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/2010/017 DK/Midtjylland Machinery from Denmark)
Date: 2011-07-11
Institutions: European Commission
Subjects: Denmark, European Globalisation Adjustment Fund, budgetary procedure, commitment of expenditure, dismissal, financial management, interinstitutional agreement

EUROPEAN COMMISSION 

Brussels, 11.7.2011 
COM(2011) 421 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/2010/017 DK/Midtjylland Machinery from 
Denmark) 

 
 
  
 
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 11 May 2010, Denmark submitted application EGF/2010/017 DK/Midtjylland Machinery 
for a financial contribution from the EGF, following redundancies in 6 enterprises operating 
in  the  NACE  Revision  2  Division  28  ('Manufacture  of  machinery  and  equipment')3  in  the 
NUTS II region of Midtjylland (DK04) 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 
Expenditure for personalised services (EUR) 
Expenditure for implementing EGF4 (EUR) 
Expenditure for implementing EGF (%) 
Total budget (EUR) 
EGF contribution (65 %) (EUR) 

EGF/2010/017 
Denmark 
(b) 
6 
Midtjylland (DK04) 
28 ('Manufacture of machinery 
and equipment') 
6.6.2009 – 6.3.2010 
11.08.2010 
11.5.2010 
813 
325 
5 627 125 
441 500 
7,3 
6 068 625 
3 944 606 

1 
2 
3 

4 

OJ C 139, 14.6.2006, p. 1. 
OJ L 406, 30.12.2006, p. 1. 
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 
establishing the statistical classification of economic activities NACE Revision 2 and amending Council 
Regulation (EEC) No 3037/90 as well as certain EC regulations on specific statistical domains (OJ L 
393, 30.12.2006, p. 1). 
In accordance with the third paragraph of Article 3 of Regulation (EC) No 1927/2006. 

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1. 

2. 

The  application  was  presented  to  the  Commission  on  11  May  2010  and 
supplemented by additional information up to 21 March 2011. 

The application meets the conditions for deploying the EGF as set out in Article 2(b) 
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. 

4. 

In order to establish the link between the redundancies and major structural changes 
in  world  trade  patterns  due  to  globalisation,  Denmark  argues  that  the  wind  turbine 
manufacturing industry in the EU, which is included in NACE Revision 2 Division 
28  ('Manufacture  of  machinery  and  equipment'),  has  been  seriously  affected  by 
changes in world trade patterns, in particular a significant reduction of the EU market 
share. Denmark explains that, although the European production of wind turbines has 
increased  in  the  past  few  years,  the  global  market  for  wind  turbines  has  developed 
even faster, especially in Asia and North America. 

Denmark quotes the World Wind Energy Report 2009 prepared by the World Wind 
Energy  Association,  which  shows  that  the  most  dynamic  progress  of  the  wind 
industry  took  place  in  Asia  and  North  America  and  the  focus  of  the  global  wind 
sector  moved  away  from  Europe.  Amid  a  dynamic  global  growth  of  the  sector, 
Europe's share in total capacity was reduced from 65,5 % in 2006 to 47,9 % in 2009. 
Asia is expanding most rapidly, accounting for 40,4 % of the new wind capacity in 
2009 (in comparison to 18,1 % in 2004) while Europe fell back from 70,7 % of new 
capacity in 2004 to only 27,3 % in 2009. 

(Source:  World  Wind  Energy  Report  2009,  WWEA  World  Wind  Energy 
Association) 

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Apart  from  considerably  lower  labour  costs,  the  high  costs  of  transporting  the  big 
parts of wind turbines require European producers to move their production closer to 
the  most  dynamic  end-user  markets  to  ensure  their  competiveness  and  market 
position. As a result, production has been progressively migrating out of the EU. 

Vestas  Group  (accounting  for  95 %  of  all  workers  targeted  for  support  under  this 
application)  has  been  part  of  the  trend  described  above.  Although  its  income  has 
been  growing  (increase  by  185 %  over  the  past  five  years)  and  the  company 
increased the number of staff by 202 % over the same period, it has also been losing 
its share in the rapidly growing world  market for wind  energy  (from  30 %  in 2004 
down to about 14 % at present). These factors resulted in Vestas shifting the focus of 
its activities and its production plants to the USA and Asia, where the bigger share of 
the customer base is located and production is more cost-effective. 

In addition, the new economic context as a result of the financial and economic crisis 
negatively  affected  the  EU  wind  industry  in  2009.  As  a  result,  the  Danish  wind 
industry  experienced a sharp  drop in employment in that year, as well as  a drop in 
turnover. 

5. 

6. 

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

7. 

8. 

Denmark submitted this application under the intervention criteria of Article 2(b) of 
Regulation  (EC)  No  1927/2006,  which  requires  at  least  500  redundancies  over  a 
nine-month period in enterprises operating in the same NACE Revision 2 Division in 
one region or two contiguous regions at NUTS II level in a Member State. 

The  application  cites  813  redundancies  in  six  enterprises  operating  in  the  NACE 
Revision 2 Division 28 ('Manufacture of machinery and equipment')5 in the NUTS II 
region  of  Midtjylland  (DK04)  during  the  nine-month  reference  period  from  6  June 
2009 to 6 March 2010. All of these redundancies were calculated in accordance with 
the  third  indent  of  the  second  paragraph  of  Article  2  of  Regulation  (EC)  No 
1927/2006. 

Explanation of the unforeseen nature of those redundancies 

9. 

5 

The Danish authorities argue that that the reduction of employment in Midtjylland, 
which  is  the  subject  of  this  application,  was  unforeseen  because  of  the  rapid 
expansion of the global wind energy sector, and the positive expectations which had 
been published by the producers in their quarterly reports in the period preceding the 
lay-offs. 

Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 
establishing the statistical classification of economic activities NACE Revision 2 and amending Council 
Regulation (EEC) No 3037/90 as well as certain EC regulations on specific statistical domains (OJ L 
393, 30.12.2006, p. 1). 

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Identification of the dismissing enterprises and workers targeted for assistance 

10. 

The application cites a total of 813 redundancies in the following six enterprises, of 
which 325 are targeted for assistance: 

Enterprises 
Vestas assembly A/S 
Vestas Blades A/S 
Vestas Control Systems A/S 
Vestas Machining A/S 
I.P.L Transmissioner 
Lind Jensens Maskinfabrik 
Total enterprises: 6 

11. 

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

Category 
Men 
Women 
EU citizens 
Non EU citizens 
15-24 years old 
25-54 years old 
55-64 years old 
> 64 years old 

Numbers of dismissals 

138 
506 
105 
24 
18 
22 
Total dismissals: 813 

Number 
251 
74 
325 
0 
28 
247 
50 
0 

Percent
77,23
22,77
100,00
0
8,62
76,00
15,38
0

12. 

13. 

None of the workers dismissed have longstanding health problems or disablilities. 

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

Category 
Professionals 
Technicians and associate professionals 
Clerical support workers 
Craft and related trades workers 
Plant and machine operators, and assemblers 
Elementary occupations6 

Number 
2 
26 
1 
133 
149 
14 

Percent
0,62
8,00
0,31
40,92
45,84
4,31

14. 

In  accordance  with  Article  7  of  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 

15. 

6 

The territory concerned is Central Denmark Region (Midtjylland, NUTS II – DK04) 
and  particularly  the  municipality  of  Ringkøbing-Skjern.  Midtjylland  is  the  first  in 
area  and  second  in  population  among  Denmark's  five  regions,  with  an  area  of 
13 053 square  kilometres  and  a  population  of  above  1,2 million.  Its  capital  city  is 

The breakdown is based on International Standard Classification of Occupations (ISCO) developed by 
International Labour Organisation. 

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16. 

Viborg.  The  affected  municipality  of  Ringkøbing-Skjern  is  located  in  the  western 
part of the region. Ringkøbing-Skjern, with an area of 1 485 km², has a population of 
58 803 (2009).  

The principal stakeholders are the municipality of Ringkøbing-Skjern and the social 
partners. The municipality has responsibility for supporting the unemployed in their 
search for new employment, including making arrangements for activities to upgrade 
workers' skills, to aid job-seeking skills and to help with the goal-setting process. The 
municipality  will  be  responsible  for  implementation  of  the  activities  in  the 
application,  as  well  as  registration  and  control.  The  social  partners,  i.e.  the  trade 
unions  and  the  employers'  organisations  involved  in  the  project  are  the  following: 
Ringkøbing Fjord Business Development Centre (Ringkøbing Fjord Erhvervscenter), 
Ringkøbing-Skjern  Vocational  College  (UddannelsesCenter  Ringkøbing-Skjern), 
Danish Confederation of Trade Unions (LO), Danish Metal (Dansk Metal – union for 
workers  in  metal  industries),  3F  (union  for  unskilled  workers),  Danish  Employers' 
Organization  (DI  –  organization  for  employers  in  industry),  Local  Employment 
Advisory  Council  (LBR  –  council  of  partners  with  interests  in  the  employment 
sector),  Regional  Employment  Advisory  Council  (RBR  –  regional  council  of 
partners), Vestas Wind Systems A/S.  

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

17. 

18. 

19. 

The  workers  in  the  iron  and  metal  industry,  to  which  the  manufacture  of  wind 
turbines  sector  belongs,  constitute  a  higher  share  in  the  total  number  of  workers  in 
the municipality of Ringkøbing-Skjern, than in Denmark as a whole (19 % and 6 % 
respectively), thus making the region more vulnerable to the negative changes in the 
sector. 

Denmark  expects  the  impact  of  the  redundancies  to  be  locally  significant;  notified 
redundancies  of  the  affected  workers  represent  about  2,5 %  of  the  total  number  of 
workplaces  in  the  municipality  of  Ringkøbing-Skjern.  The  municipality  has  been 
affected  by  rising  unemployment  much  more  than  the  region  of  Midtjylland  and 
Denmark  as  a  whole  (respective  increase  between  July  2008  and  September  2010: 
Ringkøbing-Skjern:  290 %,  Midtjylland:  192 %,  Denmark:  176 %,  source: 
www.jobindsats.dk).  

Based on the figures published by the government's Labour Market Commission, the 
consultancy  firm  M-ploy  A/S  estimates  that  these  redundancies  may  bring  about  a 
rise in unemployment support expenditure of about EUR 940 000 per annum, as well 
as reduced tax revenue of up to EUR 3,2 mln per annum. 

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 

20. 

Clarification  and  reorientation:  The  target  group  will  be  offered  a  clarifying  basic 
programme  to  determine  their  goals  and  draw  up  an  action  plan.  The  basic 
programme  will  run  for  12  weeks  and  will  focus  on  reorientation  for  the  workers 
concerned, with particular emphasis on development areas in the municipality, such 
as  green  energy  and  tourism.  Two  analyses  have  been  launched  to  better  identify 
future  development  areas.  Other  elements  of  this  measure  will  be  qualification 

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assessment, individual careers counselling, workshop activities at vocational colleges 
or vocational training centres and on-the-job-training. For foreign nationals who do 
not speak or understand Danish fluently, interpreter assistance will be provided. 

Supplementary support for further education and training: Participants who have one 
or  more  education  goals  determined  in  the  clarification  process,  are  offered  the 
opportunity to start/complete an education programme.  

Innovation  laboratory:  The  goal  of  this  measure  is  to  focus  on  upgrading  workers’ 
skills  to  enable  them  to  take  part  in  clean-tech  based  prototype  work  in  existing 
companies.  This  will  be  achieved  through  course  activities  and  apprentice-based 
learning  from  peers  in  market  leading  companies  in  the  cleantech/innovation  field. 
The  key  part  of  the  measure  will  be  a  placement  in  a  host  company,  where  the 
worker  can  try  out  an  idea  coming  from  either  the  host  company  or  the  worker 
him/herself. 

Mentoring  scheme  in  connection  with  practical  training:  Practical  training  with  a 
mentoring scheme attached is for those in the target group who, after the clarification 
process, are assessed to be suitable for further training, and for people over 50 years 
of  age  who  are  not  interested  in  starting  an  education  course.  About  40  practical 
training  programmes  with  attached  mentoring  schemes  are  expected  to  be 
established. 

Qualification hotline: The hotline centre will guide the unemployed and the potential 
employers  into  finding  the  proper  continuing  training  programme.  The  hotline 
function  must  react  as  soon  as  need  arises.  These  may  include  situations  such  as  a 
need  for  a  mentor,  clarification  of  competencies  or  a  need  for  new  competencies, 
continuing training in the form of vocational training courses etc. and guides to these.  

Job-search  allowances/unemployment  benefit/student  grants:  The  purpose  of  this 
measure  is  to  minimise  support-related  barriers.  Jobseekers  are  offered  various 
allowances  depending  on  their  status  versus  the  national  support  system  and 
activities  in  which  they  are  participating  in  the  coordinated  package  of  activities. 
Denmark confirmed that these allowances will be provided only for the duration of 
the active labour market measures. 

Mobility allowances: For the workers who have to commute to be able to participate 
in the measures mobility allowances have been envisaged. 

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 
EUR 5 627 125 and the expenditure for implementing EGF at EUR 586 500 (10,4 % 
of 
is 
total  amount).  The 
EUR 3 944 606 (65 % of the total costs). 

total  contribution  requested  from 

the  EGF 

the 

21. 

22. 

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Actions 

Estimated 
number of 
workers 
targeted 

Estimated 
cost per 
worker 
targeted 
(EUR) 

Total costs 
(EGF and 
national 
cofinancing) 
(EUR) 

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

Clarification and reorientation 

150

7 535 

1 130 250

Supplementary support for further education 

Innovation laboratory 

Mentor scheme in connection with practical 
training 

Qualification hotline 

Job-search allowances/unemployment 
benefit/student grants 

75

10

40

50

325

12 135 

910 125

24 500 

245 000

6 875 

275 000

7 100 

355 000

7 928 

2 576 600

Mobility allowances 

85

1 590 

135 150

Sub total personalised services 

5 627 125

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

Preparatory activities 

Management at local level 

Management at national level 

Information and publicity 

Control activities 

Sub total expenditure for implementing EGF 

Total estimated costs 

EGF contribution (65 % of total costs) 

33 750

159 000

56 000

33 750

159 000

441 500

6 068 625

3 944 606

23. 

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

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

24. 

Denmark started the personalised services to the affected workers included in the co-
ordinated  package  proposed  for  co-financing  to  the  EGF  on  11  August  2010.  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 

25. 

26. 

A  number  of  social  partner  organisations  (see  point  14)  was  consulted  during  the 
preparation  of  the  application  and  they  will  also  be  involved  in  monitoring  the 
implementation of the measures. 

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 

27. 

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  above  do  not  receive  assistance 

from other Community financial instruments. 

Management and control systems  

28. 

Denmark  has  notified  the  Commission  that  the  financial  contribution  will  be 
managed and controlled by the same bodies as the European Social Fund, which also 
has  the  Danish  Enterprise  and  Construction  Authority  as  Managing  Authority.  The 
Certifying Authority will be vested in a different department of the same body. The 
Auditing  Authority  will  be  the  EU  Controllerfunction  in  the  Danish  Enterprise  and 
Construction Authority.  

Financing 

29. 

On  the  basis  of  the  application  from  Denmark,  the  proposed  contribution  from  the 
EGF  to  the  coordinated  package  of  personalised  services  (including  expenditure  to 
implement  EGF)  is  EUR 3 944 606,  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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30. 

31. 

32. 

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  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. 

33. 

The Commission presents separately a transfer request in order to enter in the 2011 
budget  specific  commitment  appropriations,  as  required  in  Point  28  of  the 
Interinstitutional Agreement of 17 May 2006. 

Source of payment appropriations  

34. 

As a reinforcement of the EGF budget line 04.0501 by EUR 50 000 000 is foreseen 
through  AB2/2011,  this  budget  line  will  be  used  to  cover  the  amount  of               
EUR 3 944 606 needed for the present application. 

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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/2010/017 DK/Midtjylland Machinery 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 
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. 

Denmark submitted an application to mobilise the EGF, in respect of redundancies in 
6  enterprises  operating  in  the  NACE  Revision  2  Division  28  ('Manufacture  of 
machinery and equipment') in the NUTS II region of Midtjylland (DK04), on 11 May 

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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2010  and  supplemented  it  by  additional  information  up  to  21  March  2011.  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 3 944 606. 

(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  2011,  the  European 
Globalisation  Adjustment  Fund  (EGF)  shall  be  mobilised  to  provide  the  sum  of 
EUR 3 944 606 in commitment and payment appropriations. 

Article 2 

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

Done at [Brussels/Strasbourg], 

For the European Parliament 
The President 

For the Council 
The President 

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