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/2010/014 SI/Mura from Slovenia)
Date: 2010-10-19
Institutions: European Commission
Subjects: EU aid, Slovenia, 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, 19.10.2010 
COM(2010) 582 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/2010/014 SI/Mura from Slovenia) 

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   EN 

 
 
  
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)  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 Fund2. 

On  28  April  2010,  Slovenia  submitted  application  EGF/2010/014  SI/Mura  for  a  financial 
contribution from the EGF, following redundancies in the enterprise Mura, European Fashion 
Design, Proizvodjna oblačil, d.d. (hereinafter 'Mura') in Slovenia. 

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 
Primary enterprise 
Suppliers and downstream producers 
Reference period 
Starting date for the personalised services 
Application date 
Redundancies during the reference period 
Redundancies before and after the reference period 
Total eligible redundancies 
Redundant workers targeted for support 
Expenditure for personalised services (EUR) 
Expenditure for implementing EGF3 (EUR) 
Expenditure for implementing EGF (%) 
Total budget (EUR) 
EGF contribution (65 %) (EUR) 

EGF/2010/014 
Slovenia 
(a) 
Mura 
0 
21.10.2009 – 20.2.2010 
26.10.2009 
28.4.2010 
2 554 
0 
2 554 
2 554 
3 325 370 
133 000 
3,8 
3 458 370 
2 247 940 

1. 

2. 

1 
2 
3 

The  application  was  presented  to  the  Commission  on  28  April  2010  and 
supplemented by additional information up to 24 June 2010. 

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. 

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

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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, Slovenia argues that after the encouraging performance of the textile 
industry  in  the  EU-27  in  2007,  there  was  a  notorious  setback  in  2008  due  to  the 
economic  and  financial  crisis.  The  difficulties  faced  by  some  'textile  end-users 
sectors'  (i.e.  construction,  automotive  industry  and  housing)  in  combination  with 
increasing  production  costs  were  detrimental  for  the  textile  sector.  The  Slovenian 
authorities  cite  EUROSTAT  statistics  which  show  that  in  the  first  quarter  of  2009 
production dropped by 23 % in the textile industry and by 14 % in the clothing sector 
compared  to  the  same  period  in  2008.  This  drop  in  demand  was  directly  felt  in 
Slovenia: 4 297 jobs were lost in the manufacturing of wearing apparel between June 
2008 and December 2009 representing 46 % of all jobs that existed in June 2008 in 
this  sector.  Similarly,  2 030  jobs  were  lost  in  textile  manufacturing  over  the  same 
period, representing 27 % of all jobs that existed in this sector in June 2008.  

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

4. 

5. 

Slovenia 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  2 554  redundancies  in  the  single  enterprise  Mura  during  the 
four-month reference period from 21 October 2009 to 20 February 2010. All of these 
redundancies  were  calculated  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 

6. 

The Slovenian authorities argue that, by adjusting to the new structure required by its 
customers (such as production of small series, flexibility, just in time principle, etc.) 
Mura managed over the past years to guarantee contracts with business partners, such 
as Hugo Boss, Escada, René Lezard, Strellson,  Windsor,  etc., that require the  most 
demanding and high quality production services. Since 2003, when Mura underwent 
a major restructuring the added value per worker increased by 21 % and productivity 
by  23 %.  The  recent  termination  of  contracts  by  several  big  customers  of  Mura 
(Hugo Boss, Escada and René Lezard) could not have been foreseen. The shortfall of 
orders due to the economic and financial crisis constituted another unforeseen factor. 

Identification of the dismissing enterprises and workers targeted for assistance 

7. 

8. 

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The application cites a total of 2 554 redundancies in the single enterprise Mura, all 
of whom are targeted for assistance. 

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

Category 
Men 
Women 

Percent 
21,6 
78,4 

Number
552
2 002

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   EN 

EU citizens 
Non EU citizens 
15-24 years old 
25-54 years old 
55-64 years old 

2 554
0
1
2 455
98

100,0 
0 
> 0 
96,1 
3,9 

There  are  583  workers4  (22,8 %)  with  a  longstanding  health  problem  or  disability 
included in the categories above. 

9. 

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

Category 
Apparel manufacturers 
Textile workers 
Merchants 
Economists and associated occupations 
Installers and plumbers 
Administrators 
Metal treaters 
Others5 
Not specified 

Number
1 077
70
43
37
29
20
20
156
1 102

Percent 
42,2 
2,7 
1,7 
1,4 
1,1 
0,8 
0,8 
6,1 
43,1 

10. 

In addition, the Slovenian authorities have also provided the following breakdown of 
the workers in terms of educational level: 

Category 
Primary school not concluded 
Primary and lower secondary school 
Vocational upper-secondary education 
Technical upper-secondary education 
General upper-secondary education 
Higher vocational programmes 
University education 
Doctor or master degree 
Not specified 

Number
1 114
237
16
797
319
35
30
1
5

Percent 
43,6 
9,3 
0,6 
31,2 
12,5 
1,4 
1,2 
- 
0,2 

11. 

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

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5 

The  territory  principally  concerned  by  the  redundancies  is  the  NUTS  III  region  of 
Pomurje  (SI011).  This  region  counts  26  municipalities,  which  are  part  of  four 
administrative units. 

The  responsible  authorities  are  the  Ministry  of  Labour,  Family  and  Social  Affairs, 
the Employment Service of Slovenia and its regional office Murska Sobota as well as 

This relatively high share is due to the fact that one of the companies in the Mura Group had a policy of 
employing people with disabilities. 
Covers a large number of small categories, such as chemists, electricians, plant growers etc. 

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the  26  municipalities  in  the  region.  Other  stakeholders  include  the  Trade  Union  of 
the  Mura  Group,  the  Labour  Fund  of  Prekmurje  and  the  regional  labour  fund  of 
Pomurje,  the  Chamber  of  Craft  and  Small  Business  of  Slovenia,  the  Chamber  of 
Commerce  and  Industry  of  Slovenia  as  well  as  the  Social  Work  Centre  Murska 
Sobota. 

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

14. 

15. 

The  Slovenian  authorities  argue  that  the  employment  created  by  Mura  was  very 
important  for  the  region  of  Pomurje,  which  has  economically  been  lagging  behind 
the Slovenian average. Due to the economic and financial crisis the situation further 
deteriorated significantly. In 2008 in Pomurje compared to the Slovenian average the 
revenue per worker was 33 % lower, the added value per worker was 30 % lower and 
the salary per worker in a company 20 % lower.  

At the beginning of 2008 Mura employed 3 135 workers. This represented more than 
7 %  of  people  employed  in  the  region  of  Pomurje.  In  addition  to  Mura  Pomurka 
another  large  company  in  the  region  of  Pomurje  went  bankrupt.  Therefore,  the 
redundancies in Mura will have a significant local and regional impact. 

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. 

–  Job search assistance (workshop 2009): This comprises two workshops, one with 
a duration of 15 hours and another one with a duration of six hours and carried out 
in groups of 15 participants. The workshops aim at informing dismissed workers 
about  their  rights  and  the  employer's  obligations,  creating  career  development 
plans  and  helping  dismissed  workers  to  acquire  communication  skills  and  other 
techniques that are useful when seeking for a new job.  

–  Job search assistance (workshop I/2010): This workshop, with a duration of eight 
hours  and  carried  out  in  groups  of  10  to  15  participants,  aims  at  presenting  the 
possibilities and requirements of the labour market to dismissed workers as well 
as teaching them interview skills and how to deal with failure. 

–  Training and re-training (workshop II): This covers a workshop aimed at further 
defining  the  dismissed  worker's  personal  employment  objective  and  ensuring 
his/her  active  involvement  in  active  employment  measures.  It  comprises  a 
combination  of  group  work,  work  with  specialists  from  various  fields  and 
individual coaching. The total duration of this measure is eight months. 

–  Job club: This relates to a combination of a two-week training course followed by 
two  and  a  half  months  of  active  job-seeking  activities  with  the  assistance  of  a 
mentor.  This  measure  is  targeted  at  dismissed  workers  with  a  clearly  defined 
employment objective. 

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–  Occupational  guidance  (info  points):  The  info  points  aim  to  reach  dismissed 
workers who are facing difficulties in accessing the workshops in order to inform 
themselves about the training and labour market opportunities. Info points will be 
created in public places in all 27 municipalities across the Prekmurje and Pomurje 
regions. 

–  Working  with  the  employers:  This  covers  the  identification  of  employment 
opportunities and employers' needs and aims at encouraging employers to employ 
new  workers.  It  seeks  also  to  refer  suitable  candidates  amongst  the  dismissed 
workers to potential new employers. 

–  Entrepreneurship  promotion:  This  covers  a  one-week  exhibition  by  the  name  of 
'Employment  days'  where  employers  will  present  their  businesses  and  allow  for 
direct contact between supply of and demand for labour. 

–  Motivation  workshops:  These  workshops,  composed  of  two  seven-hour  modules 
and carried out in groups of 10 to 15 participants, aim to change the mindset of a 
selected target group in order to encourage participants to search actively for new 
employment  opportunities.  These  workshops  are  targeted  at  the  least  motivated 
workers with minor health problems. 

–  Neuro-linguistic  workshops:  This  covers  workshops  with  a  duration  of  18  hours 
carried  out  in  groups  of  10  to  15  participants  which  aim  at  motivating  the  least 
motivated dismissed workers to learn and acquire new skills. The workshops are 
composed  of  individual  and  team  exercises,  including  several  case  studies,  and 
aim at effectively transferring newly acquired skills into practice.  

–  Aid  for  self-employment:  This  covers  subsidies  for  self-employment  in  newly 
established business entities, requiring uninterrupted self-employment for a period 
of not less than one year. 

–  On the job training: This relates to the development of new skills and knowledge 
through on the job training in a job that corresponds to the educational level of the 
dismissed workers participating in this measure. 

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

The  personalised  services  presented  by  the  Slovenian  authorities  are  active  labour 
market measures within the eligible actions defined by Article 3 of Regulation (EC) 
No 1927/2006. The Slovenian authorities estimate the total costs of these services at 
EUR 3 325 370 and the expenditure for implementing EGF at EUR 133 000 (3,8 % 
of 
is 
total  amount).  The 
EUR 2 247 940 (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) 

17. 

18. 

Actions 

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Personalised services (first paragraph of Article 3 of Regulation (EC) No 1027/2006) 

Job search assistance (2009) 

Job search assistance (workshop I/2010) 

Training and re-training (Workshop II) 

Job club 

Occupational guidance (Info points) 

Working with the employers 

Entrepreneurship promotion 

Motivation workshops 

Neuro-linguistic workshops 

Aid for self-employment 

On the job training 

Sub total personalised services 

1 932

1 500

750

400

200

1 000

1 000

250

250

200

400

60 

300 

115 920

450 000

1 000 

750 000

183 

200 

125 

140 

205 

160 

4 500 

1 600 

73 200

40 000

125 000

140 000

51 250

40 000

900 000

640 000

3 325 370

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) 

20 000

20 000

93 000

133 000

3 458 370

2 247 940

19. 

Slovenia  confirms  that  the  measures  described  above  are  complementary  with 
actions  funded  by  the  Structural  Funds,  in  particular  with  the  following  ESF 
Programmes: Promotion of employment for the long-term unemployed, Training for 
greater  employability,  Institutional  training  and  Preparation  for  procedures  of 
assessing  and  awarding  National  Vocational  Qualifications.  The  Slovenian 
authorities  have  stated  that  when  performing  administrative  control  they  will  pay 
special  attention  in  order  to  ensure  that  actions  receiving  a  contribution  under  the 
EGF will not also receive assistance from other Community financial instruments. 

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

20. 

Slovenia started the personalised services to the affected workers included in the co-
ordinated package proposed for co-financing to the EGF, on 26 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 Slovenian Authorities state that, pursuant to the Employment Relationships Act, 
Mura  informed  the  trade  unions  about  the  collective  redundancies  and  sent  a 
notification on collective redundancies to the Employment Service of Slovenia. The 
Slovenian  authorities  further  argue  that  the  proposed  personalised  services  are  the 
result  of  experiences  gained  by  the  ministry  and  the  employment  service  working 
with redundant workers, and that they did not therefore actively involve trade unions 
in the preparation of the proposed activities. However, the Trade Union of the Mura 
Group has been involved in the bankruptcy procedure from the start. It has assisted in 
listing the redundant workers and in organising social aid for the workers. 

22. 

The Slovenian 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 
Slovenian 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. 

Slovenia has notified the Commission that the EGF financial contribution will not be 
managed  and  controlled  by  the  same  bodies  that  manage  and  control  the  European 
Social  Fund  (ESF)  funding  in  the  Slovenia.  The  Ministry  of  Labour,  Family  and 
Social Affairs has the role of intermediate body in the ESF system. However, in the 
EGF  system  different  divisions  within  the  Labour  Market  and  Employment 
Directorate of the Ministry of Labour, Family and Social Affairs will assume the role 
of  managing  and  certifying  authority.  The  employment  service  of  Slovenia  has  the 
role of the beneficiary of the ESF, but in the EGF system it will have the role of the 
intermediate body. 

Financing 

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25. 

26. 

27. 

28. 

On  the  basis  of  the  application  from  Slovenia,  the  proposed  contribution  from  the 
EGF  to  the  coordinated  package  of  personalised  services  is  EUR 2 247 940, 
representing 65 % of the total cost. The Commission's proposed allocation under the 
Fund is based on the information made available by Slovenia. 

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.  

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 
methodology  for  calculation  of  payment  appropriations  has  been  reviewed,  taking 
into  account  the  expected  disbursements.  The  amount  of  EUR 2 247 940  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/2010/014 SI/Mura from Slovenia) 

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 
management6, 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  Fund7, 
and in particular Article 12(3) thereof, 

Having regard to the proposal from the European Commission8, 

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. 

Slovenia submitted an application to mobilise the EGF in respect of redundancies in 
the enterprise Mura on 28 April 2010 and supplemented it by additional information 
on 24 June 2010. 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 2 247 940. 

6 
7 
8 

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

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(5) 

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

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 2 247 940 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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