Proposal for a Decision of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund for EGF/2009/016 LT/Manufacture of furniture submitted by Lithuania
Date: 2010-02-19
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, Lithuania, commitment of expenditure, dismissal, economic recession, furniture industry

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THE EUROPEAN COMMISSION  

Brussels, 19.2.2010 
COM(2010)58 final 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund for 

EGF/2009/016 LT/Manufacture of furniture submitted by Lithuania 

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EXPLANATORY MEMORANDUM 

The Interinstitutional Agreement of 17 May 20061 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. 
Eligibility rules applicable to the contributions from the Fund are laid down in Regulation EC 
N°  1927/2006  of  the  European  Parliament  and  of  the  Council  of  20  December  2006 
establishing the European Globalisation Adjustment Fund (EGF) 2. This Regulation has been 
last  amended  by  Regulation  (EC)  N°  546/20093  which  temporarily  broadens  the  scope  for 
application of EGF and modifies the eligibility criteria. The amended Regulation is applicable 
for applications received from 1 May 2009.  

The  Commission  services  have  carried  out  a  thorough  examination  of  the  application 
submitted by Lithuania in accordance with Regulation (EC)  N° 1927/2006 and in  particular 
with Articles 1, 2, 3, 4, 5 and 6 thereof. 

Case EGF/2009/016 LT/Manufacture of furniture 

1. 

2. 

3. 

Lithuania  submitted  the  application  to  the  Commission  on  23  September  2009  and 
supplemented by additional information received on 16 October 2009. It was based 
upon the specific intervention criteria Article 2(b) of Regulation (EC) No 1927/2006 
which  requires  at  least  500  redundancies  to  occur  within  a  nine-month  period  of 
reference in a NACE 2 division in one region or two contiguous regions at NUTS II 
level, and was submitted within the deadline of 10 weeks referred to in Article 5 of 
that Regulation. 

The  application  concerns  1 469  redundancies  in  49  enterprises,  all  operating  in  the 
NACE Revision 2 Division 31 (manufacture of furniture), of whom 636 are targeted 
for EGF assistance.  

The  detailed  elements  of  the  assessment  are  to  be  found  in  the  Communication 
adopted by the Commission 4. 

On  the  basis  of  the  conclusions  of  the  above  mentioned  communication,  it  is  proposed  to 
accept  application  Case  EGF/2009/016  LT/Manufacture  of  furniture  submitted  by  Lithuania 
relating to the redundancies in the furniture manufacturing sector, as evidence of a direct and 
demonstrable link has been provided that these redundancies result from the global financial 
and  economic  crisis.  A  co-ordinated  package  of  eligible  personalised  services  has  been 
proposed of which the requested contribution of the EGF is EUR 662 088 (see next page). 

Financing 

The total annual budget available for the EGF is EUR 500 million.  
An  amount  of  EUR 7  576  397  has  already  been  mobilised  for  prior  applications  in  2010 
leaving  an  amount  of  EUR 492  423  603  available.  The  Commission's  proposed  allocation 
under the Fund is based on the information made available by the applicant. 

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4 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406 of 30.12.2006, p. 1. 
OJ L 167of 29.06.2009, p. 26. 
SEC(2010) 53 of 26.1.2010 

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On the basis of the application for support from the Fund submitted by Lithuania and in which 
the furniture manufacturing sector is affected, the contribution from EGF to the coordinated 
package of personalised services to be funded is of EUR 662 088, representing 65 % of the 
total cost. 

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

The requested amount of support 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. 

By  presenting  this  proposal  to  deploy  the  Fund,  the  Commission  initiates  the  simplified 
trialogue procedure, as required by Point 28 of  the  Inter-institutional  Agreement  of  17  May 
2006,  in  view  of  securing  the  agreement  of  the  two  arms  of  the  budgetary  authority  on  the 
need to use the Fund 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.  

The  Commission  presents  separately  a  transfer  request  in  order  to  enter  in  the  2010  budget 
specific  commitment  and  payment  appropriations,  as  required  in  Point  28  of  the 
Interinstitutional Agreement of 17 May 2006. 

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Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund 

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  Inter-institutional  Agreement  of  17 May  2006  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 
management5, 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  Fund6, 
and in particular Article 12(3) thereof, 

Having regard to the proposal from the European Commission7, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  European  Globalisation  Adjustment  Fund  (EGF)  was  established  to  provide 
additional  support  to  redundant  workers  who  suffer  from  the  consequences  of  major 
structural  changes  in  world  trade  patterns  and  to  assist  them  with  their  reintegration 
into the labour market. 

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

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

Lithuania submitted an application to mobilise the EGF, in respect of redundancies in 
the  furniture  manufacturing  sector,  on  23  September  2009  and  supplemented  by 
additional  information  received  on  16  October  2009.  This  application  complies  with 
the requirements for determining the financial contributions as laid down in Article 10 
of  Regulation (EC) No 1927/2006,  therefore  the  Commission  proposes  to  deploy  an 
amount of EUR 662 088. 

(5) 

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

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7 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406, 30.12.2006, p. 1. 
OJ C […], […], p. […]. 

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HAVE ADOPTED THIS DECISION: 

Article 1 

For  the  general  budget  of  the  European  Union  for  the  financial  year  2010,  the  European 
Globalisation Adjustment Fund (EGF) shall be mobilised to provide the sum of EUR 662 088 
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 
The President 

For the Council 
The President 

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