# EUR-Lex - 52011PC0447 - EN

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# 52011PC0447

**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/2011/003 DE/Arnsberg and Düsseldorf automotive from Germany) /* COM/2011/0447 final */**

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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 9 February 2011, Germany submitted application EGF/2011/003
DE/Arnsberg and Düsseldorf automotive for a financial
contribution from the EGF, following redundancies in five
enterprises operating in the NACE Revision 2 Division 29 ('Manufacture of motor
vehicles, trailers and semi-trailers')[3] in the
NUTS II regions of Arnsberg (DEA5) Düsseldorf (DEA1) in Germany.

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/2011/003

Member State || Germany

Article 2 || (b)

Enterprises concerned || 5

NUTS II regions || Arnsberg (DEA5) Düsseldorf (DEA1)

NACE Revision 2 Division || 29 ('Manufacture of motor vehicles, trailers and semi-trailers')

Reference period || 1.3.2010 – 1.12.2010

Starting date for the personalised services || 1.3.2010

Application date || 9.2.2011

Redundancies during the reference period || 778

Redundant workers targeted for support || 778

Expenditure for personalised services (EUR) || 6 389 028

Expenditure for implementing EGF[4] (EUR) || 300 000

Expenditure for implementing EGF (%) || 4,48

Total budget (EUR) || 6 689 028

EGF contribution (65 %) (EUR) || 4 347 868

1.
The application was presented to the Commission
on 9 February 2011 and supplemented by additional information up to 28 April
2011.

2.
The application meets the conditions for
deploying the EGF as set out in Article 2(b) 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, Germany[5] argues that, as a consequence
of the crisis, demand for new motor vehicles in the European Union (EU)
decreased in 2009 by 5,6 % compared to 2008 and by 13,3 % compared to
the pre-crisis year 2007. The EU followed the trend noted at world-wide level where
demand for new motor vehicles dropped by 5,6 % in 2009 compared to 2008.
Faced with this drop in demand, manufacturers of motor vehicles reduced their
production even more drastically. In 2009 the production of motor vehicles in
the EU decreased by 17 % compared to 2008 and by 23 % compared to
2007.

This downward trend continued in 2010. The
production of motor vehicles in the EU in the first three quarters of 2010 was
14 % below that of the same period in 2008. As Germany is the biggest
motor vehicle manufacturing country in the EU the crisis had severe
consequences for its motor vehicle manufacturing industry. In 2009 the
production of motor vehicles in Germany dropped by 13,8 % compared to 2008
and by 16,1 % compared to 2007. The suppliers to the automotive industry
were more severely impacted than the main manufacturers. In 2009 the turnover
of the motor vehicles manufacturers in Germany decreased by 20 % compared
to 2008, whereas for the suppliers to these manufacturers the decrease for the
same period was 26 %. The redundancies covered by the present application
concern specifically dismissals by the suppliers.

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

4.
Germany submitted this application under the intervention
criteria of Article 2(b) of Regulation (EC) No 1927/2006, which requires at least
500 redundancies over a nine-month period in enterprises operating in the same
NACE Revision 2 Division in one region or two contiguous regions at NUTS II
level in a Member State.

5.
The application cites 778 redundancies in five
enterprises operating in the NACE Revision 2 Division 29 ('Manufacture of motor
vehicles, trailers and semi-trailers')[6] in the
NUTS II regions of Arnsberg (DEA5) and Düsseldorf (DEA1) during the nine-month reference period from 1 March 2010 to 1 December 2010. All of these redundancies were
calculated in accordance with the second indent of the second paragraph of
Article 2 of Regulation (EC) No 1927/2006.

Explanation of the unforeseen nature
of those redundancies

6.
The German authorities argue that the suppliers
have been put under pressure for some time by the motor vehicle manufacturers
to reduce their margins. The sudden and drastic crisis related reduction in
demand for motor vehicles in 2009, which could not have been foreseen, resulted
in a significant reduction in production capacity utilisation as well as in
significant drop in revenue for the suppliers to the automotive industry. As a
consequence, a significant number of suppliers went bankrupt, whilst others had
to drastically reduce their production capacity, with ensuing staff reductions.
Three enterprises covered by the present application went bankrupt and the two
others had to dismiss workers in order to reduce their costs.

Identification of the dismissing
enterprises and workers targeted for assistance

7.
The application relates to 778 redundancies all
of whom are targeted for assistance in the following five enterprises:

Enterprises and number of dismissals

Pampus Automotive GmbH & CO. KG, Arnsberg || 374 || Wiederholt GmbH, Arnsberg || 124

Continental Automotive GmbH Dortmund, Arnsberg || 45 || Tedrive Steering GmbH, Düsseldorf || 224

Leopold Kostal GmbH, Arnsberg || 11 ||   ||

Total enterprises: 5 || Total dismissals: 778 ||

8.
The break-down of the targeted workers is as
follows:

Category || Number || Percent

Men || 709 || 91,1

Women || 69 || 8,9

EU citizens || 700 || 90,0

Non EU citizens || 78 || 10,0

15-24 years old || 19 || 2,4

25-54 years old || 587 || 75,4

55-64 years old || 172 || 22,1

> 64 years old || 0 || 0,0

9.
There are 136 (i.e. 17,5 %) workers with a
long standing health problem or disability included in the categories above).

10.
In terms of occupational categories, the
break-down is as follows:

Category || Number || Percent

Professionals || 17 || 2,2

Technicians and associate professionals. || 117 || 15,0

Clerks || 35 || 4,5

Service workers and shop and market sales workers. || 4 || 0,5

Craft and related trade workers || 171 || 22,0

Plant and machine operators and assemblers || 346 || 44,5

Elementary occupations || 88 || 11,3

11.
In accordance with Article 7 of Regulation (EC)
No 1927/2006, Germany 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

12.
The territory principally concerned by the
redundancies is the land North Rhine Westphalia, in particular the
administrative districts of Arnsberg and Düsseldorf.

The responsible authorities are the Ministry
for Labour, Integration and Social Affairs of the land North Rhine Westphalia,
the central office of the Federal Employment Office, the regional directorate
North Rhine Westphalia of the Federal Employment Office and the employment
offices of Hamm and Wuppertal. Other stakeholders include IG Metall Unna, the
insolvency administrators for the enterprises Tedrive Steering GmbH, Pampus
Automotive GmbH & Co. KG and Wiederholt GmbH, the enterprises Continental
Automotive GmbH and Leopold Kostal GmbH, the transfer companies PEAG
Personalentwicklungs- und Arbeitsmarktagentur GmbH and Weitblick Personalpartner
GmbH.

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

13.
The German authorities state that at national
level the financial and economic crisis had a severe impact on the automotive
industry. Employment in the motor vehicle manufacturing industry decreased by
3,5 % in 2009 compared to 2008, for the suppliers to the automotive
industry the decrease reached 5 %.

14.
Of the 778 redundancies covered by the
application 554 occurred in the administrative district of Arnsberg and 224 in
the administrative district of Düsseldorf. As a region with economic sectors
that are largely export oriented, such as the automotive and metal industry as
well as the manufacturing of machinery, Arnsberg has been severely hit by the
crisis. In addition, the employment rate in Arnsberg was already affected by
the dismissals by Nokia in Bochum, for which an EGF contribution was granted
following application EGF/2009/002 DE/Nokia, and it will be further hit by the
announced 1 200 redundancies at the General Motors Europe plant also
located in Bochum. The administrative district of Düsseldorf is characterised
by an unemployment rate that is generally higher than the average for North
Rhine Westphalia and Germany.

15.
In December 2009 the unemployment rate reached
10,5 % both in Düsseldorf and Arnsberg against 9,6 % for North Rhine
Westphalia and 8,7 % for Germany. In December 2010 this rate was
10,0 % in Düsseldorf, 9,7 % in Arnsberg, 9 % in North Rhine
Westphalia and 8 % for Germany.

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

16.
The following types of measures are proposed,
all of which combine to form a coordinated package of personalised services
aimed at re-integrating the workers into the labour market:

–
Job search allowance: short-time allowance: This measure is intended to secure the livelihoods of workers who
opt to enter into a transfer company[7].
For the purpose of the EGF application, the short-time allowance is only
included for periods within which the dismissed workers are actively
participating in active labour market policy measures provided within the
framework of a transfer company, including measures undertaken at the own
initiative of the worker.

–
Training courses leading to qualifications: These courses are targeted at redundant workers without recognised
or with obsolete training qualifications as well as industrial workers. The
courses consist of intensive training measures adapted to the current needs of
the labour market and based on profiling, and an initial interview with the
workers as well as a further assessment of their qualification ability. The
measure includes individual and group qualifications, i.a. in the following
areas: learning to learn, German language course, basic PC course,
EU-professional driver, driver of passenger and freight trains, nursing and
elderly care, Computerised Numerical Control (NCN) milling and turning,
specialist training in mechanical, pneumatic and hydraulic engineering.

–
In-depth guidance for business start-up: This covers guidance and support, including information on regionally
existing support measures, for planning, implementing and financing of a
business start-up, as well as providing knowledge on commercial, marketing and
sales aspects. Individual coaching is also possible i.a. to prepare discussions
on financing, the elaboration of a marketing strategy or market studies.

–
Workshops and peer groups: This measure, which has already been successfully implemented in
previous German EGF cases, consists of specific coaching in small groups.
Through exchange of experience in small groups of workers with a similar
vocational background and similar difficulties on the labour market, positive
approaches are disseminated and self-confidence boosted. The peer groups target
particularly migrant and older workers and workers with disabilities. A new
theme that will be addressed is "Unemployment and health" in order to
help dismissed workers to tackle the personal crisis through preventive action.

–
International and national labour market
guidance: This measure aims at preparing a limited number
of workers to apply for a job outside their region, including outside Germany.
It covers i.a. information on employment conditions abroad, visits to trade
fairs, organisation of job fairs, translation of certificates, intercultural
and foreign language training.

–
Activation supplement: This covers an incentive for workers, who accept a new job with a
lower salary than the one in their previous job. The worker receives a lump sum
if the new salary is at least 10 % lower than the previous salary and relates
to a part- or full-time contract of employment of indefinite duration or of at
least one year.

–
Placement research: Placement researchers interface with potential employers and, on
the basis of specific job vacancies, identify the most suitable candidates and
their job specific training needs. This measure also covers the maintenance of
employer databases, which are available to dismissed workers for own initiative
job applications.

–
Counselling and support in case of a new job
and of unemployment: This measure provides for
coaching by the transfer company during the phase within which the workers, who
have accepted a new job, are adapting to this job. The objective is to minimise
the risk of a new job loss and to stabilise the new labour market situation of
the worker concerned. It also provides support for workers who do not find a
new job upon termination of the transfer company. In order to ensure continuity
in placement activities, they will retain the same mentoring network as in the
transfer company. The transfer file/portfolio which for each worker contains
the most relevant labour market data and the active labour market measures from
which he/she benefited plays an important role for the counselling and support
in case of unemployment at the end of the transfer company.

17.
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.

18.
The personalised services presented by the German
authorities are active labour market measures within the eligible actions
defined by Article 3 of Regulation (EC) No 1927/2006. The German authorities
estimate the total costs of these services at EUR 6 389 028 and
the expenditure for implementing the EGF at EUR 300 000 (4,48 % of
the total amount). The total contribution requested from the EGF is EUR 4 347 868
(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)

Job search allowance: short time allowance (Beihilfen für die Arbeitssuche: Transferkurzarbeitergeld) || 759 || 4 816 || 3 655 344

Training courses leading to qualifications (Qualifizierungsmassnahmen) || 350 || 3 399 || 1 189 650

In-depth guidance for business start-up (Vertiefte Existenzgründungsberatung) || 35 || 1 655 || 57 925

Workshops and peergroups || 75 || 1 185 || 88 875

International and national labour market guidance (Internationale und nationale Arbeitsmarktberatung) || 40 || 757 || 30 280

Activation supplement (Aktivierungszuschuss) || 150 || 2 395 || 359 250

Placement research (Stellenresearch) || 428 || 703 || 300 884

Counselling and support in case of a new job and of unemployment (Beratung und Betreuung bei Arbeitsaufnahme und bei Arbeitslosigkeit) || 599 || 1 180 || 706 820

Sub total personalised services || || 6 389 028

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

Sub total expenditure for implementing EGF || || 300 000

Total estimated costs || || 6 689 028

EGF contribution (65 % of total costs) || || 4 347 868

19.
Germany confirms that the measures described
above are complementary with actions funded by the Structural Funds, in
particular with ESF certified training courses towards qualifications provided
within the framework of the federal programme ESF-BA. The German authorities
have put in place the necessary mechanisms to avoid any risk of double funding.

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

20.
Germany started the personalised services to the
affected workers included in the co-ordinated package proposed for co-financing
to the EGF on 1 March 2010. 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

21.
The Federal Ministry for Labour and Social
Affairs consulted the shopfloor and management representatives of the
enterprises concerned and gave them the possibility to participate actively in
the preparation of the global package of personalised services. The concept for
a package of active labour market measures was presented and discussed at a
round table with representatives of the shopfloor and management, IG Metall,
the transfer service providers, the Ministry of Labour, Integration and Social
Affairs of North Rhine Westphalia as well as the Federal Employment Service.
The relevance of the measures in view of a reintegration into employment was
further checked with the competent regional employment offices.

22.
The German 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

23.
As regards the criteria contained in Article 6
of Regulation (EC) No 1927/2006, the German 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

24.
Germany has notified the Commission that the
financial contribution will be managed and controlled by the same bodies that
manage and control the European Social Fund (ESF) funding in the Germany.
Within the Federal Ministry for Labour and Social Affairs (Bundesministerium
für Arbeit und Soziales) the 'Gruppe Europaïsche Fonds für Beschäftigung –
Referat EF 3' will act as managing authority and the 'Organisationseinheit
Prüfbehörde' as control authority.

Financing

25.
On the basis of the application from Germany, the
proposed contribution from the EGF to the coordinated package of personalised
services (including expenditure to implement EGF) is EUR 4 347 868,
representing 65 % of the total cost. The Commission's proposed allocation
under the Fund is based on the information made available by Germany.

26.
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.

27.
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.

28.
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.

29.
The Commission presents separately a transfer
request in order to enter in the 2011 budget specific commitment and payment appropriations,
as required in Point 28 of the Interinstitutional Agreement of 17 May 2006.

Source of payment appropriations

30.
As a reinforcement of the EGF budget line 04.0501
by EUR 50 000 000 is foreseen through AB2/2011, this budget line
will be used to cover the amount of EUR 4 347 868
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/2011/003 DE/Arnsberg and Düsseldorf automotive from
Germany)

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[8], 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[9], and in particular Article
12(3) thereof,

Having regard to the proposal from the European
Commission[10],

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 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)       Germany submitted an
application to mobilise the EGF, in respect of redundancies in five enterprises
operating in the NACE Revision 2 Division 29 ('Manufacture of motor vehicles,
trailers and semi-trailers') in the NUTS II regions of Arnsberg (DEA5) and
Düsseldorf (DEA1), on 9 February 2011 and supplemented
it by additional information up to 28 April 2011. 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 4 347 868.

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

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European
Union for the financial year 2011, the European Globalisation Adjustment Fund
(EGF) shall be mobilised to provide the sum of EUR 4 347 868 in
commitment and payment appropriations.

Article 2

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

Done at [Brussels/Strasbourg],

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]               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).

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

[5]               Statistics in this chapter are from the European
Automobile Manufacturers Association (ACEA).

[6]               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).

[7]               A transfer company is an instrument provided for
under German law which can be put in place in case of restructuring with
ensuing job losses. The transfer company makes it possible to prepare in a
structured manner redundant workers for new jobs through coaching,
qualification and placement activities.

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

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

[10]             OJ C [...], [...], p. [...].