# EUR-Lex - 52011PC0580 - EN

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# 52011PC0580

**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/2011/004 EL/ALDI Hellas from Greece) /* COM/2011/0580 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 10 May 2011, Greece submitted application EGF/2011/004 EL/ALDI
Hellas for a financial contribution from the EGF, following
redundancies in ALDI Hellas Supermarket Holding EPE & Assoc. E.E. and one
supplier – Thessaloniki Logistics S.A. – in Greece.

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/2011/004

Member State || Greece

Article 2 || (a)

Primary enterprise || ALDI Hellas Supermarket Holding EPE & Assoc. E.E.

Suppliers and downstream producers || 1

Reference period || 4.11.2010 – 4.3.2011

Starting date for the personalised services || 1.7.2011

Application date || 10.5.2011

Redundancies during the reference period || 554

Redundancies before and after the reference period || 88

Total eligible redundancies || 642

Redundant workers targeted for support || 642

Expenditure for personalised services (EUR) || 4 266 000

Expenditure for implementing EGF[3] (EUR) || 224 000

Expenditure for implementing EGF (%) || 4,99

Total budget (EUR) || 4 490 000

EGF contribution (65 %) (EUR) || 2 918 500

1.
The application was presented to the Commission
on 10 May 2011 and supplemented by additional information up to 22 June 2011.

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, Greece argues that the
economic and financial crisis had devastating consequences for the Greek
economy and led the Greek government to take measures such as increasing tax revenues,
streamlining public expenditure and decreasing public employees' salaries.
There has also been a decrease in the average income in the private sector in
an attempt to increase the competitiveness of the Greek economy. An immediate
effect of reduced income was a decrease in consumption. In 2009 the private
final consumption expenditure figures for Greece followed the same negative
trend as the EU-27 average. In 2010 there was a recovery in private consumption
at EU-27 level while the drop of private consumption in Greece was even bigger
than that in the previous year.

Private final consumption expenditure (% change compared with the same quarter of the previous year)[4]

|| 2009 || 2010

|| Q1 || Q2 || Q3 || Q4 || Q1 || Q2 || Q3 || Q4

EU-27 || -2,3 || -2,2 || -1,8 || -0,5 || 0,4 || 0,7 || 1,2 || 1,0

EL || -1,6 || -2,6 || -2,4 || -2,2 || 1,0 || -5,0 || -5,6 || -8,6

4.
The decrease in private consumption has severely
affected the retail sector and in particular supermarkets. Greece cites Nielsen
data according to which overall turnover decreased from EUR 8,5 billion
in 2009 to EUR 7,9 billion in 2010, resulting in bankruptcies (e.g.
'Atlantic', the fifth largest supermarket chain in Greece as measured by market
share) and takeovers (DIA Hellas was taken over by Carrefour-Marinopoulos, the
largest supermarket chain, and PLUS Hellas was taken over by the second largest
supermarket AB Vassilopoulos).

5.
The largest supermarket chains, realizing the
impact of the crisis on their customers' income, changed their sales strategies
and significantly increased the volume of own label products on sale – this
change in sales strategy was also at the base of the takeovers mentioned above.
In 2010 sales of own label products represented 15 % of overall sales in
supermarkets and the two leading supermarket chains, Carrefour-Marinopoulos and
AB Vassilopoulos, were offering respectively 2 200 codes of own label
products and a total of own label products equivalent to 20 % of its whole
range of products. Other supermarket chains, including ALDI were not able to
move from a brand oriented strategy towards an own label products strategy, and
they are suffering the consequences on their turnovers.

6.
Another effect of the decrease of income
resulting from the crisis was the decline in the volume of retail sales that was
felt more sharply in Greece than by the EU-27 average.

Volume of retail trade (% change compared with the same month of the previous year)[5]

2009

|| Jan || Feb || Mar || Apr || May || Jun || Jul || Aug || Sep || Oct || Nov || Dec

EU-27 || -1,2 || -3,7 || -2,4 || -1,2 || -3,2 || -1,5 || -1,3 || -1,6 || -2,7 || -0,9 || -1,6 || -0,2

EL || -10,2 || -13,3 || -18,7 || -14,9 || -14,4 || -14,2 || -10,2 || -4,5 || -8,9 || -15,4 || -11,0 || -0,2

2010

|| Jan || Feb || Mar || Apr || May || Jun || Jul || Aug || Sep || Oct || Nov || Dec

EU-27 || -1,4 || 0,0 || 1,6 || -0,9 || -1,0 || 1,4 || 1,3 || 1,3 || 1,4 || 1,1 || 1,3 || 0.3

EL || 6,0 || 1,9 || 9,8 || -5,8 || -7,0 || -4,5 || -9,3 || -11,8 || -10,5 || -8,1 || -11,7 || -19,4

7.
ALDI's decision to invest in Greece was taken
during a phase in which the retail sector showed high growth rates (13 %
for the period 1992-2009) and the Greek GDP per capita (83 % of the EU's
GDP in 1999) was expected to rise up to 93 % of the EU's average GDP in
2006. The economic and financial crisis completely changed the scenario and related
expectations. Between 2005 and 2010 the cumulative losses of ALDI Hellas
amounted to EUR 181 595 000. Two years, 2008 and 2009,
contributed to 58 % of these total losses.

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

8.
Greece 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.

9.
The application cites 554 redundancies in ALDI Hellas Supermarket Holding EPE & Assoc. E.E. and one supplier
– Thessaloniki Logistics S.A. – during the four-month reference period from 4 November 2010 to 4 March 2011 and a further 88 redundancies in
ALDI outside the reference period, but related to the same collective
redundancies procedure and the event which triggered the redundancies during
the reference period. Of these redundancies 67 were calculated in accordance
with the first indent of the second paragraph of Article 2 of Regulation (EC)
No 1927/2006. A further 575 redundancies were calculated in accordance with the
second indent of the same paragraph.

Explanation
of the unforeseen nature of those redundancies

10.
The Greek authorities argue that when ALDI
settled in Greece (2005-2006) the company's ten-year strategic plan foresaw between
300 and 400 stores and three logistic centers (Athens, Thessaloniki and Patras)
by the end of the ten-year period and an investment of EUR 1,2 to 1,8 billion.
One logistic center was built in Thessaloniki with a capacity to supply 150
stores and the plans for building the second logistic centre (Patras) were
progressing (ALDI Hellas had purchased land for a price of EUR 3 million).
Moreover, in the period 2008-2010, ALDI Hellas continued to open new stores,
although not as many as planned.

11.
On 16 July 2010 when the company announced the
impossibility of achieving economies of scale – due to the market conditions
resulting from the crisis – and its subsequent intentions of stopping any
activity related to the implementation of the ten-year strategic plan and
closing down all its stores, neither the workers nor the Greek authorities were
prepared for the news.

Identification of the dismissing
enterprises and workers targeted for assistance

12.
The application relates to 642 redundancies in
the following enterprises:

Enterprises and number of dismissals

ALDI Hellas Supermarket Holding EPE & Assoc. E.E. || 569

Thessaloniki Logistics || 73

Total of Enterprises: 2 || Total of Dismissals: 642

13.
Of the 642 redundancies, 554 occurred during the
reference period, and 88 occurred before the reference period, but are eligible
for assistance according to Article 3a (b) of Regulation (EC) No 1927/2006. All
642 redundant workers are targeted for EGF assistence.

14.
The break-down of the targeted workers is as
follows:

Category || Number || Percent

Men || 155 || 24,1

Women || 487 || 75,9

EU citizens || 632 || 98,4

Non EU citizens || 10 || 1,6

15-24 years old || 43 || 6,7

25-54 years old || 597 || 93,0

55-64 years old || 2 || 0,3

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

15.
In terms of educational level 80 % of the
workers had completed secondary school. The remaining 20 % had completed either
tertiary education or post-secondary non-tertiary education.

16.
In terms of occupational categories, the
break-down is as follows:

Category || Number || Percent

Cashiers, cleaners and general duty employees || 447 || 69,6

Medium-level managers and accountants || 160 || 24,9

Directors and department managers || 35 || 5,5

17.
In accordance with Article 7 of Regulation (EC)
No 1927/2006, Greece 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

18.
The territories most concerned by the redundancies
are the regions of Central Macedonia and Attica where the greatest number of
ALDI stores was located. Smaller numbers of ALDI redundancies also occurred in
other Greek regions, such as Eastern Macedonia-Thrace, Western Macedonia,
Epirus, Western Greece, Mainland Greece and Peloponnese.

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

19.
The recession has had a severe impact on Greek
employment levels. According to the Greek statistical office (EL-STAT)
unemployment increased by 45,2 % in December 2010 compared with the same
month of the previous year and the unemployment rate rose to 14,8 %. In
addition, the number of inactive persons is now higher than the number of
economically active persons (4 353 149 and 4 233 764
respectively).

20.
In Northern Greece, where most of the ALDI
Hellas redundancies took place, the economic crisis and its consequences are the
most severe. In December 2010 the unemployment rate was 17,7 % in the
region of Western Macedonia while in Central Macedonia, where the ALDI
headquarters were located, it was 16,5 %. In Thessaloniki (Central
Macedonia) – Greece's second major economic, industrial, commercial and
political centre – according to the 2010 edition of the EVETH barometer, an
economic survey by the Thessaloniki Chamber of Commerce, 81,4 % of the
enterprises participating in the survey declared to be slightly or not at all
optimistic about the future of their business. The same pessimism was expressed
concerning job creation and job retention: 67,3 % of the enterprises
intended to retain their workers and 28 % planned lay-offs while in the
survey of 2009 the percentages were respectively 78 % and 11,7 %.
These circumstances have exacerbated the negative impact of the ALDI Hellas
redundancies at local, regional and national level.

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

21.
The following measures are proposed, all of
which combine to form a co-ordinated package of personalised services aimed at
re-integrating the workers into the labour market.

–
Occupational guidance and job-search
assistance: This will include an individual
welcome/information session; profiling; personal and career development
sessions – including skills development, career guidance and job-search
techniques; setting up an individual pathway of reinsertion into employment. Counsellors
will also accompany the workers during the implementation of their individual
plans. The dismissed workers who envisage self-employment will benefit from accompaniment
towards business. This covers the provision of legal advice, counselling on
projects and initiatives, fundraising and support on administrative requirements
to successfully apply for the incentives to set up a business, etc. This initial
guidance will be taken up by all 642 workers.

–
Training and re-training: This measure will include an assessment of the training needs of
the workers concerned and the subsequent training. The training offer will
cover vocational training in sectors where opportunities exist or will arise,
training designed to cater for the identified needs of local enterprises and in
transversal skills, including information and communication technologies (ICT),
and foreign languages. The participants will receive EUR 20 per day of
participation, as a participation incentive.

–
Contribution to business start-up: The workers who set up their own businesses will receive up to EUR 20 000
as a contribution to cover setting-up costs. The contribution will be paid in
two instalments of EUR 10 000 each. The payment of the first instalment is
conditional on completion of certain steps of the process of setting up a
business such as having completed training in business creation, drawing up a
business plan, registering the enterprise, etc. The second instalment will be
paid two month after the first payment, or later.

–
Job-search allowance: This is aimed at supporting the worker in actively looking for a
new job. It consists of a lump sum of up to EUR 620.

–
Mobility allowance and contribution to travel
expenses: As a contribution to the travel expenses
workers participating in the measures will receive an amount of EUR 15 per
day of participation. Those workers who accept a job involving a change of
residence will receive a lump sum of EUR 3 000 to cover the necessary
expenditure.

22.
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.

23.
The personalised services presented by the Greek
authorities are active labour market measures within the eligible actions
defined by Article 3 of Regulation (EC) No 1927/2006. The Greek authorities
estimate the total costs of these services at EUR 4 266 000 and
the expenditure for implementing the EGF at EUR 224 000 (4,99 %
of the total amount). The total contribution requested from the EGF is EUR 2 918 500
(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 and job-search assistance. || 642 || 3 000 || 1 926 000

Training and re-training & participation incentive. || 400 || 2 500 || 1 000 000

Contribution to business start-up. || 50 || 20 000 || 1 000 000

Job-search allowance. || 500 || 620 || 310 000

Mobility allowance and contribution to travel expenses || 30 || 1 000 || 30 000

Sub total personalised services || || 4 266 000

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

Preparatory activities || || 60 000

Management || || 104 000

Information and publicity || || 50 000

Control activities || || 10 000

Sub total expenditure for implementing EGF || || 224 000

Total estimated costs || || 4 490 000

EGF contribution (65 % of total costs) || || 2 918 500

24.
Greece confirms that the measures described
above are complementary with actions funded by the Structural Funds. Continuous
follow-up of ESF and EGF actions pursuing similar objectives and of the workers
concerned will prevent any overlap between ESF (or any other EU instrument or
programme) and EGF measures.

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

25.
Greece started the personalised services to the
affected workers included in the co-ordinated package proposed for co-financing
to the EGF on 1 July 2011. 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

26.
The social partners were consulted during the
preparation of the co-ordinated package of measures. The proposed application
was discussed at a meeting on 24 January 2011 with the social partners: Labour
Ministry, EGF Managing Authority (EYSEKT), Social Security Fundation, Labour
Institute of the Greek General Confederation of Workers, ALDI employee
representatives, Greek Manpower Employment Organisation, ALDI Hellas and the
employer organisation SELPE (Hellenic Retail Business Association). During the
meeting, the problems faced by employees and the support measures taken by the
company for redundant workers were outlined. Employees’ representatives
expressed their views on the possible actions to be included in the EGF package
of individualized services and submitted a relevant document to the EGF
Managing Authority and the Ministry of Labour and Social Security.

27.
The Greek 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

28.
As regards the criteria contained in Article 6
of Regulation (EC) No 1927/2006, the Greek 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

29.
Greece 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 Greece. ESF
Actions Coordination and Monitoring Authority (EYSEKT) will act as managing
authority and the EDEL (Fiscal Audit Committee) as control authority.

Financing

30.
On the basis of the application from Greece, the
proposed contribution from the EGF to the coordinated package of personalised
services (including expenditure to implement EGF) is EUR 2 918 500, representing 65 % of the total
cost. The Commission's proposed allocation under the Fund is based on the
information made available by Greece.

31.
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.

32.
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.

33.
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.

34.
The Commission presents separately a transfer
request in order to enter in the 2011 budget specific commitment
appropriations, as required in Point 28 of the Interinstitutional Agreement of
17 May 2006.

Source of payment appropriations

35.
Amending budget 2/2011 increased EGF budget line
04.0501 by EUR 50 000 000 in payment appropriations.
Appropriations from this budget line will be used to cover the amount of EUR 2 918 500
needed for the present application. An amount of EUR 6 091 460
remains available on the EGF Budget line 04.0501 after adoption by both arms of
the Budgetary Authority of the cases submitted to it to date.

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/2011/004 EL/ALDI Hellas from Greece)

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[6], 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[7], and in particular Article
12(3) thereof,

Having regard to the proposal from the European
Commission[8],

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)       Greece submitted an
application to mobilise the EGF, in respect of redundancies in the enterprise ALDI Hellas Supermarket Holding EPE & Assoc. E.E. and one supplier
– Thessaloniki Logistics S.A. – on 10 May 2011 and supplemented it by additional information up to 22 June 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 2 918 500.

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

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 2 918 500 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]               In accordance with the third paragraph of Article 3
of Regulation (EC) No 1927/2006.

[4]               Source:
Eurostat:
http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/dataset?p_product_code=TEINA021

[5]               Source: Eurostat.

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

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

[8]               OJ C [...], [...], p. [...].