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/2009/031 DK/Linak from Denmark)
Date: 2010-08-02
Institutions: European Commission
Subjects: Denmark, EU aid, budgetary discipline (EU), budgetary procedure, commitment of expenditure, dismissal, financial management, fund (EU), globalisation, interinstitutional agreement, reintegration into working life

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EUROPEAN COMMISSION 

Brussels, 2.8.2010 
COM(2010)417 final 

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/2009/031 DK/Linak from Denmark) 

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EXPLANATORY MEMORANDUM 

The  Interinstitutional  Agreement  of  17 May  2006  between  the  European  Parliament,  the 
Council  and  the  Commission  on  budgetary  discipline  and  sound  financial  management1 
allows for the mobilisation of the European Globalisation Adjustment Fund (EGF) (point 28) 
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  8  September  2009,  Denmark  submitted  application  EGF/2009/031  DK/Linak  for  a 
financial contribution from the EGF, following 198 redundancies in Linak A/S in Denmark. 

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. 
Member State 
Article 2 
Enterprises concerned 
NUTS II region 
NACE Revision 2 division 
Reference period 
Starting date for the personalised services 
Application date 
Redundancies during the reference period: 
Redundant workers targeted for support 
Personalised services: budget in EUR 
Expenditure for implementing EGF3: budget in EUR 
% expenditure for implementing EGF 
Total budget in EUR 
EGF contribution EUR (65 %) 

EGF/2009/031 
Denmark 
(c) 
Linak A/S 
DK03 - Syddanmark 
n/a 
01/11/2008 – 30/06/2009 
01/10/2009 
08/09/2009 
198 
139 
1 771 544 
95 393 
5.1 % 
1 866 936 
1 213 508 

1. 

The  application  was  presented  to  the  Commission  on  8  September  2009  and 
supplemented by additional information up to 30 March 2010. 

1 
2 
3 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406 of 30.12.2006, p. 1. 
In accordance with the third paragraph of Article 3 of Regulation (EC) No 1927/2006. 

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2. 

The application meets the conditions for deploying the EGF as set out in Article 2(c) 
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  Denmark  argues  that  the  redundancies  in  Linak A/S  are  a  direct 
consequence  of  the  abrupt  deterioration  of  demand  for  mechanical  and  electronic 
machinery  as  a  result  of  the  economic  crisis  and  associated  recession.  It  provides 
statistical  evidence  from  Eurostat  that  demonstrates  that  the  generally  favourable 
evolution  in  production  in  the  sector  'manufacture  of  machinery  and  equipment' 
changed dramatically in the fourth quarter of 2008 in the EU. In both Denmark and 
Germany  (the  leading  EU  producer)  declines  in  production  of  25 %  and  over  were 
recorded between 2008 Q4 and 2009 Q3. 

The  downturn  in  production  caused  by  the  crisis  exacerbated  an  already  difficult 
situation for companies in the sector. As a result of cost pressures from Asia, where 
labour  costs  are  a  fraction  of  those  in  the  EU,  production  had  been  progressively 
migrating out of the EU, including Denmark. 

Linak A/S was not unaffected by the cost pressures. Denmark acknowledges that the 
redundancies in Linak and other companies in the sector would have occurred in any 
event,  but  would  have  taken  place  over  a  longer  period,  and  could  thus  have  been 
planned for and dealt with more easily. 

As a family-run business, Linak A/S does not publish financial information, but the 
firm's  human  resources  director  was  quoted  in  the  press  as  saying  that  the 
redundancies were a direct result of worsening sales figures. Linak A/S is active in 
the  same  sector  as  the  Danfoss  Group,  which  also  made  significant  numbers  of 
workers redundant in the same region as a result of a severe drop in worldwide sales. 

Denmark does not expect that many of the jobs lost in Linak will return to Denmark 
even  after  the  crisis.  The  cost  pressures  in  the  sector,  along  with  the  growing 
importance of  markets in Asia and other non-EU regions, will ensure that any new 
production capacity is likely to be established outside the EU. 

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

4. 

Denmark submitted this application under the intervention criteria of Article 2(c) of 
Regulation  (EC)  No  1927/2006,  which  permits  Member  States,  in  exceptional 
circumstances,  duly  substantiated  by  the  Member  State  concerned,  to  submit  an 
application  for  a  contribution  from  the  EGF  even  if  the  intervention  criteria  laid 
down  in  points  (a)  or  (b)  are  not  entirely  met,  when  redundancies  have  a  serious 
impact on employment and the local economy. 

The  redundancies  in  Linak  A/S  coincide  in  time  and  place  with  another  significant 
redundancy  event  that  is  the  subject  of  a  separate  EGF  application  (EGF/2009/015 
DK/Danfoss  Group).  This  latter  application  concerns  1  443  redundancies  in  three 

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related  firms  in  the  engineering  sector  in  Sønderborg  in  southern  Denmark. 
Sønderborg is a municipality of approximately 76 000 people in a relatively isolated 
part of Denmark. The redundancies in Linak have occurred in the same municipality, 
at  the  same  time,  and  concern  workers  in  one  of  the  sectors  in  which  the  Danfoss 
Group was active. 

The redundancies in the Danfoss Group occurred in two different NACE 2 divisions 
(27 and  28)  and those  in  Linak occurred in NACE 2 division 27. For this reason a 
combined application covering all the workers is not possible according to Article 2 
of Regulation (EC) No 1927/2006. 

The impact on the local labour market will be especially severe, and opportunities for 
the redundant workers correspondingly reduced. Taken together, the two redundancy 
events  have  had  a  devastating  impact  on  the  local  labour  market,  which  has  seen 
unemployment rise by 250 % between mid-2008 and mid-2009. 

Denmark argues that the coincidence of the two redundancy events poses an unusual 
and difficult situation on the workers and the region concerned, and that this merits 
the consideration of the current case (Linak A/S) as an exceptional circumstance. 

The  application  derogates  from  the  criteria  of  Article  2(b)  of  Regulation  (EC)  No 
1927/2006, as the number of redundancies is inferior to the threshold of 500 in a nine 
month  period  that  that  article  requires.  Denmark  argues  that  the  large  number  of 
redundancies in the separate EGF application for the Danfoss Group, many of which 
occurred  in  the  same  NACE  2  Division  are  evidence  that  the  sector  has  suffered 
serious economic disruption. 

The  application  cites  198  redundancies  in  Linak A/S  during  the  period  from  1 
November  2008  –  30  June  2009.  All  of  the  redundancies  were  calculated  in 
accordance with the 2nd indent of the 2nd paragraph of Article 2 of Regulation (EC) 
No 1927/2006. 

Denmark argues that this application is exceptional and justifies the intervention of 
the  EGF  because  the  redundancies  have  occurred  in  the  same  sector,  at  the  same 
time, and in the same region, as those already subject to an application to the EGF 
(under case EGF/2009/015 DK/Danfoss Group). The exceptionality of the case lies 
in  the  combination  of  these  factors,  which  together  pose  an  unusual  and  difficult 
situation on the workers and the region concerned.  

5. 

6. 

Explanation of the unforeseen nature of those redundancies 

7. 

Denmark argues that the global economic and financial crisis exacerbated an already 
difficult situation for enterprises in the engineering sector. Cost pressures had been 
exerting pressure on enterprises in high-cost countries, and the reduction in demand 
and thus production that the crisis brought left Linak A/S with no alternative but to 
close  loss-making  production  facilities.  The  suddenness  of  the  crisis  meant  that 
alternatives  could  not  be  found  quickly,  and  the  depth  of  the  recession  meant  that 
losses incurred by the Group were unsustainable. 

Identification of the dismissing enterprises and workers targeted for assistance 

8. 

The application cites a total of 198 redundancies in the enterprise Linak A/S. 

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Denmark estimates that 70 % of the redundant workers (139) will receive assistance 
from the EGF. The remaining 30 % are expected to find employment through their 
own initiative without requiring assistance from the EGF. 

9. 

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

Category 
Men 
Women 
EU citizens 
Non EU citizens 
15 to 24 years old 
25 to 54 years old 
Over 54 years old 

Number 
65 
74 
n/a 
n/a 
23 
111 
5 

Percent 
46.8 % 
53.2 % 
n/a 
n/a 
16.5 % 
79.9 % 
3.6 % 

10. 

In terms of professional categories, the break-down is as follows : 

and 

Category 
Professionals 
Technicians 
associate 
professionals 
Plant  and  machine 
and 
operators 
assemblers 

Number 
11 
17 

Percent 
7.9 % 
12.2 % 

111 

79.9 % 

11. 

In  accordance  with  Article  7  of  the  Regulation  (EC)  No  1927/2006,  Denmark  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 concerned is the municipality of Sønderborg, which was established on 
1  January  2007  as  an  amalgamation  of  seven  previous  municipalities.  It  has  a 
population of 76 647. Geographically, it consists of two different parts: the island of 
Als  and  the  Sundeved  peninsula,  connected  by  two  bridges  in  the  main  town  of 
Sønderborg.  Als  has  a  ferry  connection  over  the  Little  Belt  to  Fyn,  but  the  main 
transport  artery  in  southern  Jutland  is  to  the  west  of  the  municipality.  Especially 
northern  Als,  where  Linak  has  its  headquarters,  is  remote.  From  the  town  of 
Sønderborg  it  is  only  30  km  by  road  to  the  German  border,  and  part  of  the 
municipality is on the northern side of Flensburg Fjord, with a short journey across 
the  water  to  the  southern  shore  in  Germany.  The  municipality  is  thus  part  of  the 
border  region.  However,  northern  Schleswig-Holstein,  the  adjacent  area,  is  not  a 
German  ‘growth  region’.  In  fact,  over  the  last  decade,  there  has  been  a  significant 
migration 
Jutland. 
If  there  had  not  been  a  cluster  of  mechatronics  firms  around  Danfoss,  Als  in 
particular would certainly have become a peripheral area, as is the case for example 
with  the  neighbouring  areas  of  southern  Fyn  and  the  South  Fyn  archipelago. 
The  area  is  especially  characterised  by  a  relatively  high  average  age,  and 

Germany 

southern 

labour 

from 

of 

to 

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the 

considering 

demographic  forecasts  suggest  a  decline  in  population  over  the  next  ten  years  — 
economic  downturn.  
without 
Even  if  the  average  level  of  education  and  training  is  reasonably  high,  it  is  still  a 
feature of the area that a significant proportion of the population has been employed 
in unskilled industrial jobs. To a large extent it is this section of the population which 
is now affected by globalisation. 

effects  of 

sudden 

the 

13. 

The principal stakeholders include Sønderborg municipality and the region of South 
Denmark. 

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

14. 

15. 

16. 

The  iron  and  metal  industry  in  Sønderborg  municipality  represents  around  25 %  of 
all  employment  in  the  municipality.  In  the  first  nine  months  of  2009  registered 
unemployment  climbed  by  more  than  300 %,  and  the  iron  and  metal  industry  has 
over the same time laid off more than 1 600 employees. 

Denmark  has  provided  evidence  that  the  increase  in  unemployment  in  Sønderborg 
has been greater that the Danish average over the period from mid-2008 to mid-2009. 
During this period the numbers of unemployed workers in Sønderborg increased by 
around 250 %. 

With  around  15 %  of  the  workforce,  the  engineering  sector  was  the  largest  single 
sector  in  the  area,  and  the  job  loses  in  Linak A/S  will  not  be  absorbed  by  other 
enterprises. Without retraining, the redundant workers are likely to find it difficult to 
be  re-employed.  Particularly  relevant  in  this  case  is  the  fact  that  other  major 
employers  in  the  sector  in  Sønderborg  have  also  made  significant  numbers  of 
workers redundant. The opportunity for the workers to find employment in the sector 
is therefore considerably reduced.  

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 

17. 

18. 

Denmark proposes a package of measures in favour of the redundant workers that is 
built around three pillars, following an initial vocational counselling and placement: 
education and training, employment incentives, and incentives for business start-ups. 
The package is designed to take into account the educational levels of the workers, 
their  ability  to  be  mobile,  and  current  or  expected  job  opportunities  in  the  region. 
Although  all  of  the  targeted  workers  will  participate  in  the  initial  counselling  and 
placement, other actions may target smaller numbers of workers, some of whom will 
benefit from more than one action where appropriate. 

An initial vocational counselling and placement is carried out in order to identify the 
best  options  for  each  worker  individually.  Each  targeted  worker  is  offered  a  basic 
training to identify their skills and to find the best fit with the available active labour 
market measures. It is estimated that 70 % of the redundant workers will avail of this 
action, at an estimated cost of € 3 356 per worker. 

19. 

The  pillar 

'education 

and 

training' 

comprises 

five 

separate 

actions: 

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(1) Supplementary training in tourism. It is estimated that 18 workers, predominantly 
those  with  low  levels  of  educational  attainment  will  benefit  from  the  action,  at  an 
estimated cost of € 6 644 per worker. 
relevant  to  the  growing  tourism  sector  in  the  region,  including  advertising, 
administration. 
marketing,  branding, 

The action aims to give the workers skills 

and  business 

concept 

service 

the 

(2) Supplementary training in energy technology. Due to the focus on sustainability, 
demand for skilled workers from small, medium and large enterprises in the region is 
expected. It is proposed to train approximately 12 workers, predominantly those with 
low  levels  of  educational  attainment,  to  enter  this  industry,  in  close  collaboration 
with  existing  employers  in  the  region.  The  estimated  cost  per  worker  is  € 6 644. 

(3)  Attracting  and  retaining  young  people  in  education.  The  Sønderborg  area  is 
characterized by having a group of young people without training. There have been 
many initiatives to tackle this, but they have not had the desired effect. This action is 
aimed  at  attracting  younger  redundant  workers  back  into  education,  for  which 
additional support is needed, including guidance and material and financial support 
to  facilitate  the  transition  from  work  to  study.  It  is  estimated  that  18  workers  with 
low  levels  of  educational  attainment  will  benefit  from  this  action,  at  an  estimated 
cost of € 6 711 per worker.   

(4)  Education  and  training  in  business  management.  An  estimated  9  workers, 
predominantly  those  with  low  levels  of  educational  attainment,  will  be  offered 
training  in  aspects  of  business  administration,  such  as  accounting,  planning, 
communication, and strategic management. The training will include both classroom 
and  practical  (on-the-job)  training.  The  estimated  cost  per  worker  is  € 7 114. 

(5) Remedial education. An estimated 48 of the older workers (aged 40-60) with very 
low levels of educational attainment will be offered remedial education in areas such 
as  reading,  spelling  and  mathematics  in  order  to  allow  them  to  take  advantage  of 
other educational and employment opportunities. The cost per workers is estimated 
at € 5 302. 

20. 

The 

pillar 

'employment 

incentives' 

comprises 

three 

separate 

actions: 

(1)  Incentives  for  older  persons  who  wish  to  change  career.  This  action  aims  to 
provide  incentives  to  older  workers  (aged  40-60)  who  have  worked  in  the  metal 
sector to take up opportunities in other sectors. In recognition of the likelihood that 
the  metal  sector  will  not  recover  in  the  near  future  in  the  region,  it  is  necessary  to 
help  these  workers  move  to  other  sectors.  This  action  will  include  guidance  and 
mobility  support,  and  it  is  estimated  that  around  12  workers  will  benefit,  at  an 
estimated cost of € 4 952 per worker. 

(2) Internships and mentoring. It is expected that around 36 of the younger workers 
with a low level of education will benefit from internships and  mentoring,  in  close 
cooperation  with  businesses  in  the  region  which  have  a  track  record  of  recruiting 
staff  from  other  sectors.  The  estimated  cost  per  worker  is  € 5 161.  The  aim  is  to 
ensure  that  these  workers  remain  in  close  contact  with  the  job  market,  to  facilitate 
their reintegration as quickly as possible. 

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(3)  Company-based  training.  In  order  to  facilitate  the  reintegration  of  the 
unemployed into the labour market, this action offers on-the-job training, especially 
in  SMEs,  with  a  specific  focus  on  the  skills  that  such  firms  require.  It  is  estimated 
that around 36 redundant workers will benefit from this action, at an estimated cost 
of € 5 772 per worker. 

21. 

The  pillar  'incentives  for  business  start-ups'  contains  three  separate  actions,  all  of 
which are aimed primarily at the older workers with low levels of education amongst 
the redundancies: 

(1) Financial support to persons starting up businesses in growth industries. Financial 
assistance in the form of interest-only loans would be offered to redundant workers 
who start new companies in growth business such as the leisure or welfare sectors. It 
is expected that 6 people will benefit from it. The financial support may be awarded 
if  the  redundant  worker  recruits  employees  in  the  company  he  or  she  starts.  It  is 
€ 26 846. 
estimated 

loan  per  entrepreneur  will  be  about 

the  average 

that 

(2) On-going advice and mentoring for entrepreneurs. To help new entrepreneurs to 
succeed, this action proposes to offer entrepreneurs ongoing advice and mentoring. It 
is  expected  that  9  will  benefit,  at  an  estimated  cost  of  around  € 4 027  per  worker. 
Each  entrepreneur  will  be  assigned  a  mentor  with  knowledge  of  the  sector  who 
regularly  consults  and  advises  the  entrepreneur.  It  is  planned  that  the  mentoring 
scheme  will  run  for  one  year,  and  simultaneously  it  is  planned  to  set  up  network 
groups  within  current  and  potential  growth  sectors,  where  new  entrepreneurs  can 
meet, discuss and cooperate. 

(3)  Support  for  advertising  and  branding  of  growth  entrepreneurs.  This  action  is 
designed to provide professional advice from an advertising agency on branding and 
advertising  the  start-up  companies.  It  is  expected  that  2  workers  will  benefit  from 
this action, which will run for six months, at an estimated cost of around € 8 054 per 
worker. 

The  expenditure  for  implementing  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. 

The  personalised  services  presented  by  the  Danish  authorities  are  active  labour 
market measures within the eligible actions defined by Article 3 of Regulation (EC) 
No  1927/2006.  The  Danish  authorities  estimate  the  total  costs  of  these  services  at 
€ 1 771 544  and  the  expenditure  for  implementing  EGF  at  € 95 393  (5.1 %  of  the 
total amount). The total contribution requested from the EGF is € 1 213 508 (65 % of 
the total costs). 

Estimated 
number of 
workers 
targeted 

Estimated cost 
per worker 
targeted 
(in EUR) 

Total costs 
(EGF and 
national co-
financing) (in 
EUR) 

22. 

23. 

Actions 

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

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Vocational counselling and placement 

139

3 356 

466 443

Education and Training 

Supplementary training in tourism 

Supplementary training in energy 
technology 

Attracting and retaining young people in 
youth or continuing training 

Education and training in business 
management 

Remedial education 

Employment incentives 

Incentives for older persons who wish to 
change career 

Internships and mentoring 

Company-based training 

Incentives for business start-ups 

Financial support to persons starting up 
businesses in growth industries 

On-going advice and mentoring for 
entrepreneurs 

Support for advertising and branding of 
growth entrepreneurs 

Sub total personalised services 

18

12

18

9

48

12

36

36

6

9

2

6 644 

6 644 

119 597

79 732

6 711 

120 805

7 114 

64 027

5 302 

254 497

4 953 

59 436

5 161 

5 772 

185 799

207 785

26 846 

161 074

4 027 

36 242

8 054 

16 107

1 771 544

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

Preparatory activities 

Management 

Information and publicity 

Control activities 

Sub total expenditure for implementing 
EGF 

Total estimated costs 

EGF contribution (65 % of total costs) 

[* total does not tally due to rounding] 

14 309

47 696

14 309

19 079

95 393

1 866 936*

1 213 508

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24. 

Denmark  confirms  that  the  measures  described  above  are  complementary  with 
actions funded by the Structural Funds. 

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

25. 

Denmark started the personalised services to the affected workers included in the co-
ordinated  package  proposed  for  co-financing  to  the  EGF,  on  1  October  2009.  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  South  Denmark  region  and  Sønderborg  municipality  prepared  the  application 
jointly,  with  the  involvement  of  various  social  partners,  including  industrial 
associations,  trade  unions  and  education  and  training  institutions.  A  public  hearing 
on  the  matter  was  also  held,  which  was  announced  in  the  local  and  regional  press, 
and all interested parties were able to participate. 

27. 

The  Danish  authorities  confirmed  that  the  requirements  laid  down  in  national  and 
Community 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 
Danish 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 under points 17 to 24 above do not 

receive assistance from other Community financial instruments. 

Management and control systems  

29. 

Denmark  has  notified  the  Commission  that  the  financial  contributions  will  be 
managed  and  controlled  by  the  same  bodies  that  manage  and  control  the  European 
Social Fund (ESF) funding in Denmark. 

Financing 

30. 

On  the  basis  of  the  application  from  Denmark,  the  proposed  contribution  from  the 
EGF to the coordinated package of personalised services is € 1 213 508, representing 
65 %  of  the  total  cost.  The  Commission's  proposed  allocation  under  the  Fund  is 
based on the information made available by Denmark. 

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31. 

32. 

33. 

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  above,  to  be  allocated  under  heading  1a  of  the  financial 
framework. 

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. 

By  presenting  this  proposal  to  mobilise  the  EGF,  the  Commission  initiates  the 
simplified  trialogue  procedure,  as  required  by  Point  28  of  the  Inter-institutional 
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 2010 
budget specific commitment and payment appropriations, as required in Point 28 of 
the Interinstitutional Agreement of 17 May 2006. 

Source of payment appropriations  

35. 

In  the  current  state  of  implementation,  it  is  foreseeable  that  the  payment 
appropriations  available  under  the  budget  line  01.04  05  'Completion  of  programme 
for enterprises: improvement of the financial environment for small and middle-sized 
year.  
enterprises 

2010  will 

(SMEs)' 

fully 

used 

this 

not 

be 

in 

Payment appropriations are transferred to trust accounts as required to ensure that the 
European Investment Fund (EIF) is at all times in a position to make disbursements 
intermediaries. 
to 

financial 

the 

The  financial  crisis  had  a  major  effect  on  the  disbursement  profile  of  financial 
instruments,  particularly  those  in  the  area  of  venture  capital.  According  to  the 
European Venture Capital Association (EVCA), investments and divestments (exits) 
were more than halved between 2007 and 2009 compared to the pre-crisis situation. 
These  developments  had  also  a  substantial  impact  on  the  forecasts  in  terms  of 
2010. 
disbursements 

for 

As  a  consequence  of  the  above  elements,  payment  appropriations  foreseen  in  the 
2010  budget  will  not  be  fully  needed  in  2010.  The  amount  of  EUR 1 213 508  can 
therefore be made available for transfer.  

EN 

11 

   EN 

 
 
 
 
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/2009/031 DK/Linak from Denmark) 

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 
management4, 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  Fund5, 
and in particular Article 12(3) thereof, 

Having regard to the proposal from the European Commission6, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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. 

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. 

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

Denmark submitted an application to mobilise the EGF, in respect of redundancies in 
Linak A/S.  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 € 1 213 508. 

4 
5 
6 

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

EN 

12 

   EN 

 
                                                 
(5) 

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

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 € 1 213 508 in 
commitment and payment appropriations. 

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

Article 2 

Done at, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

13 

   EN