterprises operating in the
manufacture of domestic appliances.

Demonstration of the number of
redundancies and compliance with the criteria of Article 2(a)

7.           Italy submitted this
application under the intervention criteria of Article 2(a) of Regulation (EC)
No 1927/2006, which requires at least 500 redundancies over a four-month period
in an enterprise in a Member State, including workers made redundant in its
suppliers and downstream producers.

8.           The application cites 1 517
redundancies in Antonio Merloni SpA during the four-month reference period from
23 August 2011 to 23 December 2011. All of these redundancies were calculated
in accordance with the third indent of the second paragraph of Article 2 of
Regulation (EC) No 1927/2006. The Commission has received the confirmation
required under the third indent of the second paragraph of Article 2 that this
is the actual number of redundancies effected.

Explanation of the unforeseen nature
of those redundancies

9.           The Italian authorities
argue that the financial and economic crisis led to a sudden collapse of the
world economy with an enormous impact on many sectors. The nature of the
recession as far as the manufacture of domestic appliances is concerned, with a
sudden tightening of conditions for access to financial credit and a dramatic
slowdown in new orders, was unprecedented in recent times. As a result of the
crisis, economic developments since 2008 have not been following the trends of
previous years. The closure of Antonio Merloni SpA and the redundancies could
not therefore have been foreseen or easily prevented.

Identification of the dismissing
enterprises and workers targeted for assistance

10.         The application relates to 1 517
redundancies in Antonio Merloni SpA. All of these workers are targeted for EGF
co-funded measures.

11.         The break-down of the
targeted workers is as follows:

Category || Number || Percent

Men || 1 063 || 70,07

Women || 454 || 29,93

EU citizens || 1 450 || 95,58

Non EU citizens || 67 || 4,42

15-24 years old || 0 || 0,00

25-54 years old || 1 322 || 87,15

55-64 years old || 193 || 12,72

> 64 years old || 2 || 0,13

12.         Of the targeted workers 71
are disabled or have longstanding health problems.

13.         In terms of occupational
categories, the break-down is as follows:

Category || Number || Percent

Senior officials and managers || 8 || 0,53

Professionals || 14 || 0,92

Technicians and associate professionals || 23 || 1,52

Clerks || 50 || 3,30

Craft and related trade workers || 72 || 4,75

Plant and machine operators and assemblers || 1 308 || 86,22

Elementary occupations || 42 || 2,76

14.         In accordance with Article
7 of Regulation (EC) No 1927/2006, Italy has confirmed that a policy of
equality between women and men as well as non-discrimination has been applied,
and will continue to apply, during the various stages of the implementation of
and, in particular, in access to the EGF.

Description of the territory
concerned and its authorities and stakeholders

15.         The territories concerned
by the redundancies are the regions of Marche and Umbria and in particular the
provinces of Ancona and Perugia, where the production plants of Antonio Merloni
SpA were located.

16.         As a consequence of the
global economic and financial crisis, the number of businesses active in both
provinces has declined. There has been also a progressive tertiarisation leading
to the contraction of agriculture, trade and industry. In Ancona agricultural enterprises
decreased by 1,2 %, and now account for 18,8 % of the total number of
active businesses. The manufacturing sector has remained fairly stable, while
the number of firms in the trade sector has experienced a slight increase (+0,3 %)
and now represents 26,4 % of the total number of businesses in the
province. This share is, however, lower than the national average (27,2 %).
All these figures refer to 2010 compared with the previous year. In Perugia
during the same period, the number of agricultural enterprises decreased by 0,9 %,
but still accounts for 22,6 % of the total active businesses in the
province. The manufacturing sector also slightly decreased (-0,6 %), while
firms in the trade sector increased (+1,1 %) and now represent 23,4 %
of the total businesses. However, as it is the case for Ancona, the share of
trade businesses as a percentage of all businesses in the province (23,4 %)
is lower than the national average.

17.         The main stakeholders are
the Regione Umbria and Regione Marche and in particular the Perugia and Ancona public
authorities, as well as the following trade unions: FIM-CISL[5], FIOM-CGIL[6], UILM-UIL[7], UGL metalmeccanici[8] and RSU[9].

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

18.         In the pre-crisis years,
both Ancona and Perugia provinces had an unemployment rate lower than the
national average. In 2009 unemployment increased by 40 % compared with the
previous year while in 2010 the unemployment rate remained stable in Perugia
and decreased in Ancona mainly due to the fall in the activity rate rather than
an increase in employment. In 2009 compared with the previous year, the
regional GDP decreased by about 3 % and the turnover of industry
contracted by 14,6 % in Marche and by 16,4 % in Umbria. This
contraction resulted in an increase in hours of CIG[10] in manufacturing sectors by
368 % in Marche and by 444 % in Umbria. The 1 517 redundancies
of Antonio Merloni SpA covered by this application further aggravated the
situation.

Co-ordinated package of personalised
services to be funded and a breakdown of its estimated costs, including its
complementarity with actions funded by the Structural Funds

19.         All the following measures
combine to form a co-ordinated package of personalised services aimed at
re-integrating the workers into the labour market:

–
Occupational guidance: A series of structured interviews and targeted instruments such as
skills analysis and employability profile to identify areas where workers can
improve their skills and be supported in defining their occupational
objectives.

–
Job-search assistance: This includes the development of a personalised strategy of
self-promotion and job-search actions. Workers are helped to apply for jobs
with interested firms and are supported through the selection process and, if
necessary, with specific training to help them take up job offers with the
relevant firms.

–
Entrepreneurship promotion: Coaching support for redundant workers with entrepreneurial ideas
in planning new business activities.

–
Vocational training and skills upgrade: The redundant workers receive a training voucher of an average
value of EUR 1 300 to spend on their training pathway. The voucher
can be spent in a qualified training institution or in a firm where the
redundant worker is being re-trained after being hired or in a firm providing
on-the-job training. The voucher is strictly linked to each worker's agreed pathway
of reintegration.

–
Guidance for over 50-year-olds: This is intended to provide specific support to workers aged over
50 years, to encourage them to remain in the labour market.

–
Job-search allowance: For each day they participate in the EGF measures, the workers
will receive an allowance equivalent to one day of the Italian subsistence
allowance 'CIGS'.

–
Hiring benefit:
This payment benefits the redundant workers by facilitating their re-employment
under permanent contracts in a different company. The relatively large amount
of EUR 5 000 per worker, paid to the new employer towards the
recruitment of the most disadvantaged and poorly educated workers, reflects the
investment required by the new employer in re-training them and preparing them
for their new tasks.

–
Contribution to commuting expenses: The workers participating in the measures will receive up to EUR 300
as a contribution to their travel expenses when they have to commute for a
distance longer than 25 km to the town where the measures take place.

–
Contribution to the expenses for change of
residence: Those workers who accept a job involving
a change of residence will receive a mobility allowance of EUR 5 000
to cover the necessary expenditure. The allowance shall be paid as a one-off contribution
upon presentation of proof of the expenditure incurred.

20.         The expenditure for
implementing the EGF, which is included in the application in accordance with
Article 3 of Regulation (EC) No 1927/2006, covers preparatory,
management and control activities as well as information and publicity.

21.         The personalised services
presented by the Italian authorities are active labour market measures within
the eligible actions defined by Article 3 of Regulation (EC) No 1927/2006. The
Italian authorities estimate the total costs at EUR 7 749 972,
of which the expenditure for personalised services at
EUR 7 451 972 and the expenditure for implementing the EGF at
EUR 298 000 (3,84 % of the total amount). The total contribution
requested from the EGF is EUR 5 037 482 (65 % of the total
costs).

Actions || Estimated number of workers targeted || Estimated cost per worker targeted (EUR) || Total costs (EGF and national cofinancing) (EUR)

Personalised services (first paragraph of Article 3 of Regulation (EC) No 1927/2006)

Occupational guidance (Orientamento professionale) || 1 517 || 36 || 54 612

Job-search assistance (Assistenza alla ricerca attiva) || 1 517 || 180 || 273 060

Entrepreneurship promotion (Assistenza all'autoimprenditorialità) || 280 || 240 || 67 200

Vocational training and skills upgrade (Voucher formativo) || 1 011 || 1 300 || 1 314 300

Guidance for over-50s (Misure spechifiche di stimolo per lavoratori muri) || 280 || 210 || 58 800

Job-search allowance (Indennita per la ricerca attiva) || 1 517 || 2 000 || 3 034 000

Hiring benefit (Bonus assunzionali) || 400 || 5 000 || 2 000 000

Contribution to commuting expenses (Contributo per la mobilità formativa) || 500 || 300 || 150 000

Contribution to the expenses for change of residence (Bonus per la mobilità territoriale) || 100 || 5 000 || 500 000

Sub total personalised services || || 7 451 972

Expenditure for implementing EGF (third paragraph of Article 3 of Regulation (EC) No 1927/2006)

Preparatory activities || || 30 000

Management || || 125 000

Information and publicity || || 36 000

Control activities || || 107 000

Sub total expenditure for implementing EGF || || 298 000

Total estimated costs || || 7 749 972

EGF contribution (65 % of total costs) || || 5 037 482

22.         Italy confirms that the
measures described above are complementary with actions funded by the
Structural Funds. According to the Italian authorities, the absence of double
funding is ensured by a permanent coordination between the institutional actors
responsible for planning and managing the financial resources of the Structural
Funds and the EGF.

Date(s) on which the personalised
services to the affected workers were started or are planned to start

23.         Italy started the
personalised services to the affected workers included in the co-ordinated
package proposed for co-financing to the EGF on 29 March 2012. This date
therefore represents the beginning of the period of eligibility for any
assistance that might be awarded from the EGF.

Procedures for consulting the social
partners

24.         The possibility of making
use of the EGF support was incorporated into the 'Accordo di Programma',
an agreement signed in 2010 by the Ministry of Economic Development and Emilia
Romagna, Marche and Umbria regions and subsequently agreed by the social
partners. In November 2011 the social partners were consulted on the coordinated
package of EGF co-financed measures. Furthermore the implementation of the EGF
measures will be monitored by the 'Accordo di Programma' coordination
group.

25.         The Italian authorities
confirmed that the requirements laid down in national and EU legislation
concerning collective redundancies have been complied with.

Information on actions that are
mandatory by virtue of national law or pursuant to collective agreements

26.         As regards the criteria
contained in Article 6 of Regulation (EC) No 1927/2006, the Italian authorities
in their application:

· confirmed that the financial contribution from the EGF does not
replace measures which are the responsibility of companies by virtue of
national law or collective agreements;

· demonstrated that the actions provide support for individual workers
and are not to be used for restructuring companies or sectors;

· confirmed that the eligible actions referred to above do not receive
assistance from other EU financial instruments.

Management and control systems

27.         Italy has notified the
Commission that the financial contribution will be managed and controlled by
the same bodies that manage and control the ESF. The regions of Marche and
Umbria will be the intermediate bodies for the managing authority.

Financing

28.         On the basis of the
application from Italy, the proposed contribution from the EGF to the
coordinated package of personalised services (including
expenditure to implement EGF) is EUR 5 037 482,
representing 65 % of the total cost. The Commission's proposed allocation
under the Fund is based on the information made available by Italy.

29.         Considering the maximum
possible amount of a financial contribution from the EGF under Article 10(1) of
Regulation (EC) No 1927/2006, as well as the scope for reallocating
appropriations, the Commission proposes to mobilise the EGF for the total
amount referred to above, to be allocated under heading 1a of the financial
framework.

30.         The proposed amount of
financial contribution will leave more than 25 % of the maximum annual
amount earmarked for the EGF available for allocations during the last four
months of the year, as required by Article 12(6) of Regulation (EC) No
1927/2006.

31.         By presenting this proposal
to mobilise the EGF, the Commission initiates the simplified trialogue
procedure, as required by Point 28 of the Interinstitutional Agreement of 17
May 2006, with a view to securing the agreement of the two arms of the
budgetary authority on the need to use the EGF and the amount required. The
Commission invites the first of the two arms of the budgetary authority that
reaches agreement on the draft mobilisation proposal, at appropriate political
level, to inform the other arm and the Commission of its intentions. In case of
disagreement by either of the two arms of the budgetary authority, a formal
trialogue meeting will be convened.

32.         The Commission presents
separately a transfer request in order to enter in the 2013 budget specific
commitment appropriations, as required in Point 28 of the Interinstitutional
Agreement of 17 May 2006.

Source of payment appropriations

33.         Appropriations from the EGF
budget line will be used to cover the amount of EUR 5 037 482
needed for the present application.

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 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 (application EGF/2012/023 IT/Antonio Merloni SpA from Italy)

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 the Interinstitutional
Agreement of 17 May 2006 between the European Parliament, the Council and the
Commission on budgetary discipline and sound financial management[11], and in particular point 28
thereof,

Having regard to Regulation (EC) No
1927/2006 of the European Parliament and of the Council of 20 December 2006
establishing the European Globalisation Adjustment Fund[12], and in particular Article
12(3) thereof,

Having regard to the proposal from the European
Commission[13],

Whereas:

(1)       The European Globalisation
Adjustment Fund (EGF) was established to provide additional support for workers
made redundant as a result of major structural changes in world trade patterns
due to globalisation and to assist them with their reintegration into the
labour market.

(2)       The scope of the EGF was
broadened for applications submitted from 1 May 2009 to 30 December 2011 to
include support for workers made redundant as a direct result of the global
financial and economic crisis.

(3)       The Interinstitutional
Agreement of 17 May 2006 allows the mobilisation of the EGF within the annual
ceiling of EUR 500 million.

(4)       Italy submitted an
application to mobilise the EGF, in respect of redundancies in the enterprise Antonio
Merloni SpA, on 29 December 2011 and supplemented it by additional information
up to 4 September 2012. This application complies with the requirements for
determining the financial contributions as laid down in Article 10 of
Regulation (EC) No 1927/2006. The Commission, therefore,
proposes to mobilise an amount of EUR 5 037 482.

(5)       The EGF should, therefore,
be mobilised in order to provide a financial contribution for the application
submitted by Italy,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European
Union for the financial year 2013, the European Globalisation Adjustment Fund
(EGF) shall be mobilised to provide the sum of EUR 5 037 482 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 C 139, 14.6.2006, p. 1.

[2]               OJ L 406, 30.12.2006, p. 1.

[3]               In accordance with the third paragraph of Article 3
of Regulation (EC) No 1927/2006.

[4]               Eurostat, EU27 Trade since 1988 by SITC.

[5]               Federazione Italiana Metalmeccanici – Confederazione
Italiana Sindacato Lavoratori.

[6]               Federazione Impiegati e Operai Metallurgici.

[7]               Unione Italiana lavoratori Metalmeccanici –
Confederazione General Italiana del Lavoro.

[8]               Unione Generale del Lavoro Metalmeccanici.

[9]               Rappresentanza Sindacale Unitaria.

[10]             CIG is a scheme under
Italian law, consisting of a financial
benefit paid by Istituto Nazionale
della Previdenza Sociale-INPS (National Institute of the Social Security)
in favor of workers suspended from undertaking the work performance or working reduced hours.

[11]             OJ C 139, 14.6.2006, p. 1.

[12]             OJ L 406, 30.12.2006, p. 1.

[13]             OJ C [...], [...], p. [...].