EUROPEAN COMMISSION Brussels, 7.8.2015 COM(2015) 397 final Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund

(application from Italy – EGF/2015/004 IT/Alitalia)



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 (the ‘EGF Regulation’). 2.On 24 March 2015, Italy submitted application EGF/2015/004 IT/Alitalia for a financial contribution from the EGF, following redundancies in Gruppo Alitalia in Italy. 3.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/2015/004 IT/Alitalia Member State Italy Region(s) concerned (NUTS level 2) Lazio (ITI4) Date of submission of the application 24 March 2015 Date of acknowledgement of receipt of the application 7 April 2015 Date of request for additional information 7 April 2015 Deadline for provision of the additional information 19 May 2015 Deadline for the completion of the assessment 11 August 2015 Intervention criterion Article 4(a) of the EGF Regulation



Primary enterprise Gruppo Alitalia



Number of enterprises concerned 1 Sector(s) of economic activity (NACE Revision 2 Division) Division 51 (Air transport)



Number of subsidiaries, suppliers and downstream producers 0 Reference period (four months) 31 August 2014 – 30 December 2014 Number of redundancies during the reference period (a) 1 247 Number of redundancies before or after the reference period (b) 2 Total number of redundancies (a + b) 1 249 Total number of eligible beneficiaries 1 249 Total number of targeted beneficiaries 184 Number of targeted young persons not in employment, education or training (NEETs) 0 Budget for personalised services (EUR) 2 264 080 Budget for implementing EGF (EUR) 94 000 Total budget (EUR) 2 358 080 EGF contribution (60 %) (EUR) 1 414 848 ASSESSMENT OF THE APPLICATION Procedure 4.Italy submitted application EGF/2015/004 IT/Alitalia on 24 March 2015 within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met. The Commission acknowledged receipt of the application within two weeks of the date of submission of the application, on 7 April 2015, and requested additional information from Italy on the same date. Such additional information was provided within six weeks 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 August 2015. Eligibility of the application Enterprises and beneficiaries concerned 5.The application relates to 1 249 workers made redundant in Gruppo Alitalia. Gruppo Alitalia operates in the economic sector classified under the NACE Revision 2 Division 51 (air transport). The redundancies made by Gruppo Alitalia are mainly located in the NUTS level 2 region of Lazio (ITI4). Intervention criteria 6.Italy 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 over a reference period of four months in an enterprise in a Member State, including workers made redundant by suppliers and downstream producers and/or self-employed persons whose activity has ceased. 7.The reference period of four months for the application runs from 31 August 2014 to 30 December 2014. During the reference period 1 247 workers were made redundant in Gruppo Alitalia. Calculation of redundancies and of cessation of activity 8.The 1 247 redundancies during the reference period have been calculated from the date of the de facto termination of the contract of employment or its expiry. Eligible beneficiaries

9.In addition to the 1 247 workers already referred to, the eligible beneficiaries include two workers made redundant after the reference period of four months. A clear causal link can be established with the event which triggered the redundancies during the reference period. 10.The total number of eligible beneficiaries is therefore 1 249. Link between the redundancies and major structural changes in world trade patterns due to globalisation. 11.In order to establish the link between the redundancies and major structural changes in world trade patterns due to globalisation, Italy argues that although globally, the international air transport market is still dominated by European airlines, this sector has undergone serious economic disruption, in particular a decline of the EU’s market share. Over the period 2008-2012, global traffic increased by 4,6 % per year, as part of a trend of long-term growth observed since 1970. Air traffic between Europe and the rest of the world is however growing at a slower pace (2,4 %) which has led to a decrease of the EU-27’s market share in air transport measured in revenue passenger-kilometres (RPK). Available data for 2013 and 2014 indicate that the trend shown for the period 2008-2012 continues. Europe grew by 3,8 % in 2013 and 5,7 % in 2014 compared to the previous year, below the world average (5,2 % and 6,3 % respectively), and accounts for 38 % of the world traffic (measured in RPK), one percentage point less than in 2012. The Middle East region remains the fastest growing in the world, expanding by 10,9 % in 2013 and 13,4 % in 2014 and accounting for 14 % of world international traffic. 12.In terms of connecting air traffic, the Middle East is a strong performer, with the three key airports of Doha (Qatar), Abu Dhabi (UAE) and Dubai (UAE) all showing high connecting traffic volumes (around 50 %). When taken as a group the three airports now serve roughly 15 % of all air traffic volume that goes from Asia to Europe and from Europe to the South West Pacific. Overall traffic volume between Europe and Asia is growing by approximately 7 % each year, but Europe-Asia traffic routed via the Middle East is growing at roughly 20 % per annum. 13.The recent evolution of Turkish Airlines was comparable to that of the Gulf companies. The company has leveraged its hub Istanbul–Atatürk to capture a significant share of traffic flows between Asia and Europe and, to that end, has doubled he total size of its fleet, which increased from 100 aircraft in 2006 to 200 in 2012. The growth of Turkish Airlines was even more marked when measured in seat/kilometre offered on its long-haul network which increased from 5 000 million in 2004 to more than 30 000 million in 2013. 14.International passenger traffic from/to Italy and the UAE, where the carriers Emirates and Etihad are based, grew on average 21 % each year over the period 2004 to 2014. The number of passengers increased sixfold, from 297 268 in 2004 to 1,7 million in 2014. In the case of Turkey and Turkish Airlines, the average annual increase was 18 % and the passengers carried from/to Italy increased fivefold, from 426 818 to 2 million passengers over the same period. This huge increase in the number of passengers carried occurred at the expense of mainly Alitalia. 15.The effects of these changes in trade patterns have been worsened by other factors such as a decrease in demand as a consequence of the economic crisis and the increase of oil prices (fuel represents sometimes almost one third of seat/kilometre costs), resulting in a decline in employment in the air traffic sector by 6,6 % at EU level over the period 2008-2013. 16.To date, the air transport sector has been the subject of two EGF applications, both based on trade related globalisation. Events giving rise to the redundancies and cessation of activity 17.As already mentioned above, the huge increased in the number of passengers carried from/to Italy by the Gulf carriers and Turkish airlines was made at the expense of Alitalia. The decrease in the number of passengers transported in 2014 back to the figures in 2010, which represent a decline by 3,6 % compared to 2013 and by 6,4 % compared with 2012 coupled with the losses accumulated since the full privatisation of Alitalia in 2009, which in Q1 2014 were EUR 1 137 million are the events giving rise to these redundancies in Gruppo Alitalia for which Italy has requested the EGF support. 18.In the light of this situation (decrease in the number of passengers transported and accumulated loss), on 12 July 2014 Gruppo Alitalia, in agreement with the relevant trade unions, decided to submit to the Ministry of Labour a request for CIG for corporate crisis, concerning 1 635 workers. Later on the 'mobilità' procedure was launched for 1 249 workers. Expected impact of the redundancies as regards the local, regional or national economy and employment 19.Lazio's production structure is characterized by the great importance of services and a low level of industrialisation. Services represent 85,4 % of the added value at regional level, while the national average is 74,1 %. As a result of the constant and high flows of tourists and visitors in the region and of Rome in particular, the sectors related to tourism are among the most developed in Lazio. 20.Employment in Lazio has been affected by the effects of the economic and financial crisis to a lesser extent then employment at national level. According to Eurostat in Lazio over the period 2008-2013 employment decreased by 1,7 %, (this decrease representing more than 38 000 jobs lost) whilst employment in Italy declined by 4,2 % and nearly one million jobs were lost. 21.In 2014 the total number of CIG hours authorized in Lazio increased by 12,3 % compared with 2013. Furthermore, as the number of CIG hours authorized is already at a very high level since 2011 each increase has an impact on the labour market greater than the figures suggest. 22.Additionally, over the period 2008-2013, employment in the Italian air transport sector declined almost by 20 %. The redundancies from Gruppo Alitalia will further aggravate an already difficult employment situation. Targeted beneficiaries and proposed actions Targeted beneficiaries 23.The estimated number of redundant workers expected to participate in the measures is 184. The breakdown of these workers by sex, citizenship and age group is as follows:

Category Number of

targeted beneficiaries Sex: Men: 129 (70,1 %) Women: 55 (29,9 %) Citizenship: EU citizens: 183 (99,5 %) non-EU citizens: 1 (0,5 %) Age group: 15-24 years: 0 (0 %) 25-29 years: 0 (0 %) 30-54 years: 178 (96,79 %) 55-64 years: 6 (3,3 %) over 64 years: 0 (0 %) Eligibility of the proposed actions 24.The personalised services to be provided to the redundant workers consist of the following actions: –Intake and skill assesstment: The first measure is provided to the participants by the Employment Centres and includes a profile of the workers and a skill assessment along with information on available services and accredited agencies delivering the services. The worker interested in availing of the services selects the agency of his/her choice and enters into an agreement with the employment centre and the agency, the so called 'contratto di ricollocazione' (reemployment agreement). The worker agrees in participating actively while the operator undertakes the obligation to actively accompany the worker towards re-employment. –Active job-search support. Accredited agencies will provide the redundant workers with active job search support. The workers will be accompanied by a tutor who will assist and guide them. The tutor also will help the workers by finding solutions which enable their re-employment. The agencies will be paid on the basis of results achieved. EUR 4 000 where a redundant worker found a permanent job, EUR 2 500 where a redundant worker found work with a contract of twelve months or more, EUR 1 000 where a redundant worker found work with a contract of at least six months. Where it had not been possible to find a solution for the redundant worker, the agency will receive per participant an amount equivalent to 20 % of the average contribution received per reemployed worker, for mentoring and support services. –Training. The participants will be offered vocational training aimed at the requalification or the upskilling of the workers, at the request of potential employers. The preparatory training at college can be combined with on-the-job training at the premises of the potential employer. The average estimated cost for training is EUR 4 800. –Reimbursement of mobility costs. The actual costs incurred by the workers in order to participate in on-the-job training in enterprises located 80 km or more from the participants' home will be reimbursed up to EUR 5 000, on presentation of invoices, tax receipts or any other equivalent accounting document. The mobility costs include travel expenses, living expenses, accommodation costs, and installation expenses (moving expenses, electricity, water, gas, etc.). –Hiring benefits for over 50s. This payment benefits the redundant workers by facilitating their re-employment under fixed-term or permanent contracts in an enterprise other than Gruppo Alitalia. For re-employment under permanent contracts the hiring company will receive EUR 7 000 per worker while for re-employment under fixed-term contracts of at least 12 months, the hiring company will receive EUR 3 000 per worker and EUR 1 000 for re-employment under fixed-term contracts of at least 6 months. If during the period of effectiveness of a fixed term contract the employer turns it into a permanent contract, the hiring benefit received will be supplemented up to EUR 7 000. However, in case of renewal of fixed-term contracts the employer is not entitled to any additional bonus. 25.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. 26.Italy has 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 such actions. Estimated budget 27.The estimated total costs are EUR 2 358 080, comprising expenditure for personalised services of EUR 2 264 080 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 94 000. 28.The total financial contribution requested from the EGF is EUR 1 414 848 (60 % of total costs). 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) Intake and skill assessment

(Bilancio di competenze) 184 70 12 880 Active job-search support

(Soggetto accreditato) 184 4 000 736 000 Training

(Formazione on demand) 184 4 800 883 200 Sub-total (a): Percentage of the package of personalised services – 1 632 080 (72,09 %) Allowances and incentives (Actions under Article 7(1)(b) of the EGF Regulation) Reimbursement of mobility costs

(Bonus di mobilità per la formazione) 90 5 000 450 000 Hiring benefits for over 50s

(Bonus assunzione over 50) 26 7 000 182 000 Sub-total (b): Percentage of the package of personalised services: – 632 000 (27,91 %)



Actions under Article 7(4) of the EGF Regulation 1. Preparatory activities – 8 500 2. Management – 35 000 3. Information and publicity – 8 500 4. Control and reporting – 42 000 Sub-total (c): Percentage of the total costs : – 94 000 (3,99 %) Total costs (a + b + c): – 2 358 080 EGF contribution (60 % of total costs) – 1 414 848 29.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. Period of eligibility of expenditure 30.Italy started providing the personalised services to the targeted beneficiaries on 1 April 2015. The expenditure on the actions referred to in paragraph 24 shall therefore be eligible for a financial contribution from the EGF from 1 April 2015 to 1 April 2017. 31.Italy started incurring the administrative expenditure to implement the EGF on 30 January 2015. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 30 January 2015 to 1 October 2017.

Complementarity with actions funded by national or Union funds 32.The source of national pre-financing or co-funding is the Fund for Active Policies, referred to in Article 1, paragraph 215 of Law no. 147/2013. 33.Italy has confirmed that the measures described above receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments. Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities 34.Italy has consulted and/or informed on the co-ordinated package of personalised services the social partners, the accredited agencies which provide job-search support and the workers. The meeting with the trade unions was held on 4 March 2015 and with the employers' associations on 6 March 2015. The accredited agencies were informed on 23 February 2015, while the package of personalised services in support of former Alitalia workers was presented to the beneficiaries on 31 March 2015. To further encourage and facilitate the exchange of information and clarifications regarding the case, a dedicated e-mail address (alitalia2014@regione.lazio.it) was circulated to the beneficiaries and the social partners. Management and control systems 35.The application contains a description of the management and control system which specifies the responsibilities of the bodies involved. Italy has notified the Commission that the financial contribution will be managed by the Ministero del lavoro e delle politiche sociali - Direzione generale per le politiche attive, i servizi per il lavoro e la formazione (MLPS — DG PASLF) as follows: MLPS — DG PASLF — Divisione III will act as managing authority, MLPS — DG PASLF — Divisione IV as certification authority and MLPS — Secretariato Generale — Divisione II as audit authority. Regione Lazio will be the intermediate body for the managing authority. Commitments provided by the Member State concerned 36.Italy has 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, –Gruppo Alitalia the dismissing enterprise, which has continued its activities after the lay-offs, has complied with its legal obligations governing the redundancies and provided for its workers accordingly, –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. 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. 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 1 414 848, 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.

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 1 414 848. 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

(application from Italy – EGF/2015/004 IT/Alitalia) 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, and in particular Article 15(4) thereof, Having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, and in particular point 13 thereof, Having regard to the proposal from the European Commission, Whereas: (1)The European Globalisation Adjustment Fund (EGF) aims 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, 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 is not to 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. (3)On 24 March 2015, Italy submitted an application EGF/2015/004 IT/Alitalia for a financial contribution from the EGF, following redundancies in Gruppo Alitalia in Italy. It was supplemented by additional information in accordance with Article 8(3) of Regulation (EU) No 1309/2013. That application complies with the requirements for determining a financial contribution from the EGF in accordance with Article 13 of Regulation (EU) No 1309/2013. (4)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 1 414 848 in respect of the application submitted by Italy. (5)In order to minimise the time taken to mobilise the EGF, this decision should apply from the date of its adoption, HAVE ADOPTED THIS DECISION: Article 1 For the general budget of the European Union for the financial year 2015, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 1 414 848 in commitment and payment appropriations.