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/2010/011 NL/NXP Semiconductors from the Netherlands)
Date: 2010-08-31
Institutions: European Commission
Subjects: EU aid, Netherlands, 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, 31.8.2010 
COM(2010) 446 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/2010/011 NL/NXP Semiconductors from the Netherlands) 

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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 
management1  allows  for  the  mobilisation  of  the  European  Globalisation  Adjustment  Fund 
(EGF) 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 Fund2. 

On  26  March  2010,  the  Netherlands  submitted  application  EGF/2010/011  NL/NXP 
Semiconductors  for  a  financial  contribution  from  the  EGF,  following  redundancies  in  NXP 
Semiconductors Netherlands BV (hereinafter 'NXP') in the Netherlands. 

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 
Enterprise concerned 
Suppliers and downstream operators 
Reference period 
Starting date for the personalised services 
Application date 
Redundancies during the reference period 
Redundancies before or after 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/2010/011 
Netherlands 
(a) 
NXP Semiconductors Netherlands BV 
None 
1/10/2009 to 31/1/2010 
1/10/2009 
26/3/2010 
590 
0 
512 
2 672 395 
111 350 
4 % 
2 783 745 
1 809 434 

1. 

The  application  was  presented  to  the  Commission  on  26  March  2010  and 
supplemented by additional information up to 3 June 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(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  structural  changes  in 
world trade patterns due to globalisation, the Netherlands argues that the market for 
semiconductors4 is a highly competitive global market with a limited number of big 
players.  The  20  biggest  manufacturers  in  2009  represented  63 %  of  the  global 
market5. This imposes a continuous pressure on manufacturers to reduce costs. The 
Netherlands  refers  to  the  much  lower  salaries  for  semiconductor  manufacturers  in 
Asia. The direct salary costs in the Netherlands are 54 % higher than in Singapore, 
for example, and for the indirect salary costs the difference is 47 %. On the basis of 
annual sales data provided by iSuppli Corporation Europe's market share decreased 
from  14,9 %  in  2005  to  11,2 %  in  2009,  whereas  for  the  biggest  players  in  Asia  it 
increased  from  39,7 %  in  2005  to  43,3 %  in  2009.  The  exchange  rate  EUR/USD 
created a further comparative disadvantage for European manufacturers, as the costs 
are incurred in EUR and the products sold in USD. 

4. 

The  Netherlands  further  argue  that  the  impact  of  the  changes  in  world  trade  was 
further  aggravated  by  the  economic  and  financial  crisis,  as  the  market  for 
semiconductors is highly sensitive to changes in economic growth. In April 2009 the 
world-wide turnover in semiconductors dropped by 25,1 % compared to April 2008. 

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

5. 

6. 

The Netherlands 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. 

The  application  cites  590  redundancies  in  a  single  enterprise  –  NXP  –  during  the 
four-month  reference  period  from  1  October  2009  until  31  January  2010.  Of  these 
redundancies,  473  were  calculated  in  accordance  with  the  first  indent  and  117  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 

7. 

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The Dutch authorities argue that, despite the fact that NXP has during recent years 
made  significant  efforts  to  reduce  its  manufacturing  costs  in  order  to  remain 
competitive  on  the  global  market,  it  could  not  be  foreseen  that  manufacturers  of 
semiconductors  in  Asia  would  improve  their  competitive  position  so  significantly. 

A  semiconductor  is  a  substance  with  electrical  conductivity  intermediate  between  that  of  an  insulator 
and  a  conductor.  It  is  a  basic  component  of  various  kinds  of  electronic  circuit  element  used  in 
communications, control and detection technology and in computers. 
Based on the ranking established on an annual basis by iSuppli Corporation. 

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The cost reductions by NXP were not sufficient to compensate for the comparative 
advantage offered by low salaries in Asia. The current economic and financial crisis 
constitutes an additional factor that could not have been foreseen. 

Identification of the dismissing enterprises and workers targeted for assistance 

8. 

The  application  cites  a  total  of  590  redundancies  in  a  single  enterprise  NXP,  of 
whom  512  are  targeted  for  assistance.  The  remaining  workers  are  expected  to  find 
employment through their own initiative without requiring assistance from the EGF, 
or to leave the labour market. 

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 
55 to 64 years old 

Number 
425 
87 
486 
26 
1 
450 
61 

Percent 
83 
17 
95 
5 
> 0 
88 
12 

There  are  7  workers  (1,3 %)  with  a  longstanding  health  problem  or  disability 
included in the categories above. 

10. 

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

Category 
Manager 
Professional 
Technicians 
Clerical support workers 
Service and sales workers 
Plant and machine operators and assemblers 

Number 
10 
20 
24 
14 
4 
440 

Percent 
2 
4 
4 
3 
1 
86 

11. 

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

13. 

NXP is located in Nijmegen in the province of Gelderland (NUTS II region NL22) 
and  in  Eindhoven  in  the  province  of  Noord  Brabant  (NUTS  II  region  NL41).  The 
territory  most  concerned  by  the  redundancies  is  Nijmegen  and  its  surroundings  as 
most of the redundancies occurred in the production site of NXP in Nijmegen. 

The responsible authority is the Dutch Ministry of Social Affairs and Employment. 
NXP,  through  its  mobility  centre  called  'NXT  Job',  is  delegated  to  carry  out  the 
measures.  Other  stakeholders  involved  are  the  municipalities  of  Nijmegen  and 
trade  unions  FNV  ('Federale  Nederlandse  Vaksbeweging') 
Eindhoven, 
Bondgenoten,  CNV 
in  Nederland'), 
Dienstenbond,  De  Unie  and  VHPP  ('Belangen  Vereniging  Hoger  opgeleid 
Personeel'),  the  offices  in  Nijmegen  and  Eindhoven  of  the  public  organisation 

('Christelijk  Nationaal  Vakverbond 

the 

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for 

paying 

responsible 
('Uitvoeringsinstituut 
allowances 
WerknemersVerzekeringen')  Werkbedrijf,  the regional training centres in Nijmegen 
and  Eindhoven,  Hoge  School  Arnhem  Nijmegen,  Avans  Hogescholen,  Technical 
University Eindhoven, the organisation Learning and Working Nijmegen ('Leren en 
Werken Nijmegen'). 

UVW 

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

14. 

Of the 590 redundancies, 526 occurred in Nijmegen and 76 in Eindhoven. The Dutch 
authorities  argue  that  the  redundancies  in  Nijmegen  will  have  a  significant  local 
impact  as  NXP  is  the  biggest  industrial  employer  in  the  area.  It  provided  jobs  to  a 
large number of low skilled workers, who have worked for decades in this enterprise. 
The lack of job opportunities in similar enterprises in the region will be particularly 
problematic  for  workers  with  a  highly  specialised  experience  in  manufacturing. 
According  to  the  Netherlands  the  situation  in  Eindhoven,  where  the  redundancies 
concern  mainly  the  R&D  activities  is  somewhat  different.  The  redundant  NXP 
workers have experience, but this is only relevant within a limited market segment, 
and  other  R&D  enterprises  in  the  region  are  suffering  from  the  economic  and 
financial crisis.  

15. 

As a consequence of the economic and financial crisis, the Dutch authorities predict 
that the economic situation in all provinces in the Netherlands in 2010 will be worse 
compared  to  the  years  before  the  crisis.  Therefore,  the  redundancies  in  NXP  have 
only served to aggravate the already existing situation. 

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. These measures will be provided through NXT Job, the mobility 
centre created by NXP. 

–  Starting phase and job-to-job accompaniment: This covers collective information 
meetings about the available measures, the intake and registration of the dismissed 
workers,  the  appointment  of  an  individual  mentor  available  for  the  duration  of 
their  re-integration,  the  identification  of  the  most  suitable  types  of  measures.  It 
also  includes  job  to  job  accompaniment  that  is  composed  of  tailor-made 
programmes  including  screening,  the  establishment  of  a  career  and  vocational 
action  plan,  application  training  and  providing  information  on  job  vacancies  as 
well as actively contacting potential new employers.  

–  Training and re-training: This covers vocational training. The individual training 
paths are based on labour market demand and are identified in close co-operation 
between dismissed workers, social partner organisations (employer and employee 
organisations) as well as interested stakeholders in the region concerned. 

–  Recognition  of  prior  experience:  This  covers  the  evaluation  of  prior  knowledge 
and  experience  of  each  individual  worker  as  well  as  the  identification  of  areas 
where further training is required. 

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17. 

18. 

Actions 

The  expenditure  for  implementing  EGF,  which  is  included  in  the  application  in 
accordance  with  Article  3  of  Regulation  (EC)  No  1927/2006,  covers  management 
and control activities as well as information and publicity. 

The personalised services presented by the Dutch authorities are active labour market 
measures  within  the  eligible  actions  defined  by  Article  3  of  Regulation  (EC)  No 
1927/2006.  The  Dutch  authorities  estimate  the  total  costs  of  these  services  at 
EUR 2 672 395  and  the  expenditure  for  implementing  EGF  at  EUR 111 350  (=4 % 
is 
total  amount).  The 
of 
EUR 1 809 434 (65 % of the total costs). 

total  contribution  requested  from 

the  EGF 

the 

Estimated 
number of 
workers 
targeted 

Estimated cost 
per worker 
targeted 
(in EUR) 

Total costs 
(EGF and 
national 
cofinancing) 
(in EUR) 

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

Starting phase and job-to-job 
accompaniment (startfase en begeleiding 
'van werk naar werk) 

Training (scholing) ( 

Recognition of prior experience 
(Erkenning van eerder Verworven 
Competenties – EVC) 

Sub total personalised services 

512

221

61

3 583 

1 834 496

3 453 

1 226 

763 113

74 786

2 672 395

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

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. 

27 837

27 837

55 675

111 350 *

2 783 745

1 809 434

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19. 

The  Netherlands  confirms  that  the  measures  described  above  are  complementary 
with  actions  funded  by  the  Structural  Funds,  in  particular  with  a  specific  ESF 
training  project6  for  workers  in  enterprises  involved  in  the  manufacturing  of 
semiconductors, the timing of which partly coincides with the EGF implementation 
period.  The  managing  authority  for  the  EGF,  which  is  also  the  managing  authority 
for the ESF, has put in place the necessary control procedures to eliminate any risk of 
double funding. 

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

20. 

The Netherlands 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 

21. 

The  social  partners  (FNV  Bondgenoten,  CNV  Bedrijvenbond,  De  Unie  en  VHPP) 
were  involved  in  the  design  and  the  approval  of  the  package  of  measures.  The 
responsibility  for  the  mobility  centre  is  with  the  employer  NXP.  The  trade  union 
organisations are represented in a steering group, which is responsible for monitoring 
the  progress  of  the  measures,  as  well  as  in  an  accompanying  committee,  which  is 
responsible for monitoring the working method of NXT Job and the implementation 
of the social plan. 

22. 

The  Dutch  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 

23. 

As regards the criteria contained in Article 6 of Regulation (EC) No 1927/2006, the 
Dutch 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 Community financial instruments. 

Management and control systems  

24. 

The Netherlands has notified the Commission that the financial contributions will be 
managed  and  controlled  by  the  same  bodies  that  manage  and  control  the  European 

6 

2009ESFN451 Stichting Opleidings- en ontwikkelingsfonds voor semiconductor productiebedrijven. 

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Social  Fund  (ESF)  funding  in  the  Netherlands.  The  Agency  for  Social  Affairs  and 
Employment  ('Agentschap  SZW')  will  be  the  intermediate  body  for  the  managing 
authority. Furthermore, as the coordinated package of personalised measures will be 
carried  out  by  NXP,  a  covenant  was  concluded  on  5  March  2010  between  the 
Ministry of Social Affairs and NXP laying down the obligations of NXP as regards 
the organisation and the verifiable nature of the relevant administrative records. 

Financing 

25. 

26. 

27. 

28. 

On the basis of the application from the Netherlands, the proposed contribution from 
the  EGF  to  the  coordinated  package  of  personalised  services  is  EUR 1 809 434, 
representing 65 % of the total cost. The Commission's proposed allocation under the 
Fund is based on the information made available by the Netherlands. 

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. 

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  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 2010 
budget specific commitment and payment appropriations, as required in Point 28 of 
the Interinstitutional Agreement of 17 May 2006. 

Source of payment appropriations  

30. 

31. 

In  the  current  state  of  implementation,  it  is  foreseeable  that  the  payment 
appropriations available in 2010 under the budget line 01.0404 "Competitiveness and 
Innovation  Framework  Programme  -  Entrepreneurship  and  innovation  programme" 
will not be fully used this year. 

Indeed,  this  line  covers  expenditure  related  to  the  implementation  of  the  financial 
instrument of this programme, the main objective of which is to facilitate the access 
of  SMEs  to  finance.  Some  time  lag  exists  between  transfers  to  the  trust  accounts 
managed  by  the  European  Investment  Fund  and  disbursement  to  the  beneficiaries. 
The financial crisis has a major effect on the forecasts in terms of disbursements for 
2010.  As  a  result,  in  order  to  avoid  excessive  balances  on  the  trust  accounts,  the 

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methodology  for  calculation  of  payment  appropriations  has  been  reviewed,  taking 
into  account  the  expected  disbursements.  The  amount  of  EUR 1 809 434  can 
therefore be made available for transfer. 

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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 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/2010/011 NL/NXP Semiconductors from the Netherlands) 

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 
management7, 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  Fund8, 
and in particular Article 12(3) thereof, 

Having regard to the proposal from the European Commission9, 

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. 

The  Netherlands  submitted  an  application  to  mobilise  the  EGF,  in  respect  of 
redundancies  in  the  enterprise  NXP  Semiconductors  Netherlands  BV  on  26  March 
2010  and  supplemented  it  by  additional  information  up  to  3  June  2010.  This 
application complies with the requirements for determining the financial contributions 

7 
8 
9 

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

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as  laid  down  in  Article  10  of  Regulation (EC) No 1927/2006.  The  Commission, 
therefore, proposes to mobilise an amount of EUR 1 809 434. 

(5) 

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

HAVE DECIDED AS FOLLOWS: 

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 1 809 434 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 

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