COMMISSION STAFF WORKING DOCUMENT RESTRUCTURING IN EUROPE 2011
Date: 2012-01-17
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, European Social Fund, anti-crisis plan, change of job, climate change, competitiveness, early retirement, economic growth, economic intelligence, industrial restructuring, innovation, job creation, job cuts, labour mobility, motor vehicle industry, part-time employment, small and medium-sized enterprises

EUROPEAN COMMISSION 

Brussels, 17.1.2012 
SEC(2012) 59 final 

COMMISSION STAFF WORKING DOCUMENT 

RESTRUCTURING IN EUROPE 2011 

Accompanying the document 

GREEN PAPER 

Restructuring and anticipation of change, what lessons from the economic crisis? 

{COM(2012) 7 final} 

 
 
 
 
  
 
COMMISSION STAFF WORKING DOCUMENT 

RESTRUCTURING IN EUROPE 2011 

Accompanying the document 

GREEN PAPER 

Restructuring and anticipation of change, what lessons from the economic crisis? 

EN 

  EN 

 
 
 
RESTRUCTURING IN EUROPE 2011 

 
 
 
Restructuring in Europe  2 

FOREWORD 

The  European  economy  is  slowly  emerging  from  the  deepest  recession  in  decades.  The 
economic crisis resulted in a large drop in economic activity in the EU, along with millions 
of jobs lost and a high human cost. The economic and financial crisis is also speeding up 
new  developments  on  the  international  competition  front  with  the  rise  of  successful 
companies  in  emerging  countries  that  are  increasingly  competing  with  European 
businesses in upper segments of the market. 

The competitiveness of the European economy and the preservation of activities and jobs 
in Europe will depend more and more on the capacity of European companies to boost 
their competitiveness through innovating and quickly and smoothly adapting to change. 

As  underlined  in  the  Annual  Growth  Survey,  the  EU  needs  to  use  this  crisis  to  address 
decisively the issue of its global competitiveness so that it comes out stronger and turns 
itself 
levels  of 
employment, productivity, competitiveness and social cohesion. 

inclusive  economy  delivering  high 

into  a  smart,  sustainable  and 

The  positive  export  performance  of  some  Member  States  shows  that  success  in  global 
markets rests not only on price competitiveness but also on wider factors such as sector 
specialisation,  innovation,  and  skills  levels  that  enhance  real  competitiveness.  In  that 
regard,  the  structural  weaknesses  pre-dating  the  crisis  which  had  not  been  tackled 
adequately are becoming glaringly obvious. 

The EU has built up a strong system of employment and social protection that, combined 
with  a  relatively  high  level  of  education,  has  been  the  basis  for  its  economic  and  social 
prosperity over the last few decades. However, at a time when the business environment 
is changing fast, some aspects of that system are making it more difficult to quickly and 
smoothly reallocate resources, and especially human resources, from declining activities 
to emerging ones. 

On the other hand, that system, built around the principle of job stability, is less and less 
capable  of  giving  individual  workers  a  real  chance  of  a  secure  professional  future  when 
their jobs are at risk, because it does not sufficiently encourage them to adapt to change. 

The economic and financial crisis and the faster pace of change that it is causing make it 
more important than ever for Europe to address those two weaknesses. Recognising the 
need  for  economic  adjustment  as  a  vital  feature  of  future  growth  and  job  creation,  the 
Commission  wants  to  encourage  permanent  business  adaptation  to  fast-changing 
economic  circumstances  while  maintaining  a  high  level  of  employment  and  social 
protection. 

The  Green  Paper  ‘Restructuring  and  anticipation  of  change:  what  lessons  from  the 
economic crisis?’ is a sign of the Commission’s determination to put in place all possible 
mechanisms  and  frameworks  that  support  and  encourage  business  adaptation  while  at 
the same time creating the conditions that will allow workers and regions to accompany 
that process and avoid unemployment and social distress. 

The  present  report  describes  the  numerous  actions  developed  by  the  Commission  that 
contribute to the objectives outlined above and details the reasons why further action in 

 
 
 
 
Restructuring in Europe  3 

this field is needed. It covers multiple policy areas and a wide range of instruments and 
demonstrates  an  effort  of  internal  coordination  that  is  all  the  more  needed  as 
restructuring is a complex and multifaceted phenomenon that cannot be efficiently dealt 
with otherwise. 

 
 
 
 
 
Restructuring in Europe  4 

EXECUTIVE SUMMARY 

Anticipating,  managing 
mitigating 
consequences of restructuring 

and 
negative 

the 

Coping with the crisis 

This  report  presents  an  overview  of  the  European 
Union’s main strategies, policies and actions that aim 
to  help  anticipate,  prepare  and  manage  restructuring 
and change. Particular emphasis is placed on efforts to 
mitigate  the  negative  consequences  of  restructuring 
on individual workers and the wider community. 

The report has been written against the background of 
the  most  serious  economic  and  financial  crisis  for 
many decades, which has had a severe impact on the 
levels  of  restructuring  and  change  throughout  the 
European Union. Over the period from 2002 to 2010, 
more  than  11 000  cases  of  restructuring  were 
recorded by the European Restructuring Monitor, with 
the  ratio  of  announced 
losses/job  creations 
standing  at  1.8:1.  In  the  period  2008-2010,  that  ratio 
increased  to  2.5:1.  The  crisis,  from  which  the  EU  has 
not  yet  fully  emerged,  has  tested  the  ability  of  both 
the EU and the individual Member States to cope with 
high  levels  of  change  and  as  such  provides  the 
backdrop to the report. 

job 

to 

for 

the 

the  EU  economy 

labour  market.  The 

The  crisis  of  the  past  two  years  has  had  a  severe 
impact  on 
level  of 
restructuring has increased considerably as companies 
struggle 
challenging 
cope  with  extremely 
circumstances.  Chapter  1  of  the  report  examines  the 
main  restructuring  developments  across  Europe, 
looking  at  recent  levels  of  restructuring  and  the 
numbers of jobs lost and created. It looks in detail at 
restructuring  in  the  automotive  industry,  a  major 
(the  European 
sector 
Restructuring  Monitor  announced  that  job  losses  in 
the sector from the first quarter of 2008 to the end of 
the  second  quarter  of  2010  amounted  to  more  than 
160 000).  It  also  gives  examples  of  some  initiatives 
undertaken at company level to preserve employment 
in  the  context  of  the  economic  crisis.  It  also  looks  at 
Member  States’  responses  to  the  crisis,  including 
labour  market  reforms  and  the  widespread  use  of 
short-time  working  in  some  countries,  which  has 
served  to  cushion  the  labour  market  effects  of  the 
crisis. Further, it examines the role of industrial policy 
during the crisis, focusing in particular on the steel and 

 
 
 
 
 
 
 
Restructuring  as  a  necessary 
part of business life 

The EU’s wealth of experience in 
dealing with restructuring 

Restructuring in Europe  5 

automotive industries. 

However,  it  should  not  be  forgotten  that,  even  in 
normal times, restructuring is a part of daily business 
life, and a process that is necessary in order to ensure 
that organisations keep pace with change and remain 
is 
competitive 
therefore  a  vital  and  constant  part  of  organisational 
life and can create as well as destroy jobs. It is also a 
reaction  to 
larger-scale  changes,  such  as  global 
warming and climate change. 

in  a  global  market.  Restructuring 

In  order  to  reflect  the  changed  and  changing 
environment  in  which  the  EU  finds  itself,  the  report 
looks at the likely challenges for the EU, which include 
finding the necessary skills to allow the EU to remain 
competitive in the global market in the years to come, 
dealing with the health consequences of restructuring, 
coping  with  global  warming  and  climate  change, 
including  finding  new  and  alternative  sources  of 
energy  (which  could  produce  up  to  2020  a  net  effect 
of about 410 000 additional jobs and a 0.24 % increase 
in  gross  domestic  product  (GDP)  in  the  EU)  and 
adapting  industrial  policy  to  ensure  that  the  EU  can 
compete with its global neighbours. 

Over  the  past  few  decades,  the  EU  has  built  up  a 
wealth  of  experience  in  examining  and  dealing  with 
how  best  to  anticipate  and  manage  restructuring  in 
order  to  mitigate  its  negative  impacts  as  far  as 
possible. There are many examples of best practice at 
the  level  of  individual  Member  States,  which  have 
been  drawn  together  and  showcased  in  a  range  of 
recent  EU-funded  projects  on  restructuring.  The 
challenge  now  is  to  try  to  build  on  and  use  this 
experience  to  formulate  a  framework  at  European 
level on anticipating and managing restructuring. The 
European  Commission  has, 
its  October  2010 
Communication on industrial policy, as well as in other 
recent policy papers, touched on some of the relevant 
issues,  and  has  indicated  that  it  will  consult  the  EU-
level cross-sector social partners on such a framework.

in 

Dealing  with  restructuring  in  a  positive  way  involves 
both anticipating and managing it. In order to limit the 
negative impact of restructuring as much as possible, 
it is vital that anticipatory measures are put into place 
as  far  as  possible.  There  are  examples  of  initiatives 
such  as  economic  and  financial  observatories  and 

 
 
 
The  crucial  role  of  competence 
and skills development … 

Restructuring in Europe  6 

early  warning  systems  in  some  EU  Member  States, 
although  these  are  not  replicated  in  all  of  them  and 
could  be  developed  further  in  those  where  they  are 
present.  The  anticipation  of  restructuring  is  key  to 
mitigating  the  adverse  effects  as  far  as  possible,  as  it 
enables  the  actors  to  plan  and  take  action  to  lessen 
the impact in advance of the restructuring event. 

the 

Competence and skills development sits at the core of 
forward-looking  employment  policy  and  is  a  subject 
that is integral to best practice in the management of 
restructuring. The demand for a highly qualified labour 
force  remains  a  key  source  of  future  growth.  From  a 
market  standpoint,  it  is  essential  that  qualifications, 
competences and skills of mobile EU professionals are 
recognised in a fast, simple and reliable way if we are 
to meet this surge in demand. On 19 December 2011 
the  European  Commission  adopted  a  proposal  to 
modernise the Professional Qualifications Directive1 in 
order  to  adapt  it  to  an  evolving  labour  market. 
therefore  examines 
report 
Chapter  2  of 
competences  and  skills  in  the  context  of  the  future 
direction  of  the  EU  economy  and  the  restructuring 
that the EU has undergone in the past few years. This 
includes  issues  such  as  lifelong  learning  and  the 
importance  of  ensuring  that  all  workers  have  the 
opportunity  to  develop  their  skills  and  competences 
throughout  their  working  life.  It  is  also  important  to 
ensure that skills are transferable, as this will improve 
employability and aid movement between companies 
and between sectors if necessary. A particular focus is 
placed  on  the  skills  needs  and  skills  policy  of  the 
automotive sector, and on the skills needs of SMEs (in 
2008, according to Eurostat figures, out of nearly 20.8 
million  companies  in  the  EU,  99.8 %  were  SMEs  and 
they  accounted  for  around  67.4 %  of  all  employment 
by  enterprises).  These  businesses  cannot  offer  as 
skills 
targeted  an  approach 
development as their larger counterparts.  

training  and 

to 

… and of the EU support funds 

The  EU  makes  a  range  of  funds  available  to  Member 
States in order to support restructuring, and this plays 
an important role in helping to anticipate and manage 

1 Directive  2005/36/EC  of  the  European  Parliament  and  of  the  Council  of  7  September  2005  on  the  recognition  of  professional 
qualifications, OJ L 255/22, 30.09.2005. 

 
 
 
                                                       
 
Restructuring in Europe  7 

restructuring.  Chapter  3  of  the  report  examines  the 
role of state aid provided by Member States, including 
the  Commission’s  policy  response  to  the  economic 
crisis, involving aid both to the financial sector and to 
the  real  economy.  It  also  examines  the  role  of  the 
European  Social  Fund  (over  400 000  enterprises  have 
received  assistance  from  the  ESF  and  more  than  7 
million have been supported by activities funded by it) 
and  the  European  Globalisation  Adjustment  Fund  (a 
total  of  29  applications  were  submitted  to  the 
Commission  in  2009,  with  an  amount  requested  per 
worker varying between slightly above € 500 and over 
€ 15 700, with an average of € 5 698); it gives examples 
of  where  the  funds  have  succeeded  in  helping  to 
manage restructuring. Finally, it looks at the impact of 
restructuring in the EU regions and how EU funds have 
helped specific regions to manage restructuring. 
Restructuring  in  the  EU  is  covered  by  a  body  of 
legislation,  in  the  form  of  a  number  of  Directives, 
largely  in  the  field  of  informing  and  consulting  the 
workforce  about  changes  that  are  likely  to  affect 
them.  Chapter  4  of  the  report  examines  this 
framework and also looks at the implementation of EU 
law and the preparation of possible new initiatives in 
this area. 

Social dialogue also plays an important part in shaping 
responses  to  restructuring,  at  both  EU  and  national 
level.  There  are  a  number  of  joint  actions  at  EU  level 
on the management of change, and a range of sectoral 
initiatives  that  have  successfully  managed  change.  A 
number of transnational agreements on restructuring 
also  cover 
issues  such  as  social  responsibility, 
anticipating  change,  and  mitigating  the  negative 
consequences of change.  

A  wide  range  of  measures  have  been  taken  by 
Member  States  to  support  restructuring,  focusing  on 
anticipation  and  management  of  the  process,  and 
Chapter 5 of the report reviews them. In particular, it 
examines  the  findings  of  a  large-scale  Commission-
funded project undertaken in 2009-2010, designed to 
showcase examples of best practice in the anticipation 
and management of restructuring in each of the 27 EU 
Member  States  and  to  stimulate  debate  at  both 
national  and  EU  level  on  these  issues.  It  also  reviews 
the  existing  schemes,  instruments  and  mechanisms 

Legislation  and  social  dialogue 
shape 
employee 
involvement  framework  for  the 
response to restructuring 

the 

Initiatives  and  tools  available  at 
national  level  to  anticipate  and 
manage restructuring 

 
 
 
Facing up to future challenges 

Restructuring in Europe  8 

providing support to workers affected by restructuring 
that have been set up in parallel and in addition to the 
typical support mechanisms of the public employment 
services  (PES),  based  on  a  study  carried  out  for  the 
Commission  in  2009.  The  chapter  also  provides  a 
comparative  analysis  of  these  tools  and  a  review  of 
how  flexicurity  policies  can  help  to  anticipate  and 
manage restructuring.  

The  future  challenges  that  the  EU  is  facing  are  many 
and varied, and Chapter 6 of the report examines the 
main issues and how they might be addressed. One of 
these  is  the  psychosocial  effects  of  restructuring, 
including the effects not only on the workers who are 
losing  their  jobs,  but  also  on  the  ‘survivors’  and  the 
in  an  organisation.  Managing  the 
line  managers 
psychosocial  effects  of  restructuring 
is  of  prime 
importance  as  this  will  help  to  ensure  that  the 
negative  consequences  of  the  restructuring  process 
have  as  little  effect  as  possible  on  those  involved  in 
the process. 

Climate  change  is  another  huge  challenge  for  the  EU 
and  an  issue  that  has  been  a  focus  for  EU  policy 
makers  for  some  time.  There  are  many  potential 
impacts  of  climate  change  on  employment,  such  as 
effects  on  specific  sectors,  the  changes  to  skills 
policies  that  will  be  needed  in  a  green  economy  and 
the challenges of moving to a low-carbon economy. It 
is  likely  that  climate  change  will  require  a  significant 
and coordinated response from the European Union in 
order  to  ensure  that  the  full  benefits  of  the  green 
economy are harnessed by the EU economy. 

In terms of sectoral impacts, the transport sector is an 
industry that will be significantly affected by the move 
to  a  low-carbon  economy  and  challenges  include  the 
development of green jobs, the types of skills that will 
in 
be  needed 
restructuring. 

in  the  sector,  and  best  practices 

Future  challenges  also  include  the  best  way  forward 
for EU industrial policy, and most specifically the links 
between  industrial  policy  and  employment  and  skills 
policies. Many of the relevant issues are highlighted in 
the  Commission’s  October  2010  Communication  on 
industrial  policy,  which  sets  out  the  main  challenges 
for industrial policy in a globalised economy. 

 
 
 
The  challenges  of  economic  and 
social change and the need for a 
common approach 

Tentative lessons on anticipation 
of 
management 
and 
restructuring 

Restructuring in Europe  9 

As  mentioned  above,  the  EU  has  developed  many 
responses to restructuring and change, and Chapter 7 
of  the  report  looks  into  them.  It  focuses  in  particular 
on how the EU is dealing with the challenges posed by 
economic and social change, including a review of the 
range  of  policies  and  practices  that  have  been 
developed in order to anticipate and manage change. 
In  particular,  it  looks  at  what  the  Commission  has 
been  undertaking  to  try  to  improve  the  process  of 
managing change, including its consultations with the 
EU-level  cross-sector  social  partners  on  the  issue  of 
anticipating  and  managing  change,  and  the  social 
partners’  response,  which  took  the  form  of  joint 
orientations for managing change. Drawing on all this 
experience, the Commission has stated that ‘updated 
orientations  on  restructuring  can  be  very  useful  in 
reinforcing  the  capacity  of  businesses  and  workforce 
to adapt to a fast-changing economic environment’. 

The Commission has initiated a range of activities over 
the  past  15  years  with  the  aim  of  trying  to  help 
organisations  and  stakeholders  manage  restructuring 
in a way that has the least possible negative impact on 
surrounding 
families  and 
workers, 
community. These include two consultations with the 
EU-level  social  partners  on  the  issue  of  managing 
change. 

their 

the 

The Commission has also, over the past two decades, 
funded  a  wide  range  of  research,  in  the  form  of 
studies  or  analyses  aimed  at 
identifying  good 
practices,  measures  or  actions  to  better  anticipate 
restructuring  and  manage  it  in  a  responsible  way. 
There is a significant degree of convergence between 
the good practices and measures highlighted in these 
studies,  enabling  the  following  tentative  messages  to 
be identified: 

●  Measures  to  anticipate  and  manage  restructuring 
differ  in  individual  Member  States,  depending  on 
factors such as national culture, national industrial 
relations  and  employment  systems,  national 
welfare  and  social  security  systems  and  national 
skills and training strategies. Nevertheless, there is 
clearly  scope  for  transposing  initiatives  or  parts  of 
to 
initiatives  across  borders,  adapting 
different national contexts. 

them 

 
 
 
Restructuring in Europe  10 

●  Active social partner involvement is crucial in many 
of the schemes available to anticipate and manage 
restructuring. 

is 

this 

strengthening 

●  Where  a  wide  range  of  actors  participate 

in 
measures, 
factor. 
a 
Partnerships  can  provide  a  broad  spectrum  of 
to  support 
expertise  and  human 
organisations 
to  manage 
are 
restructuring.  This  can  also  limit  the  effects  of 
restructuring  on  the  wider  region,  community  and 
employees’ families. 

resources 
trying 

that 

●  SMEs have specific challenges when engaging with 
the  anticipation  and  management  of  restructuring 
in  a  socially  responsible  way.  They  often  lack  the 
resources, both financial and in terms of personnel, 
to go much beyond statutory compliance. 

●  Anticipation of restructuring is a powerful tool that 
can limit its adverse effects. However, there needs 
to  be  greater  emphasis  on  anticipation  and 
preparation of restructuring. 

●  European  funds  play  an  important  role  in  some  of 
the  newer  EU  Member  States  and  in  southern 
Europe. 

●  While  redundancy  should  always  be  a  last  resort, 
active  measures  should  take  precedence  over 
passive measures. 

●  Training 

is  a  crucial  and  core 

issue  when 
considering  the  anticipation  and  management  of 
restructuring. 

●  The  impact  of  restructuring  on  the  health  of  the 
individuals concerned should be monitored closely, 
and  adverse  effects,  such  as  psychosocial  but  also 
physical  impacts,  should  be  mitigated  as  much  as 
possible.  This  concerns  those  who  are  made 
redundant, those overseeing the redundancies (line 
managers) and the ‘survivors’ of restructuring. 

Although  a  range  of  innovative  policies  and  practices 
have been highlighted by all these studies, at national, 
regional,  sectoral  and  organisational  level,  there  is  a 
general  lack  of  coordination  and  consistency  in  the 
implementation  of  socially  responsible  restructuring. 

 
 
 
Restructuring in Europe  11 

More  emphasis  therefore  needs  to  be  placed  on 
coordinating measures. 

 
 
 
 
Restructuring in Europe  12 

FOREWORD 

EXECUTIVE SUMMARY 

CHAPTER 1: RESPONDING TO THE CRISIS 

1: RECENT LEVELS OF RESTRUCTURING IN THE EUROPEAN 

UNION 
1.1: THE EMPLOYMENT IMPACT OF RESTRUCTURING IN 

EUROPE 

1.2: RESTRUCTURING ACTIVITY DURING THE ECONOMIC 

CRISIS 

1.3: JOB LOSSES 
1.4: RESTRUCTURING INVOLVING JOB CREATION 
1.5: EMPLOYMENT-MAINTAINING INITIATIVES DURING THE 

CRISIS 

1.6: TENTATIVELY EMERGING FROM RECESSION? 

2: LABOUR MARKET REFORMS 
3: SUPPORTING LABOUR MARKETS DURING THE CRISIS: SHORT-

TIME WORKING 
3.1: SHORT-TIME WORKING ARRANGEMENTS 
3.2: PHASING OUT CRISIS-RELATED LABOUR MARKET 

MEASURES 
3.3: THE WAY FORWARD 

4: THE ROLE OF INDUSTRIAL POLICY IN RESTRUCTURING 

DURING A PERIOD OF CRISIS 
4.1: CHALLENGES AND OPPORTUNITIES DRIVING FUTURE 

RESTRUCTURING 

4.2: IMPLICATIONS FOR INDUSTRIAL POLICY MEASURES 
4.3: SECTOR-SPECIFIC INDUSTRIAL POLICIES FOR 

RESTRUCTURING 
4.4: THE WAY FORWARD 

5: ACCESS TO FINANCE IN THE CRISIS 

CHAPTER 2: DEVELOPING COMPETENCES 

1: THE IMPORTANCE OF LIFELONG LEARNING 

1.1: PLANNED NEW PROPOSAL ON THE VALIDATION OF 

INFORMAL LEARNING 

1.2: THE EUROPASS FRAMEWORK 
1.3: EU POLICY ON LIFELONG LEARNING AND SKILLS 

DEVELOPMENT 

2: THE ROLE OF SKILLS IN IMPROVING LABOUR MARKET 

MOBILITY 

2 

4 

17 

18 

22 

24 
25 
34 

37 
40 
46 

54 
54 

59 
60 

62 

63 
68 

69 
74 
74 

79 

81 

83 
83 

84 

86 

 
 
 
Restructuring in Europe  13 

2.1: GENERAL VS SPECIFIC COMPETENCES 
2.2: TRANSFERABLE SKILL SETS 
2.3: FUTURE SKILLS NEEDS 
2.4: THE ROLE OF DIFFERENT ACTORS IN SKILLS 

DEVELOPMENT 

3: SECTOR STUDIES AND THE NEW SKILLS FOR NEW JOBS 

INITIATIVE 
3.1: NEW SKILLS FOR NEW JOBS INITIATIVES 
3.2: SECTORAL STUDIES OF INNOVATION, SKILLS AND JOBS 
3.3: EVOLUTION OF OCCUPATIONS IN THE EU 
3.4: EMERGING COMPETENCES 
3.5. WORK AND LIFE QUALITY IN NEW AND GROWING JOBS 

4: EUROPEAN SECTOR COUNCILS ON JOBS AND SKILLS 

4.1: FEASIBILITY STUDY’S RECOMMENDATIONS AND POLICY 

OPTIONS 

4.2: MODEL CHOSEN BY THE COMMISSION 
4.3: FIRST PILOT SECTOR COUNCILS ON JOBS AND SKILLS 

5: SKILLS INITIATIVES IN THE AUTOMOTIVE SECTOR 

5.1: EUROPEAN PARTNERSHIP FOR THE ANTICIPATION OF 
CHANGE IN THE AUTOMOTIVE INDUSTRY 

5.2: ANTICIPATION OF SKILLS NEEDS — TOWARDS A 

EUROPEAN SECTOR COUNCIL 

6: TRAINING IN SMALL AND MEDIUM-SIZED ENTERPRISES 

6.1: SMEs IN EUROPE 
6.2: GUIDE FOR TRAINING IN SMEs 
6.3: TRAINING — A KEY TO SUCCESS AND ADAPTATION 
6.4: FINANCIAL AND ORGANISATIONAL MEANS 
6.5: HR AND SKILLS DEVELOPMENT POLICY 
6.6: LESSONS LEARNED 

CHAPTER 3: EU ROLE  WITH REGARD TO RESTRUCTURING 

SUPPORT 

1: THE ROLE OF STATE AID 

1.1: THE COMMISSION’S POLICY RESPONSE TO THE 

FINANCIAL CRISIS 

1.2: WAY FORWARD 

2: THE ROLE OF THE EUROPEAN SOCIAL FUND 

2.1: ADAPTABILITY IN THE ESF OPERATIONAL 
PROGRAMMES FOR DURING 2007-2013 

2.2: ESF INTERVENTIONS AT THE DIFFERENT STAGES OF THE 

RESTRUCTURING AND CHANGE PROCESS 

86 
88 
90 

90 

94 
94 
95 
97 
102 
103 
106 

108 
110 
111 
113 

114 

117 
119 
119 
121 
123 
124 
125 
127 

129 

130 

131 
135 
137 

138 

140 

 
 
 
Restructuring in Europe  14 

3: THE ROLE OF THE EUROPEAN GLOBALISATION ADJUSTMENT 

FUND 
3.1: THE FUNCTIONING OF THE EGF 
3.2: OVERVIEW OF APPLICATIONS RECEIVED IN 2009 
3.3: NEXT STEPS 

4: THE IMPACT OF RESTRUCTURING IN THE EU REGIONS 

4.1: THE INFLUENCE OF GLOBALISATION 
4.1.3: ‘SMART SPECIALISATION STRATEGIES’ AND THE 

SMART SPECIALISATION FORUM 

4.2: MANAGEMENT OF RESTRUCTURING UNDER THE 
EUROPEAN REGIONAL DEVELOPMENT FUND 

CHAPTER 4: DIALOGUE AND LAW 

1: EU LABOUR LAW AND RESTRUCTURING 

1.1: MAIN EU LABOUR LEGISLATION RELATING TO 

RESTRUCTURING 

1.2: IMPLEMENTING AND ADAPTING LEGISLATION 
1.3: PREPARATION OF NEW INITIATIVES 

2: EUROPEAN-LEVEL SOCIAL DIALOGUE ON MANAGEMENT AND 

ANTICIPATION OF CHANGE 
2.1: UNDERSTANDING WHAT HAPPENS 
2.2: SECTOR-LEVEL SOCIAL DIALOGUE 

3: TRANSNATIONAL COMPANY AGREEMENTS AND 

RESTRUCTURING 
3.1: AN EMERGING PHENOMENON 
3.2: ADDRESSING SPECIFIC RESTRUCTURING EVENTS 
3.3: SOCIALLY RESPONSIBLE MANAGEMENT OF FUTURE 

RESTRUCTURING 

3.4: ANTICIPATING CHANGE 
3.5: ADDRESSING RESTRUCTURING IN GLOBAL 

AGREEMENTS 

3.6: COMMISSION’S ROLE IN PROMOTING TRANSNATIONAL 

146 
146 
148 
152 
154 
154 

160 

162 

167 

168 

168 
170 
174 

175 
175 
178 

184 
184 
184 

186 
188 

189 

4: CROSS-BORDER MERGERS 

COMPANY AGREEMENTS 

190 
192 
4.1: EMPLOYEE PARTICIPATION IN CROSS-BORDER MERGERS  192 
193 
4.2: EUROPEAN COMPANIES (SEs) 

CHAPTER 5: MEMBER STATE ACTIONS TO SUPPORT 

RESTRUCTURING 

1: RESTRUCTURING IN THE MEMBER STATES 
2: ORGANISING TRANSITIONS 

2.1: CLASSIFYING EXISTING SCHEMES AND MECHANISMS 

198 

198 
206 
207 

 
 
 
Restructuring in Europe  15 

2.2: RESULTS OF A COMPARATIVE EVALUATION 
2.3: THE ROLE OF FLEXICURITY IN SECURING TRANSITIONS 

CHAPTER 6: ISSUES AND CHALLENGES 

1: PSYCHOSOCIAL EFFECTS OF RESTRUCTURING AND MENTAL 

HEALTH IN THE WORKPLACE 
1.1: THE EU FRAMEWORK, STRATEGIES AND ACTIONS 
1.2. THE PSYCHOSOCIAL RISKS OF RESTRUCTURING AND 

CHANGE 

1.3: MENTAL HEALTH AND WELL-BEING AT WORK 
2: THE IMPACT OF CLIMATE CHANGE ON EMPLOYMENT 

2.1: OVERALL IMPACT OF CLIMATE CHANGE ON 

EMPLOYMENT 

2.2: SECTORAL IMPACT OF CLIMATE-CHANGE POLICIES 
2.3: CLIMATE-CHANGE POLICIES AND SKILLS 
2.4: THE TRANSITION TO A LOW-CARBON ECONOMY 

3: THE IMPACT OF RENEWABLE ENERGY POLICY ON 

EMPLOYMENT 
3.1: THE BENEFITS OF THE RES SECTOR 
3.1.1: THE EMPLOYMENT BENEFITS OF RES 
3.1.2: THE FUTURE IMPACT OF RES ON EMPLOYMENT 
3.1.3: LOOKING TO THE FUTURE 

4: CHALLENGES FOR THE TRANSPORT SECTOR 

4.1: OVERVIEW OF THE EU TRANSPORT SECTOR 
4.2: DECARBONISATION AND GREEN JOBS 
4.3: DEMOGRAPHY: HEADING FOR SKILL AND LABOUR 

SHORTAGES 

4.4: INTEGRATION IN THE TRANSPORT SECTOR 
4.5: FROM NATIONAL PUBLIC MONOPOLIES TO EUROPEAN 

PRIVATE MONOPOLIES? 

4.6: THE EFFECTS OF THE ECONOMIC CRISIS 
4.7: EXISTING PRACTICES IN RESTRUCTURING 
4.8: EU ACTIONS TO SOFTEN THE SOCIAL EFFECTS OF 

RESTRUCTURING 
4.9: OBJECTIVES FOR THE FUTURE 
5: THE FUTURE OF INDUSTRIAL POLICY 
5.1: AN INTEGRATED INDUSTRIAL POLICY FOR THE 

GLOBALISATION ERA 

5.2: IMPROVING THE FRAMEWORK CONDITIONS FOR 

INDUSTRY 

5.3: INDUSTRIAL INNOVATION 
5.4: IMPROVING THE EU’S SKILLS BASE 

212 
213 

219 

220 
220 

225 
231 
235 

235 
236 
238 
239 

241 
243 
244 
245 
247 
248 
252 
253 

257 
259 

260 
261 
263 

264 
266 
267 

267 

268 
268 
269 

 
 
 
Restructuring in Europe  16 

5.5: TACKLING STRUCTURAL EXCESS CAPACITIES 
5.6: THE ROLE OF MANAGEMENT AND WORKER 

REPRESENTATIVES 

5.7: TOWARDS A NEW EU GOVERNANCE FOR INDUSTRIAL 

POLICY 

5.8: SUSTAINABLE INDUSTRIAL POLICY 
5.9: ENERGY-INTENSIVE INDUSTRIES AND INTERNATIONAL 

ASPECTS 

5.10: DEVELOPING A SUSTAINABLE INDUSTRIAL POLICY 
5.11: THE FUTURE 

CHAPTER 7: MAIN ECONOMIC AND SOCIAL CHALLENGES: THE 

RESPONSE OF THE EU 

1: PRINCIPLES EXPRESSED IN AND RESULTING FROM THE 

COMMISSION’S CONSULTATIONS OF EUROPEAN SOCIAL 
PARTNERS 
1.1: THE 2002 CONSULTATION OF THE EUROPEAN SOCIAL 

PARTNERS ON ANTICIPATING AND MANAGING 
CHANGE 

1.2: THE 2003 EUROPEAN SOCIAL PARTNERS’ WORK ON 

MANAGING CHANGE 

269 

270 

271 
271 

272 
272 
272 

272 

272 

272 

272 

1.3: THE 2005 CONSULTATION OF THE EUROPEAN SOCIAL 

PARTNERS ON RESTRUCTURING AND EMPLOYMENT  272 

2: PRINCIPLES RESULTING FROM ANALYTICAL WORK AND 

STAKEHOLDERS’ VIEWS 
2.1: SOURCES: STUDIES, REPORTS, RESTRUCTURING FORA 

3: MAIN ISSUES RELATING TO THE ANTICIPATION AND 

MANAGEMENT OF CHANGE 
3.1: THE IMPORTANCE OF TIMELY ACTION 
3.2: A MULTI-LEVEL, MULTI-ACTOR ISSUE 

CHAPTER 8: CONCLUSIONS 

1: TEN TENTATIVE LESSONS ON THE ANTICIPATION AND 

MANAGEMENT OF RESTRUCTURING 

SOURCES AND FURTHER READING 

BIBLIOGRAPHY 

272 
272 

272 
272 
272 

272 

272 
272 

272 

 
 
 
Restructuring in Europe  17 

CHAPTER 1: RESPONDING TO THE CRISIS 

The economic crisis of the past two years has had a severe impact on the labour market, as 
organisations  are  obliged  to  make  redundancies  in  significant  numbers  in  order  to  try  to 
respond to the external environment. Over the period from 2002 to 2010, over 11 000 cases 
of  restructuring  were  recorded  by  the  European  Restructuring  Monitor,  based  at  the 
European Foundation for the Improvement of Living and Working Conditions (Eurofound) in 
Dublin,  with  a  ration  of  2:1  regarding  announced  job  loss  to  announced  job  creation.  The 
level of recorded restructuring announcements has, of course, increased over the past two 
years,  accompanied  by  higher  levels  of  job  loss,  although  it  would  seem  that  both 
announced job loss and cases of restructuring peaked during the first quarter of 2009. 

The  crisis  has,  however,  had  an  uneven  impact  in  terms  of  sector,  with  some  sectors  hit 
much  harder  than  others.  The  automotive  sector,  which  is  a  manufacturing  sector  for  the 
EU, has been hit hard by the crisis, due to reduced demand. By contrast, other sectors, such 
as  the  retail  sector,  appear  to  have  weathered  the  crisis  comparatively  well,  with  job 
creation, certainly more recently, outweighing job loss in this sector. 

In terms of employment, the automotive sector is vital in the EU, both in terms of direct and 
indirect  employment.  In  order  to  weather  the  recent  crisis,  employers  in  this  sector  have 
resorted to a range of initiatives, the most common of which has been short-time working, 
which aims to bridge difficult but temporary economic circumstances. 

In  response  to  these  challenges,  the  EU  institutions  have  been  trying  to  put  into  place  a 
sustainable labour market policy response, in the form of an integrated strategy based on 
factors  such  as  interventions  in  employment  protection,  lifelong  learning  and  activation 
policies. These may help to improve the adjustment capacity of labour markets and smooth 
the employment and social impact of restructuring. Increasing participation, and enhancing 
workers’ employability through better skills. The ultimate goal is to return to strong growth. 
The Europe 2020 strategy, which is based on seven flagship policies, contains two policies 
that  are  relevant  for  the  labour  market:  an  agenda  for  new  skills  and  new  jobs,  aimed  at 
modernising the labour market, notably by developing skills which better match with labour 
market  needs  and  enhancing  labour  mobility  prospects;  and  the  ‘Youth  on  the  Move’ 
initiative, which aims to remove obstacles to reaching greater educational attainment and 
higher employment rates for young people. 

More widely around the EU, short-time working has been one of the major policy responses 
of  organisations,  and  one  that  appears  to  have  had  the  desired  effect  in  terms  of 
maintaining  employment  levels.  However,  there  are  limitations  to  this  measure,  and  it  is 
particularly  important  to  ensure  that  short-time  working  is  phased  out  correctly  and  not 
viewed as a long-term option, as this will undermine recovery and growth. 

It is not easy to see a clear way forward, following on from the recent crisis, but it is clear 
that recovery will come and that EU employment and industrial policy must be in a position 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  18 

to face up to the challenges of the future, in order to ensure that recovery and growth in 
the EU is strong and smooth. To this end, industrial policy has begun to be more active in 
supporting  the  transition  of  industries  by  setting  up  public  private  partnerships,  fostering 
innovation  and  coordinating  Member  States’  policies.  In  addition,  in  its  strategies  on 
restructuring,  industrial  policy  is  also  trying  to  better  incorporate  initiatives  from  other 
policies,  as  it  is  clear  that  only  a  holistic  approach  will  lead  to  sustainable  growth  in  the 
future.  The  Commission’s  October  2010  Communication  on  industrial  policy  makes  this 
clear. 

1: RECENT LEVELS OF RESTRUCTURING IN THE EUROPEAN UNION 

The  European  Restructuring  Monitor  (ERM),  operated  by  Eurofound,  Dublin,  records 
restructuring  announcements  in  establishments,  based  on  media  reporting.  The  ERM  has 
been in operation since 2002 and now constitutes a dataset of over 11 000 individual cases 
of  restructuring  which,  notwithstanding  certain  biases  (see  below),  is  the  best  single, 
publicly  available  source  of  EU  data  on  the  employment 
large-scale 
organisational restructuring. 

impacts  of 

Using a network of national correspondents based in each of the EU27 Member States plus 
Norway, the ERM captures basic descriptive and quantitative data concerning each reported 
case of restructuring involving over 100 announced job losses or job creations or, in the case 
of companies employing more than 250 persons, announced restructurings affecting at least 
10 % of the workforce. 

It  should  be  noted  that  this  definition  only  captures  reported  mass  or  large-scale 
restructuring processes. It therefore only corresponds to the tip of the iceberg in terms of 
job  creation  and  loss  most  likely  to  be  captured  by  national  media.  First,  the  information 
does not include the impact on subcontractors unless these also satisfy the thresholds, and 
ignores local spill-over effects indirectly generated on employment in a given area. Second, 
it  is  well  known  that  the  main  flows  of  job  loss  and  creation  in  a  given  country 
overwhelmingly  come  from  small-scale  loss  and  creation.  However,  these  large-scale 
processes are highly meaningful, for several reasons. They are dramatic in scope and affect 
a  large  number  of  people,  both  the  workers  given  notice,  their  dependants  and  their 
families.  Further,  as  they  often  relate  to  major  employers  in  a  location,  they  can  have  a 
disproportionate impact on the local and sometimes the regional economy, often including 
important spill-over effects. 

The value of the ERM database also stems from the distinctions it allows regarding various 
organisational  dimensions  of  restructuring.  Box  1.1  summarises  the  types  of  restructuring 
identified in the ERM. 

 
 
 
 
 
 
 
 
Restructuring in Europe  19 

Box 1.1: Type of restructuring 

Relocation:  When  the  activity  stays  within  the  same  company,  but  is  relocated  to 
another location within the same country. 

Outsourcing: When the activity is subcontracted to another company within the same 
country. 

Offshoring/delocalisation: When the activity is relocated or outsourced outside of the 
country’s borders. 

Bankruptcy/closure: When an industrial site is closed or a company goes bankrupt for 
economic reasons not directly connected to relocation or outsourcing. 

Merger/acquisition:  When  two  companies  merge  or  during  an  acquisition,  which  then 
involves an internal restructuring programme aimed at rationalising an organisation by 
cutting personnel. 

Internal restructuring: When the company undertakes a job-cutting plan, which is not 
linked to another type of restructuring defined above. 

Business  expansion:  Where  a  company  extends  its  business  activities,  hiring  new 
employees.  This  form  of  restructuring  has  been  introduced  to  the  ERM  database  in 
order to reflect the positive effects of certain restructuring processes on employment. 

Box 1.2 below gives information about the methodology used by the ERM 

Box 1.2: Measuring the employment effects of restructuring, the ERM 
methodology 

The  information  contained  in  the  ERM  comes  from  correspondents  in  each  of  the  EU 
Member States, together with Norway, who submit fact sheets on the basis of articles 
published in national newspapers and the business press in the country in question of 
enterprise restructuring, where this is defined as cases which: 

●  affect at least one EU Member State; 

●  entail an announced or actual reduction of at least 100 jobs; or 

●  involve  sites  employing  more  than  250  people  and  affecting  at  least  10 %  of  the 

workforce; or 

●  create at least 100 jobs. 

In principle, all instances of restructuring that meet these criteria should be included 
in the ERM, although how far this is the case in practice depends on both the diligence 
of the national correspondents concerned in reviewing the sources in question and the 

 
 
 
 
 
Restructuring in Europe  20 

extent  to  which  the  news  sources  (a  selection  of  three  to  five  business  or  economy-
oriented newspapers is screened in each country) actually report relevant cases. Both 
may vary between Member States, partly with the size of the country, since a case of 
restructuring involving the loss of, say, 30 jobs at a worksite employing 250 people is 
likely to be more newsworthy in a small country than a large one. 

The  cases  excluded  because  they  do  not  meet  the  criteria  defined  because  of  either 
the  worksite  concerned  or  the  job  losses  involved  being  too  small,  are  also  likely  to 
vary  between  countries.  In  this  case,  the  cases  excluded  might  be  expected  to  vary 
inversely  with  the  size  of  the  country,  though  this  is  not  necessarily  so,  since  the 
typical  size  of  enterprise  itself  tends  to  vary  across  countries,  there  being  a  much 
larger number of small and medium-sized enterprises in the southern Member States in 
particular than in other parts of the EU. 

There is an acute lack of solid evidence on the employment effects of restructuring at 
European level. While the ERM is not fully representative of the employment effects of 
restructuring,  it  is  the  only  EU-wide  attempt  to  measure  restructuring  directly. 
Moreover,  the  ERM  is  very  timely2 and  is  based  on  publicly  available  information.  This 
characteristic,  together  with  the  fact  that 
identifies  the  companies  and 
establishments  undergoing  restructuring,  makes  the  ERM  a  particularly  useful  measure 
from a policy perspective. 

it 

Potential biases in ERM 

The  ERM  defines  job  loss  as  intended  redundancies,  which  are  not  notified  to  any 
public  authority  but  rather  ‘announced’  either  in  the  media  or  some  other  public 
domain.  The  thresholds  for  inclusion  in  the  ERM  database  are:  at  least  100  jobs  or 
involving  sites  employing  more  than  250  people  and  affecting  at  least  10 %  of  the 
workforce. There is no stipulation of the time within which the intended job loss is to 
occur. 

The  major  advantage  of  the  ERM  is  that  it  occurs  very  early  in  the  dismissal  process 
and that it will capture those who come to leave very early in the dismissal process. It 
will,  however,  almost  certainly  overestimate  the  actual  number  affected  by  the 
restructuring.  The  early  warning  feature  of  the  ERM  is  one  of  its  major  strengths  as 
information is usually available long before the reduction of the workforce is enacted. 
Another  major  strength  of  the  ERM  is  that  it  is  based  on  information  in  the  public 
domain.  There  are  no  issues  of  privacy  and  the  identification  of  specific  cases  allows 
the process of structural change to be observed at the company level. 

2 

Indeed,  ERM  is  to  some  degree  anticipatory  in  that  it  records  announcements  of  job  losses;  these 
announcements are often only one stage in a multi-step process in which factors such as social dialogue 
and negotiation play a role in affecting the ultimate employment outcomes.   

 
 
 
                                                       
 
Restructuring in Europe  21 

However, the major problem with the ERM is whether the macro picture that it tells is 
representative  of  job  loss  in  general.  How  then  can  we  expect  the  ERM  to  be  biased 
with respect to job loss in general? A priori, there is reason to suppose the following. 

Firm  size  bias  occurs  by  definition  due  to  the  ERM  thresholds.  Moreover,  even  within 
the firm size definitions there will almost certainly be an over-representation of large 
firms  and  large  workforce  reduction  as  these  are  more  likely  to  be  reported  in  the 
media. As firm size is correlated with a number of important factors such as economic 
sector,  size  bias  will  lead  to  many  types  of  bias.  For  example,  the  large  firm  bias 
probably  leads  to  a  higher  reporting  rate  in  the  ERM  for  manufacturing  relative  to 
services. The manufacturing bias may in turn lead to bias as regards region and gender. 
The  fact  that  the  sampling  error  will  be  greater  when  firms  are  small  may  lead  to 
inconsistencies  over  time  (if  firm  size  varies  over  time)  and  between  countries  with 
differing firm size distributions. The most obvious impact of large firm bias impacts on 
small Member States such as Malta and Cyprus as they have very few firms of the size 
that  fall  under  the  ERM  thresholds.  Indeed,  the  ERM  database  provides  very  poor 
information on restructuring in these countries. 

Regional  bias,  apart  from  that  which  follows  from  the  large  firm  bias  mentioned 
earlier,  is  likely  to  occur  when  media  coverage  is  not  evenly  spread  throughout  the 
country.  While  most  of  the  designated  newspapers  are  formally  national,  there  may 
well be some national or regional capital city bias. 

Country size bias is also likely. In absolute numbers, there is obviously much more job 
loss in large countries. In terms of national impact, restructuring involving for example 
100 employees will be a less frequently occurring and more media-prominent event in 
Portugal  or  Greece  than  in  Germany  or  the  UK.  This  suggests  that  the  reporting 
frequency will be higher in small countries than in big ones. This could seriously flaw 
comparisons between countries (but not over time). Note that because there are more 
large firms in large countries, this leads to better coverage in the ERM. Thus there are 
likely  to  be  conflicting  tendencies  to  bias  as  regards  country  size,  leaving  little 
indication on the size and direction of the bias. 

Type of restructuring bias (in terms of internal restructuring, relocation, closure etc.) 
may  also  occur  if  public  and  media  focus  is  more  concentrated  on  certain  types  of 
restructuring. Otherwise there is little to suggest that bias occurs in this aspect of the 
ERM. 

The  ERM  also  reports  cases  of  job  creation.  As  the  major  part  of  ERM  cases  are 
identified in newspapers, one could presume, in accordance with the journalist adage 
that ‘the best news is bad news’, a higher rate of reporting of job loss relative to job 
creation. 

Regarding  the  information  collected,  the  sample  ERM  fact  sheet  below  illustrates  the 
basic data that the system is designed to capture. 

 
 
 
Restructuring in Europe  22 

This section of this chapter gives a basic descriptive overview of the employment effects of 
large-scale restructuring in EU27 and Norway from the ERM dataset from 2002 to the end of 
the second quarter of 2010. Then it turns to look in more detail at recent data covering the 
period 2008 to the second quarter of 2010, which covers the mini-cycle both before, during 
and after the acute economic and financial crisis from the fourth quarter of 2008 to the first 
quarter of 2009, when restructuring activity also peaked. The section includes brief features 
looking at instances of early retirement captured in ERM cases in the recent period and at 
restructuring developments in  the car manufacturing sector. It concludes with some short 
examples  of  company  and  social  partner  initiatives  which  have  helped  to  mitigate  the 
negative employment impacts of the most severe European recession in recent memory.3  

1.1: THE EMPLOYMENT IMPACT OF RESTRUCTURING IN EUROPE 

Between  the  beginning  of  2002  and  the  end  of  the  second  quarter  of  2010,  over  11 000 
cases  of  large-scale  restructuring  in  EU  Member  States  (including  the  new  central  and 
eastern European Member States from 2005 onwards) were recorded by the ERM. The ratio 
of cases of announced job loss to announced job creation was around 2:1 over the period.4 
The  cases  recorded5 were  associated  with  announced  job  losses  totalling  just  above  3.8 
million  and  announced  job  creation  of  just  over  2.0  million.  The  annual  median  size  of 
restructuring cases varied between 200 and 250 over the period covered for both job gain 
and job loss. For details, see table 1.1 below. 

Table 1.1: Large-scale restructuring in Europe: an overview of ERM cases from 2002 to 
2010* 

Cases 

Employment 

Median case size 

Job loss 

Job gain 

Job loss 

Job gain 

Job loss 

Job gain 

2002-7 

2008 

2009 

2010* 

Total 

4 341 

1 032 

1 650 

345 

7 368 

2 622 

2 509 713 

1 532 048 

535 

359 

183 

527 124 

651 557 

144 162 

278 781 

203 295 

61 566 

3 699 

3 832 556 

2 075 690 

210 

227.5 

200 

230 

205 

250 

200 

220 

200 

231 

Source: ERM (*2010, q1 and q2 only). 

As the chart below indicates, the distribution of announced employment gains and losses is 
heavily  concentrated  in  larger-scale  restructurings.  In  part  this  is  for  reasons  of  large-firm 

3 

4 

5 

The source for these cases is not the ERM itself. They were identified in desk research for the ERM annual 
report 2009 (Eurofound 2009). 

Though note that ERM only began recording announced job creation cases towards the end of 2003. 

Excluding cross-national EU or World cases (to avoid double counting). 

 
 
 
 
 
  
                                                       
 
Restructuring in Europe  23 

bias  and  media  coverage  bias  which  are  inherent  to  ERM  (see  box  1.2).  It  is  possible  to 
discern patterns comparing year-on-year shifts in the composition of announced job loss by 
case  size.  The  share  of  announced  job  loss  in  large-scale  cases  involving  at  least  1 000  job 
losses has varied between 40 % and 60 % over the period (share of cases on the other hand 
varies between 7 % and 11 % by year). The share of medium-sized cases and smaller cases 
increased markedly during the crisis (2008-9) before beginning to fall back in early 2010. For 
details, see figure 1.1 below. 

Figure 1.1: Share of ERM-recorded announced job loss/gain by case size, 2002-10* 

100%

80%

60%

40%

20%

0%

1000+

500-999

250-499

200-249

150-199

100-149

<100

2002-7

2008

2009

2010

2002-7

2008

2009

2010

Job gain

Job loss

Source: ERM (*2010, q1 and q2 only). 

In terms of announced job gain, large-scale cases involving at least 1 000 new jobs account 
for the majority (c.60 %) of overall job gains recorded on ERM in the period 2002-2009. The 
pattern  in  the  first  semester  of  2010  as  growth  has  resumed  has,  however,  been  quite 
distinctive:  the  share  of  jobs  in  medium-sized  cases  involving  150-499  jobs  has  doubled 
(from 21 % to 42 %). 

Over  the  period  from  2002-2007  to  2010,  the  median  number  employed  in  companies 
announcing  major  job  loss  has  risen  from  800  to  900  and  the  share  of  larger  employing 
units6 (500 or more employed in the affected units) announcing job loss has not decreased; 
in fact it has increased, from 58 % to 60 %. 

In  summary,  the  trends  appear  to  be  for  a  declining  share  of  large-scale  restructuring-
related job loss or gain to be in very large cases (those leading to the announced dismissal of 

6 

ERM  records  numbers  of  workers  employed  in  the  units  affected  by  the  individual  restructuring  event. 
While this bears no necessary relationship to either firm-level or establishment-level employment, we use 
it as a proxy of both here in the absence of other data. 

 
 
 
 
 
 
                                                       
 
over 1 000 individuals). At the same time, a consistently high share (around 60 %) of job loss 
cases involves larger employing units (those with more than 500 employees). 

Restructuring in Europe  24 

Box 1.3: What is the employment impact of restructuring? 

The  word  ‘restructuring’  has  several  meanings  and  some  definitions  of  restructuring 
might  include  events  that  do  not  have  any  impact  on  employment  levels  or  that, 
through a reorganisation of work, may have an impact on the workforce in some other 
way.  Similarly,  the  relationships  between  restructuring  and  employment  are  neither 
simple nor straightforward. 

The  term  ‘restructuring’  has  come  to  be  associated  with  the  enactment  of  structural 
change  below  the  macro  or  national  level:  there  are  reports  of  the  restructuring  of 
sectors, companies and establishments. Restructuring is also seen as more of an active 
process initiated by employers, in contrast to the more passive and deterministic long-
term forces of structural change and economic development. Even if it is driven by the 
need to maintain or enhance profitability, and to ensure by so doing the survival of the 
company  (and  thus  jobs)  in  the  long  term,  restructuring  is  primarily  perceived  as 
having a negative impact on employment levels at particular workplaces. 

Nonetheless,  the  more  abstract  concept  of  structural  change,  ie  the  reallocation  of 
resources to more productive uses, is generally viewed in positive terms. Job creation 
in  new  companies  and  sectors  of  the  economy  is,  together  with  cheaper  goods  and 
services, the main benefit of structural change. However, to define this job creation as 
restructuring  is  both  contrary  to  public  perceptions  of  the  term,  as  well  as  being 
somewhat illogical. It is also a complex theoretical problem insofar as restructuring is 
also  often  defined  by  its  negative  effect  on  jobs  and  no  clear-cut  definition  has  yet 
emerged. 

Nonetheless, job creation is related to restructuring in the short term in one particular 
context  —  when  jobs  are  lost  in  one  company  or  location  in  order  to  be  moved  to 
another company or location. This occurs either through the process of outsourcing or 
offshoring. Jobs may be lost due to offshoring, for example, in Germany, but not from 
the  EU.  Some  evidence,  for  instance  in  the  ERM,  indicates  that  much  job  creation  in 
the newer Member States emanates from companies located in the old EU15. Similarly, 
significant  technological  changes  have  already  triggered  restructuring  processes  in 
which the loss of (unskilled) jobs has gone hand in hand with the creation of (skilled) 
jobs. In the meantime, it is obvious that not all job creations are linked to change, let 
alone to restructuring. 

1.2: RESTRUCTURING ACTIVITY DURING THE ECONOMIC CRISIS 

As noted at the beginning of this chapter, the past two years have been extremely difficult 
for the EU economy, due to the financial and economic crisis that it has been experiencing 
during  this  time,  and  from  which  it  has  not  yet  fully  emerged.  The  crisis  has,  naturally, 

 
 
 
 
Restructuring in Europe  25 

caused  the  level  of  restructuring  in  the  EU  to  increase,  due  to  the  higher  incidence  of 
bankruptcies  and  closures.  The  trends  of  the  past  two  years  have  been  captured  by  ERM 
data. 

As stated above, the ERM has been in existence since 2002 and tends on average to record 
approximately 90-100 large-scale restructurings per month. Restructuring activity recorded 
on ERM peaked in the last quarter of 2008 and the first quarter of 2009 almost immediately 
following the global financial crisis triggered by the collapse of Lehman Bank in September 
2008. In this period, monthly case totals climbed to over 300 and featured a much higher 
share of job loss cases. For details, see figure 1.2 below. 

Figure 1.2: Restructuring activity during the crisis (by quarter) 

300000

250000

200000

150000

100000

50000

0

800

700

600

500

400

300

200

100

0

Total announced job
loss / gain Loss

Total announced job
loss / gain Gain

No. of cases Loss 

No. of cases Gain

2008q1

2008q2

2008q3

2008q4

2009q1

2009q2

2009q3

2009q4

2010q1

2010q2

Source: ERM. 

Declining  ERM  restructuring  activity  since  the  second  quarter  of  2009  coincides  with  the 
onset  of  recovery  in  output,  although  unemployment  levels  only  began  to  stabilise  at  the 
end of the first quarter of 2010. 

1.3: JOB LOSSES 

for  17 %  of  restructuring-related 

The sectors most affected by large-scale restructuring job loss during the peak quarters of 
the  economic  crisis  were  manufacturing,  retail  and  financial  intermediation.  Public 
administration,  which  had  accounted 
loss 
announcements in 2006-2007, represented a much smaller share of announced job loss in 
the most recent period. This may be due to the fact that public sector employment levels 
often  have  a  counter-cyclical  nature,  ie  they  can  rise  during  private  sector  downturn. 
Nevertheless,  there  have  been  some  high-profile  announcements  of  job  losses  in  public 
administration most recently, in countries such as the UK, although these announcements 
will  affect  actual  employment  levels  over  a  longer  period  than  announcements  in  the 
private sector. 

job 

 
 
 
 
 
 
 
For details, see figure 1.3 below. 

Figure 1.3: Announced job loss in ERM restructuring cases by major sector, 2008-2010q2 

Restructuring in Europe  26 

300,000

250,000

200,000

150,000

100,000

50,000

0

Other

Retail

Financial intermediation

Public administration

Transport and communications

Manufacturing

2008q1

2008q2

2008q3

2008q4

2009q1

2009q2

2009q3

2009q4

2010q1

2010q2

Source: ERM. 

The  next  part  of  this  chapter  looks  in  more  detail  at  recent  restructuring  activity  in  the 
automotive  sector,  which  is  a  major  manufacturing  sector  for  the  EU,  and  one  that  has 
experienced a significant level of restructuring in recent years. 

1.3.1: SECTOR IN FOCUS: AUTOMOTIVE MANUFACTURING 

Within  the  broad  manufacturing  sector,  announced  job  losses  were  most  acute  in 
automotive  manufacturing,  which  accounted  for  over  a  quarter  of  all  manufacturing  job 
losses. Demand for cars and trucks has been severely affected by the economic downturn. 
Europe’s  automotive 
industry,  with  the  assistance  of  the  public  authorities,  has 
experimented  with  various  remedies  to  endure  and  survive  the  slump  while  preparing  for 
the next generation of vehicles and consumers. 

The  automotive  sector  remains  vital  as  an  employer  in  Europe  —  more  than  2  million 
workers are directly employed and nearly 10 million work in supply-chain activities. It is also 
a major hub of research and development activity, a source of tax revenues and a positive 
contributor to the EU’s trade balance with the rest of the world. This last fact is important as 
it signals that the industry in Europe is internationally competitive. 

Nonetheless,  the  scale  of  the  slump  in  demand  for  cars  has  raised  questions  over  the 
viability  of  parts  of  the  automotive  industry,  especially  in  a  context  of  local  and  global 
overcapacity, estimated to be in the range of 20 % to 30 %. Two main stimulus paths have 
been  identified  for  the  sector,  one  short-term  and  the  other  more  medium-term,  both 
involving  relatively  large  public  investment.  In  the  short  term,  car  scrappage  premia 
introduced  by  a  number  of  Member  State  governments  have  provided  a  boost  to 

 
 
 
 
 
 
 
Restructuring in Europe  27 

production  and  sales,  especially  of  smaller,  economy  cars.  In  the  medium-term,  climate-
change  imperatives  are  motivating  large-scale  public  investment  such  as  the  European 
Investment  Bank’s  European  Clean  Transport  Facility,  which  will  underwrite  research, 
development and production of less polluting, more energy-efficient vehicles.7 

Various flexibility measures — including short-term working, shift reductions and temporary 
plant closures — have been deployed to confront the consequences of a fall-off in demand 
for passenger vehicles, which was over 25 % year-on-year at the height of the crisis.8 While 
these measures may have absorbed some, perhaps many, potential job losses, according to 
Eurostat  short-term  business  statistics  data  there  was  nonetheless  a  net  decline  of  nearly 
8 %  in  automotive  sector  employment  between  the  first  quarter  of  2008  and  the  first 
quarter  of  2009.  The  sector  also  accounted  for  the  largest  single  share  of  announced  job 
losses by sector in ERM restructuring cases  during 2008-2010. For an overview, see figure 
1.4 below. 

Figure 1.4: Breakdown of ERM job losses by sub-sector (within NACE 34, automotive 
manufacture) 

80000

70000

60000

50000

40000

30000

20000

10000

0

Manufacture of
parts/accessories for motor
vehicles (34.3)

Manufacture of bodies for
motor vehicles (34.2)

Manufacture of motor
vehicles (34.1)

Non-specific auto
manufacture (NACE 34)

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: ERM (*2010, q1 and q2 only). 

As  figure  1.4  above  illustrates,  announced  ERM  job  losses  in  the  sector  in  the  30-month 
period from the first quarter of 2008 to the end of the second quarter of 2010 amounted to 

7 

See also Mandl, Storrie, Bober 2009. 

8  ACEA 2009. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  28 

more  than  160 000.  Of  these,  the  majority  were  in  supply-chain  firms  (NACE  34.3)  rather 
than  in  original  equipment  manufacturers  (OEMs,  NACE  34.1),  in  contrast  to  the  earlier 
period, when OEM job loss announcements predominated. The increasing share of job loss 
announcements  in  the  manufacture  of  auto  parts/accessories  is  suggestive  evidence  that 
the combination of negotiated flexibility and public measures to stem unemployment in the 
sector  have  been  more  effective  at  avoiding  restructuring  job  loss  in  the  main  auto 
manufacturers rather than in their supply chains. This may reflect the political importance of 
the principal manufacturers (and their employees) and also the pragmatic fact that OEMs lie 
at  the  centre  of  an  extensive  network  of  high-end  manufacturing  activity  and  are  its  least 
dispensable  components.  Another  possible  contributing  factor  is  the  fact  that  during  the 
recession the main car producers have moved certain ancillary functions in house that had 
been previously outsourced to supplier firms. 

The  sector’s  problems  were  thrown  into  stark  perspective  by  the  plight  of  two  of  the  big 
three  US  car  manufacturing  groups.  The  US  administration  guided  Chrysler  and  General 
Motors  through  fast-track  bankruptcies  in  the  second  quarter  of  2009  and  financed  their 
restructuring with over $ 60 billion in public funding. General Motors announced the cut of 
8 369  out  of  48 000  jobs  at  its  European  Opel  plants  in  February  2010.  An  additional  850 
partial retirement jobs are due to be cut when current workers retire. The plan included the 
closure of the Belgian plant in Antwerp, where 2 606 people are employed, 3 900 job cuts in 
Germany  and  900  jobs  in  Spain.  PSA  Peugeot  Citroen  announced  in  late  2009  the  loss  of 
6 000  jobs  in  its  factories  in  France  between  January  2010  and  December  2013  in  a 
performance plan aimed at restoring the profitability of the group. 

In the early part of the crisis, car sector restructurings revealed in particular the vulnerability 
of  temporary  and  fixed-term  workers,  who  constituted  a  front-line  buffer  of  numerical 
flexibility for manufacturers. BMW announced in February 2008 that it would cut a total of 
8 100 jobs, mainly in its German operations. Temporary agency workers accounted for 5 000 
of these jobs. The decision of the company to let go at short notice of 850 of its temporary 
agency staff at its Cowley (UK) plant, which produces the new Mini, caused an outcry in the 
UK. Union leaders accused the company of taking advantage of the basic level of protections 
afforded agency workers in the UK. In the case of Skoda Auto’s announcement of 4 000 job 
losses  in  December  2008  in  its  Czech  operations,  all  were  temporary  agency  worker 
positions.  Similarly,  Volkswagen  in  March  2009  announced  that  it  would  be  cutting  all 
16 500 temporary jobs in its worldwide operations. 

When consumer demand returned in 2009 as a result of scrappage incentives, much of the 
slack was taken up by hiring/firing temporary workers. The ERM records one case of 1 000 
jobs  created  at  Skoda  Auto,  Mladi  Boleslav  (Czech  Republic)  in  March  2009,  attributed  to 
increased demand arising from scrappage schemes in neighbouring Member States, notably 
Germany.  Less  than  a  year  later,  VW  Skoda  announced  2 440  job  losses  at  its  Czech  units 
(including  Mladi  Boleslav),  principally  temporary  workers  taken  on  to  deal  with  scrappage 
scheme demand. 

 
 
 
 
 
 
 
Restructuring in Europe  29 

As already noted, the automotive sector has seen announced job creation as well as (more 
significant)  job  loss  during  2008  to  2010  and  is  the  second  sector,  after  retail,  in  terms  of 
announced  new  jobs  on  ERM.  As  the  geographical  distribution  of  job  gains/losses  below 
shows, the major West European producing countries are in general those with the largest 
announced job losses. In France, Sweden, Germany and the UK, extensive job losses were 
reported  with  only  nominal  countervailing  job  gain.  Germany  had  the  highest  level  of 
announced job losses (over 26 000) but this represents a much smaller percentage of overall 
sector  employment  in  that  Member  State  than  in  the  case  of  Sweden  for  example.  There 
was also some countervailing job gain as was also the case in the Czech Republic — the one 
exception to a qualified East-West dichotomy of job creation and loss. 

Figure 1.5: Automotive sector job losses/gains recorded on ERM 2008-2010q2 — countries 
most actively restructuring 

30,000

25,000

20,000

15,000

10,000

5,000

0

Job loss

Job gain

Poland

Slovakia

Romania

Hungary

Spain

Belgium
Czech Republic
Italy

United Kingdom
Sweden

Germany

France

Source: ERM (*2010, q1 and q2 only). 

Since  2008,  there  have  been  13  very  large-scale  cases  of  business  expansion  in  auto 
manufacturing involving the announced creation of at least 1 000 jobs. All but one were in 
the  central  and  eastern  European  Member  States  (including  four  in  the  Czech  Republic, 
three in Poland and two each in Romania and Hungary). This was a continuation of previous 
trends and shows clearly a shift — though not explicitly, or necessarily, an offshoring — of 
productive capacity in the sector from older to newer Member States. 

At company level, the ERM picked up a number of concrete examples of the above shifts. 
Autoliv,  manufacturer  of  safety  equipment  including  seatbelts  and  airbags,  announced  a 
major  worldwide  restructuring 
in  July  2008. 

involving  3 000  announced  job 

losses 

 
 
 
 
 
Restructuring in Europe  30 

Subsequently,  specific  job  loss  announcements  were  made  at  facilities  in  Hasselholm, 
Sweden (August 2008) and Gournay-en-Bray, France (March 2009) while 800 new jobs were 
announced (also in March 2009) as the company expanded production at Jelcz-Laskowice in 
Poland. In 2008, auto components manufacturer, Faurecia, announced 1 250 job losses at its 
French units between 2009 and 2011, and 1 000 new jobs at its facilities in Pisek and Karvina 
in the Czech Republic. Similar patterns can be observed in cases involving a number of other 
automotive component manufacturing firms including Keiper, Johnson Control and Mahle. 

While  much  attention  has  been  paid  to  the  successful  employment-maintaining  effects  of 
short-time working schemes, especially in the car sector during the most acute phase of the 
crisis  in  late  2008  to  early  2009,  the  scale  of  the  demand  slump  for  consumer  and 
commercial vehicles was such that job losses were extensive in the sector. Short-time work 
and other forms of working time flexibility ensured that losses were not even greater, but 
the  ERM  is  consistent  with  short-term  business  statistics  data  in  finding  that  auto 
manufacture  was  nonetheless  the  sectoral  division  contributing  most  to  aggregate 
manufacturing net employment decline. 

1.3.2:  TYPE  OF  RESTRUCTURING:  RISING  CONTRIBUTION  OF  BANKRUPTCY/CLOSURE  TO 
OVERALL JOB LOSS 

Internal restructuring represents a kind of catch-all or default category of restructuring and 
has  tended  to  account  for  around  70 %  of  announced  job  loss  in  ERM  cases  for  any  given 
period since 2002. Of the other categories of restructuring that the ERM captures, the most 
important  is  the  combined  bankruptcy/closure  category,  which  accounted  for  a  sharply 
increased proportion of announced job losses during the crisis period in 2008-2010 (up from 
14 % in 2002-2007 to 22 % of total in 2008-2010). 

The factors leading to this increased incidence of restructuring borne of business failure are 
not  difficult  to  identify.  Reduced  demand,  difficulties  in  accessing  credit  and  receiving 
payment  are  all  customary  features  of  a  recession  that  make  trading  difficult  even  for 
stronger  companies.  In  the  period  immediately  preceding  the  crisis,  a  combination  of  low 
interest  rates,  easy  credit  and  excessive  debt/leverage  may  also  have  weakened  the 
financial  foundations  of  many  companies  by  encouraging  them  to  over-extend.  Firms  that 
are already over-borrowed or structurally weak may not have the commercial resilience to 
withstand  a  more  challenging  commercial  environment  during  a  recession.  The  largest 
single bankruptcy in the period was that of UK high street retailers Woolworths in late 2008, 
where  the  closure  of  over  800  stores  resulted  in  over  27 000  announced  job  losses;  the 
firm’s  former  German  subsidiary,  Woolworths  Deutschland,  also  declared  bankruptcy  in 
May 2009 with the announced loss of over 5 000 jobs. Figure 1.6 below shows announced 
job losses by type of restructuring and year. 

 
 
 
 
 
 
 
Figure 1.6: Share (%) of ERM announced job losses by type of restructuring (except 
internal restructuring) and year 

Restructuring in Europe  31 

25

20

15

10

5

0

2003

2004

2005

2006

2007

2008

2009

2010

Source: ERM (*2010, q1 and q2 only). 

Bankruptcy/Closure

Offshoring/Delocalisation

Merger/Acquisition

Relocation, outsourcing and other

At national level, the increased share of bankruptcy/closure-related job losses was notable 
in the UK, Slovenia, Portugal, Greece, Italy and Finland (more than 15 percentage points in 
each  country).  At  aggregate  EU  level,  the  increase  in  the  share  of  bankruptcy/closure-
the  share  of 
related  announced 
offshoring/relocation/outsourcing  announced  job  losses.  This  is  consistent  with  expected 
patterns  of  business  behaviour  during  an  economic  downturn  —  higher  levels  of  business 
failure  and  retrenchment  and  less  emphasis  on  expansion  or  diversification  via  offshoring 
and  relocation.  From  this  perspective,  the  most  recent  data  showing  an  increase  in  the 
share of offshoring may be considered a hopeful signal of recovery. 

losses  was  matched  by  a  decline 

job 

in 

1.3.3: EARLY RETIREMENT AS A MEANS OF DEALING WITH JOB LOSS 

There  are  many  ways  in  which  the  effects  of  restructuring  involving  job  loss  can  be 
mitigated. Traditionally, and particularly when a larger part of the workforce was engaged in 
more traditional heavy industry sectors, early retirement was a favoured means of allowing 
older workers to leave the workforce in a relatively non-traumatic way. 

However,  the  past  10  years  have  seen  a  withdrawal  or  reduction  of  incentives  to  early 
retirement — in both the public and private sectors — in line with a policy consensus 9 that 
emphasises the importance of broadening labour market participation and of increasing the 

9  Council of the European Union, Joint Employment Report 2008/9 – ‘To sustain progress, it is essential to 

avoid using early retirement schemes to regulate supply as in past downturns’. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  32 

effective retirement age.10 The move to reduce early retirement incentives has been made 
all the more pressing by empirical evidence that countries with generous and easy-to-access 
early retirement schemes have also been those which have suffered the sharpest declines in 
the  employment  levels  of  55-64  year  olds.  Old  age  employment  rates  are  particularly 
sensitive  to  retirement  incentive  structures,  which  vary  considerably  from  country  to 
country.  Research  also  largely  confirms  that  early  retirement  has  not  been  successful  at 
aggregate  level  in  one  of  its  ancillary  objectives11 —  contributing  to  increased  youth 
employment by ‘freeing up’ jobs for younger workers. 

However,  there  are  strong  interests  in  maintaining  early  retirement  arrangements,  which 
can  be  attractive  for  different  reasons  for  a  variety  of  stakeholders,  including  unions, 
employees and employers. While some governments have recently attached more stringent 
limitations  to  access  to  early  retirement  benefits  (for  example  Poland,  Sweden  and 
France12), others have rediscovered the short-term attractions of early retirement as a cost-
saving  measure  and/or  as  a  politically  acceptable  means  of  gaining  numerical  flexibility  in 
the public service. An illustrative example is the early retirement scheme for civil servants 
introduced  by  the  Irish  government  in  April  2009.  The  scheme  was  included  in  an 
emergency  budget  as  one  of  a  number  of  measures  explicitly  targeting  public  sector  cost 
savings.13 ERM national correspondents also report increased recourse to early retirement in 
Romania, Latvia, Luxembourg and Hungary.14 

The ERM shows some evidence of the persistence of early retirement as one form of labour-
shedding  during  restructuring,  especially  amongst  large  companies.  In  the  ERM  in  2008-
2010,  80  cases  make  explicit  mention  of  early  retirement.  Early  retirement  features  in 
particular in cases from the following countries — Belgium, France and Spain (10 cases), UK 
(7), Italy and Norway (6). As a rule, early retirement tends to be one of a range of measures 
deployed  when  restructuring  as  by  definition  it  relates  only  to  that  part  of  a  company’s 
workforce  between  50  and  6015 years  of  age  and  the  statutory  retirement  age  (generally 
65).  Other  measures  may  include  partial  retirement,  part-time  working,  relocation, 

10  See for example the Polish government’s recent proposed reform of early retirement provisions for certain 

strenuous occupations, http://www.eurofound.europa.eu/eiro/2008/11/articles/pl0811019i.htm. 

11 

12

 Though there may be counter examples at firm level; Group Michelin in June 2009 announced the offer of 
early retirement benefits aimed primarily at those within five years of retirement with the aim of creating 
vacant positions to be filled by the 500 new hires Michelin expects to make annually. 
 Carley,  M., 
http://www.eurofound.europa.eu/eiro/studies/tn0903029s/tn0903029s.htm. 

developments 

Industrial 

available 

relations 

Europe, 

online 

2008, 

at 

in 

13 Dobbins, T., Emergency budget includes public service pay review and early retirement, available online at 
      http://www.eurofound.europa.eu/eiro/2009/04/articles/ie0904019i.htm . 
14 Mandl, I./Salvatore, L., Tackling the recession: Employment-related public initiatives in the EU Member 
     States and Norway, Comparative study of the European Foundation for the Improvement of Living and 
     Working Conditions, 2009, available online at 
     http://www.eurofound.europa.eu/emcc/erm/studies/tn0907020s/tn0907020s.htm.  

15  Though in the case of Hellenic Petroleum (EL) early retirement was offered to workers as young as 47-48.  

 
 
 
 
 
                                                       
 
Restructuring in Europe  33 

retraining and voluntary redundancies, and the mix of measures in specific restructurings is 
generally agreed on the basis of social partner negotiations. 

Early retirement has in the past been associated with restructuring arising from privatisation 
where states have bought industrial peace by offering generous early retirement packages 
to  workforces  affected  by  post  privatisation  restructuring  job  loss.  Three  examples  of 
company restructuring involving the use of early retirement are set out below, focusing on 
the  Italian  airline  Alitalia,  the  Italian  telecommunications  group  Telecom  Italia,  and  the 
Austrian retail bank BAWAG. 

Alitalia’s new phase as a private company began in January 2009 after Italian investor group 
Compagnia Aerea Italiana (CAI), acquired the ‘new’ Alitalia, leaving the Italian government 
with  the  old  company’s  debts  and  its  least  profitable  units.  Employment  in  the  privatised 
Alitalia totalled 12 600 compared with 21 500 in the combined ‘old’ Alitalia and Air One, the 
smaller  Italian  airline,  with  which  it  merged.  Prior  to  the  acquisition  and  in  a  context  of 
sustained  industrial  action,  the  Italian  government  and  main  trade  unions  reached  a  deal 
which made use of the full range of Italian social shock absorbers (ammortizzatori sociali) to 
cushion the effects of redundancies for over 3 000 of the Alitalia employees. The agreement 
included  recourse  to  the  ‘extraordinary’  Wages  Guarantee  Fund  (Cassa  Integrazione 
Guadagni  Straordinaria,  CIGS)  for  four  years.  After  this  period,  redundant  workers  benefit 
for  three  years  from  the  ‘mobility’  programme,  which  supports  their  incomes  until  they 
reach  retirement  age  (or  find  a  new  job).  The  Italian  state  —  through  the  National  Social 
Security Institute (Istituto Nazionale Previdenza Sociale, Inps)  — pays an allowance equal to 
80 % of the average wage lost by the workers. 

At  Telecom  Italia,  the  announcement  of  5 000  job  losses  in  June  2008  led  to  strike  action 
which was resolved when the restructuring plan was largely deferred to 2009-2010. The job 
cuts  were  planned  to  be  effected  with  recourse  to  a  mobility  procedure  (procedura  di 
mobilita), which is an administrative prelude to dismissal, with a view to early retirement, 
which would guarantee up to 90 % of salary for the redundant workers. 

BAWAG,  the  Austrian  retail  bank,  formerly  owned  by  the  Austrian  Federation  of  Trade 
Unions (ÖGB), announced its intention to reduce its workforce by 400 during 2008 without 
recourse to compulsory redundancies. The bank was taken over in 2007 by a consortium led 
by  the  US  private  equity  firm  Cerberus  Capital  Management  following  losses  incurred  on 
currency derivative investments. The takeover was facilitated by a large injection of public 
funds  by  the  Austrian  state.  Employees  within  seven  years  of  the  official  retirement  age 
were allowed to opt for early retirement, in which case they continued to receive at least 
60 %  of  their  last  take-home  pay  until  reaching  the  legal  retirement  age  —  60  for  women 
and 65 for men. 

Other large-scale restructurings with a significant element of early retirement include those 
at: 

●  Eon-Energy, in August 2008 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  34 

●  Air France-KLM, in May 2009 

●  Michelin, in June 2009 

●  Volvo Europa, in October 2008 

●  Malta Shipyards, in June 2008 

●  Birmingham City Council, in February 2010, and 

●  Vattenfall Europe, in March 2010. 

The  above  examples  show  how  early  retirement  is  still  being  used  by  organisations 
throughout the EU, albeit in a more limited way than in previous decades. Early retirement 
is clearly still an option for organisations that are faced with the need to make large-scale 
redundancies, although this does have implications for the balance of age and experience in 
an organisation’s workforce, and for the wider workforce as a whole, within the context of 
EU policy targets concerning the level of employment for older workers. 

1.4: RESTRUCTURING INVOLVING JOB CREATION 

Although  cases  of  announced  job  loss  have  generally  outweighed  those  announcing  job 
creation during restructuring events, there was a marked shift to job-creating as opposed to 
job-destroying cases of restructuring on ERM in the years up to 2008. This is reflected in the 
fact that while cases of business expansion only began to be included in the dataset late in 
2003  —  the  original  focus  of  ERM  was  on  the  negative  employment  consequences  of 
industrial  change  —  in  2007,  they  accounted  for  the  majority  of  individual  restructuring 
cases. 2007 was also the first year in which the aggregate positive employment impact of all 
cases exceeded the aggregate negative employment impact. 

Since the second quarter of 2008, however, announced job losses have exceeded job gains 
in every quarter and in aggregate by a ratio of around 3:1. Nevertheless, there has also been 
a sharp decline in the level of reported job creation by quarter in the most recent period — 
with the somewhat surprising exception of the first quarter of 2009, near the height of the 
crisis,  when  low-price  retailers  (Asda,  Tesco)  and  restaurant  chains  (KFC)  in  the  UK 
announced major countrywide expansions. 

Data contained in the latest  ERM Quarterly publication, which tracks developments in the 
third quarter of 2010, shows that some sectors are now beginning to recover and to create 
jobs.  For  example,  it  would  seem  that  the  automotive  manufacturing  sector  is  slowly 
recovering  from  the  deep  decline  of  2008  and  2009.  In  the  third  quarter  of  2010,  several 
auto  manufacturing  companies  that  between  September  2008  and  the  end  of  2009 
announced  dismissals  of  large  numbers  of  employees  are  now  creating  new  jobs.  In 
job  creation 
Sweden,  the  Volvo  group  has  been  responsible  for  three  cases  of 
announcements.  Volvo  Trucks  announced  it  will  hire  200  employees  at  its  plant  in  Tuve, 
Gothenburg.  Volvo  Powertrain  announced  it  has  permanently  employed  150  people,  who 
are part of 350 fixed-term recruitments the company made during last year. Further, Volvo 

 
 
 
 
 
 
Restructuring in Europe  35 

PV announced that 140 fixed-term employees will be permanently employed at the factory 
facility  in  Torslanda.  Volkswagen  Slovakia  announced  it  is  to  create  1 000  new  jobs  at  its 
Bratislava  plant  by  September,  while  PSA  Peugeot  Citroën  announced  the  recruitment  of 
900 new employees to be employed in various plants across France before the end of 2010. 
The  company  also  announced  that  it  will  reintroduce  a  third  shift  at  its  plant  in  Portugal, 
which  was  abolished  in  2009.  This  decision  will  result  in 300 new jobs; the third shift was 
planned  to  be  operative  in  November  2010  and  to  last  six  months.  Whether  it  continues 
thereafter will depend on market conditions. 

In the computer and related activities sector, the largest case of job announcement refers to 
Hewlett  Packard  (HP),  which  announced  it  is  to  create  700  new  jobs  at  its  plant  near 
Glasgow, as the company is setting up an IT service hub. In 2009, HP announced the loss of 
700 manufacturing jobs at the same plant following the decision to transfer production to 
the  Czech  Republic.  These  jobs  were  expected  to  be  gone  by  October  2010  but  with  the 
newly created jobs in IT services, the plant will go back to employing around 1 300 people. In 
Ireland,  internet  company  Google  has  announced  the  creation  of  200  jobs  for  graduates 
with  strong  IT  skills  as  a  result  of  a  new  operations  centre  in  Dublin.  The  new  centre  was 
expected  to  be  operational  by  the  end  of  2010  and  it  will  focus  mainly  on  Google 
geographical products such as Google Maps and Google Local. 

As can be seen from figure 1.7 below, which shows ERM data for aggregate announced job 
creations, manufacturing has been one of the more dynamic sectors in terms of announced 
job creations, although this relates largely to the first half of 2008, before the onset of the 
economic crisis. Thereafter, manufacturing accounts for a declining share of job gains and 
the  principal  source  of  announced  job  creation  has  been  the  retail  sector.  From  the  first 
quarter of 2008 to the second quarter of 2010, around 30 % of announced job gains were in 
the retail sector and around 25 % in manufacturing. 

Figure 1.7: Announced job gain in ERM restructuring cases by major sector, 2008-2010q2 

120,000

100,000

80,000

60,000

40,000

20,000

0

Other

Hotrec

Financial
intermediation
Transport and comms

Real estate and
business activities
Retail

Manufacturing

2008q1 2008q2

2008q3 2008q4 2009q1

2009q2 2009q3 2009q4

2010q1 2010q2

 
 
 
 
 
 
Restructuring in Europe  36 

Source: ERM (*2010, q1 and q2 only). 

Box  1.4  below  looks  at  the  retail  sector,  which  has  been  one  of  the  sole  motors  of  job 
creation in the EU over the past few months. 

Box 1.4: Examples of restructuring involving job creation: the retail sector 

The retail sector is of great importance to the EU economy, employing over 14 % of the 
workforce. The European Commission characterises this sector as being one of the EU’s 
main  employers,  and  often  the  entry  point  into  the  labour  market  for  many  young, 
low-skilled or unskilled people. However, the Commission also notes that a number of 
issues  have  an  impact  on  employment  and  competitiveness  in  the  sector,  such  as: 
differences  in  labour  law  and  collective  agreements  applicable  to  retail  services;  the 
negative  impact  of  the  informal  economy  on  working  conditions;  and  a  mismatch 
between the skills needs of companies and those of staff in the retail sector. 

The sector has experienced major job losses over the past two years, due to high levels 
of  restructuring.  However,  over  the  past  few  months,  this  sector  has  also  seen 
significant  job  creation,  and  it  is  indeed  one  of  the  few  sectors  currently  recruiting 
workers. In the second quarter of 2010, around 30 % of announced job gains in the ERM 
were in the retail sector. The retail sector is extremely competitive and in the current 
difficult  economic  climate,  the  lower-cost  chains  are  doing  well  and  embarking  on 
business expansion, at the expense of other retail groups. 

Recent job creation plans have been announced in a range of retail groups, often the 
result  of  multinationals  investing  in  central  and  eastern  European  countries.  For 
example, in mid-August, hypermarket chain Kaufland, part of the German group Lidl & 
Schwarz, announced the creation of 180 new jobs near Turda (Cluj, Romania) as result 
of  an  investment  of  € 80  million  in  a  new  regional  distribution  centre.  Kaufland 
operates 53 stores in Romania; the group intends to open five to six new units in the 
second half of 2010. Also in Romania, the Romanian DIY chain Dedeman announced in 
late September that it planned to open a new store at Cluj Napoca in February 2011, 
creating 230 jobs. 

In the Czech Republic, towards the end of August, AAA Auto, one of the largest used 
car retailers in Europe, announced that it has created 200 jobs in the first six months 
of  2010.  The  company,  operating  in  the  Czech  Republic  and  Slovakia,  reported 
substantial profits despite a decline in sales. In Estonia, in mid-August, Maxima Eesti, a 
member of the international retail chain Maxima Grupe, announced the creation of 120 
new  jobs  by  the  end  of  2010  in  three  new  stores.  Maxima  Grupe  is  based  in  the 
Lithuanian  capital  and  is  one  of  the  largest  employers  in  the  Baltic  States  with 
approximately  25 500  employees.  Also  in  Estonia,  in  mid-August,  the  Estonian  retail 
sale company OG Elektra announced that 200 new jobs will be created by the end of 
2010  in  six  new  stores.  Between  January  and  August  2010,  the  company  created  130 
new jobs by opening five new stores, mostly in the capital Tallinn. 

 
 
 
 
Restructuring in Europe  37 

The UK supermarket chain Tesco has been expanding into central and Eastern Europe. 
In  Hungary,  in  mid-August,  Tesco  Hungary  announced  the  opening  of  two  new 
supermarkets,  in  Bicske  and  Tolna,  creating  200  new  jobs  in  total.  Over  the  past  16 
years,  Tesco Hungary has  opened 108 supermarkets and has around 22 000 employees 
in  the  country.  Tesco  is  also  expanding  in  Ireland:  in  mid-July,  it  announced  an 
expansion  that  will  result  in  seven  new  stores  and  the  creation  of  approximately  750 
jobs during the course of 2010, the majority of which will be outside Dublin. 

Other  job  creation  announcements  in  the  older  EU  Member  States  include  the 
announcement in mid-September by the furnishing retailer Ikea that it is to create 240 
new jobs, with the opening of a new store in Catania (Sicily, Italy). The new store will 
be opened in March 2011. Ikea already has 18 stores and 6 300 employees in Italy. Also 
in  mid-September,  the  French  retail  group  Mestdagh  announced  its  intention  to  hire 
between  250  and  300  workers  before  1  October  in  Belgium,  in  order  to  run  the  16 
stores  that  the  group  bought  from  the  French  retailer  Carrefour.  In  Ireland,  the 
American fashion retailer, Forever 21, announced in early October that it is to open a 
new fashion outlet in  Dublin in November  2010, which will create 250 new  jobs.  This 
chain  has  over  500  shops  in  15  countries.  Finally,  in  the  UK,  in  early  August,  the  US 
cash and carry company Costco announced the creation of 130 jobs in Coventry, with 
the opening of a new warehouse. 

The future is likely to hold more restructuring activity in the retail sector, as private 
equity  firms  are  reported  to  be  engaged  in  renewed  takeover  activity  in  this  sector. 
Although  takeover  activity  has  dropped  sharply  over  the  past  year  —  there  were  only 
€ 8.7  billion  worth  of  retail  takeover  deals  in  Europe  last  year,  which  is  down  from 
€ 15.2  billion  in  2008  and  € 44.5  billion  in  2007,  according  to  data  from  Thomson 
Reuters  —  there  are  reports  that  many  retail  chains,  including  some  well-known  high 
street names, could become targets for takeovers in the months ahead. 

Source: ERM Quarterly 3, autumn 2010. 

1.5: EMPLOYMENT-MAINTAINING INITIATIVES DURING THE CRISIS 

In  addition  to  the  large-scale  cases  of  restructuring  involving  job  loss  or  creation,  a  key 
labour market development during the 2008-2009 economic crisis was the often innovative 
approaches to forestalling or avoiding job loss that may otherwise have occurred. In most 
cases,  these  involved  combinations  of  company  initiatives  and  social  partner  negotiation 
often  within  a  framework  of  public  policy  initiatives  —  notably  public  short-time  working 
schemes — that were rapidly adapted to the worsening economic situation. 

In  the  face  of  unprecedented  large  output  losses,  especially  in  major  goods-producing 
sectors,  employment  losses  have  been  in  many  cases  surprisingly  modest.  Even  the 
significant  decline  in  employment  in  automotive  manufacturing  noted  above  is  in  the 
context  of  declines  in  sales  and  production  which  were  many  factors  greater  than  the 
associated job loss. 

 
 
 
 
Restructuring in Europe  38 

At company level, the main instruments, in addition to early retirement, used by companies 
to adapt cost structures to an abrupt decline in demand while avoiding permanent job loss 
included: 

●  pay freezes (in some cases, pay cuts) or deferred bonuses/wage claims; and 

●  various forms of working time flexibility, such as: 

short-time working — with or without public incentives; 

running down of working time account surpluses; 

overtime reductions; 

compulsory unpaid or partially paid leave; 

temporary lay-offs; 

temporary plant closures; and 

career breaks. 

Box  1.5  below  serves  as  a  brief  illustration  of  some  of  the  measures  identified  or 
implemented to share the pain of adjustment while retaining jobs. They involve a range of 
initiatives, many of which re-frame the conventional labour contract from working for free 
(albeit very temporarily) to being paid for not working (albeit at a marginal rate). 

Box 1.5: Measures aimed at retaining jobs during restructuring 

Career break/sabbatical 

At  the  beginning  of  May  2009,  Spanish-headquartered  BBVA  bank  introduced  a  set  of 
cost-cutting  measures  which  also  aimed  to  help  employees  to  reconcile  family  and 
working life and allow them more flexibility. The measures were offered to its 30 000 
Spain-based employees on a voluntary basis and included: 

●  three  to  five  years  of  leave  to  pursue  personal  or  professional  projects,  with  a 
guaranteed  job  at  the  end  of  the  leave.  During  the  leave,  employees  receive  the 
equivalent  of  30 %  of  their  annual  pre-tax  compensation,  subject  to  an  annual 
minimum of € 12 000, plus € 3 600 in healthcare coverage. To qualify for the scheme, 
the employee must have worked at BBVA for at least eight years (BBVA, 2009); 

●  up to two years of special leave  to take care of children or relatives or to take up 
post-graduate  studies.  Employees  on  study  leave  are  paid  € 6 000  a  year.  To  be 
eligible, employees must have worked at the bank for at least three years. Family 
leave is unpaid and requires having worked at BBVA for at least one year; and 

 
 
 
 
 
 
Restructuring in Europe  39 

●  shorter working days: a five-hour day, five days a week or a four-day working week. 
During the short-time working period, an employee’s pay is reduced in proportion to 
the reduction in working hours.16  

Pay freezes and pay cuts 

In December 2009, Independent News and Media (INM), which owns several newspapers 
in  Ireland,  announced  pay  cuts  and  freezes  affecting  employees  working  on  its  two 
main  Irish  newspaper  titles  —  the  Irish  Independent  and  the  Sunday  Independent.  All 
directors and top executives would have their pay cut by 10 % and bonuses would not 
be paid for the 2008/2009 period. Employees at other levels were also affected by pay 
cuts  in  proportion  to  their  salaries.  The  cuts  varied  from  a  pay  freeze  for  those  on 
€ 40 000 or less per annum and a reduction of 2.5 % for those on between € 40 000 and 
€ 50 000.  Those  earning  between  € 50 000  and  € 100 000  took  a  5 %  pay  cut  (The  Irish 
Independent,  2008).  At  the  same  time,  INM  introduced  a  new  share-buying  scheme 
whereby  employees  were  given  the  option  to  buy  shares  —  at  the  share  price  on  the 
day of introduction of the scheme — worth 2.5 times the pay cut. 

Working for free 

In  June  2009,  British  Airways  chief  executive  Willie  Walsh  announced  that  he  would 
work  for  free  the  following  month,  forgoing  his  monthly  salary  of  £ 61 000.  He  was 
immediately  followed  by  the  airline’s  financial  officer.  All  employees  were  given  the 
option to volunteer (as the company was aware that not all staff members were in the 
financial  position  to  participate)  for  between  one  and  four  weeks’  unpaid  leave  or 
unpaid  work,  with  the  pay  loss  spread  over  three  or  six  months.  The  measure  was 
announced to the employees in the form of an email as well as by a letter of the chief 
executive  published  in  the  company  internal  magazine.  Employees  had  one  month  to 
apply for their participation, and the measures were to be carried out by March 2010. 

By  June  2009,  around  800  out  of  the  40 000  employees  had  volunteered  to  work  for 
free (mostly for one week) and a further 7 000 had agreed to unpaid leave, which will 
save the company up to £ 10 million.17 The participants came from all employee groups, 
with no group being particularly represented. 

Financial employee participation 

Works  councils  at  German  car  producers  such  as  Opel,  Volkswagen  and  Daimler  have 
started  a  discussion  about  the  role  of  financial  participation  in  times  of  economic 
crisis. 

16 Financial  Times,  BBVA  offers 
staff 
http://ftalphaville.ft.com/blog/2009/06/03/56539/bbva-offers-staff-five-years-leave/. 
17 British  Airways,  Thousands  Of  Staff  Opt  For  Pay  Cuts,  News  Release  25  June  2009b,  available  online  at 
https://www.britishairways.com/travel/bapress/public/en_gb. 

June  2009,  available  online  at 

five  years’ 

leave,  3 

 
 
 
                                                       
 
Restructuring in Europe  40 

In  the  past,  employees  of  Opel  have  accepted  wage  cuts  in  exchange  for  investment 
commitments  and  employment  guarantees.  In  the  context  of  the  crisis,  the  Opel 
employees were ready to waive wage claims worth about € 1.2 billion. In return, they 
asked  for  10 %  of  future  Opel  shares.  According  to  the  works  councils’  proposal,  the 
stock  corporation  would  hold  the  employees’  shares  in  trust,  while  the  chairs  of  the 
works councils of Opel’s German plants would serve as shareholders.18  

At Daimler, the works council was also considering the conversion of employee bonus 
payments, worth a total of € 280 million, into Daimler shares. Similarly, in the case of 
the  combined  Volkswagen-Porsche  group,  the  unions’  and  the  works  councils’  goal 
consists in enabling the more than 380 000-strong workforce to hold a significant share 
of  the  company.  The  works  council’s  model  of  financial  participation  is  based  on  the 
bundling  of  employee  shares  in  a  foundation,  cooperative  or  registered  association. 
According  to  this  model,  employees  would  receive  dividends  in  the  form  of  social 
projects.  Also  the  voting  stock  should  be  exercised  collectively  in  order  to  guarantee 
an effective influence on strategic decisions. 

1.6: TENTATIVELY EMERGING FROM RECESSION? 

At  the  time  of  writing,  it  would  seem  that  Europe  is  beginning  to  emerge  from  recession, 
albeit  tentatively.  The  latest  available  figures  from  Eurostat,  which  relate  to  the  third 
quarter of 2010, show that GDP in the EU27 increased by 2.1 % compared with figures for 
the  third  quarter  of  2009.  Compared  with  the  previous  quarter,  EU27  GDP  increased  by 
0.4 %.  However,  GDP  growth  in  many  individual  Member  States  is  below  the  EU  average, 
with  some  still  experiencing  negative  growth  in  the  third  quarter  of  2010,  compared  with 
the  second  quarter  of  the  year.  Further,  there  are  disparities  in  growth  rates  in  individual 
Member States, ranging from 5.3 % in Luxembourg and 4.5 % in Sweden on a year-on-year 
basis, to negative growth in some countries, such as -4.5 % in Greece and -2.3 % in Romania 
on  a  year-on-year  basis.  For  details,  see  figures  1.8  and  1.9  below.  Further,  there  remain 
concerns over the level of public debt in some countries and some concern over the stability 
of the euro. 

18 Dettmer,  M.,  German  employees  exchange  wage  cuts  for  equity.  A  share  of  future  profits,  spiegel  online, 
2009, available online at:  http://www.spiegel.de/international/business/0,1518,640304,00.html. 

 
 
 
 
                                                       
 
Figure 1.8: GDP growth in EU Member States, third quarter 2010. % change compared with third quarter 2009 

Restructuring in Europe  41 

2.5%

2.1%

1.5%

s
u
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1.8%

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5.3%

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1.0%

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Source: Eurostat. 

* Second quarter figures 

**Percentage change calculated from non-seasonally adjusted data 

 
 
 
 
 
 
 
Figure 1.9: GDP growth in EU Member States, third quarter 2010. % change compared with second quarter 2010 

Restructuring in Europe  42 

2.5%

2.0%

1.5%

1.0%

0.9%

0.5%

0.0%

-0.5%

-1.0%

-1.5%

Source: Eurostat. 

1.7%

1.1%

1.3%

0.5%

0.6%

0.3%

0.5%

0.4%

0.7%

0.8%

0.8%

0.2%

0.1%

0.1%

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Restructuring in Europe  43 

Unemployment  levels  in  the  EU27  countries  have  stabilised  over  2010.  Recent  internal 
flexibility arrangements — short-term contracts, part-time work, temporary lay-offs and job 
share  schemes  —  as  well  as  improvements  in  the  general  macroeconomic  climate  have 
helped to stabilise labour markets, according to the ERM Quarterly for the third quarter of 
2010. 

According  to  the  European  Restructuring  Monitor’s  most  recent  figures  at  the  time  of 
writing,  which  relate  to  the  third  quarter  of  2010,  the  number  of  restructuring  events 
recorded  is  falling  steadily,  indicating  that  the  worst  may  be  over,  in  terms  of  weathering 
the current crisis. The number of restructuring cases recorded in the second quarter of 2010 
was 224, of which 120 were cases of restructuring involving the announcement of job loss. 
The total number of announced job losses was around 128 000. This compares with a high 
point  recorded  by  the  ERM  in  the  first  quarter  of  2009,  in  which  over  700  cases  of 
restructuring concerning the announcement of job losses were recorded, involving around 
280 000 announced job losses. 

In terms of sectors, it would seem that the automotive manufacturing sector is beginning to 
recover, and job creation in the retail sector is outweighing job loss, due to the expansion 
plans  of  a  number  of  retail  chains.  However,  some  sectors  are  still  suffering  from  the 
downturn, notably the construction sector, which recorded a 1.7 % seasonally adjusted drop 
in  output  in  September  2010  in  the  EU27,  compared  with  figures  for  August  2010,  and  a 
3.6 %  drop  compared  with  September  2010.  Figures  for  the  eurozone  were  even  more 
pronounced, with a 2.1 % fall compared with August 2010 and an 8.6 % fall compared with 
September 2009. 

In the medium-term, therefore, it would seem that the European economy is beginning to 
stabilise  and  that  growth  is  reasserting  itself,  certainly  in  terms  of  export-led  growth  in 
countries such as Germany. The incidence of restructuring is therefore likely to fall further, 
although  some  countries,  including  Greece,  Portugal,  Italy  and  Spain,  may  continue  to 
experience some turbulence due to high levels of public debt and unbalanced budgets. The 
ERM Quarterly for the third quarter of 2010 notes that opinions differ on the timing of the 
budget consolidation in EU Member States and withdrawal of fiscal stimulus at this stage of 
recovery while the EU economy is still fragile. Critics point out that fiscal consolidation with 
In  this  context,  private 
prolonged  unemployment  will  weigh  on  nominal  wages. 
consumption  may  lose  momentum  with  negative  knock-on  consequences  for  domestic 
demand.  Further,  softening  global  demand  for  the  European  goods  in  the  second  half  of 
2010 could pose a risk for EU exports. 

Adopting  a  longer-term  perspective  and  looking  forward  to  the  coming  10  years,  the  EU’s 
2020  Strategy  sets  out  a  framework  for  economic  growth  and  job  creation  in  the  EU.  Its 
specific targets are as follows: 

●  75 %  of  the  population  aged  20-64  should  be  employed,  including  through  the  greater 
involvement of women, older workers and the better integration of migrants in the work 
force; 

 
 
 
 
 
 
 
 
Restructuring in Europe  44 

●  3 % of the EU’s GDP should be invested in R&D; 

●  The  ‘20/20/20’  climate/energy  targets  should  be  met  (including  an  increase  to  30 %  of 

emissions reduction if the conditions are right); 

●  The share of early school leavers should be under 10 % and at least 40 % of the younger 

generation should have a tertiary degree; and 

●  20 million less people should be at risk of poverty. 

The  2020  Strategy  aims  to  turn  the  EU  into  a  smart,  sustainable  and  inclusive  economy 
delivering  high  levels  of  employment,  productivity  and  social  cohesion.  Under  its  flagship 
initiative ‘An agenda for new skills and jobs’, the Commission intends to create conditions 
for modernising labour markets with a view to  raising employment levels. It states that in 
order to achieve this, it will work: 

●  to  define  and  implement  the  second  phase  of  the  flexicurity  agenda,  together  with 
European social partners, to identify ways to better manage economic transitions and to 
fight unemployment and raise activity rates; 

●  to adapt the legislative framework, in line with ‘smart’ regulation principles, to evolving 
work patterns (eg working time, posting of workers) and new risks for health and safety 
at work; 

●  to facilitate and promote intra-EU labour mobility and better match labour supply with 
demand  with  appropriate  financial  support  from  the  structural  funds,  notably  the 
European Social Fund (ESF), and to promote a forward-looking and comprehensive labour 
migration  policy  which  would  respond  in  a  flexible  way  to  the  priorities  and  needs  of 
labour markets; 

●  to  strengthen  the  capacity  of  social  partners  and  make  full  use  of  the  problem-solving 
potential of social dialogue at all levels (EU, national/regional, sectoral, company), and to 
promote  strengthened  cooperation  between  labour  market  institutions  including  the 
public employment services of the Member States; 

●  to  give  a  strong  impetus  to  the  strategic  framework  for  cooperation  in  education  and 
training (ET 2020) involving all stakeholders. This should notably result in the completion 
of  of  lifelong  learning  strategies  (in  cooperation  with  Member  States,  social  partners, 
experts)  including  through  flexible  learning  pathways  between  different  education  and 
training sectors and levels and by reinforcing the attractiveness of vocational education 
and training. Social partners at European level should be consulted in view of developing 
an initiative of their own in this area; and 

●  to  ensure  that  the  competences  required  to  engage  in  further  learning  and  the  labour 
market  are  acquired  and  recognised  throughout  general,  vocational,  higher  and  adult 
education,  and 
for 
education/training  and  work:  a  European  Skills,  Competences  and  Occupations 
framework (ESCO). 

language  and  operational 

to  develop  a  common 

tool 

 
 
 
 
The next section of this chapter examines the reactions of the EU labour market to the crisis 
and the types of reforms that are being put into place to ensure that it emerges from the 
crisis in a way that ensures its future competitiveness in the global economy. 

Restructuring in Europe  45 

 
 
 
Restructuring in Europe  46 

2: LABOUR MARKET REFORMS 

As already set out in the previous section of this chapter, in the second half of 2008, the EU 
economy entered a recession that continued for most of 2009, although in 2010 there were 
renewed  signs  of  growth.  The  impacts  of  this  recession  have  taken  a  severe  toll  on  the 
economic  well-being  of  many  European  citizens  over  the  past  two  years.  In  the  euro  area 
alone,  GDP  contracted  by  4 %  in  2009,  unemployment  surged,  and  public  debt  rose  to 
unprecedented  levels.  However,  the  latest  figures,  relating  to  the  third  quarter  of  2010, 
show that GDP has begun to rise again, by 1.9 % in the eurozone and by 2.2 % in the EU27, 
compared with the third quarter of 2009. 

European labour markets have reacted to the economic slowdown of 2008 and 2009 with a 
gradual but steady decline in employment that has yet to come to an end. Around 4 million 
jobs  were  lost  in  Europe  in  2009  and  the  rate  of  unemployment  reached  9.4 %  in  the  last 
quarter of the year, despite some moderate signals of economic recovery appearing in some 
countries.  The  latest  figures,  relating  to  November  2010,  show  that  unemployment  is  still 
climbing, with a eurozone rate of 10.1 %, compared with 9.9 % in November 2009, and an 
EU27 rate of 9.6 %, compared with 9.4 % in November 2009. 

Figure 1.10 below gives details of GDP and employment growth in the EU27 from 1996 to 
2009. 

Figure 1.10: GDP and employment growth 

EU27

(%)

6.00

4.00

2.00

0.00

-2.00

-4.00

-6.00

Source: Commission services. GDP growth is year-on-year growth. 

GDP grow th

Employment grow th

Grey font => Recession 

i d

During 2008 and 2009, the deterioration of the labour market in the US was accompanied 
by a drop in the participation rate (the fourth quarter of 2009 was some 2 % lower than the 
level  in  the  first  quarter  of  2008).  Conversely,  a  moderate  drop  in  employment  was 
accompanied  by  an  increase  in  participation  in  the  EU  and  the  euro  area.  This  should  be 
seen as a positive development for the prospects of the recovery, as a fall in participation 

 
 
 
 
 
 
Restructuring in Europe  47 

during the recession can also turn into a persistently low labour supply during the recovery. 
Unemployment at record high levels for a long period may in fact mean that those without 
jobs, especially those with a low attachment to the labour market, may give up searching 
because  of  their  relatively  low  employment  chances.  Skills  mismatch  and  unconditional 
welfare  policies  can  further  worsen  this  discouragement  to  participating  in  the  labour 
market, while activation policies and support to workers affected by economic change can 
encourage people to remain in the labour market and facilitate their transition to new jobs. 

The first signal of discouragement is a decrease in labour force participation, which usually 
means a falling unemployment rate in the short run. In the long run, a low participation rate 
hampers  the  functioning  of  the  labour  market,  through  shortages  of  labour  supply  and 
higher wage pressures, and can be a bottleneck for economic growth. Avoiding such effects 
in labour markets is of crucial importance in averting a lasting negative impact on potential 
output  after  a  crisis.  This  is  why  the  European  Economic  Recovery  Plan19 (EERP)  placed 
considerable importance on measures to prevent unnecessary labour shedding which would 
have entailed great losses in human capital and had a lasting negative impact on potential 
output. 

The EERP also called for priority to be given to those reforms which can support aggregate 
demand,  employment  and/or  household  income  during  the  crisis,  while  at  the  same  time 
improving adjustment capacity to enable a faster recovery when conditions improve. In line 
with this, in spring 2009 the European Commission issued a number of guiding principles for 
labour market and social policy action contingent to the crisis,20 including: 

●  keeping  people  in  viable  employment,  while  supporting  employability  and  easing 

transitions to new jobs; 

●  providing adequate income support and reinforcing activation; 

●  considering measures to boost both labour demand and labour supply; and 

●  investing  in  training  and  skills  upgrading,  and  enhancing  the  employment  services  to 

cope with increasing unemployment. 

By  contrast,  it  stated  that  measures  such  as  indiscriminate  tax-funded  support  for  jobs  in 
declining  sectors  or  regions,  which  could  delay  necessary  restructuring,  large  direct  job-
creation schemes in the public sector not sufficiently targeted at specific vulnerable groups 
and early retirement or other policies that push workers out of the labour market needed to 
be avoided. 

19  See  the  Commission  Communications:  ‘From  Financial  crisis  to  recovery:  A  European  framework  for 

action’, COM(2008) 706, and ‘A European Economic Recovery Plan’, COM(2008) 800. 

20 

 See:  March  2009  Commission  Communication  for  the  Spring  European  Council  ‘Driving  European 
recovery’, COM(2009) 114. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  48 

European  labour  markets  have  reacted  very  differently  to  the  crisis  in  terms  of  labour 
turnover. Many countries have recorded on average a low labour turnover. However, while 
in the Nordic countries, high turnover is associated with efficient labour market activation 
policies  and  low  hiring  and  firing  restrictions,  in  France  and  Spain  this  appears  to  be  a 
consequence of a segmented labour market. As a result, one can draw the conclusion that 
there is a faster labour market response to the first signs of recovery in those countries with 
more  flexible  labour  market  institutions,  as  they  enable  better  transitions  in  the  labour 
market.21  

Together with changes in the number of jobs, firms have also used changes in working hours 
as a tool to adjust labour input during the crisis. Labour hoarding is the normal response of 
firms that prefer to keep their experienced workers during the early stages of a recession, 
especially  if  high-skilled  workers  are  difficult  to  find  when  the  recovery  takes  hold.  By 
cutting hours, firms can keep their wage costs down and save jobs during difficult periods. In 
addition,  government-sponsored  short-time  schemes  have  also  been  widely  used  in  many 
EU Member States. These schemes have been reinforced in some countries and introduced 
for the first time in others (see also section 3 of this chapter, which focuses on short-time 
working).22 

Many  countries  responded  to  the  impact  of  the  severe  economic  crisis  that  hit  the  EU 
economy by extending the coverage or generosity of unemployment benefits, by reinforcing 
other social benefits, and/or by introducing generous short-time work schemes. Measures 
have  also  been  reinforced  to  support  activation  and  facilitate  transitions  to  new  jobs. 
Temporary labour market and income support measures amount to 0.4 % and 0.2 % of GDP 
in 2009 and 2010 respectively — and represent a large share of all temporary measures in 
2009 and 2010 respectively. Three main types of measures can be identified: 

●  measures  addressing  labour  demand,  consisting  of  public  subsidies  for  temporary 

working time reductions, wage subsidies and changes in labour taxation; 

●  measures  dealing  with  activation,  comprising  a  range  of  active  labour  market  policies; 

and 

21  For  an  extensive  analysis  on  labour  market  transitions during  the crisis,  see:  Arpaia, A.  and  N.  Curci,  ‘EU 
labour  market  behaviour  during  the  Great  Recession’,  European  Commission  (DG  ECFIN),  European 
Economy, Economic Paper No 405, June 2010. 

22  Detailed analysis on STW schemes during the crisis can be found in Arpaia, A., N. Curci, E. Meyermans, J. 
Peschner and F. Pierini, ‘Short-time working arrangements as response to cyclical fluctuations’, European 
Commission (DG ECFIN), European Economy, Occasional Paper No 64, June 2010. A joint paper, prepared in 
collaboration  by  Directorate-General  for  Economic  and  Financial  Affairs  and  Directorate-General  for 
Inclusion. 
Employment, 
http://ec.europa.eu/economy_finance/publications/occasional_paper/2010/pdf/ocp64_en.pdf. 

Affairs 

Social 

and 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  49 

●  measures  supporting  incomes  and  thereby  aggregate  demand,  such  as  changes  in  the 
generosity  of  unemployment  benefits  and  social  measures  to  support  households’ 
purchasing power. 

These  measures  have  played  a  role  in  shaping  the  impact  of  the  crisis  on  labour  market 
developments  in  the  EU,  where,  compared  to  the  US,  participation  rates  have  in  general 
held  up  well  and  unemployment  increases  have  been  more  muted  than  could  have  been 
expected. Even so, the crisis has clearly shown the underlying structural weaknesses of the 
European labour markets, which ultimately need to be tackled, irrespective of the prevailing 
cyclical  conditions.  Pre-existing  long-term  challenges  (such  as  ageing,  globalisation  and 
technological  change)  have  also  remained  unchanged,  if  not  intensified  by  the  crisis. 
Further,  the  crisis  has  added  two  new  dimensions  to  existing  challenges.  First,  with  the 
unemployment  rate  increasing  almost  everywhere,  the  burden  of  adjustment  has  been 
unequally  spread  across  various  socio-economic  groups.  Second,  public  finances  will  be 
extremely constrained in the coming years. Within this new environment, the focus has to 
be first and foremost on well-targeted policies (for example to activate those with low levels 
of  skills  or  who  are  unemployed  on  a  long-term  basis)  with  low  or  no  direct  budgetary 
impact  and  designed  in  such  a  way  as  to  avoid  deadweight  losses.  At  the  same  time, 
measures  that  have  adverse  effects  on  inter-sectoral  mobility,  such  as  short-time  working 
schemes,  should  be  discontinued  as  the  recovery  gains  strength  and  replaced  by  policies 
that  promote  job  reallocation,  thus  helping  to  smooth  the  impact  of  restructuring  on 
workers. As the deterioration in economic growth bottoms out and fiscal space diminishes, 
the  emphasis  needs  to  switch  from  measures  aimed  at  containing  labour  shedding  to 
measures aimed at returning to a sustained growth path. Careful design and sequencing of 
exit  strategies  are  also  important  in  order  to  avoid  the  risk  of  policy  mistakes  that  could 
induce  another  recession  and  to  ensure  that  the  withdrawal  of  short-term  support  is 
performed efficiently. 

The  ECOFIN  Council  of  16  March  2010  identified  a  number  of  principles  to  underpin  the 
coordinated  withdrawal  of  short-term  measures  in  labour  and  product  markets,23 which 
complement  existing  principles  on  fiscal  exit  strategies.  As  far  as  the  labour  market  is 
concerned: 

●  short-term measures need to be gradually withdrawn when the recovery is secured, by 
2011 at the latest, while a number of countries need to consolidate before then. If left in 
place  too  long,  these  measures  could  hinder  the  adjustment  process  within  and  across 
sectors by distorting price and cost signals and by introducing wrong incentives; 

●  a slight differentiation could be made between different labour market measures. There 
is a case for concentrating first on short-term schemes to reduce working time. Keeping 
the  ad  hoc  subsidising  of  working  time  reductions  in  place  for  a  long  period  after  a 

23  ECOFIN  Council  Conclusions  on  exit  strategies  for  crisis-related  measures  in  the  labour  and  product 

markets, of 16 March 2010. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  50 

recovery  in  economic  activity  takes  hold  could  lead  to  a  ‘freezing’  of  job  patterns  at  a 
time when reallocation is needed. On the other hand, short-term unemployment support 
could be maintained until a sustainable recovery is secured, but once this is attained they 
should  be  gradually  removed  as  they  could  carry  a  significant  economic  cost  in  the 
medium  term,  still  bearing  in  mind  that  in  some  countries  the  need  for  budgetary 
consolidation may lead to other conclusions, depending on the fiscal space available; and 

●  the withdrawal of short-term measures needs to be complemented with a credible long-
term  structural  reform  agenda  which  bolsters  potential  growth  and  employment, 
improves competitiveness and supports fiscal consolidation efforts. To minimise the risk 
of  skills  deterioration  and  the  length  of  resulting  unemployment  spells,  the  gradual 
phasing-out  of  temporary  labour  market  support  measures  should  be  accompanied, 
where necessary, by a strengthening of activation, training and other flexicurity policies 
to  facilitate  job  reallocation  and  workers’  re-skilling.  Increasing  the  flexibility  of  the 
labour market and its transitional security is of relevance in the face of the challenges of 
tackling  unemployment  created  by  the  recession,  especially  of  young  people,  in  the 
context  of  segmented  labour  markets,  and  to  ease  the  necessary  sectoral  reallocation 
and smooth its impact on the workers concerned. 

Although effective, the measures enacted in response to the crisis have been in many cases 
ad  hoc.  As  such,  they  are  more  mistake-prone  than  policies  adopted  during  relatively 
normal, ie non-crisis, times. Nevertheless, some crisis-related measures that have desirable 
characteristics  could  become  part  of  a  consistent  labour  market  policy  framework  to  deal 
with future aggregate demand shocks. For example, a number of Member States (such as 
Finland,  France,  Latvia,  Italy,  Portugal,  and  Slovenia)  have  taken  steps  to  improve  the 
coverage  of  unemployment  benefits,  some  have  increased  the  activation  of  displaced 
workers (such as the Czech Republic, Denmark, and the UK) and some have enhanced the 
effectiveness of public employment services in order to cope with the increased numbers of 
unemployed  people  (Germany,  Belgium,  Finland,  Hungary,  and  the  UK).  Countries  such  as 
the  Netherlands,  Hungary  and  Slovenia  have  introduced  short-time  working  schemes 
imposing  strict  conditionality  on  firms  to  deal  with  risks  of  deadweight  losses  or  to  avoid 
prolonging  the  moment  of  inevitable  closure  of  a  company.  While  expenditure  on  these 
measures  should  be  reversed  as  the  recovery  gains  momentum,  the 
institutional 
infrastructure  set  up  for  their  implementation  should  remain,  to  cope  with  future  cyclical 
fluctuations. 

Over a longer time horizon, the flexicurity agenda is an appropriate framework to highlight 
the importance of labour market reforms in moving towards a better adjustment to shocks. 
Reforms  enhancing  the  flexibility  and  security  of  the  labour  market  and  the  response  of 
wages  to  local  labour  market  conditions  and  productivity  developments  will  increase  the 
resilience of the EU economy to these shocks. Reforms that shift the focus from protection 
on  the  job  to  insurance  in  the  market  should  reconcile  workers’  demands  for  protection 
from unemployment and income risks with the need of firms to respond quickly to swings in 
consumer  preferences  and  to  the  challenges  and  instability  created  by  technological 
progress  and  globalisation. An  integrated  strategy  based  on  interventions  in  employment 

 
 
 
 
Restructuring in Europe  51 

protection,  lifelong  learning  and  activation  policies  may  contribute  to  improving  the 
adjustment capacity of labour markets and smoothing the employment and social impact of 
restructuring.  Increasing  participation,  improving  labour  market  matching  and  enhancing 
workers’  employability  through  better  skills  are  needed  to  minimise  the  social 
consequences of the crisis, to preserve European human capital and labour productivity in 
the long run, and, ultimately, to return to strong growth. 

As mentioned above, the Europe 2020 strategy24 has identified three broad priorities in this 
context: smart growth; sustainable growth; and inclusive growth, with two initiatives being 
particularly  relevant  for  the  labour  market:  an  agenda  for  new  skills  and  new  jobs;  and 
‘Youth on the Move’. 

The  different  policies  needed  to  achieve  these  priorities  will  need  to  be  sequenced 
intelligently  to  ensure  the  effectiveness  and  time-consistency  of  the  European  reform 
agenda.  As  stated  by  the  European  Council  of  16-17  June  2010,  the  Europe  2020  strategy 
responds to: 

‘the  challenge  of  reorienting  policies  away  from  crisis  management  towards  the 
introduction  of  medium-to 
longer-term  reforms  that  promote  growth  and 
employment and ensure the sustainability of public finances. It constitutes a coherent 
framework  for  the  Union  to  mobilise  all  of  its  resources  and  policies  and  for  the 
Member States to take coordinated action.’ 

With  the  Europe  2020  strategy,  the  EU  is  indeed  acting  to  strengthen  its  instruments  to 
deliver a successful structural reform agenda in the coming years. The strategy will involve a 
stronger policy framework at EU level, organised around two strands, addressing on the one 
side  key  macro-structural  challenges  at  country  level,  including  macroeconomic  and  fiscal 
stability issues, and on the other side a number  of thematic policy areas, including labour 
market  policies.  The  first  strand  will  be  implemented  in  the  framework  of  a  reinforced 
Stability  and  Growth  Pact  and  through  the  Broad  Economic  Policy  Guidelines.  The  second 
will  allow  a  much  more  in-depth  horizontal  assessment  of  key  structural  reforms  through 
the National Reform Programmes and Integrated Guidelines. 

More  specifically,  macro-structural  country  surveillance  will  have  a  wide  scope  and  be 
carried  out  through  the  use  of  existing  Treaty-based  coordination  instruments  —  the 
Integrated Employment and Broad Economic Policy Guidelines, set up in the framework of 
the  Lisbon  Strategy  (and  through  its  successor  strategy,  Europe  2020),  and  the  fiscal 
surveillance in the framework of the Economic and Monetary Union — that will be aligned 
in  time  but  kept  distinct.  Policy  coordination  on  fiscal  policy  would  be  conducted  through 
the  Stability  and  Growth  Pact,  whereas  coordination  on  all  other  (non-fiscal)  macro-
structural  policies  would  be  carried  out  in  accordance  with  the  Integrated  Guidelines  and 

24  Commission  Communication  ‘Europe  2020  —  A  strategy  for  smart,  sustainable  and  inclusive  growth’, 

COM(2010) 2020. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  52 

internal/external 

thus  cover 
imbalances,  macro-financial  stability,  competitiveness, 
employment and growth weaknesses. The thematic surveillance would focus on structural 
reforms  of  a  microeconomic  nature  needed  to  achieve  the  goals  of  the  Europe  2020 
strategy.  The  policies  pursued  under  thematic  surveillance  in  the  context  of  the  seven 
flagship  initiatives  and  three  EU-level  instruments  outlined  in  the  Commission’s  3  March 
2010  Communication  on  its  Europe  2020  strategy  (see  above)  aim  to  galvanise  actions  at 
national and EU level to achieve measurable progress towards the five headline targets (on 
employment,  research  and  development  and  innovation,  energy  and  climate  change, 
education,  and  social  inclusion),  which  are  a  representation  of  the  main  dimensions  and 
objectives of the strategy. 

For an overview of the Europe 2020 strategy, see table 1.2 below. 

Table 1.2: Europe 2020 architecture 

Overall 
institutional 
structure 

Integrated Guidelines establishing scope and policy priorities, including 
headline targets for the EU27 to reach by 2020 and to be translated into 
national targets 

Delivery 

Country reporting (Treaty-based 
surveillance) 

Thematic approach (flagship 
initiatives) 

Aim: help Member States define and 
implement  exit  strategies  to  restore 
macroeconomic  stability, 
identify 
national bottlenecks and return their 
economies  to  sustainable  growth 
and public finances. 

Approach:  enhanced  assessment  by 
the ECOFIN of main macroeconomic 
challenges  facing  Member  States 
taking  account  of  spillovers  across 
Member States and policy areas. 

through 

States 
and 

reporting  by 

the 
Instruments: 
their 
Member 
stability 
convergence 
programmes,  followed  by  separate 
but  synchronised  recommendations 
on  fiscal  policy  in  SCP  Opinions  and 
on  macro  imbalances  and  growth 
bottlenecks in the BEPGs (art. 121.2) 

Aim: deliver headline targets agreed 
at  EU 
level  combining  concrete 
actions at EU and national levels. 

Approach:  strategic  role  of  the 
sectoral  Council 
for 
implementing flagship initiatives and 
monitoring  and  reviewing  progress 
towards the agreed targets. 

formations 

reform 

reporting  by 

Instruments: 
the 
Member  States  through  streamlined 
national 
programmes 
including 
information  on  growth 
bottlenecks  and  progress  towards 
the targets, followed by policy advice 
at  EU  level  based  on  transparent 
evaluation  frameworks  issued  in  the 
form  of  recommendations  under 
BEPGs 
the 
Employment Guidelines (art. 148). 

121.2) 

(art. 

and 

Source: Commission Communication Europe 2020 — A strategy for smart, sustainable and inclusive 
growth, 3 March 2010. 

 
 
 
 
The next section of this chapter looks in more detail at a key labour market response to the 
recent crisis: short-time working. 

Restructuring in Europe  53 

 
 
 
Restructuring in Europe  54 

3: SUPPORTING LABOUR MARKETS DURING THE CRISIS: SHORT-TIME WORKING 

Since the onset of the global downturn, policy makers across the EU have been concerned 
to mitigate its adverse effects on the labour markets. This is because previous crises have 
shown that sharp output declines usually take two to three quarters to be transmitted into 
noticeable  rises  in  unemployment,  reductions  in  demand  for  new  workers,  and  overall 
contractions in employment. 

However,  Member  States  face  significantly  different  situations  and  constraints.  Some, 
including  Ireland,  Spain,  Latvia  and  Lithuania,  have  been  particularly  hard  hit  by  the  crisis 
in 
reductions 
and  have  experienced  substantial 
unemployment, while in others, including Belgium and Germany, the loss of jobs has been 
relatively limited. Nevertheless, an assessment of the crisis-related labour market policies of 
all Member States is of common interest, given their commitment to the common EU goal 
of creating more and better jobs for all. 

in  employment  and 

increases 

This section focuses on short-time working, which has been a tool used by many Member 
States  as  a  means  of  maintaining  employment  during  the  downturn  caused  by  the  crisis, 
based  on  a  recent  joint  paper  published  by  the  Directorate-General  for  Economic  and 
Financial Affairs and the Directorate-General for Employment, Social Affairs and Inclusion.25  

3.1: SHORT-TIME WORKING ARRANGEMENTS 

There has been a significant increase in the use of short-time working around Europe. Most 
strikingly, the number of recipients in Germany increased from 39 000 in May 2008 to more 
than  1 500 000  in  May  2009,  while  in  Belgium  the  number  of  recipients  increased  from 
around  87 000  in  July  2008  to  a  peak  of  313 000  in  March  2009,  after  which  it  started  to 
decline gradually. In Austria, the total number of recipients rose from zero in August 2008 to 
more than 36 000 in June 2009, falling thereafter. A more modest increase can be observed 
in the other Member States. 

Scope and limitations of short-time working 

A  short-time  work  arrangement  (STWA)  can  be  seen  as  a  temporary  reduction  in  working 
time intended to maintain an existing employer/employee relationship. It can involve either 
a  partial  reduction  in  the  normal  working  week  for  a  limited  period  of  time  (a  partial 
suspension  of  the  employment  contract)  or  a  temporary  lay-off  (zero  hours  a  week),  in 
other  words,  a  full  suspension  of  the  employment  contract.  In  both  cases,  however,  the 
employment contract remains in force, and is not broken. See box 1.6 for a summary of the 
main institutional characteristics of STWAs. 

25  Short-time  working  arrangements  as  a  response to cyclical  fluctuations.  Occasional paper 64,  June  2010. 

http://ec.europa.eu/economy_finance/publications/occasional_paper/2010/pdf/ocp64_en.pdf. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  55 

The objective of STWAs in times of economic crisis is twofold. First, it enables companies to 
reduce  labour  costs  in  the  short  term  and  to  quickly  adjust  labour  inputs  to  cyclical 
fluctuations in labour demand by reducing working time for the existing workforce, rather 
than resorting to lay-offs and related costly and lengthy dismissal procedures, especially in 
highly regulated labour markets. Moreover, it enables companies to retain skilled workers, 
thus avoiding the costs of recruiting and training new workers when demand recovers, and 
enhances employee morale. 

Second,  to  the  extent  that  they  prevent  lay-offs,  such  measures  spread  the  adjustment 
burden over all of the workers rather than concentrating the impact on a few, possibly more 
vulnerable workers, who might otherwise risk becoming inactive in the long term. 

However, two main kinds of risks are associated with STWA schemes. First, they could lead 
to deadweight costs as they may encourage employers to enrol in such schemes, even if no 
lay-offs  are  planned.  This  may  lead  to  excessive  take-up  and  become  an  undue  financial 
burden  on  national  unemployment  insurance  schemes,  which  are  the  usual  financing 
instrument in the EU. In the long run, taxes or contribution rates would have to be increased 
—  inducing  higher  wage  costs  and  loss  of  competitiveness.  This  is  in  contrast  to  the  USA, 
where the financing of STWAs is generally privately arranged and insurance-based. 

Second, STWAs could prove ineffective in saving jobs permanently. The jobs kept alive for 
some  time  could  eventually  prove  to  be  unviable  and  ultimately  end  in  lay-offs.  In  the 
meantime,  more  viable  jobs  held  by  non-beneficiaries  of  such  schemes  —  who  would 
typically  be  new  entrants  to  the  labour  market  or  SMEs  —  might  be  exposed  to  effective 
‘displacement’. 

Box 1.6: Institutional characteristics of short-time working 

There  is  considerable  variety  in  the  institutional  arrangements  concerning  short-time 
working programmes across Europe. 

In  France,  Belgium  and  Luxembourg,  public  short-time  working  and  temporary  lay-off 
schemes are usually known as ‘partial’ or ‘temporary unemployment’, sometimes with 
reference  to  the  specific  application  or  circumstances  (eg  economic,  seasonal,  and 
technical).  These  schemes  should  be  distinguished  from  voluntary  working  time 
reduction  on  an  individual  or  collective  basis  (through  time  accounts,  time  credit, 
sabbatical leave, etc.26) or from ‘part-time unemployment’, which indicates a situation 
where  (partially)  unemployed  jobseekers  would  prefer  to  work  longer  hours  or  full 

26 

In Germany, short-time working accounted for only 25 % of the total reduction in average hours from 2008 
to 2009, while reductions in the volume of paid over-time work and debiting working-time accounts were 
both  responsible  for  a  20 %  reduction  in  hours  (other  leave  covered  by  sick  leave  etc.):  Bach,  H.-U.  and 
Spitznagel, E., 2009, ‘Kurzarbeit: Betriebe zahlen mit — und haben was davon‘, Institut für Arbeitsmarkt- 
und Berufsforschung, IAB Kurzbericht 17/2009: 
http://doku.iab.de/kurzber/2009/kb1709.pdf. 

 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  56 

time,  but  can  only  find  part-time  work  and  receive  various  forms  of  direct  financial 
support for the incurred loss of earnings. 

In  Denmark,  short-time  working  is  designated  as  ‘work  sharing’.  This  indicates  a 
reduction in working time intended to spread a reduced volume of work over the same 
number  of  workers  to  avoid  lay-offs.  As  such,  it  is  to  be  distinguished  from  ‘job 
sharing’,  which  refers  to  a  voluntary  arrangement  whereby  two  persons  take  joint 
responsibility for one full-time job. 

In  the  Netherlands,  short-time  working  support  was  temporarily  offered  up  until  the 
end  of  March  2009  in  order  to  respond  to  the economic  crisis.  Since  then,  companies 
experiencing  temporary  financial  difficulties  may  apply  for  partial  unemployment  for 
their workforce. 

Austria and Germany simply refer to such schemes as ‘short-time working’, while Italy 
stresses the aspect of income support in its short-time working scheme, which is called 
the  Wage  Supplementation  Fund  (CIG 27 ).  The  Italian  scheme  is  among  the  larger 
examples of STWAs in the EU and was created with the specific purpose of absorbing 
sectoral crisis and favouring technological/commercial restructuring. 

In countries such as Estonia, companies and employees may agree on STWA, however, 
without public financial support. 

In most of the other Member States (Estonia, Greece, Cyprus, Malta and Sweden) which 
do  not  have  government-subsidised  STWAs  to  respond  to  drops  in  labour  demand 
caused by an economic downturn, insured workers can get support through the regular 
unemployment scheme, or receive training grants for people working reduced hours. 

Main changes in response to the crisis 

Table 1.3 summarises the main changes in the STWAs across the Member States since the 
onset of the economic crisis. 

In  the  Member  States  where  STWAs  already  existed  before  the  crisis,  the  practical 
arrangements concerning these schemes were temporarily modified with the onset of the 
crisis (ie in Belgium, Denmark, Germany, Ireland, Spain, France, Italy, Luxembourg, Austria, 
Portugal and Finland). These modifications are primarily aimed at lowering the participation 
costs  for  employers  and/or  increasing  the  level  of  financial  support  by:  extending  the 
eligibility  duration;  opening  the  arrangement  to  more  participants;  and  simplifying  the 
enrolment procedure. 

In  nine  Member  States  (Bulgaria,  Czech  Republic,  Latvia,  Lithuania,  Hungary,  Netherlands, 
Poland,  Slovenia  and  Slovakia)  new  public  support  schemes  for  STWAs  have  been 

27  Cassa integrazione guadagni. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  57 

temporarily  introduced  since  the  onset  of  the  downturn.  A  feature  of  most  of  these 
arrangements  is  that  public  support  for  short-time  working  is  combined  with  training.  It 
remains  optional  in  a  majority  of  Member  States  but  in  the  Czech  Republic,  Hungary, 
Netherlands, Portugal and Slovenia, people in short-time working are required to undertake 
training. In Belgium, Germany, Lithuania, Hungary, Malta, Austria, Poland, Portugal, Slovenia 
and Finland, training for those in short-time work is government-subsidised. 

 
 
 
 
Restructuring in Europe  58 

Table 1.3: Recent changes and new STWAs in the EU Member States 

Country 

Already existing scheme 

Wage supplement 
through employer 

Support 
by UI plus 
activation 

New STC 
scheme 

(Changes) 
Eligibility/ 
Coverage 

(Changes) 
Duration 

(Changes) 
Benefits to 
Employees 

(New)  
Link to 
Training 

Cuts in 
employer’s 
SSC 

Temporariness 
of Changes 

More 
flexible 
procedures/ 
WTO 

Austria 
Belgium 
Bulgaria 
Czech Republic
Denmark 
Germany 
Spain 
Finland 
France 
Hungary 

Ireland 
Italy 
Lithuania 
Latvia 

Luxembourg
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
United Kingdom

X 
X 

X 

X 

X 

X 

X 
X 

X
X

X 

X
X 

X
X
X

X
X

X

X
X

X

X

X
X

X

X

X

X

X
X

X

X
X

X

X
X
X

X
X
X 

X

X
X

X

incentives
incentives

compulsory

incentives

incentives/ 
compulsory
incentives
incentives
incentives
incentives 

incentives
incentives
compulsory
incentives
incentives

compulsory

No changes

X
X

X
X

X
X 

X

X

X
X
X

X
X
X

End 2010 
End 2010 
End 2009 
2010 
30/04/2011 
End 2010 
End 2009 
2011 
Permanent/ 
Mid 2010 

2010 
End 2010 
No end date 
End 2010 (to 
be confirmed) 

X

End 2010 

01/04/2010 
End 2011 
End 2010 
End 2010 
31/03/2010  
End 2010 

Note: STC: short-time compensation. For new STW schemes we look at: introduction of benefits for employees, training incentives and other extra 
incentives for employers. SSC: social security contribution. UI: unemployment insurance. WTO: working time organisation 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  59 

3.2: PHASING OUT CRISIS-RELATED LABOUR MARKET MEASURES 

Although  the  Member  States  differ  in  terms  of  the  constraints  and  initial  conditions  they 
face,  and  although  labour  market  policies  are  only  part  of  a  more  comprehensive  policy 
package  that  bolsters  potential  growth  and  employment,  improves  competitiveness  and 
supports  fiscal  consolidation,  some  general  principles  can  be  formulated  regarding  the 
phasing out of crisis-related labour market measures and the phasing in of structural labour 
market measures. 

First, a distinction can be made between labour market measures that have to be phased 
out gradually once the recovery is secured, such as STWAs, and measures that, due to their 
positive impact on the structural working of the labour market, should be maintained and 
reinforced.  This  latter  category  includes  cuts  in  social  security  contributions,  increases  in 
training, activation and other flexicurity policies that facilitate job reallocation and workers’ 
re-skilling. There are also measures such as the Italian CIGS scheme, which is a permanent 
measure  based  on  insurance  contributions  and  which,  prior  to  the  crisis,  had  a  credit 
balance,  which  is  now  about  to  be  exhausted,  if  not  already  in  the  negative.  The 
entitlements  of  this  kind  of  scheme,  as  it  is  insurance-based,  have  a  legal  force  and 
therefore a phasing out of the scheme would be problematic. On the other hand, when (if) 
growth  returns,  the  CIGS  will  return  to  credit  and  therefore  to  abolish  it  would  not  make 
sense. The same is true for other insurance-based schemes in the EU. 

Second,  the  risks  associated  with  the  timing  of  the  phasing  out  of  the  labour  market 
measures  should  not  be  under-estimated.  Too  early  a  withdrawal  may  undermine 
confidence  and  thus  depress  aggregate  demand,  with  consequent  knock-on  effects  on 
companies in terms of orders or demands for services. Too late a withdrawal on the other 
hand  may  delay  the  necessary  structural  adjustments,  lead  to  entrenched  high  levels  of 
unemployment (labour market hysteresis), and contribute a significant additional burden to 
the public finances. 

Third,  the  phasing  out  of  measures  should  reflect  the  situation  and  constraints  of  the 
Member  States,  with  those  that  have  advanced  furthest  in  their  recovery  able  to  move 
faster than those where the recovery is still to come and where unemployment is expected 
to continue to increase — provided, of course, the fiscal position allows it. 

Fourth,  as  the  fiscal  constraints  intensified  during  the  course  of  the  crisis,  it  became  ever 
more 
labour  market  measures  by 
strengthening their targeting and timing. 

improve  the  cost-effectiveness  of 

important  to 

Fifth, due consideration also needs to be given to the social dimension of the exit strategy, 
including  the  central  issue  of  gender  equality  as  part  of  the  foundation  to  strengthen 
growth, employment and social cohesion in the long term. In any case, particular attention 
needs to be paid to differences in employment patterns between women and men: sector 
and occupational segregation, the greater presence of women in part-time jobs and in the 
public  sector,  and  the  lower  numbers  of  women  in  self-employment.  In  this  respect,  it 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  60 

should be noted that, due to their high concentration in the public sector, women could be 
disproportionately  affected  by  job  losses  when  budgetary  spending  is  cut  as  part  of  fiscal 
consolidation. 

For  further  consideration  of  this  topic,  see  Chapter  2  of  the  European  Commission’s 
Employment in Europe 2010 Report.28 

3.3: THE WAY FORWARD 

Following the onset of the downturn, policy makers in the Member States of the European 
Union took a variety of decisions to introduce new labour market policies, or to modify or 
strengthen  existing  ones  in  order  to  maintain  employment,  create  jobs,  upgrade  skills, 
increase access to employment, and support households. 

A major concern of the EU and its Member States has been to develop policy responses in 
ways that do not compromise long-term employment and growth potential. As such, labour 
market  policies  have  been  designed  to  be  implemented  in  a  temporary,  timely,  targeted, 
fair and coordinated way, and in line with flexicurity principles as well as with the country-
specific recommendations for growth and jobs identified under the Lisbon Strategy. 

Most measures are expected to expire by the end of 2010 or later if the recovery is slower 
than  projected  by  labour  market  experts.  However,  some  measures,  such  as  hiring 
subsidies,  job-search  assistance  and  training,  are  expected  to  continue  during  the  early 
phase of the recovery, which may well carry on until the end of 2011, as their effectiveness 
reaches its full potential in this phase. Nevertheless, it should also be noted that maintaining 
the  arrangements  for  too  long  poses  the  risk  that  necessary  restructuring  is  delayed, 
enterprises  become  overstaffed,  workers  lose  the  incentive  to  upgrade  their  skills, 
deadweight losses accumulate, and funds are diverted from other useful purposes such as 
training. 

When assessing the timeliness of the crisis-related measures, a distinction should be made 
between, on the one hand, measures that are more effective at the beginning of the crisis 
than at the end-phase, such as STWAs, and, on the other hand, measures that have greatest 
impact  if  they  are  implemented  when  the  economy  starts  to  recover,  such  as  wage 
subsidies.  Nevertheless,  some  measures  maintain  their  effectiveness  irrespective  of  the 
stage of the recovery, such as job-search assistance and training. 

By targeting people at the margins of the labour market, the effectiveness and fairness of 
the crisis-related labour market measures are often strengthened. For instance, in order to 
minimise the fiscal cost and maximise their fairness, hiring subsidies have been targeted at 
specific groups at the margin of the labour market. 

28  Employment in Europe 2010: http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=593. 

 
 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  61 

Nevertheless,  although  there  are  strong  indications  that  all  these  crisis-related  labour 
market  measures  had  a  positive  impact  on  the  variability  of  employment  during  the 
economic crisis, it is too early to determine whether employment saved by these measures 
will endure once the crisis recedes. 

Given  the  socio-economic  complexity  of  the  issue,  it  should  be  clear  that  EU-wide  mutual 
learning,  the  exchange  of  good  practice  and  a  constructive  dialogue  with  social  partners 
should form the main driving forces for strengthening the effectiveness and equitability of 
the recovery measures. 

Finally,  the  phasing  out  of  crisis-related  measures  should  take  into  consideration  the 
concrete  situation  and  constraints  of  the  Member  States  and  be  complemented  by  the 
phasing  in  of  structural  measures  that  are  aimed  at  reducing  structural  unemployment, 
increasing  labour  market  participation,  developing  a  skilled  workforce,  promoting  social 
inclusion and combating poverty. 

The main EU influence on the labour market is employment policy. However, there are links 
to many other strands of EU policy, not least industrial policy, which influence the actions of 
companies and the framework within which they operate. The next section of this chapter 
therefore examines the role of industrial policy in restructuring, with a particular emphasis 
on the crisis. 

 
 
 
 
 
 
 
 
Restructuring in Europe  62 

4: THE ROLE OF INDUSTRIAL POLICY IN RESTRUCTURING DURING A PERIOD OF CRISIS 

Restructuring tends to be usually associated with job shedding and is consequently more at 
the  centre  of  employment,  rather  than  industrial,  policy.  From  an  industrial  policy 
perspective,  restructuring  is  largely  perceived  as  a  structural  adjustment  to  change  and  a 
transformation of industries in response to adjustment pressures, which in turn are linked 
to efforts to keep pace with a global, dynamic economy. Consequently, restructuring is seen 
as an inevitable process in a constantly changing world. The role for industrial policy in this 
regard centres on increasing the capacity of enterprises and industry to adapt to structural 
changes,  rather  than  attempting  to  mitigate  the  negative  effects  of  restructuring  on 
employment. 

However, the recent economic crisis has, at least temporarily, changed the outlook for many 
industrial  sectors.  As  a  consequence, 
in  the  current  macroeconomic  context,  the 
restructuring of companies in reaction to the crisis could also, to some extent, be addressed 
by industrial policy actions. Of particular importance is the need to ensure that short-term 
adjustment will lead to long-term improvements in competitiveness and that the European-
wide nature of recession is properly assessed in order to implement action relating to this 
and  future  downturns.  That  is  why  the  European  Commission’s  Directorate  for  Enterprise 
and  Industry  (DG  ENTR)  has  tried  to  identify  the  links  existing  between  the  present 
economic  crisis  and  the  need  for  longer-term  adjustment.  For  information  concerning  the 
most  recent  development  in  this  area,  in  the  form  of  the  October  2010  Communication 
from the Commission on industrial and employment policy, see chapter 6. 

Having  assessed  restructuring  needs,  industrial  policy  actions  should  then  go  beyond 
stimulus  plans  and  focus  on  a  forward-looking  targeted  policy  framework.  Although 
forecasting is not the role of policy makers, there is a real need to understand underlying 
trends if policy makers are to aid the recovery process. On balance, the emphasis should be 
on  facilitating  and  encouraging  recovery  rather  than  driving  industrial  competitiveness  in 
key areas or sectors. 

As  well  as  having  contributed  to  the  creation  of  the  European  Economic  Recovery  Plan 
(EERP), DG ENTR undertakes various actions in the framework of industrial policy to better 
manage restructuring. It attempts to closely follow developments in sectors in order to be in 
a position to propose a strategy that goes beyond temporary measures. A monthly analysis 
of  changes  in  output,  new  orders,  trade  flows,  employment  and  confidence  levels  in 
manufacturing  sectors  provides  a  good  basis  for  formulation  of  specific  actions. 29 In 
addition, more thorough analysis has been carried out in the form of a stocktaking exercise 
that investigated the strengths and weaknesses of different individual sectors. This analysis 

29  This 

is 

published 

ENTR/B2  — 
http://ec.europa.eu/enterprise/policies/industrial-competitiveness/documents/index_en.htm#monthly_n
otes. 

competitiveness 

Industrial 

unit 

by 

policy: 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  63 

has  served  the  Commission  as  a  reference  for  its  new  strategy  on  industrial  policy  that 
intends to focus on facilitation of industrial change as one of its main objectives. 

4.1: CHALLENGES AND OPPORTUNITIES DRIVING FUTURE RESTRUCTURING 

in 

innovation,  a  considerable  re-orientation  of 

Over  the  past  10-15  years,  European  industry  has  changed  radically,  both  in  the  new 
Member States and the EU15 Member States. European industry has seen high productivity 
its  workforce  and  capital 
and  strong 
investment, the development of new products for new and emerging markets, and a major 
improvement 
its  environmental  performance.  The  process  of  globalisation  has 
increasingly  resulted  in  tightly  interlinked  international  value  chains.  As  a  result  of  the 
massive fall in costs for transport (eg the use of containers) and communication (ICT) and of 
transaction  costs  and  risks  traditionally  associated  with  doing  business  across  borders, 
previously  integrated  industrial  operations  have  been  split  into  highly  complex  smaller 
manufacturing  and  service  packages  and  have  to  some  extent  been  geographically 
redistributed across continents. 

This trend towards a more intensive intra-sectoral (as opposed to an inter-sectoral) division 
of labour, both at the national and at the international level, has led to a reorganisation and 
fragmentation of product and services value chains. The role of the final producer has been 
shifted,  and  their  performance  increasingly  depends  on  the  performance  of  upstream 
businesses, including those located outside the EU. This applies not only to manufacturing 
and assembly operations, but also to service functions that were previously carried out in-
house. The traditional view that treats industrial sectors as homogeneous, independent and 
national thus no longer seems to be an adequate basis for policy development. Excellence at 
all  levels  has  become  much  more  important  and  increasingly  suppliers  and  innovation 
partners  from  different  sectors  and  regions  and  those  with  complementary  competences 
are needed. Clusters of mutually reinforcing industries and international cooperation have 
thus been increasingly attracting the attention of policy makers. Moreover, the process of 
globalisation  has  increased  the  exposure  of  numerous  subsectors  to  exchange-rate 
volatility, especially in those industries that mainly compete on costs as opposed to quality 
or service. 

This process is also reflected in foreign direct investment and the high level of merger and 
acquisition activities, transforming the scope and geographical distribution of many of the 
major industries, such as chemicals, pharmaceuticals, and steel. These restructuring efforts 
have triggered economies of scale and the exit of smaller players, while at the same time 
global  markets  have  become  wider  and  more  competitive.  For  an  overview  of  sectors  in 
terms of exposure to adjustment pressure, globalisation and technology intensity, see figure 
1.11. 

 
 
 
 
 
 
 
Restructuring in Europe  64 

Figure 1.11: Typology of sectors (Nace 2 classification) in terms of exposure to adjustment 
pressure, globalisation (export share of production) and technology intensity 

Nace codes — Sectors 

Group 1 (Globalisation: low — Technology intensity: low) 

15 

16 

20 

21 

22 

23 

26 

28 

Food products and beverages 

Tobacco products 

Wood and products of wood  

Pulp, paper and paper products 

Publishing, printing and reproduction of recorded media 

Coke, refined petroleum products and nuclear fuel 

Other non-metallic mineral products 

Metal products, except machinery and equipment 

Group 2 (Globalisation: medium — Technology intensity: low) 

25 

36 

37 

Rubber and plastic products 

Furniture; manufacturing n.e.c. 

Recycling 

Group 3 (Globalisation: high — Technology intensity: low) 

17 

18 

19 

27 

Textiles 

Wearing apparel; dressing and dyeing of fur 

Tanning and dressing of leather 

Basic metals 

Group 4 (Globalisation: high — Technology intensity: high) 

24 

29 

30 

31 

Chemicals and chemical products 

Machinery and equipment n.e.c. 

Office machinery and computers 

Electrical machinery and apparatus n.e.c. 

32  Radio, television and communication equipment and apparatus 

33  Medical, precision and optical instruments, watches and clocks 

34 

35 

Motor vehicles, trailers and semi-trailers 

Other transport equipment 

 
 
 
 
 
Restructuring in Europe  65 

Group 4

Group 1 

Group 2

Group 3 

Source: ECORYS, Measuring and Benchmarking Structural Adjustment Performance of EU Industry, 
May 2009. 

The transformation of companies has proceeded at a differential pace in different sectors, 
and it is true to say that not all sectors operate in conditions that oblige them to embark on 
substantial restructuring. A study ordered by DG ENTR30 grouped sectors according to their 
exposure  to  key  adjustment  pressures  such  as  technology  intensity  and  globalisation. 
According to this study, companies in sectors mostly exposed to these adjustment pressures 
are  most  likely  to  experience  restructuring,  and  were  also  among  those  most  negatively 
affected  by  the  crisis.  However,  many  companies  in  these  sectors  have  already  adjusted 
their  business  models  to  their  changing  business  environment  and  are  therefore  more 
capable of adapting to their environment. 

Nonetheless,  the  adjustment  pressures  faced  by  European  industry  in  recent  years  have 
been  strengthened  significantly  by  the  recent  financial  and  economic  crisis.  The  impact  of 
the  crisis  on  industry  has  been  severe,  with  manufacturing  output  falling  by  around  20 % 
and recovering as yet only slowly, by about 9 % in July 2010 since the trough in April 2009. 
Further, employment in manufacturing has fallen sharply, by some 12 % since the onset of 
the  crisis.  However,  in  some  industries,  labour  market  adjustment  has  worked  somewhat 

30  ECORYS,  Measuring  and Benchmarking  the  Structural  Adjustment  Performance  of EU industry,  May 2009 

http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5328. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  66 

differently  compared  with  earlier  recessions,  namely  through  increased  use  of  short-term 
working and labour hoarding. This emphasises the increased importance of a highly skilled 
labour  force  to  production  and  the  conviction  that  the  severity  of  the  recession  might  be 
relatively short-lived. 

Successfully  overcoming  the  economic  crisis  will  require  substantial  adjustments  in  a 
number of sectors. First, if the recovery is slow to materialise, the implications of short-term 
working and labour hoarding in industry will have to be dealt with. In particular, actions will 
be needed to facilitate re-skilling and re-employment. 

Second, sectors that were already undertaking restructuring or had been in decline for some 
time have been faced with an acceleration of the negative changes and stronger adjustment 
pressures as a result of the crisis. Further restructuring of these sectors will be necessary to 
re-establish  competitiveness  and  profitability  and  re-orientate  them  towards  new  and 
growing market opportunities. 

Third, the recession exposed a serious overcapacity problem and a mismatch of product mix 
—  particularly  in  the  automobile  industry  —  that  will  have  to  be  dealt  with  in  the  near 
future.  Other  investment  and  consumer  durable  goods  sectors  have  also  been  badly 
affected by the recession, although the degree of over-capacity in these industries appears 
to be less severe. 

More  widely,  there  are  some  overarching  challenges  that  most  of  the  EU’s  manufacturing 
sectors will have to face in the near future. These include: 

●  exiting the crisis/tackling access to finance; 

●  facing  globalisation: 

increasing  competition  from  Brazil,  Russia,  India  and  China 
(commonly known as the BRICs), market access for trade and investment outside of the 
EU, access to raw materials; 

●  basing  growth  on  research  and  innovation,  which  includes  in  particular  deployment  of 

key enabling technologies and acquiring a workforce with relevant skills; 

●  increasing energy and resource efficiency and transition to low-carbon economy; and 

●  responding  to  emerging  societal  challenges,  such  as  demographic  change,  security  and 

health. 

The impact of these challenges on companies will depend on the sector and even more on 
the  situation  of  individual  companies  and  their  business  environment.  What  is  important, 
however, is that all the actions taken by companies to restructure will place them in a better 
position to face those challenges. 

This is also an area where industrial policy can play a crucial role. Although it is clear that it 
cannot  and  should  not  focus  on  individual  companies,  it  still  can  enhance  and  alleviate 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  67 

restructuring  costs  by  providing  the  right  framework  and  support  mechanisms  for 
companies and sectors. 

The  European  Economic  and  Social  Committee’s  Consultative  Commission  on  Industrial 
Change (CCMI) has carried out a significant amount of work in analysing industrial change. 
Box 1.7 below contains two CCMI opinions, on civil aviation and shipbuilding. 

Box 1.7: CCMI opinions on civil aviation and shipbuilding 

Opinion on the European aviation relief programme31 

This CCMI opinion was adopted on 17 December 2009 and outlines the position of the 
European aviation industry in the context of the economic crisis. 

It  states  that  the  crisis  has  had  a  severe  impact  on  the  European  aviation  industry, 
resulting in a significant fall in operating results of the network carries, despite cuts on 
the  supply  side.  Aviation  companies  have  been  trying  to  react  by  means  such  as 
relocation of operations outside Europe, although it notes that this may have long-term 
negative consequences for high-qualified jobs  in the EU, which in turn may ‘seriously 
worsen’ the competitiveness of the industry in the EU. 

In terms of the structure of the sector, it notes that the fleets in service still have a 
relatively high average age, which has an impact on airlines’ results, and therefore a 
structured dismantling sector therefore needs to be set up, which should be a genuine 
European sector, established under the auspices of public authorities. 

The  opinion  also  states  that  the  European  Investment  Bank  should  revert  to  its  pre-
2007  policy,  under  which  European  carriers  were  able  to  benefit  from  credits;  it 
believes  that  this  should  be  rapid  and  specifically  targeted  at  the  financing  of  new 
aircraft, rather than financing a fleet expansion. 

The  opinion  states  that  it  would  also  be  appropriate  to  provide  for  mechanisms  to 
cover financial risks, such as those arising from fluctuating exchange rates. This could 
also  take  the  form  of  loan  guarantees  based  on  refundable  advances  or  European 
Investment Bank (EIB) loans. 

Given the innovative and strategic importance of the aeronautics industry for Europe’s 
industrial and technological base, strong support for research and development (which 
has been jeopardised by the crisis) could be obtained through sustained efforts by the 
EU, from the implementation phase of the Commission’s 7th Framework Programme for 
Research  and  Development  and  throughout  the  new  framework  programme  for 
Research and Innovation. the Horizon 2020. 

31  CCMI 

Opinion 

on 

the 

European 

aviation 

relief 

programme: 

http://eescopinions.eesc.europa.eu/EESCopinionDocument.aspx?identifier=ces\ccmi\ccmi071\ces1944-
2009_ac.doc&language=EN. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  68 

The European shipbuilding industry: dealing with the current crisis32 

This opinion was adopted on 29 April 2010 and focuses on the situation of the European 
shipbuilding industry in the context of the current economic crisis. 

It  states  that  the  EU  shipbuilding  industry  is  in  severe  crisis,  resulting  from  a  lack  of 
new orders, significant financing problems, overcapacity and irreversible job losses. It 
is therefore necessary to develop a common European strategy and to coordinate any 
initiatives taken by EU Member States. The main points of focus are as follows: 

●  stimulating demand; 

●  financing (including a  prolongation beyond 2011 of measures under  the Framework 

on State Aid to Shipbuilding); 

●  ensuring employment measures (including support at the time of shipyard closures); 

and 

●  countering the absence of a level playing field. 

In the absence of an international agreement at the OECD, however, the EU must take 
direct  and  decisive  action  to  protect  the  European  shipbuilding  sector  from  unfair 
competition. 

Member States and the EU must address the problem of the long-term financing of the 
shipbuilding sector. A European financing instrument for shipbuilding should therefore 
be set up with the EIB. 

The Committee recommends that during the crisis the social partners make special use 
of the opportunities for social dialogue with a view to drawing up joint strategies for 
the future. Social dialogue is a platform for joint ideas and solutions to tackle current 
and future challenges for the shipbuilding sector. 

4.2: IMPLICATIONS FOR INDUSTRIAL POLICY MEASURES 

European industrial policy does not favour sectoral interventions that may directly influence 
the  restructuring  actions  of  companies.  Rather,  it  tries  to  set  the  appropriate  framework 
and incentives for companies to manage the transition on their own. 

Furthermore, the crisis has highlighted an additional aspect of the restructuring process that 
will  require  more  attention  on  the  part  of  the  Commission  and  coordination  with  the 
Member States. Usually, discussions on restructuring and support for companies from the 

32  CCMI  opinion  on 

the  European 

shipbuilding 

industry:  dealing  with 

the 

current 

crisis: 

http://eescopinions.eesc.europa.eu/EESCopinionDocument.aspx?identifier=ces\ccmi\ccmi069\ces644-
2010_ac.doc&language=EN. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  69 

public  sector  are  set  in  the  regional  or  sectoral  contexts  where  the  company  in  question 
operates. Notwithstanding the relevance of this, it seems that an additional angle of analysis 
is  necessary.  With  growing  cross-border  interdependencies  and  increasing  complexity  of 
value chains, restructuring of companies might  have serious repercussions  on  suppliers  or 
clients in various parts of Europe. This calls for a more transnational perspective, looking at 
various  actors  in  the  value  chain,  both  in  terms  of  national  recovery  plans  and  specific 
restructuring plans for companies. The case of the motor manufacturer Opel, for example, 
where various countries were bargaining over which production facilities should be closed, 
shows clearly that restructuring plans of multinational companies need to be analysed in an 
international context.33 

4.3: SECTOR-SPECIFIC INDUSTRIAL POLICIES FOR RESTRUCTURING 

In addition to integrated horizontal policy, DG ENTR is also active at sectoral level. Various 
sectoral initiatives have been launched as a response to adjustment pressures, again more 
in  order  to  foster  future  growth  rather  than  to  deal  with  short-term  restructuring.  The 
section  below  highlights  two  examples  of  policy  responses  to  adjustment  pressures.  Both 
sectors concerned have been amongst those most negatively affected by the crisis. 

4.3.1: STEEL INDUSTRY 

During  the  1980s  and  early  1990s,  the  steel  sector  in  the  EU  underwent  a  period  of 
extensive restructuring which was characterised by a reduction of capacity, accompanied by 
the elimination of state aid, and followed by privatisation and consolidation. Due to these 
restructuring  efforts,  the  EU  steel  sector  is  today  seen  as  a  dynamic,  innovative  and 
customer-oriented industry. 

Continuous  research  and  development,  coupled  with  capacity  to  innovate,  are  crucial  to 
maintaining competitiveness in relation to companies from non-EU countries. EU companies 
in the steel sector exploit the technological advantage at the top of the product line, such 
as,  for  example,  special  steel  for  the  automotive  industry,  and  have  established  a  strong 
relationship with clients, including in the area of product development. 

However, demand for steel depends on the development of demand for durable goods and 
construction  and  the  sector  is  therefore  very  vulnerable  to  economic  downturns.  The  EU 
steel  sector  is  also  open  to  international  competition  and  strongly  affected  by  the  cyclical 
development  of  global  demand  for  steel.  The  sector  is  dependent  on  imported  raw 
materials and exposed to high volatility of raw material prices. 

The  ability  of  steel  producers  to  sustain  periods  of  low  demand  and  prices  is  limited.  The 
cost  structure  of  the  steel  sector  is  characterised  by  high  fixed  and  capital  costs  and 

33 

restructuring 
‘General 
http://www.eurofound.europa.eu/eiro/2010/02/articles/eu1002029i.htm. 

Europe-wide 

announces 

Motors 

plans’, 

May 

2010 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  70 

covering  these  costs  requires  high  capacity  utilisation.  Reducing  output  is  a  short-term 
option only, therefore, and requires availability of capital reserves. In a global perspective, 
world  steel  overcapacity  poses  a  permanent  risk  of  disruptions  on  the  market  and 
depressed prices in periods of declining demand. 

Impacts of the crisis and current situation 

In 2009, the steel sector was hit by the crisis in industries that use steel, and in particular by 
the strong decline in demand from the construction and automotive sectors. The production 
of  crude  steel  in  the  EU27  fell  by  29.9 %  in  2009  compared  with  2008  figures.  The  crisis 
therefore  affected  all  the  largest  steel-producing  countries  in  the  EU.  Many  European 
companies reduced the number of days of production, or mothballed capacity, in particular 
during the first half of 2009. 

The  steel  producers  dealt  with  the  crisis  by  cutting  production  on  a  massive  scale  and 
making temporary lay-offs. This meant that they avoided significant permanent job losses, 
as  had  been  the  case  during  past  downturns.  The  European  federation  of  iron  and  steel 
industries,  EUROFER,  estimates  that  the  ad  hoc  temporary  crisis  measures  (such  as 
temporary lay-offs and short-time working) and redundancies affected approximately 40 % 
of  the  total  steel  workforce,  as  at  the  end  of  June  2009.  However,  by  December  2009, 
EUROFER  estimated  that  the  percentage  affected  had  dropped  to  17 %  of  the  total  steel 
workforce. 

The sector started to recover in mid-2009 as the overall economic conditions improved. The 
recovery in steel production continued during the first half of 2010 — key drivers have been 
the  recovery  in  international  trade  and  the  rebuilding  of  inventories  that  were  depleted 
during  2009.  Most  producers  have  now  restarted  mothballed  capacities,  and  in  Europe 
capacity  utilisation  of  blast  furnaces  has  risen  from  60 %  (at  the  end  of  2009)  to  80 %. 
However,  while  EU  production  has  been  improving,  mainly  through  restocking  and 
increasing exports, there is no evidence of improvement in terms of real demand. 

Effects of measures implemented in response to the crisis 

Over the past two years, the demand for metal products has been influenced by temporary 
measures adopted by Member States, such as the introduction of car scrappage schemes or 
measures  facilitating  access  to  credit  that  were  adopted  under  the  temporary  framework 
for state aid, issued by the European Commission in January 2009.34 In  one  case  only,  the 
Commission authorised a state aid measure under the temporary framework: this was for a 
Latvian steel manufacturer, JSC Liepājas Metalurgs, in order to finance modernisation. 

34 

Temporary Community framework for State aid measures to support access to finance in the current 
financial and economic crisis (2009/C16/01): 

 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:016:0001:0009:EN:PDF. 

 
 
 
 
 
 
 
 
 
 
 
                                                       
 
 
 
Restructuring in Europe  71 

The  steel  industry  has  welcomed  the  new  public-private  partnerships  for  research  which 
have  been  launched  in  the  framework  of  the  European  Economic  Recovery  Plan  in  the 
manufacturing,  construction  and  automotive  sectors.  Through  the  development  of  new 
materials,  steel  plays  an  important  role  in  reducing  the  carbon  footprint  of  buildings  and 
cars over their life cycle. The steel industry aspires to participate in projects funded by this 
scheme  and  to  this  end,  the  European  steel  technology  platform  (ESTEP)  has  established 
links  with  other  technology  platforms  in  sectors  such  as  construction  and  the  automotive 
industry. The PPP Factories of the future35 is also seen by the steel industry as an expedient 
instrument to incentivise process innovations. 

As for the immediate future and amid current fears that existing surplus supply will reduce 
prices, another period of idling blast furnaces in order to reduce capacity may occur in the 
short term. From a longer perspective, adaptation in the EU steel sector will be a continuous 
process in order to face tough competition from non-EU countries, volatility in energy and 
raw  material  prices  and  increasing  environmental  requirements  set  by  EU  regulations. 
Opportunities  can  be  seen  in  terms  of  the  development  of  products  for  growing  markets, 
such as the renewable energy sector, and meeting the increasing demand for special (high 
strength) steel, particularly in the automotive sector. 

4.3.2: AUTOMOTIVE SECTOR 

The European automotive industry has visible and persistent structural difficulties, further 
aggravated  by  the  economic  downturn  and  current  slow  recovery.  In  recent  years,  the 
industry  has  shown  all  the  characteristics  of  very  intense  competition  with  tight  profit 
margins,  shortening  product  cycles,  an  increasing  need  for  innovation  and  for  aggressive 
sales  strategies  in  a  constant  battle  for  market  share.  Competition  has  further  intensified 
because  of  industry  globalisation  and  new  entrants  to  European  automotive  markets.  On 
the  other  hand,  new  global  markets  have  opened  and  with  them  new  business 
opportunities. 

The industry’s reaction to increased competition and new market opportunities has been, 
among others, to add significant new production capacity — particularly by expansion into 
the new EU Member States (as well as investments around the EU’s periphery). However, 
the  building  of  new  capacity  has  often  delayed  structural  change  and  left  the  automotive 
industry  with  a  serious  overcapacity  problem.  It  is  estimated  that  average  capacity 
utilisation in Europe before the crisis was 80-85 % and this has now dropped even further 
due to the economic crisis. 

On  a  more  positive  note,  the  automotive  industry  in  the  EU  has  also  sought  to  boost  its 
competitiveness  by  fine-tuning  its  production  to  changing  consumer  preferences  and 
societal needs. In respect of the latter, the EU has proved a powerful driver of anticipation 

35  Factories 

future 
http://ec.europa.eu/research/industrial_technologies/factories-of-the-future_en.html. 

public/private 

partnership 

the 

of 

initiative: 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  72 

and  change  by  establishing  ambitious  emission  and  safety  standards.  Despite  very  tight 
reserves, the high cost of innovation and against the backdrop of intense competition, the 
industry has proved a responsible partner in answering the societal needs for less emission 
and  more  safety.  At  the  same  time,  it  has  established  its  role  as  a  global  leader  in 
environmental  and  safety  technology.  The  illustration  of  this  trend  is  that  in  2009,  the 
demand for passenger cars emitting less than 120g of CO2 is up by almost 60 % compared 
with 2008, and sales  of  those  vehicles  account for 25 % of the market. It can be expected 
that this trend will orientate the industry in the future. 

Impact of the crisis and current situation 

The  economic  and  financial  crisis  affected  the  automotive  industry  severely  —  its  effects 
began  to  be  felt  from  August  2008  in  the  form  of  plummeting  sales  and  interruptions  in 
production. Falling demand and production levels have led to reduced employment across 
the  automotive  value  chain  as  companies  seek  to  cut  costs.  Hundreds  of  thousands  of 
employees have been affected, and in particular workers on temporary contracts (see the 
section  above  on  the  automotive  industry).  The  crisis  has  also  highlighted  the  economic 
importance  of  the  sector,  on  which  12  million  people  depend  for  their  employment  and 
many regions for their economic well-being. The Commission was prompt in reacting to the 
crisis by putting into place a package of measures grouped under the so-called Green Cars 
Initiative.36 

In  2010,  the  situation  of  the  automotive  industry  has  improved  in  terms  of  sales  and 
production. There is, however, still the case for very cautious optimism in terms of forecasts 
for the next years. While the industry appears to have weathered the worst of the crisis, it 
has not yet completely dealt with overcapacity and structural change. 

Effects of the measures implemented in response to the crisis 

Changes in the automotive sector will need to be partly driven by public policy and this is 
why the European Commission has devised a new, comprehensive strategy37 supporting the 
development  and  market  uptake  of  clean  and  energy-efficient  vehicles.  This  strategy,  by 
providing  a  favourable  legislative  framework,  stimulating  research,  market  uptake  and 
infrastructure  development,  aims  to  further  boost  the  competitiveness  of  the  European 
automotive  industry  in  green  technologies  and  thus  stimulate  creation  of  new  jobs, 
including in associated industries and the supply  chain. Importantly, this new strategy will 
support  restructuring  by  providing  clear  strategic  vision  that  will  be  supported  by  the 
European policies. 

36  Green Cars Initiative: http://ec.europa.eu/research/transport/info/green_cars_initiative_en.html. 

37  A 

European 

strategy 

on 

clean 

and 

energy 

efficient 

vehicles, 

COM(2010) 

0186: 

http://www.ipex.eu/ipex/cms/home/Documents/doc_COM20100186FIN. 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  73 

The  strategy  comprises  over  40  concrete  actions  and  among  them  an  important  place  is 
taken by anticipation and management of restructuring as well as anticipation of the skills 
and  qualifications  needed  to  design  and  produce  innovative  vehicles.  This  objective 
translates into two concrete actions: 

●  establishment of a European Sectoral Skills Council, aiming at creating a network of 

Member States’ national observatories; and 

●  targeting the use of the European Social Fund, starting in 2011, to encourage retraining 

and upskilling of automotive workers. 

In  October  2010,  the  CARS  21  (Competitive  Automotive  Regulatory  System  for  the  21st 
century)  High  Level  Group  was  relaunched  by  the  Commission.  One  of  its  tasks  is  to 
‘contribute  to  ensuring  a  smooth  and  balanced  economic  and  social  transition,  through  a 
pro-active  anticipation  and  management  of  restructuring  processes,  skills  needs  and  the 
related qualification needs’. In its interim report, the HLG identifies some policy highlights 
on workers’ employability in times of restructuring (see box).   

●  Reinforcing the competitiveness of the European industry constitutes the only way to preserve 
and  develop  employment  in  the  EU  in  the  long  term.  The  joint  efforts  to  be  deployed  should 
always aim at preserving future competitiveness rather than trying to defend existing jobs. 

●  Anticipation  of  change  and  restructuring  is  vital,  it  should  be  holistic  and  respect  all  factors 
influencing  competitiveness  and  long-term  perspective  of  companies.  It  should  be  integrated 
effectively  in  companies’  long-term  strategies,  with  due  attention  paid  to  human  resources’ 
skills and availability. 

●  Increased  skills  and  competence  levels  contribute  to  the  creation  of  an  adaptable  and  mobile 
workforce,  enhancing  the  employability  of  workers  in  the  sector  and  facilitating  employment 
transitions.  Members  States,  regions,  companies  and  employees  share  the  competence  and 
responsibility for increasing skills and competence levels. 

●  Some  companies,  when  appropriate  in  cooperation  with  relevant  stakeholders,  develop 
mechanisms  for  forward  planning  of  employment  and  skill  needs.  That  requires  a  proper 
identification of skills  needs and effective cooperation between the public sector, industry and 
educational establishments in ensuring that the training being offered is in line with the needs of 
companies and the innovation process. 

●  As during the crisis, social dialogue should continue to constitute a crucial tool for dealing with 
employment, skills and, in general, adaptation issues. Social dialogue demonstrated, throughout 
the crisis, that it encouraged the adaptation of companies to difficult situations. These included 
development of innovative instruments (such as short-time work, and variation of employment 
conditions  in  accordance  with  production  needs  and  market  demand,  etc.),  as  well  as  by  more 
fundamental restructuring. 

●  At  company  level,  this  means  that  necessary  restructuring  cannot  be  resisted  but  in  order  to 
minimise  its  social  impact,  good  practices  in  this  field  should  be  disseminated  and  promoted 

 
 
 
 
 
 
Restructuring in Europe  74 

while  paying  attention  to  the  specifics  of  individual  national  industrial  relations  system  and  of 
economic and social contexts. 

4.4: THE WAY FORWARD 

The  current  crisis  has  not  changed  the  approach  of  industrial  policy  to  restructuring.  This 
policy  does  not  aim  to  intervene  in  specific  restructuring  cases,  but  rather  reshape  the 
framework  conditions  in  order  to  allow  companies  to  regain  their  competitiveness  after 
necessary structural adjustments. Nonetheless, industrial policy has also begun to be more 
active  in  supporting  the  transition  of  industries  by  setting  up  public-private  partnerships, 
fostering innovation and coordinating Member States’ policies. In addition, in its strategies 
on restructuring, industrial policy is also trying to better incorporate initiatives from other 
policies,  as  it  is  clear  that  only  a  holistic  approach  will  lead  to  sustainable  growth  in  the 
future.  The  latest  Communication  from  the  Commission  on  industrial  and  employment 
policy is set out in chapter 6. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  75 

5: ACCESS TO FINANCE IN THE CRISIS 

Cohesion policy38 and the EU rural development policy recognise the difficulties of SMEs in 
gaining access to finance, especially in the case of innovative companies in the early stages 
of growth or expansion. In the 2007-2013 programming period, under the Cohesion policy, 
at  least  € 27  billion  is  targeted  directly  at  SMEs  and  an  additional  amount  of  around  € 28 
billion is planned for support to productive investment not related to business size, of which 
a large proportion should also benefit micro, small and medium-sized enterprises. The Rural 
development  policy  further  invests  more  than  € 9  billion  in  rural  non-agricultural  SMEs 
(including via the Leader approach), and more than € 20 billion are targeted as productive 
support  towards  agricultural,  forestry  and  agri-food  enterprises,  which  are  predominantly 
family-based,  micro-  or  small  businesses.  In  additional  to  the  traditional  support  through 
grants, Structural Funds and the Rural Development Fund can also provide other forms of 
financing to SMEs, such as equity investments, loans, guarantees or a combination of these. 

instruments  have  acquired  a  new  emphasis 

Financial  engineering 
in  the  current 
programming  period,  namely  through  specific  provisions  made  in  the  regulations  to 
promote  the  use  of  these  instruments  and  a  stronger  association  of  the  international 
financial  institutions  (IFIs),  in  particular  the  European  Investment  Bank  (EIB)  and  the 
European Investment Fund (EIF), in the development and implementation of some products 
(for  example,  the  Joint  European  Resources  for  Micro  to  Medium  Enterprises  fund 
(JEREMIE), which is a joint initiative developed by the Commission together with the EIF/EIB 
for  the  2007-2013  Structural  Funds  programming  period,  with  the  objective  of  improving 
access  to  finance  for  SMEs  and  new  business  creation  through  financial  engineering 
instruments). 

The JEREMIE initiative has been showing good progress and has currently been developed in 
15 Member States either at national or regional level, or both. Total funds legally committed 
under 29 JEREMIE holding fund agreements exceed € 3.1 billion. The EIF directly manages 11 
mandates  for  some  € 1.1  billion  and  many  Member  States  and  regions  are  implementing 
JEREMIE with other financial institutions, national or regional, acting as holding funds (two-
thirds  of  legally  committed  funds).  There  are  also  financial  engineering  instruments  for 
SMEs implemented without holding funds in other regions. 

Additional financial engineering support to businesses in rural areas as well as to agricultural 
and  agri-food  enterprises  are  given  under  the  European  Agricultural  Fund  for  Rural 
Development (EAFRD). In total 23 rural development programmes by 8 Member States have 
foreseen  such  possibilities  (Latvia,  Lithuania,  Italy,  Romania,  Germany,  Belgium,  Corse 
(France),  Greece).  The  EAFRD  funding  for  financial  engineering  actions  has  seen  a  steady 

38   The Cohesion Policy is one of the main instruments supporting investments in growth and jobs. "The 
Cohesion Policy: Responding to the economic crisis", is a review of the implementation of cohesion policy 
measures adopted in support of the European Economic Recovery Plan SEC(2010) 1291 final. 

 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  76 

growth  in  the  last  two  years  with  total  EAFRD  funds  committed  for  the  period  2007-2013 
reaching  already  € 573  million.  Additional  public  co-funding  will  bring  the  overall 
expenditure for financial engineering under rural development to more than € 650 million. 
There  are  also  several  regional  financial  engineering  initiatives  (mostly  in  Italy)  without 
EAFRD support to have been provided. 

Microfinance  is  an  important  means  of  stimulating  self-employment  and  the  creation  of 
micro enterprises and is increasingly an option for the unemployed to earn a living. In the 
current context of reduced credit supply, the new European Progress Microfinance Facility, 
established  by  the  European  Commission,  aims  to  ease  access  to  finance  for  people  who 
want  to  start  up  or  further  develop  their  own  business  but  have  difficulties  in  accessing 
banking loans. 

An initial budget of € 100 million is expected to leverage to a total amount of € 500 million in 
micro-credit.  This  will  be  realised  in  cooperation  with  the  European  Investment  Bank 
(EIB) Group  and  is  expected  to  result  in  around  45 000  loans  over  a  period  of  up  to  eight 
years. 

Financial engineering instruments are used primarily to deliver non-grant financial support 
for SMEs. There are sectors where investments can be expected to yield a revenue stream 
and  are  therefore  amenable  to  repayable  support;  involvement  of  financial  sector  also 
brings additional co-financing to the system. 

Typical areas of support include: 

●  creation of new businesses or strengthening of existing businesses; 

●  access to investment and working capital by enterprises, (particularly SMEs) to 

modernise and diversify their activities, develop new products, and secure and expand 
market access; 

●  business-oriented research and development, technology transfer, innovation and 

entrepreneurship; 

●  technological modernisation of productive structures; and 

●  productive investments which create and safeguard sustainable jobs. 

Discussions  with  Member  States  and  other  stakeholders  show  that  there  is  widespread 
support  for  the  continuation  and  possible  expansion  of  the  use  of  financial  engineering 
instruments in current and future programming periods. Future discussion will address the 
possibilities  of  redirecting  a  decisive  amount  of  support  to  the  private  sector,  and 
particularly towards SME development, and to non-grant forms of assistance. 

Increasing advances to ERDF ESF and EAFRD programmes 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  77 

Additional advance payments provided an immediate cash injection of € 6.25 billion in 2009, 
with a view to increasing pre-financing and accelerating investments for the benefit of final 
beneficiaries, all carried out within the financial envelope agreed for each Member State for 
the 2007-2013 period. This amendment to Regulation (EC) No 1083/2006 had brought the 
total of advance payments to € 11.25 billion in 2009. All advance payments were paid to the 
Member States by June 2009. 

Similar  increase  of  advance  payments  has  been  carried  out  by  the  EAFRD,  where  advance 
rate payments for investments have been raised from the initial 20 % to 50 % following an 
amendment  to  Regulation  (EC)  No  1698/2005.  Additional  higher  EAFRD  co-financing  rates 
for the period of the economic crisis have further eased the burden on national and regional 
budgets. 

By doing this, the EU has allowed more money to be spent rapidly on priority projects and 
Member  States  have  acknowledged  the  facilitating  role  of  additional  advances  in  the 
context of their liquidity difficulties. 

Almost  all  Member  States,  with  the  exception  of  Austria,  Denmark  and  Sweden,  indicate 
how the advances were applied, often involving changes in national policy and procedures. 
However, the use of advances varied between countries. Accelerated spending through the 
EU budget provided support to Member States and regions that were feeling the strain of 
severely  constrained  public  finances  (in  Latvia,  for  example)  and  enabled  more  rapid 
implementation of structural funds programmes. 

Most countries used these additional resources for projects to support the public sector (ie 
local authorities) and non-governmental organisations (NGOs). Advances were also used to 
support  SMEs,  both  through  guarantees  and  under  state  aid  schemes.  Further,  some 
Member  States  (such  as  Poland  and  Estonia)  adapted  their  schemes  to  increase  the  pace 
and volume of advances to both public and private beneficiaries or to reach out to specific 
groups  at  risk.  In  other  cases,  advances  were  used  to  address  specific  objectives  such  as 
promoting competitive funding schemes for urban regeneration projects in qualifying towns 
(eg Gateways and Hubs in the UK). 

It is clear that this measure has been received favourably by Member States, particularly in 
terms  of  its  contribution  towards  the  achievement  of  financial  targets  for  2009.  Some 
Member States have emphasised the positive impacts associated with the easing of liquidity 
and supporting investment. 

Simplifying the system for advances 

In  order  to  support  enterprises,  and  particularly  SMEs,  the  conditions  governing  the 
payment of advances within the framework of EU state aid rules were made more flexible 
by allowing state aid advances to reach 100 % of total aid (until the end of 2010), instead of 
35 %, provided the other conditions laid down in Article 78(2) of the General Regulation are 
met. 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  78 

A  total  of  10  Member  States  (Cyprus,  Germany,  Estonia,  Greece,  Italy,  Latvia,  Poland, 
Portugal,  Romania  and  Slovenia)  indicated  that  they  had  used  this  simplification.  Some 
Member  States  (eg  Greece)  had  decided  to  increase  the  threshold  from  the  35 %  to  50 %, 
rather than the full 100 %. 

In addition, the Commission put into place a temporary framework under the state aid rules 
for  Member  States  to  tackle  the  effects  of  the  credit  squeeze  on  the  real  economy  until 
2010 (see below). 

Temporary framework for state aid rules 

In  addition  to  the  above-mentioned  legislative  changes,  on  17  December  2008  under  EC 
Treaty State aid rules, the Commission adopted a temporary framework providing Member 
States with additional means to tackle the effects of the credit crunch on the real economy. 
The detailed provisions of the temporary framework are discussed in more detail in Chapter 
3, section 1.1.2. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  79 

CHAPTER 2: DEVELOPING COMPETENCES 

Skills  and  competence  development 
is  central  to  the  successful  anticipation  and 
management of restructuring and to the future development of the EU’s economy and its 
workforce.  If  the  EU  is  to  remain  competitive  on  the  world  stage,  it  is  vital  that  the 
workforce keeps pace with the skills and competences that will be needed in a globalised 
and changing world. 

During  the  economic  downturn,  promoting  mobility  within  the  EU  single  market  can 
contribute  to  tackling  mismatches  between  skills  and  labour  market  needs.  Each  Member 
State  is  free  to  make  access  to  a  particular  profession  legally  conditional  upon  the 
possession  of  a  specific  professional  qualification.  Across  the  27  Member  States,  the 
Professional  Qualifications  Directive 
  applies  to  about  800  categories  of  regulated 
professions.  The  regulation  of  access  to  a  profession  can  be  a  major  obstacle  for  the  free 
movement of workers. The active working population in many Member States is shrinking, 
but the demand for a highly qualified labour force remains a key source of future growth. 
From  a  market  standpoint  it  is  essential  that  qualifications  of  mobile  EU  professionals  are 
recognised in a fast, simple and reliable way if we are to meet this surge in demand. Dealing 
with  labour  supply  shortages  will  require  a  well-functioning  system  for  recognising 
professional  qualifications.  On  19  December  2011  the  European  Commission  adopted  a 
proposal  to  modernise  the  Professional  Qualifications  Directive  in  order  to  adapt  it  to  an 
evolving  labour  market.  For  example,  the  legislative  proposal  introduces  an  obligation  for 
Member  States  to  list  and  describe  the  professions  they  regulate  and  explain  why  the 
regulation is necessary. In addition, the Commission will launch a mutual evaluation of the 
national legislations regulating the professions. 

Central  to  competence  development  is  the  concept  of  lifelong  learning,  which  focuses  on 
encouraging workers to develop their skills and competences throughout their working life. 
This  will  also  ensure  that  they  retain  high  levels  of  employability,  making  them  more 
resilient to future waves of restructuring, both within their specific sector and more broadly 
across the whole economy and maybe even across national borders. Employees therefore 
need to possess a set of skills that are easily transferable, which will equip companies with a 
more flexible, adaptable and mobile workforce, while at the same time facilitating worker 
mobility occupationally and geographically. The EU's Lifelong Learning Programme supports 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  80 

these goals by funding innovative cooperation between education and training institutions 
to support the learning mobility of both students and staff. The Commission's proposal for 
the  future  "Erasmus  For  All"  Programme  builds  on  this  experience,  helping  education  and 
training systems to work together across borders to deliver the knowledge and skills needed 
in an increasingly globalised labour market.  

In  a  quickly  changing  environment,  people  need  not  only  basic  skills  such  as  literacy  and 
numeracy,  but  also  competences  in  learning  to  learn,  in  analyzing  complex  information  in 
the media (digital and media literacy), in being able to adapt and to seize new opportunities 
in a global world (entrepreneurship, foreign language).  

Job and sector-specific skills are equally important for employability. Skills connected with 
new  technology  and  green  technology,  and  a  range  of  management  competences  and 
innovative  skills  will  also  be  crucial.  There  is  a  need  for  a  range  of  actors  to  cooperate  in 
helping workers to gain the skills they need in the future. These actors include the workers 
themselves,  their  employers,  public  placement  bodies,  regional  and  local  bodies,  and  the 
education sector. It is important that all actors also work closely with local industry to make 
sure that skills provision is adapted to ever-evolving business needs. 

The validation of non formal and informal learning is also a crucial piece of the jigsaw, as is 
ensuring  that  skills  are  transferable,  as  this  will  aid  movement  between  companies  and 
between  sectors  if  necessary.  Initiatives  such  as  the  EU’s  Europass  system  and  a 
Recommendation  on  the  validation  of  informal  and  non  formal  learning  can  help  in  this 
respect. 

The EU naturally has an important role to play in providing a framework within which skills 
and competence development at national level can take place. In 2009, the Council set up a 
Strategic  Framework  for  European  Cooperation  in  education  and  training  ("ET  2020")  that 
will  support  such  development.  EU  institutions  have  been  active  in  initiating  a  range  of 
activities  and  programmes  designed  to  enhance  skills  development,  including  targeting 
policy at young people and focusing on specific sectors. Central to policy in this area is the 
creation  of  European  sector  councils  on  jobs  and  skills,  briefed  to  gain  insight  into  likely 
developments in employment and skills needs, with the aim of assisting policy making in a 
specific sector. They are also intended to function as a platform in which at least two types 
of stakeholder are involved. A number of pilot councils have so far been initiated in sectors 
such as automotive and textiles. 

The  automotive  sector  in  particular  needs  to  ensure  that  the  skills  of  its  workers  are 
updated, in order to keep pace with the particular demands placed on this sector, as a key 
driver of innovation. A European sector council on jobs and skills in this sector would, it is 
hoped,  help  existing  national  observatories  on  skills  and  qualifications  in  the  sector, 
facilitate the exchange of information between them, and allow its dissemination to a wider 
audience. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  81 

SMEs face particular challenges when trying to ensure that the skills of their workforce are 
up  to  date,  and  the  Commission  is  developing  a  policy  aimed  at  encouraging  skills 
development in SMEs. Overall, a lack of financial means and organisational reasons are the 
first obstacles to training faced by many SMEs, and the EU is working to disseminate good 
practice examples of how these obstacles can be overcome. 

1: THE IMPORTANCE OF LIFELONG LEARNING 

Some recent initiatives in the lifelong learning policy area are likely to have a strong, albeit 
indirect,  impact  on  the  consequences  of  restructuring,  as  they  support  people  and 
organisations in managing transitions. These initiatives all share a feature that is proving to 
be  a  significant  factor  of  innovation,  actually  triggering  wide-ranging  developments  at 
national level: a strong focus on competences. 

While developing, assessing and certifying competences has always been considered part of 
education  and  training,  the  systematic  organisation  of  the  provision,  assessment  and 
accreditation  of  learning  around  learners’  outcomes  in  a  lifelong  learning  perspective  is  a 
relatively innovative approach. 

The  action  that  brings  forward  this  approach  in  the  most  high-profile  and  comprehensive 
way  is  the  European  Qualifications  Framework  for  lifelong  learning  (EQF),  established 
through a Recommendation of the European Parliament and the Council in April 2008.39 The 
EQF  is  a  reference  framework  in  which  eight  qualification  levels  are  defined  in  terms  of 
learning outcomes: ie what a learner knows, understands and is able to do after a learning 
experience, as opposed to learning inputs such as the length of a learning experience or the 
type of institution. This enables the EQF to connect to different national systems and to cut 
across sub-systems such as higher education and vocational training. 

EU  Member  States  are  in  the  process  of  referencing  their  qualification  levels  to  the  eight 
EQF  levels.  The  EQF  will  then  act  as  a  translation  device  to  make  qualifications  more 
readable and understandable to employers, individuals and institutions, so that workers and 
learners can better use their qualifications across countries, systems and sectors. 

Implementing  the  EQF  means  that  national  qualification  levels  should  also  be  defined  in 
terms  of  learning  outcomes,  which  in  some  Member  States  and  systems  amounts  to  a 
radical change of approach. However, all Member States have started developing a national 
qualifications framework (NQF) based on learning outcomes and covering the whole span of 
qualifications.  It  can  be  considered  that  Ireland,  France,  Malta  and  the  UK  have 
frameworks,  and  10  more  countries  are  now  entering  an  early 
implemented 
implementation  stage.  This  clearly  indicates  the  widespread  consensus  on  the  need  to 

39  Recommendation  on  the  establishment  of  the  European  Qualifications  Framework  for  lifelong  learning 
111/01): 

(2008/C 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:111:0001:0007:EN:PDF. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  82 

define qualifications — and consequently the  provision and the assessment of learning — 
through  what  people  can  do  at  the  end  of  their  learning  process.  For  an  overview  of  the 
implementation of a NQF, see figure 2.1 below. 

Figure 2.1: Number of EU Member States with a national qualifications framework, 2002-
2014 

25

20

15

10

5

0

EU Member
States with
NQF

2002

2006

2010

2014

Source: European Commission. 

The consistent application of this approach should prove specifically helpful in situations of 
crisis,  when  companies  may  need  to  undergo  radical  reorganisation  and  many  workers 
change  tasks,  jobs,  companies  and  trade  and  often  need  specific  further  training.  This 
approach  helps  companies,  institutions  and  individual  workers  to  gain  a  clearer  and  more 
comprehensive overview of the skills and competences available to them, so that they can 
make better informed choices when confronted with the need to reorganise. The focus on 
competences makes it easier to match tasks and workers, to train workers and to take into 
account  both  the  skills  developed  through  formal  learning  and  those  developed  through 
work experience. 

The  development  of  qualification  frameworks  based  on  learning  outcomes  is  expected  to 
promote  schemes  for  the  validation  of  non-formal  and  informal  learning  outcomes, 
including  the  accreditation  of  prior  experience:  countries  that  already  have  established 
national  frameworks  based  on 
learning  outcomes  also  feature  effective  validation 
arrangements.  For  instance,  all  qualifications  included  in  the  French  national  register  can 
also be obtained through the validation pathway. 

Consistent with the EQF approach, the European credit system for vocational education and 
training  (ECVET),  adopted  in  2009,  organises  the  transfer  of  credits  from  one  qualification 
system to another (or from one learning ‘pathway’ to another) around the assessment and 
validation  of  the  learning  outcomes  of  individuals.  This  allows  learners  to  accumulate  the 
required learning outcomes for a given qualification over time, in a variety of situations and 

 
 
 
 
 
 
 
Restructuring in Europe  83 

in more than one country. This offers a valuable opportunity in a society characterised by 
flexible  occupational  and  learning  pathways  —  an  element  that  may  grow  dramatically  in 
times of economic crisis. 

1.1: PLANNED NEW PROPOSAL ON THE VALIDATION OF INFORMAL LEARNING 

The  regular  inventory  of  national  experiences  of  validation  of  non-formal  and  informal 
learning  prepared  by  the  European  Commission  and  the  European  Centre  for  the 
Development of Vocational Training, Cedefop, shows that such experiences and their impact 
are growing. However, the fact that all European countries are now engaged in establishing 
national  qualification  frameworks  creates  the  conditions  for  a  more  systematic  and 
comprehensive approach to validation. Measures aimed at developing this will be included 
in  a  proposal  for  a  Council  Recommendation  on  the  promotion  and  recognition  of  the 
validation of non-formal and informal learning, planned for adoption in 2012. As a practical 
tool  to  support  authorities  in  setting  up  and  managing  validation  arrangements,  a  set  of 
European guidelines was recently published and will regularly be updated.40  

1.2: THE EUROPASS FRAMEWORK 

The  competence  approach  applied  at  system  level  by  qualification  frameworks  and  credit 
transfer systems has an indirect but significant impact on individual workers and learners. A 
more direct service — also organised around the concept of competence — is provided by 
instruments that specifically target citizens as users, such as the documents made available 
within the Europass framework. Europass allows EU citizens to present their qualifications 
and  skills  in  a  way  that  employers  can  understand  and  appreciate.  Further,  the  Europass 
Certificate  Supplement  describes  certificates  in  terms  of  learning  outcomes  and  in  some 
Member States is part and parcel of the national qualification framework. 

The Europass CV is a tool that is increasingly used by EU citizens — about 10 000 each day — 
and  aims  to  help  people  to  highlight  their  skills  and  competences  by  providing  both 
information  on  formal  education  and,  when  available,  work  experience.  Figure  2.2  below 
charts the growth in the number of completed Europass CVs from 2005 to 2010. 

40  European 

validating  non-formal 
for 
http://www.cedefop.europa.eu/EN/Files/4054_en.pdf. 

guidelines 

and 

informal 

learning.  Cedefop, 

2009: 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  84 

Figure 2.2: Europass CV completed (daily average) 

Europass CV completed - daily average

9900

7370

5550

3880

1960

480

2005

2006

2007

2008

2009

2010

Source: European Commission. 

Through  the  language  of  competences,  the  Europass  CV  helps  communication  between 
jobseekers  and  employers,  and  as  such  can  be  a  valuable  tool  in  the  context  of 
restructuring, although it rests on self-declaration on the part of the applicant. Information 
on skills developed during specific experiences, such as traineeships or periods of work, can 
however be given by the company or other organisation that has hosted the experience. 

The Europass Mobility is a specific Europass document, which currently enables citizens to 
document experiences involving transnational mobility, such as traineeships in a company 
abroad. Its use is currently also being tested for home country experiences, with a view to 
laying  the  ground  for  the  development  of  a  more  general  Europass  Skills  Passport,  which 
would  record  the  skills  and  competences  acquired  by  citizens  in  any  setting,  including  in 
particular work experience and volunteering. 

In addition to these tools, the Europass Skills Passport, in combination with the Europass CV 
and  with  formal  qualification  supplements,  describing  learning  outcomes  as  promoted  by 
the EQF and applied within national qualification frameworks, will provide a comprehensive 
portrait  of  its  holders  in  terms  of  competences,  supporting  companies  and  individuals  in 
their choices in the labour market. 

1.3: EU POLICY ON LIFELONG LEARNING AND SKILLS DEVELOPMENT 

Information,  advice  and  guidance  are  crucial  factors  in  enabling  citizens  to  manage 
transitions,  helping  them  to  identify  the  strengths  and  weaknesses  in  their  competence 
learning  and  employment 
profile,  make  better 

informed  decisions  about  further 

 
 
 
 
 
 
 
 
Restructuring in Europe  85 

opportunities  and  make  effective  use  of  validation  schemes.  Two  EU  Resolutions  of  the 
Education  Council  adopted  in  200441 and  200842 have  highlighted  the  need  for  strong 
guidance services throughout a worker’s life to equip them with the skills to manage their 
learning and careers and the transitions between and within education/training and work. 
Member  States  were  invited  by  those  Resolutions  to  take  action  to  modernise  and 
strengthen their guidance systems, paying particular attention to the development of career 
management skills; accessibility of services; quality assurance and coordination of services. 

The  Commission  supports  policy  and  practice  in  this  area  in  a  number  of  ways.  Firstly,  EU 
resources from the Lifelong Learning Programme are used to fund two European networks: 

●  Euroguidance provides guidance to practitioners in the form of information, 

documentation and training; and 

●  the European Lifelong Guidance Policy Network — set up by the Member States at the 

end of 2007 — aims to raise the awareness of policy makers in education and 
employment sectors of the importance of lifelong guidance and support Member States 
in modernising their systems. Among other activities, the network will work towards a 
new version of the appreciated handbook, developed jointly with the OECD in 2005, for 
policy makers in career guidance.43 

The  increased  frequency  of  transitions  that  citizens  face  over  the  course  of  their  working 
life,  coupled  with  greater  diversity  and  mobility  in  education/training  and  the  labour 
market, make effective lifelong guidance systems more important than ever. The successor 
to the Lisbon strategy — Europe 202044 — highlights in particular the need for guidance to 
improve young people’s entry into the labour market. Measures to strengthen guidance will 
form  part  of  new  initiatives  being  put  forward  in  2010  concerning  the  mobility  of  young 
people, combating early school leaving and new skills for jobs. 

41  Resolution of the Council and of the representatives of the Member States meeting within the Council of 
28 May 2004 on Strengthening Policies, Systems and Practices in the field of Guidance throughout life in 
Europe. 

42  Resolution of the Council and of the Representatives of the Governments of the Member States, meeting 
within  the  Council  of  21  November  2008  on  better  integrating  lifelong  guidance  into  lifelong  learning 
strategies. 

43  Career  Guidance.  A  Handbook  for  Policy  Makers.  The  European  Commission.  OECD.  OECD  Publishing, 

December 2004. ISBN: 9789264015210.  

44  Commission  Communication  ‘Europe  2020  —  A  strategy  for  smart,  sustainable  and  inclusive  growth’, 

COM(2010) 2020. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  86 

2: THE ROLE OF SKILLS IN IMPROVING LABOUR MARKET MOBILITY 

All  economic  sectors  are  currently  in  the  throes  of  a  phase  of  restructuring,  which  itself 
needs to be seen against a background of efforts to improve the EU’s competitiveness and 
re-direct the European economy towards fresh activities with a higher added value that are 
capable  of  generating  new  and  better  jobs.  The  success  of  these  endeavours  hinges  on  a 
more strategic management of human resources, with more dynamic and forward-looking 
interaction  between  labour  supply  and  demand.  This  is  essential  to  a  cohesive  society,  to 
competitiveness,  as  well  as  to  the  capacity  for  innovation  in  the  business  sector  and  the 
economy as a whole. 

The level of skills achieved can be a key factor in determining how successful workers will be 
on  the  labour  market.  Knowledge,  know-how  and  skills  are  decisive  and  condition 
everyone’s chances of a successful professional career and playing an active role in society. 
Keeping  skills  levels  up  to  date  is  a  key  factor  in  ensuring  the  continuing  employability  of 
workers, particularly in times of restructuring, when workers may need to move companies 
or  even  sectors  in  the  search  for  alternative  employment.  Employees  therefore  need  to 
possess a set of skills that are easily transferable, which will equip companies with a more 
flexible,  adaptable  and  mobile  workforce,  while  at  the  same  time  facilitating  worker 
mobility  occupationally  and  geographically,  making  it  easier  for  them  to  develop  their 
occupational pathways. 

For  workers,  skills  mean  employability  and  occupational  mobility.  They  are  the  best 
insurance  against  unemployment  and  are  an  important  factor  in  facilitating  personal 
development and active citizenship. However, labour markets — and the skills people need 
— are evolving ever faster and future jobs are likely to require higher levels and a different 
mix  of  skills,  knowledge  and  qualifications.  It  will  therefore  be  increasingly  necessary  for 
workers to participate in lifelong learning and  to develop new skills in  order to be able to 
adapt to a variety of tasks over their working lives. 

2.1: GENERAL VS SPECIFIC COMPETENCES 

Results from a European Commission study on transferable skills45 show that general human 
capital/competences are those that increase the value of a person across the whole of the 
labour market, ie in companies, sectors and occupations. On the other hand, specific human 
capital/competences increase the value of a person only within the company in which they 

45  The European Commission, DG Employment, Social Affairs and Inclusion financed a study on ‘Transferable 
skills  across  economic  sectors  —  Role  and  importance  for  employment  at  European  level’  in  order  to 
identify  which  skills  are  transferable  across  sectors,  groups  of  sectors  and  occupations,  currently  and 
during the 10 next years, which are the instruments and methods to be used for a better mobility of the 
workers through the development of transferable competences and which is the role of the main actors in 
this 
study. 
http://ec.europa.eu/social/main.jsp?catId=101&langId=en&furtherPubs=yes 

results 

article 

based 

field. 

This 

this 

the 

on 

of 

is 

 
 
 
 
 
 
 
                                                       
 
  
Restructuring in Europe  87 

have acquired them; leaving the company therefore leads to devaluation of some specific 
human  capital/competences  since  they  do  not  apply  in  other  companies,  sectors  and 
occupations.  It  should  be  noted,  however,  that  the  existence  of  purely  general  or  purely 
specific  forms  of  human  capital/competences  is  very  rare.  It  is  usually  possible  to 
characterise  human  capital/competences  as  rather  general  or  rather  specific,  which 
indicates  some  extent  that  there 
is  a  mixture  of  these  two  kinds  of  human 
capital/competences in the real-life economy. 

The characterisation of human capital/competences as general and specific, based on their 
application  in  the  labour  market,  affects  the  willingness  of  various  economic  subjects,  be 
they  individuals  or  companies,  to  invest  in  their  acquisition.  The  more  general  human 
capital/competences are, the more likely employees are to invest in acquiring them in order 
to increase their employability in other companies, occupations and sectors. Conversely, the 
more  specific  human  capital/competences  are,  the  less  likely  employees  are  to  invest  in 
acquiring them due to their narrow application; should workers leave a specific employer, 
these  skills  become  less  useful.  For  employers,  the  opposite  applies:  general  human 
capital/competences  increase  the  risk  of  losing  the  employee,  while  investing  in  the 
acquisition of specific human capital/competences ties the employee ever more closely to 
the company. 

At present, in addition to the interest shown in specific skills, attention is also focused on 
general  skills  —  and  mainly  soft  skills  —  due  to  their  usability  and  transferability  across 
occupations, sectors, and in some cases even across the whole economy. General skills that 
are  applicable  in  most  companies,  occupations  and  sectors  can  be  effectively  applied  in 
almost  all  jobs  and  in  an  employee’s  personal  life;  thus  they  are  perceived  as  highly 
transferable.  Soft  skills  —  job  non-specific  skills  that  are  related  to  individual  ability  to 
operate  effectively  in  the  workplace  —  are  usually  described  as  extremely  transferable. 
Specific skills — technical and job-specific abilities that are applicable in very small number 
of companies, occupations and sectors — can be specified negatively as skills not belonging 
among  generic  skills.  They  describe  special  attributes  for  performing  an  occupation  in 
practice  and  are  constituted  as  a  mix  of  knowledge  and  abilities  used  during  the  practical 
process. Box 2.1 below sets out the main soft and general skills. 

 
 
 
 
 
 
Restructuring in Europe  88 

Box 2.1: General and soft skills 

General skills 

Soft skills 

Legislative/regulatory awareness  Self-control and stress 

Achievement orientation 

Economic awareness 

Self-confidence 

resistance 

Basic competencies in science 
and technology 

Flexibility 

Environmental awareness 

Creativity 

Concern for order, 
quality and accuracy 

Initiative-Active 
approach 

Problem solving 

ICT skills 

Lifelong learning 

Planning and organising 

Knowledge of foreign languages 

Interpersonal 
understanding 

Information exploring 

Knowledge of foreign languages  Customer orientation 

Autonomy 

Entrepreneurial competences  Cooperation with others 

Analytical thinking 

Communication 

Conceptual thinking 

Impact/Influence 

Organisation awareness 

Leadership 

Developing others 

2.2: TRANSFERABLE SKILL SETS 

Knowledge of a set of skills that can be used between sectors or groups of sectors enables 
effective  job  change  during  an  individual’s  working  life.  Finding  the  most  suitable 
occupation, where the worker can make the most of their present skills, not only minimises 
any loss of qualifications due to a change in job, but also reduces the costs for training of 
new  employees  and  the  time  necessary  for  handling  tasks  connected  with  the  new 
occupation.  This  also  offers  the  best  alternative  opportunities  for  the  worker.  The  more 
skills are identified for each pair of occupations as common, the higher the transferability, 
and vice versa. This knowledge is very useful for the facilitation of occupational mobility in 
general and in particular during restructuring processes, which has a substantial impact on 
both the speed of restructuring processes and level of unemployment. 

The  comparison  of  key  occupations  in  terms  of  their  skills  transferability  allows  possible 
shifts  in  sectoral  employment  to  be  highlighted.  Combining  information  on  transferable 
skills with the skills profile of the new occupation helps identify what kind of re-skilling or 
upskilling  is  necessary  to  achieve  a  smooth  transition  for  those  made  redundant.  Box  2.2 
below examines skills that can be transferred between different groups of sectors. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  89 

Box 2.2: Skills that can be transferred between different groups of sectors 

Workers who have been made redundant in a sector usually look for alternative work in 
the same sector only, because they cannot imagine that they might use their skills in 
other sectors. However, it is obvious that their skills can be used in different sectors, 
but it is also obvious that there are sectors, or groups of sectors, where they can use 
more of these skills, and sectors, or groups of sectors, where they can use only few of 
them. For example, a redundant worker from the manufacture of textiles and leather 
(NACE 13, 14, 15) can be fairly easily employed in the manufacture of wood and 
furniture sector (NACE 16, 31), but not so easily in the agriculture, forestry and fishing 
sector (NACE 1, 2, 3) or the ICT sector (NACE 62). This is due to the range of applicable 
skills already at their disposal. 

The worker can use the same number of general skills from the textiles and leather 
sector (NACE 13, 14, 15) in the wood and furniture, agriculture, forestry and fishing and 
ICT sectors, as set out below. 

Agriculture, forestry and fishing (NACE 1, 2, 3): Legislative/regulatory awareness; 
economic awareness; basic competences in science and technology; environmental 
awareness; knowledge of foreign languages. 

Manufacture of wood and furniture (NACE 16, 31): Legislative/regulatory awareness; 
economic awareness; basic competences in science and technology; environmental 
awareness; knowledge of foreign languages. 

ICT (NACE 62): Legislative/regulatory awareness; economic awareness; basic 
competences in science and technology; environmental awareness; knowledge of 
foreign languages. 

Workers can also use approximately the same number of soft skills, as set out below. 

Agriculture, forestry and fishing (NACE 1, 2, 3): Flexibility; cooperation with others; 
communication; achievement orientation, efficiency; planning and organisation; 
autonomy. 

Manufacture of wood and furniture (NACE 16, 31): Creativity; customer orientation; 
cooperation with others; communication; achievement orientation, efficiency; 
concern for order, quality, accuracy; planning and organisation; autonomy. 

ICT (NACE 62): Flexibility; creativity; customer orientation; cooperation with others; 
communication; achievement orientation, efficiency; autonomy. 

Regarding specific skills, the worker can use 17 such skills from the textile and leather 
sector in the wood and furniture sector, but only three in agriculture, forestry and 

 
 
 
 
 
 
Restructuring in Europe  90 

fishing and none in ICT, as set out below. 

Agriculture, forestry and fishing (NACE 1, 2, 3): Handling of production lines and 
machineries; technical drawing; maintenance and adjusting of machines and 
appliances. 

Manufacture of wood and furniture (NACE 16, 31): Orientation in technical 
documentation; appraisal and control of quality of raw materials, semiproducts and 
products; handling of production lines and machineries; technical drawing; waste 
disposal; machine and industrial sewing; hand sewing and needlework; handling of 
programmable and semiautomatic machines; upholstery; restoring and conservation of 
artefacts; preparation of materials and raw materials; maintenance and adjusting of 
machines and appliances; mounting, compounding and completion of products; 
calculations of material consumption; design; leading of staff collectives or teams; 
applying knowledge of history of art. 

ICT (NACE 62): None 

2.3: FUTURE SKILLS NEEDS 

Future  skills  that  are  adapted  to  the  evolution  of  the  labour  market  needs  also  play  an 
important  role  in  the  employability  of  workers.  ICT  skills  rank  in  first  place  because 
technological development will allow workers to use them efficiently in a growing number 
of  occupations,  tasks  and  areas.  Further,  the  number  of  occupations  that  will  require 
advanced  ICT  user  knowledge  is  set  to  grow.  Skills  linked  to  specific  technology  (such  as 
specialised skills in chemistry, biology, electronics, or skills in the field of nanotechnology) 
will be increasingly important, but for a relatively smaller group of expert occupations. 

Environmental  technologies  will  trigger  growth  in  demand  for  skills  in  that  area.  Other 
identified  future  trends  include  business  and  management  skills,  including  in  middle-  and 
low-level  occupations.  This  will  be  linked  to  a  growing  need  for  inter-sectoral  knowledge. 
For example, to know how the product the worker develops or produces will be used by the 
user helps them to identify possible innovations. This is also the case concerning knowledge 
of  the  previous  and  succeeding  parts  of  the  production/development  process,  which  will 
boost  efficiency  and  innovation  potential.  Language  and  cross-cultural  requirements, 
process management, skills related to the trend of teleworking (autonomy, ability to work 
and solve problems independently), and moral values such as ethics and loyalty will increase 
in importance. 

2.4: THE ROLE OF DIFFERENT ACTORS IN SKILLS DEVELOPMENT 

The  importance  of  workers’  general,  specific  and  soft  skills  among  different  occupations, 
groups of sectors and their contribution both to the quality of work at microeconomic level 
and  the  effective  functioning  of  the  labour  market  at  microeconomic  level  have  been 

 
 
 
 
 
 
 
 
Restructuring in Europe  91 

stressed  often  and  in  different  contexts  by  the  business  sector,  employers’  and  workers’ 
representatives,  academic  institutions,  policy  makers  and  other  key  players  on  several 
occasions. 

Skills development at enterprise level 

in 

Companies differ in the complexity of their approach to the acquisition, development and 
assessment  of  specific  skills.  In  general,  it  is  possible  to  identify  two  types  of  enterprises: 
those that have sophisticated and well-designed models (this is developed in a systematic 
manner,  especially 
large  and  medium-sized  companies  with  human  resources 
departments  or  at  least  a  human  resources  specialist);  and  those  that  carry  out  these 
activities  intuitively  on  the  basis  of  ad  hoc  solutions  or  through  experience  on  the  job 
(especially  in  small  companies).  The  most  frequently  used  tools  for  recognition  and 
assessment  of  skills  are  periodical  employee  appraisal,  feedback  and  360-degree 
assessment,  balanced  scorecard,  competency-based  performance  review  or  behavioural 
event interview and quality control circles. Specific skills are often developed by learning-by-
doing, which is usually supported by other tools, such as review, coaching, and simulations 
of  job  tasks.  Mentoring  is  very  common  in  this  process.  This  elementary  form  of  skills 
development is often accompanied by targeted education/training, which can be internal (in 
the enterprise) or external (undertaken by an external body) and take different forms, for 
example  education,  training,  workshops,  seminars,  conferences,  meetings  and  solving 
concrete tasks by brainstorming or case studies. 

Enterprise initiatives for the recognition, development and assessment of general and soft 
skills are mostly rare, even though they can play a role in the employee selection process. 
The  cost  of  this  investment  can  be  carried  by  large  and  medium-sized  companies,  whose 
strategy also relies on lucrative internal labour markets. Even in this case, large companies 
are often ambivalent towards a systematic acquisition of general and soft skills. On the one 
hand,  they  understand  that  these  skills  can  improve  work  efficiency,  which  benefits  the 
company as a whole. On the other hand, such systematic training promotes willingness to 
leave  on  the  part  of  the  employee,  which  the  company  does  not  want.  Against  this 
background,  acquisition  of  these  skills  is  often  performed  in  a  muted  way,  with  targeted 
employees but not throughout the whole organisation. 

Regarding employability, it is important to mention that employers’ requirements grow over 
time. Today, an applicant for a job must be much better prepared and comply with the job 
description more fully than a few years ago; many employers are less willing to invest in up-
skilling new staff. Therefore, individuals as well as the education and public sector must pay 
more attention to the skills they have, and train or support as necessary. 

Public labour administration and placement offices 

Public  labour  administrations  and  placement  offices  possess  tools  to  assess  and  conduct 
targeted  training,  which  also  aim  to  meet  the  needs  of  companies.  Many  labour 
administrations  develop  profile  documents  with  their  clients  in  order  to  represent  their 
skills profile. This is sensible and necessary as this clientele is a target group with little or no 

 
 
 
 
 
 
 
 
Restructuring in Europe  92 

formal qualifications that they can present to a prospective employer. Particular groups that 
are  in  focus  for  the  development  of  general  and  soft  skills  are  young  people,  older 
unemployed people and migrants, which are three groups with specific problems in entering 
the labour market. Acquiring skills sets increases and updates their employability. 

The task of the public sector is to increase or at least maintain employment, which can be 
guaranteed by the development of skills. Many public sector representatives are aware that 
the importance of employers in the further training of the labour force is essential as well as 
the fact that they have to motivate employers (for example financially) to provide training in 
areas that can help people to increase their long-term employability. 

Regional and local bodies 

It  is  the  responsibility  of  regional  administrative  bodies  to  raise  awareness  of  the  need  to 
acquire,  develop  and  certify  transferable  skills.  They  approach  firms,  trade  unions,  labour 
administration  bodies,  placement  offices  and  professional  associations  in  order  to  raise 
general  awareness.  Their  activities  can  also  include  labour  market  monitoring  activities, 
which in the best cases give a detailed picture of regionally available human resources and 
also of the associated strengths and shortages concerning skills. However, very often their 
strategies lack a systematic approach and are in some cases limited to model projects. 

Besides  enterprises,  regional  and  local  players  are  probably  the  second  most  important 
actors when it comes to labour market initiatives relevant to the transferability of skills. The 
main  reason  for  this  is  the  prevailing  regional  and  local  mobility  of  the  workforce  in  EU 
Member States and, next to this, regional and local competence to develop partnerships of 
key players to deal with complex labour market issues. Regional and local partnerships for 
the labour market are therefore very useful strategic tools for efficient interventions on the 
labour market. 

The education sector 

Education sector representatives acknowledge that they also carry significant responsibility 
in this field, whether at the initial education stage or through further continuous education 
and training. Universities and education providers should be aware of developments in the 
labour  market  and  periodically  evaluate  their  training  provision  so  that  they  can  better 
accommodate the evolving needs of specific occupations. Workers are liable to change their 
field of work ever more often, and restructuring processes are underway within companies 
as  well  as  whole  economies.  Upskilling  and  re-skilling  is  in  ever-greater  demand,  and  the 
importance of specific but also general and soft skills is gaining an ever-higher profile. 

In  this  context,  the  role  of  the  education  and  training  system  is  seen  as  pivotal.  It  gives  a 
wide  range  of  people  a  good  chance  to  acquire  all  kinds  of  necessary  skills  or  adapt 
previously  acquired  skills  to  a  changing  situation.  Many  models  are  used  to  support 
occupational mobility through skills development, such as the identification of skills gaps for 
new  jobs,  career  counselling,  the  development  of  skills  through  training  for  workers  who 
have  been  made  redundant,  many  of  them  based  on  local  skills  needs.  Education  and 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  93 

training  providers  see  learning-by-doing  as  a  crucial  method  of  skills  development,  which 
can  be  supported  by  other  relevant  tools,  such  as  workshops,  seminars,  conferences, 
coaching,  distance  learning,  blended  learning,  e-learning,  consulting,  observation  and 
review  of  work  by  expert  or  peer,  sharing  of  experiences,  skills  and  knowledge,  training 
courses  with  certificate,  team  discussions  etc.  Further,  the  representatives  of  educational 
institutions believe in particular that the adaptation of educational activities to the needs of 
students  and  labour  market  demands  is  very  important  in  terms  of  developing  skills  in 
relation  to  occupational  mobility.  Besides  practical  skills,  particular  skills  and  knowledge 
with  a  wider  application  in  more  jobs  and  skills  need  to  be  simultaneously  developed. 
Developing  abilities  and  competences  should  be  a  lifelong  process  for  which  people  are 
sufficiently motivated and the results are officially recognised. 

At national level, there is a division of competences between public institutions responsible 
for education and for employability. Sometimes this can result in competing/counteracting 
systems  and  methods  for  identifying,  assessing  and  recognising  non-formal  learning.  Their 
goal  is  mostly  the  same:  rendering  the  system  of  vocational  education  and  training  more 
flexible and inclusive by recognising alternative paths of knowledge and skill acquisition and 
relating them to the needs of the labour markets and employers. These latter needs are met 
through  the  profiling  tool  which  most  labour  placement  offices  use  in  order  to  determine 
the existing skills of a person and the possible career paths. Based on that, they offer advice 
to  individuals  as  to  the  best  ways  of  reaching  an  employment  in  an  area  where  their 
strengths lie. 

Joined-up and coordinated approach required 

Global economic competitiveness depends on high levels of knowledge and skills which in 
turn lead to quality jobs and decent wages. This is why governments strive to attract talent 
and provide skills upgrading opportunities for people on all levels. However, this important 
task  cannot  be  achieved  by  one  single  actor.  Working  on  skills  development  requires  a 
joined-up approach between education, training, employment and economic development 
policies. It also means working closely with local industry to make sure that skills provision is 
adapted  to  ever-evolving  business  needs.  And  it  needs  to  involve  community  and  civil 
society organisations to ensure that all can participate in enhanced prosperity. 

The  EU  institutions  can  also  play  an  important  role  in  skills  development  and  therefore  in 
the next section of this chapter, a range of EU initiatives in the area of skills and competence 
development are explored. 

 
 
 
 
 
 
 
Restructuring in Europe  94 

3: SECTOR STUDIES AND THE NEW SKILLS FOR NEW JOBS INITIATIVE 

This section explores a range of EU initiatives designed to help boost skills and competence 
development, and to try to prepare the EU for the likely kinds of skills that will be needed in 
the future. 

3.1: NEW SKILLS FOR NEW JOBS INITIATIVES 

Companies in Europe are faced with a continually changing environment. Challenges such as 
the  ageing  of  the  population,  the  rapid  evolution  of  ICT,  increasing  globalisation  and  the 
greening  of  the  economy  have  concrete  implications  for  companies  in  their  day-to-day 
business. Factors such as a changing regulatory framework, evolving consumer preferences, 
new  and  more  efficient  technologies  and  increased  competition  from  abroad,  affect 
companies and their business, with implications for their competitiveness. 

To stay competitive, companies have to invest permanently in human capital to acquire, or 
equip the workforce with, the skills mix that they need today and tomorrow. The issues of 
identifying  future  skills  needs,  upgrading  skills  and  matching  them  with  labour  market 
demands  have  gained  increased  attention  in  recent  years  throughout  the  Union.  In 
December  2008,  the  Commission  published  a  Communication  entitled  New  Skills  for  New 
Jobs: anticipating and matching labour market and skills needs.46 

In  February  2010,  the  expert  group  on  new  skills  for  new  jobs  issued  a  report47 to  the 
European Commission, in which it detailed recommendations for future action. The report 
called for action in four main areas: 

●  provide better incentives for employers and individuals to upskill, and investment in skills 

must be significant, smart and not just financial; 

●  open  up  the  worlds  of  education  and  training  by  making  education  and  training 
institutions more innovative and responsive to both learners’ and employers’ needs, and 
by developing relevant qualifications that focus on concrete learning outcomes; 

●  offer a better mix of skills that is more suited to labour market needs; and 

●  better anticipation of future skill needs. 

In March 2010, the Commission presented its strategy for the next 10 years, Europe 2020 — 
A  European  strategy  for  smart,  sustainable  and  inclusive  growth,48 in  which,  under  the 

46  New Skills for New Jobs: anticipating and matching labour market and skills needs. COM(2008) 868 final: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0868:FIN:EN:PDF. 

47  New Skills for New Jobs: Action Now. A report by the Expert Group on New Skills for New Jobs prepared for 
the European Commission. February 2010. http://ec.europa.eu/social/BlobServlet?docId=4508&langId=en. 

48  Europe 2020 — A European strategy for smart, sustainable and inclusive growth. COM(2010) 2020. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  95 

theme  of  inclusive  growth,  a  flagship  initiative  entitled  An  agenda  for  new  skills  and  jobs 
was  announced.  This  initiative  highlights,  among  other  issues,  the  role  and  importance  of 
skills in enabling workers to adapt to changing conditions and stay productive, and also in 
reducing unemployment. 

On  15  September  2010,  the  Commission  set  out  its  agenda  of  actions  targeted  at  young 
people  in  the  Communication  Youth  on  the  Move.49 In  particular,  actions  are  targeted  at 
supporting lifelong learning strategies, the reform of higher education, the reinforcement of 
learning  mobility  programmes  and  actions  to  improve  the  employment  situation  of  young 
people. 

3.2: SECTORAL STUDIES OF INNOVATION, SKILLS AND JOBS 

In 2008 and 2009, the Commission conducted a series of 19 sectoral studies50 (see table 2.1) 
to map and analyse the evolution of innovation, skills and jobs within each of the selected 
sectors, taking into account each sector’s global, national and regional contexts, in order to 
anticipate  possible  changes  in  jobs  and  skills  needs  up  to  2020.  These  studies  also  served 
the  purpose  of  bringing  attention  to  ways  and  methods  of  achieving  forward-looking  and 
strategic human resource management and thereby improving European competitiveness in 
the global economy. A common ‘foresight’ methodology (see box 2.3 below) was applied to 
18 of the 19 studies (the study on the construction sector followed a similar but different 
methodology), allowing for comparisons between sectors. 

Box 2.3: Methodology 

The  sector  studies  followed  a  European  Foresight  Methodology  (EFM)  developed  by 
Professor  Maria  João  Rodrigues  with  support  from  the  European  Commission.  The 
methodology has been developed in order to perform comprehensive sectoral analyses 
and foresights on emerging skills and competences in the EU. It involves the following 
steps: 

●  presentation and analysis of the sector’s main economic and employment trends and 
structures:  this  includes  detailed  sectoral  data  analysis  on  employment,  added 
value,  education  and  occupations,  along  with  a  SWOT  (strengths,  weaknesses, 
opportunities and threats) analysis of the sector; 

●  identification of the sector’s main drivers of change; 

●  identification of emerging or changing sector job profiles, skills, and competences; 

●  construction  of  possible  sector  scenarios  and  their  implications  for  employment 

trends; 

49  Youth on the Move. COM(2010) 477 final: http://ec.europa.eu/education/yom/com_en.pdf. 

50  For further details, see http://ec.europa.eu/social/main.jsp?catId=784&langId=en. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  96 

●  analysis of the scenarios’ implications for competences and occupational profiles; 

●  identification of strategic choices to be taken by companies in order to meet skills 

needs; 

●  identification of implications for education and training; and 

●  presentation of main recommendations. 

The 19 sectors covered represent together over 60 % of total private employment in the EU 
— see figure 2.3. Both traditional manufacturing sectors and services sectors were analysed. 
The  largest  sector  by  far,  in  terms  of  both  added  value  and  share  of  EU  employment,  is 
distribution  and  trade,  followed  by  health  and  social  work.  Some  sectors,  such  as  hotels, 
restaurants and catering (Horeca), construction, and textiles, apparel and leather products, 
are far more important in terms of employment than added value, indicating their labour-
intensive  nature.  Other,  typically  more  knowledge-intensive  sectors,  such  as  financial 
services and chemicals, pharmaceuticals, rubber and plastics, are much more important in 
terms of added value than employment. 

Figure 2.3: Share of total EU employment by sector (%), 2006 

Source: Sector studies and Eurostat 2009. 

 
 
 
 
 
Restructuring in Europe  97 

A  transversal  analysis  of  these  sector  studies  was  then  carried  out.  While  the  sectoral 
studies focused on sector-specific developments and characteristics, this analysis aimed to 
identify common patterns of change across the  different sectors and to group the sectors 
according  to  common  historical  and  anticipated  developments  in  jobs  and  skills.  A  brief 
extract  of  the  transversal  analysis  is  presented  below.  The  full  report  is  available  for 
download on the Anticipedia website.51 

Table 2.1: The 19 sectors analysed in the sectoral skills studies 

Automotive 

Building of ships and boats 

Furniture 

Health and social work 

Chemicals, pharmaceuticals, rubber and plastics

Hotels, restaurants and catering (Horeca) 

Computer, electronic and optical devices 

Non-metallic materials 

Construction 

Defence industry 

Distribution and trade 

Other services, maintenance and cleaning 

Post and telecommunications 

Printing and publishing 

Electricity, gas, water and waste 

Textiles, apparel and leather products 

Electromechanical engineering 

Transport and logistics 

Financial services 

3.3: EVOLUTION OF OCCUPATIONS IN THE EU 

Looking at the general development in occupations within the European labour force from 
2002 to 2008, there has been a clear tendency towards polarisation. The number of high-
skilled jobs is clearly on the increase while the number of skilled manual jobs has fallen — 
see figure 2.4. The number of very low-skilled jobs (known as elementary occupations) has 
remained more or less the same, increasing just slightly. 

The  decrease  in  the  number  of  skilled  manual  jobs  seems  to  be  closely  connected  to 
developments within Europe’s traditional production sectors, which have normally relied on 
craft  workers  and  other  skilled  workers.  Many  of  these  sectors  are  under  heavy  pressure 
due  to  fierce  international  competition  and  many  production  activities  have  been 
outsourced and offshored during the past 10-15 years. 

Overall, the higher the skills level of the employee, the greater the advantage for both the 
employee  and  the  employer.  Employees  with  high  and  transferable  skills  levels  have  a 
higher  degree  of  employability  and  will  find  it  easier  to  move  between  employers,  and 
maybe even sectors, should that be required. For the employer, employees with higher skills 
levels will increase productivity and the quality of the goods and services offered. 

51  https://ec.europa.eu/employment_social/anticipedia/document/show.do?id=2945. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  98 

The  studies  grouped  occupations  into  three  categories  according  to  the  level  of  skills 
required  to  perform  the  job.  High-skilled  workers  include,  among  others,  managers  and 
professionals,  who  are  typically  workers  with  relatively  lengthy  educational  backgrounds 
and/or  specialist  knowledge  within  a  certain  field.  A  high  share  of  high-skilled  workers 
within a sector indicates a relatively high knowledge intensity. As shown by figure 2.4, the 
sectors with the highest share of high-skilled workers are: health and social work; computer, 
electronic  and  optical  devices;  financial  services;  printing  and  publishing;  electricity,  gas, 
water and waste; and chemicals, pharmaceuticals, rubber and plastics. 

The sectors with the lowest share of high-skilled workers are, not surprisingly, the labour-
intensive but relatively low knowledge-intensive sectors such as: furniture; textiles, apparel 
and leather products; transport and logistics; and Horeca. 

 
 
 
 
 
 
Figure 2.4: Share of high-skilled workers1 in sectors, 2007 

Restructuring in Europe  99 

Professionals, 
Technicians  and 
associated proffs. 
Managers 
and 
Legislators 

* 2006 data. 

1High skilled = 1. legislators & managers, 2. professionals and 3. technicians & associate 
professionals. For detailed description of the ISCO classifications see: 
http://www.ilo.org/public/english/bureau/stat/isco/isco88/major.htm  

Source: Eurostat LFS 2008 and sector studies. Comparable data not available for construction and 
defence. 

 
 
 
 
 
Figure 2.5: Changes in the share of occupations in the EU labour force, 2000-2008 

Restructuring in Europe  100 

Source: Eurostat 2009. 

It should be noted when viewing the above figure that the breakdown of employed persons 
by  occupation  is  based  on  the  classification  ISCO  88-COM.  High  skilled  =  1,  legislators  & 
managers  =  2,  professionals,  technicians  &  associate  professionals  =  3,  low  skilled  non 
manual = 4, clerks and service, shop & market sales workers = 5, skilled manual = 6, craft & 
related  trade  workers  =  7,  skilled  agricultural,  forestry  and  fishery  workers  and  plant  & 
machine operators = 8, and elementary occupations = 9.52 

Scenarios of evolution 

Three  or  four  ‘scenarios  of  evolution’  were  constructed  for  each  sector.  They  take  into 
account  the  main  drivers  of  change  affecting  each  sector  and  their  likely  development. 
These drivers include both: 

●  macroeconomic trends affecting the whole economy such as the ageing of the workforce, 
the  globalisation  of  the  economy  and  the  increased  use  of  ICT,  which  can  be 
characterised as ‘exogenous’ drivers; and 

●  more  sector-specific 

‘endogenous’  drivers  such  as  the  regulatory  environment 

influencing the activities of the sectors. 

These scenarios are not forecasts of the future but are based on foresight analyses, which 
are  experts’  opinions  on  possible  futures  for  the  sector.  In  the  transversal  analysis,  these 

52  For 

a 

detailed 

description 

of 

the 

ISCO 

classifications 

see: 

http://www.ilo.org/public/english/bureau/stat/isco/isco88/major.htm. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  101 

scenarios have been regrouped and summed up in a single graph, also taking into account 
the impact of the recent financial crisis. Sectors have been grouped into service, production 
and combined production/service sectors. 

As  can  be  seen  from  the  figure  2.6  below,  it  emerges  from  the  analysis  that  employment 
within production in the EU will, in general,  continue to decline while employment within 
services  will,  in  general,  continue  to  increase.  Furthermore,  the  financial  crisis  seems  to 
have  speeded  up  ongoing  developments,  with  continued  job  losses  in  the  traditional 
production sectors. However, many of the production sector studies contain quite positive 
scenarios, including consolidation and/or job growth. Thus, post-crisis, the forecasts predict 
a  consolidation  within  production  employment  in  total  and  renewed  employment  growth 
within services. 

Figure 2.6: Grouped employment index (2001=100) for services, production and combined 
production/services sectors, developments 2001-2008 and forecasts 2009-2012 

Source: Eurostat 2009 for historical data; analyses and scenarios for forecasts. 

The  graph  above  charts  the  actual  development  of  employment  from  2001  in  services, 
production  and  combined  production/services  sectors.  The  years  from  2008  to  2010  are 
characterised  by  the  economic  crisis,  during  which  employment  in  production  drops  most 
sharply. In the post-economic crisis period, from 2010 to 2012, employment in production 
and  combined  production/services  sectors  is  forecast  to  be  relatively  stable,  whereas 
employment in services is predicted to increase. 

 
 
 
 
 
 
 
Restructuring in Europe  102 

3.4: EMERGING COMPETENCES 

The sector studies identify emerging competences at sectoral as well as occupational level. 
The  transversal  analysis  provides  an  overall  summary  of  the  most  important  skills  which 
emerge across all sectors — see table 2.2. 

Table 2.2: Main emerging competences across sectors 

Social/cultural 

Technical 

Managerial 

Intercultural skills 

Team work 

Self management 

ICT and E-skills (both at user and 
expert level) 

Intercultural management 

Skills/knowledge  related  to  new 
materials and new processes 

International 
management 

value 

chain 

Health  and  green  skills  (related 
to  health  and  climate  and 
environmental solutions) 

International 
management 

financial 

Entrepreneurship 
innovativeness 

and 

Green 
management 
(implementing  and  managing 
climate  and  environmentally 
friendly policies and solutions) 

+  Multiskilling  and  new  combinations  for  skills  and  competences  (eg  combining  two  sets  of  skills 
normally belonging to two different occupations in the same organisation) 

Main findings 

The analysis reveals the increasing polarisation of the labour market and skills needs. Skilled 
jobs  (such  as  craft  workers)  are  declining  and  high-skilled  jobs  (such  as  professionals  and 
managers)  are  increasing  rapidly,  while  the  demand  for  very  low-skilled  elementary  jobs 
continues to rise at a moderate pace. There is also a divide between services and production 
sectors.  Whereas  significant  job  growth  has  mainly  occurred  in  services  sectors  and  will 
continue to do so during the next 10-15 years, there have been quite significant job losses in 
production  sectors  during  the  past  decade,  especially  within  skilled  jobs.  However,  in 
production, there seems to be a development towards ‘European excellence’, characterised 
by  products  with  a  higher  added  value,  requiring  more  high-skilled  jobs  but  also  less 
medium-skilled jobs. 

Modern economies are experiencing a dissolution of traditional sector divisions, most often 
owing to new technologies, new customer demands and enlarged supply and value chains. 
As a result, new job profiles are appearing, which demand new combinations of skills and 
competences,  and  companies  are  increasingly  demanding  new  types  and  mixes  of 
employees and educational backgrounds in most sectors. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  103 

Regardless  of  job  losses  and  other  structural  developments,  there  is  a  clear  tendency 
towards  upskilling  for  all  occupations,  which  goes  in  parallel  with  an  increase  in  the 
educational attainment levels of workers in all sectors. 

Looking at emerging skills and competences, many sectors are experiencing new skills needs 
within areas that are closely connected to major world policy and economic trends, such as 
sustainability 
continued 
internationalisation of markets and supply chains. 

climate,  health, 

(environment, 

etc.), 

and 

the 

ICT 

At  the  same  time,  many  sectors  will  face  serious  recruitment  and  skills  problems  in  the 
coming years if no actions are taken. The ageing workforce, poor working conditions and/or 
a negative sector image will for many sectors result in problems in finding sufficient labour 
and  the  right  skills.  This  is  particularly  true  for  production  sectors  which  are  penalised  by 
their  ‘heavy  industry’  image  (such  as  shipbuilding  or  electromechanical  engineering)  but 
also  for  some  service  sectors,  the  records  of  which,  in  terms  of  working  conditions  and 
career  opportunities,  are  perceived  as  low  (such  as  Horeca).  Many  sectors  will  therefore 
need to improve their image and working conditions if young graduates, women and groups 
such as migrant workers are to be attracted to fill vacant positions. 

The  next  section  of  this  chapter  examines  how  the  EU  can  help  develop  skills  levels  in 
individual sectors by setting up European sector councils on jobs and skills. 

3.5. WORK AND LIFE QUALITY IN NEW AND GROWING JOBS 

An  ongoing  FP7  research  project  on  Work  and  Life  Quality  in  New  and  Growing  Jobs 
(WALQING53)  explores  the  linkages  between  ‘new  jobs’,  their  conditions  of  work  and 
employment, and outcomes for employees’ quality of work and life. 

In a first instance, employment growth in various countries (EU Labour Force Surveys 2000 
and  2007)  was  analysed  on  the  basis  of  an  original  new  methodology  developed  to 
construct  a  balanced  list  of  growing  sectors  in  the  EU.54 While  conventional  concepts  of 
employment  growth  choose  between  either  a  relative  trend  index  (e.g.  expressed  in 
percentages) or an absolute trend index (expressed in numbers such as hours, workers or 
production  output),  the  BART  Index  for  structural  growth  (balanced  absolute  and  relative 
trend  index)  integrates  both  into  a  single  index,  overcoming  misinterpretations  (over-  or 
underestimating structural changes) and improving comparability across Europe. The BART 

53   http://www.walqing.eu  (FP7,  2010-2012)  —  Walqing  focuses  on  work  in  growing  jobs  in  Europe  with 
problematic  working  conditions,  precarious  employment,  and/or  lack  of  social  integration.  It  specifically 
addresses  the  representation  of  vulnerable  groups  in  these  jobs  such  as  migrant  and  ethnic  minority 
workers, some groups of women and younger and older workers. 

54   Walqing  working  paper  2010.1,  Structural  growth  of  employment  in  Europe  Balancing  Absolute  and 

Relative Trends, by Sem Vandekerckhove, Bart Capéau and Monique Ramioul of HIVA-K.U.Leuven. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  104 

index  enables  to  zoom  in  on  national  particularities  in  growing  sectors  without  being 
obscured by trends in larger countries. 

Figure 2.7: BRAT Index 

The  BART  Index  data  presented  above  measure  employment  growth  between  the  GDP-
growth  peaks  of  2000  and  2007  based  on  the  European  Labour  Force  Survey.  Although 
Construction (2.45 %) takes the lead, the whiskers (indicating standard deviation) show that 
its average growth is dispersed over countries with a very high growth and countries where 
the  sector  might  even  be  declining;  this  applies  also  (but  to  a  lesser  extent)  to  Health  & 
Social Work. On the other hand, this is not the case for Business Activities (2.38 %) and the 
IT sector, which are growing steadily in most or all countries. 

The weignted Job Quality Index (using European Working Conditions 2005 Survey data) uses 
weights for 38 measures according to the unique percentage of variance that it explains in 
three  aspects  of  employee  well-being  (physical  well-being,  psychological  well-being,  job 
satisfaction)  The  growing  sectors  (NACE  Two-Digit)  of  the  EU  economy  with  higher  than 
average  levels  of  job  quality  are:  Real  Estate  (Mean  Job  Quality  =  60.2),  Education  and 
Health (M=60.4); Public Administration (M=62.3); and, Financial Intermediation (M=67.7). 
The results below show the top ten sub sectors with the highest growth and below average 
job quality. Two of the three most critical are quite ‘feminised’ sectors: 1) Retail (M=53.5); 
2) Construction (M=52.1); 3) Hotels and Restaurants (M=48.8). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  105 

Figure 2.8: Job Quality Index 

NACE 
No. 

Sub Sectors 

Growth by 
BART Index 

Weighted 
Job Quality

45 

95 

55 

63 

28 

34 

93 

33 

50 

90 

Construction 

Activities of households as 
employers  

0.0246 

0.0036 

Hotels and restaurants 

0.0035 

0.0032 

0.0020 

0.0017 

0.0013 

0.0007 

Supporting and auxiliary 
transport activities 
Manufacture of fabricated 
metal products 
Manufacture of motor 
vehicles 
Other service activities 
Manufacture of medical, 
precision and optical 
instruments 

Sale, maintenance and 
repair of motor vehicles  

Sewage and refuse 
disposal, sanitation  

52.1 

41.9 

48.8 

53.2 

48.6 

51.9 

53.3 

52.8 

0.0007 

54.2 

0.0007 

49.3 

The  WALQING  researchers  note  that  European  employment  growth  has  not  exclusively 
been shaped by knowledge-intensity and skill-upgrading, and that employment growth does 
not  automatically  generate  ‘better  jobs’  with  satisfactory  wages,  autonomy,  learning 
opportunities, secure careers and participation in the workplace. A number of the growing 
sectors  attend  to  fairly  basic  needs  of  consumers  and  companies  (shelter,  food,  waste 
disposal,  and  care),  all  of  high  relevance  for  the  quality  of  life,  future  productivity  and 
sustainability  of  European  societies.  However,  many  segments  of  these  important  and 
expanding  sectors  are  characterised  by  poor  job  quality.  Low-skilled  work,  low  wages, 
insecurity,  health  and  safety  risks,  and  little  discretion  and  voice  tend  to  accumulate  and 
reinforce one another. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  106 

4: EUROPEAN SECTOR COUNCILS ON JOBS AND SKILLS 

The idea of creating EU-level sectoral councils on jobs and skills has received support from a 
range of studies and sources, since the European Commission announced in its December 
2008 Communication on New Skills for New Jobs (NSNJ) its intention to discuss setting up 
these  councils  with  the  sectoral  social  partners,55 an  idea  reiterated  in  a  June  2009 
Communication entitled A Shared Commitment for Employment .56 

In February 2010, an expert group on NSNJ set up by the Commission presented its report,57 
which  makes  a  series  of  concrete  recommendations  to  decision-makers  on  how  to  solve 
labour  market  needs.  The 
Europe’s 
recommendations include the following: 

skills  deficiencies  and  mismatches  with 

Create EU sectoral councils, bringing together existing national networks at EU level 
for  the  analysis  of  the  skills  needs  and  the  development  of  proposals  for  updated 
qualifications  in  each  sector.  Encourage  the  emergence  of  a  new  and  specific  body 
representing all key stakeholders of the learning sector at EU level. 

Most  recently,  in  November  2010,  the  Commission  issued  a  new  Communication,  entitled 
An  agenda  for  new  skills  and  jobs:  A  European  contribution  towards  full  employment,58 in 
which it sets out its views on ways in which the EU’s labour market targets for the coming 
years can be met, in the post-crisis context. 

Conclusions  and  recommendations  based  on  sectoral  studies  on  future  skills  needs 
conducted  by  the  Commission  had  revealed  a  need  for  stronger  cooperation  between 
stakeholders  —  that 
is,  businesses  and  social  partners,  public  authorities  and 
representatives  of  education  and  training  systems.  The  apparent  absence  of  exchanges  of 
information between existing national observatories on skills and jobs (or their equivalent), 
and  the  support  of  many  sectoral  social  partners  for  this  initiative,  convinced  the 
Commission to launch in 2009 a study to analyse the state of play with regard to national 
skills  councils  in  the  OECD  countries,  as  well  as  to  investigate  the  feasibility  of  setting  up 
such bodies at a European level. The study was published in February 2010 and some of its 
finding are summarised in box 2.4. 

55  New 

Skills 

for 

New 

Jobs 

COM(2008) 

868 

final: 

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0868:FIN:EN:PDF. 

56  A 

Shared 

Commitment 

for 

Employment 

COM(2009) 

257 

final: 

http://register.consilium.europa.eu/pdf/en/09/st10/st10628.en09.pdf. 

57  Expert  Group  on  New  Skills  for  New  Jobs  (2010),  New  Skills  for  New  Jobs:  Action  Now,  European 

Commission, http://ec.europa.eu/social/main.jsp?catId=568&langId=en. 

58  An  agenda  for  new  skills  and  jobs:  A  European  contribution  towards  full  employment  COM(2010)  682: 

ec.europa.eu/social/BlobServlet?docId=6328&langId=en. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  107 

Box 2.4: National sector councils on employment and skills 

The  European  Commission’s  feasibility  study  on  EU-level  sector  councils  on 
employment  and  skills,  published  in  February  2010, 59  looked  at  national  sector 
councils, defining them as bodies that: 

●  deal with one specific economic sector; 

●  seek  to  gain  insight  into  likely  developments  in  employment  and  skills  needs,  with 

the aim of assisting policy making within or for the sector concerned; 

●  do so by providing analysis of developments on the sectoral labour market; 

●  function as a platform in which at least two types of stakeholder are involved; and 

●  work in a structured and continuous way. 

The  study  also  looked  at  ‘transversal  councils’,  which  are  similar  to  sector  councils, 
but cover trends and developments in two or more sectors of the labour market. 

Main features 

Sector councils and transversal councils for employment and skills are defined by three 
main features: 

●  they carry out or commission forecasting studies on jobs and/or skills in a sector; 

●  the outcomes of these studies are discussed in a sectoral dialogue in which at least 

two types of stakeholder are involved; and 

●  these  discussions  lead  to  proposals  and/or  actions  to  bridge  quantitative  and/or 

qualitative gaps. 

The study found that 22 of the 27 EU Member States have at least one type of council, 
under various names and in various forms. The councils can deal with initial vocational 
education  and  training  (IVET)  and/or  continuing  vocational  training  (CVT),  and  they 
can operate at national and/or regional level. 

Objectives and activities 

All sector and transversal councils have a common objective: to improve the match on 
the  labour  market  between  demand  and  supply  in  quantitative  (jobs)  and/or 
qualitative  (skills  and  competences)  terms.  To  achieve  this  main  objective,  councils 
can implement a variety of activities, notably: 

●  analysing quantitative trends on the labour market; 

59  Sector  Councils  on  Employment  and  Skills  at  EU  level  —  A  study  into  their  feasibility  and  impact: 

https://ec.europa.eu/employment_social/anticipedia/document/show.do?id=2947. 

 
 
 
 
                                                       
 
Restructuring in Europe  108 

●  analysing qualitative trends in the labour market; 

●  developing  policy  proposals  to  bridge  quantitative  gaps  between  supply  and 

demand; 

●  developing policy proposals to bridge qualitative gaps between supply and demand; 

●  fostering  cooperation  between  firms  and  vocational  education  and  training 

providers; and 

●  implementing programmes of actions to bridge gaps. 

Most sector councils focus on qualitative skills gaps, analysing qualitative trends on the 
labour market and responding to skills/competency needs. Almost as frequently, they 
analyse  quantitative  trends  on  the  labour  market  —  that  is  the  number  of  job 
opportunities that are available currently and, more importantly, in the future. 

Representation 

If councils are linked to the IVET system, in most cases employers’ organisations, trade 
unions,  the  ministry  responsible  for  the  sector  and  the  IVET  providing  system  are 
represented  on  their  boards.  CVT-oriented  councils  are  typically  financed  and  led  by 
the social partners. 

Efforts  to  make  education  and  training  more  demand-oriented  require  a  focus  on 
companies  and  production  technologies,  and  this  is  reflected  in  the  objectives  of 
national  councils  (and  the  desired  composition  of  EU-level  councils).  Some 
stakeholders, and in particular trade unions, bring to the fore the implications for the 
quality of work. This is more easily done in CVT-oriented councils where social partners 
have  the  predominant  role,  and  in  countries  where  tripartite  policy  making  and 
management are more common. 

4.1: FEASIBILITY STUDY’S RECOMMENDATIONS AND POLICY OPTIONS 

Based  on  the  analysis  of  national  experiences,  expert  interviews  and  a  survey  amongst 
stakeholders  in  five  sectors  (textiles,  wearing  apparel  and  leather  products,  construction, 
distribution and trade, and health and social work), the feasibility study made seven general 
recommendations: 

●  proceed with promoting EU-level Sector Councils on Jobs and Skills; 

●  set realistic objectives and expectations; 

●  ensure commitment from stakeholders for any EU initiative to promote such councils by 
making  participation  voluntary,  and  making  support  temporary  and  dependent  on 
achievements agreed upon in advance; 

 
 
 
 
 
 
Restructuring in Europe  109 

●  make EU support dependent on a few stringent conditions and agreement on targets at 
the  stage  of  applying  to  set  up  a  council,  and  on  participation  in  monitoring  and 
evaluation measures; 

●  promote cooperation with existing EU initiatives, notably in the fields of labour market 

trends, and education and training; 

●  put  the  initial  focus  on  information  exchange  and  on  the  social  partners,  while 

considering a multi-stage involvement of the other relevant stakeholders; and 

●  establish a transversal council with a limited number of objectives. 

The study provided three policy options for the future: 

●  no  policy,  with  no  action  is  pursued  and  the  current  situation  prevailing  in  the  future. 
Although not generating immediate negative effects, this option was considered a loss of 
opportunities to reinforce existing initiatives in Member States, extend good practices to 
other Member States and increase the available knowledge at EU level; 

●  focus  on  information  exchange.  This  option  would  recommend  that  national  sector 
councils  exchange 
identification  and  monitoring  of  future 
employment  and  skills  needs  in  the  sector  concerned,  in  terms  of  both  tools  and 
outcomes; and 

information  on  the 

●  focus on policy initiatives. This option would consider information exchange as a basis for 
the  development  of,  or  support  for,  concrete  policy  actions.  The  focus  of  this  option 
would be on objectives related to furthering the responsiveness of the education sector, 
and  the  quantitative  and  qualitative  alignment  of  future  skills  needs  and  the  education 
sector. 

The  Consultative  Commission  on  Industrial  Change  CCMI  of  the  European  Economic  and 
Social  Committee  issued  an  opinion  on  sector  councils  on  employment  and  skills,  which 
supported the concept and recommended cooperation between sectoral councils. For more 
details, see box 2.5 below. 

Box 2.5: CCMI opinion on matching skills: sector councils on employment and 
skills 60 

This  opinion,  which  was  adopted  on  17  February  2010,  states  that  European  sectoral 
councils  (ESCs)  involving  various  stakeholders  should  provide  crucial  support  in  the 
process  of  anticipating  and  managing  sectoral  changes,  in  particular  in  terms  of 
employment  and  skills  needs,  in  order  to  adapt  skills  to  supply  and  demand.  The 

60  CCMI 

opinion 

on  matching 

skills: 

sector 

councils 

on 

employment 

and 

skills: 

http://www.eesc.europa.eu/?i=portal.en.ccmi-opinions.14368. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  110 

Committee supports the concept of a sectoral council based on the model proposed in 
European social dialogue. 

It  states  further  that  the  activities  of  the  European  sectoral  dialogue  committees 
(ESDC)  could  serve  as  an  operational  model  for  the  sectoral  councils.  However,  ESCs 
can have a broader scope, in terms of the number of stakeholders they comprise, and a 
more independent role than ESDCs, focusing more on skills and the labour market than 
social dialogue. Those sectors without European Social Dialogue (ESD) structures should 
also have the opportunity to set up ESCs. A new ESC could then serve as a basis for the 
creation of a new ESDC. 

With a view to strengthening the impact of ESCs on sectoral changes, they should give 
consideration  to  continuing  education  at  all  levels.  Using  the  open  method  of 
coordination  as  a  basis,  it  is  important  to  move  towards  integration  of  policy  on 
continuing training. 

Professional associations and organisations providing vocational education and training 
should  participate  in  ESCs.  Furthermore,  ESCs  should  cooperate  with  European 
universities  and  higher  education  establishments,  which,  in  turn,  should  create a  link 
between industry and academic research relating to training. 

Structural  and  information-based  support  for  the  work  of  sectoral  councils  by  the 
European  Centre  for  the  Development  of  Vocational  Training  (Cedefop)  and  the 
European  Foundation  for  the  Improvement  of  Living  and  Working  Conditions 
(Eurofound)  should  be  taken  into  account  in  the  designation  of  the  tasks  of  these 
institutions. 

Sectoral  councils,  both  at  European  and  national  level,  should  cooperate  and  even 
create links with employment and skills observatories and their national and European 
networks. 

4.2: MODEL CHOSEN BY THE COMMISSION 

Based  on  the  conclusions  of  the  above-mentioned  feasibility  study,  the  Commission  has 
developed  an  initiative  to  set  up  European  Sector  Councils  on  Jobs  and  Skills,  which  are 
networks  of  existing  national  sector  skills  councils.  The  feasibility  study  showed  that  at 
present, national sectoral skills councils exist in many EU Member States; overall, taking into 
account the diversity of sectors and regions, there may be more than 2 500 of these bodies 
in place. The majority of these are facing the same types of challenges, but unfortunately 
there is little or no exchange of information and discussion between them. 

The objective is to develop, at European level, platforms for national sector skills councils, 
social  partners  and  education  and  training  representatives  to  share  information  on: 
quantitative  and  qualitative  trends  relating  to  existing  skills  gaps  and  future  skills  needs; 
best practices; and tools, processes and strategies implemented nationally. This information 
should  be  monitored,  discussed  and  disseminated  to  a  wider  audience,  together  with 

 
 
 
 
 
Restructuring in Europe  111 

recommendations for the attention of policy makers and other stakeholders. The objectives 
are to: 

●  create a community of practice between these actors in the field of skills anticipation and 
labour  market  needs,  sharing  information  on  both  initial  vocational  education  and 
training and continuing vocational training; 

●  facilitate the dissemination and use of European instruments in the field of employment 
and education and training — the European Credit System for Vocational Education and 
Training  (ECVET),  the  European  Quality  Assurance  Reference  Framework  for  Vocational 
Education  and  Training  (EQARF),  the  European  Qualifications  Framework  (EQF)  and  the 
Europass European CV; and 

●  optionally  and  conditional  upon  the  success  of  the  first  objective,  have  the  councils 
develop  joint  policy  initiatives  for  their  sector,  such  as  proposals  for  qualification  and 
competence standards for the sector at European level. 

4.3: FIRST PILOT SECTOR COUNCILS ON JOBS AND SKILLS 

The Commission decided to launch the European Sector Councils on Jobs and Skills initiative 
in a limited number of pilot sectors. The model chosen for the creation of these European 
councils is to leave their governance to the sector’s stakeholders, more particularly to the 
European-level  social  partners  in  those  sectors  for  which  a  European  social  dialogue 
committee exists. In April 2010 the Commission invited the relevant sectoral social partners 
to  take  a  voluntary  initiative  to  create  a  European  council  in  their  sector  and  to  submit  a 
joint request to the European Commission for its establishment and financial support. 

So far, the textile, clothing, footwear and leather sector is closest to launching the first EU 
sector council. The automotive commerce and steel sectors are also exploring the possibility 
of setting up EU councils for their sectors. There is a great interest from many sectors and 
stakeholders in this initiative, the issue of skills having gained huge attention in recent years, 
as a result of concerns regarding the competitiveness of European companies in need of a 
skilled workforce, and with the ageing of the population and the need to meet the demand 
for  replacements.  This  is  no  surprise  since  the  vast  majority  of  economic  sectors  are 
affected by these phenomena and all are fighting to attract the best talent. 

Structure proposed 

European Sector Councils on Jobs and Skills will include a limited number of representatives 
of  each  national  sector  council,  or  equivalent,  in  Member  States  where  such  structures 
exist. The European-level sectoral social partners and other representatives of the sector, in 
particular  in  sectors  where  there  is  no  European  social  dialogue,  will  be  members  of  the 
councils’  boards  and  responsible  for  their  day-to-day  management.  European-level 
representatives of education and training systems will also be full members of the councils 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  112 

It is envisaged that the sector councils will meet twice a year, with larger-scale conferences 
held to disseminate the information collected as well as to share recommendations made 
with a wider audience. 

Timetable and Commission support 

The establishment of European Sector Councils on Jobs and Skills is being carried out in two 
phases.  The  first  phase  consists  of  the  identification  by  the  sectoral  social  partners  of 
existing national observatories and councils on jobs and skills for the sector concerned. This 
first phase also serves to test the opportunity to launch a sector council at European level or 
not,  by  questioning  the  national  councils  on  their  interest  in  the  initiative,  their  likely 
involvement, the type of information they would like to exchange and the type of actions 
they would want to see developed by the European network. 

The second phase involves the creation of the sector council itself, bringing together these 
bodies in a network and starting the information collection and sharing process. 

The  Commission  will  financially  support  the  sector  councils  and  the  social  partners. 
However, this support will be conditional on an evaluation of the sector councils in terms of 
output, commitment, satisfaction and value added. 

The  next  section  of  this  chapter  focuses  on  skills  initiatives  in  the  automotive  sector,  a 
sector  that  has  already  been  identified  in  various  parts  of  this  report  as  being  faced  with 
significant change over the coming years. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  113 

5: SKILLS INITIATIVES IN THE AUTOMOTIVE SECTOR 

The  automotive  industry  is  a  key  sector  in  the  EU  economy.  Europe  is  the  world’s  largest 
producer  of  motor  vehicles,  making  almost  a  third  of  its  passenger  cars.  According  to  the 
European  Automobile  Manufacturers  Association  (ACEA),  within  the  EU  there  are  around 
240 vehicle production and assembly plants in 19 Member States, producing passenger cars, 
light commercial vehicles or vans, buses and coaches, medium-sized and heavy duty lorries 
and  engines,  plus  over  8 000  equipment  manufacturers.  The  sector  is  Europe’s  largest 
private  investor  in  research  and  development,  investing  nearly  € 20  billion  in  this  area 
annually, and is a key driver of innovation. 

The automotive sector is a major employer of skilled workers. In 2007, according to ACEA, it 
employed  directly  2.2  million  people  in  the  EU  (6.5 %  of  total  employment  in  EU 
manufacturing)  in  automotive  manufacturing,  equipment  and  accessories,  plus  bodywork, 
trailers  and  caravans.  A  further  9.8  million  people  were  employed  indirectly  in  related 
manufacturing  activities  (eg  tyres,  gears  and  electrical  equipment),  automobile  use  (eg 
sales, distribution, maintenance and repairs) and passenger and freight road transport. The 
EU Member States with the largest direct automotive workforces are Germany, France, the 
UK, Italy, Spain, Poland and the Czech Republic. 

Over  the  past  century,  the  automotive  industry  has  been  characterised  by  one  constant 
factor: change. It was thus already undergoing a process of restructuring before the onset of 
the financial and economic crisis in 2008-2009. It was facing: overcapacity and declining car 
ownership through increased urbanisation and congestion; stagnation in western markets, 
though coupled with significant growth elsewhere; consolidation; and increasing fuel costs 
and  environmental  concerns.  The  crisis  has  only  compounded  the  sector’s  inherent 
problems. For an overview of the drivers of change in the automotive industry, see box 2.6. 

Against  this  background,  the  various  actors  in  the  automotive  sector  have  increasingly 
become  aware  of  the  need  to  anticipate  change,  and  to  take  a  proactive  approach  rather 
than to react in a defensive and protectionist way. Areas where the automotive industry has 
been active in moving forwards and formulating new policy include using new technology, 
specifically green technology, in response to environmental concerns. 

Box 2.6: Drivers of change in the automotive industry 

Changes  in  society  and  evolution  of  demand.  The  need  for  mobility  remains  high  in 
mature  economies  and  is  increasing  in  emergent  ones,  but  is  accompanied  by  new 
pressures  and  aspirations,  such  as  environmental  concerns,  urbanisation,  demand  for 
differentiation  and  increased  energy  prices.  The  car  is  becoming  less  a  prized 
possession  and  more  a  means  of  transport  (which  increases  competition  with  other 
modes of transport, especially in cities, and raises the importance of user costs). 

Emerging  technology.  The  car  industry  has  always  been  one  of  the  most  innovating 
sectors and is likely to be even  more so  in the future.  Three areas  of technology are 

 
 
 
 
 
 
 
 
Restructuring in Europe  114 

particularly  important:  electronics  and  ICT;  new  composite  materials;  and  new,  non-
fossil fuel forms of propulsion. 

Company  strategies.  The European  industry is  composed  of internationally recognised 
specialist manufacturers and large generalist ones less involved in exporting. The pace 
of  internationalisation  of  the  latter  will  be  important  in  competition  with  low-cost 
producers  outside  Europe,  as  will  be  the  range  of  models  they  can  offer  and  the 
innovations incorporated in them. 

Policies  of  regulation.  Such  policies  include  fiscal  measures  as  well  as  the  regulatory 
framework  as  such,  and  affect  both:  the  supply  side,  by  imposing,  for  example, 
limitations  on  CO2  emissions;  and  the  demand  side,  by  raising  prices,  as  well  as 
stimulating new technologies. 

5.1: EUROPEAN PARTNERSHIP FOR THE ANTICIPATION OF CHANGE IN THE AUTOMOTIVE 
INDUSTRY 

A  European  partnership  for  the  anticipation  of  change  in  the  automotive  industry  was 
launched in October 2007 on the occasion of a Restructuring Forum on the sector organised 
by  the  European  Commission.  The  partnership  is  based  on  a  joint  declaration61 by  ACEA, 
representing automotive manufacturers, the European Association of Automotive Suppliers 
(CLEPA) and the European Metalworkers’ Federation (EMF), supported by the Commission. 
The  partnership’s  aim  is  to  better  anticipate  and  manage  changes  in  the  European 
automotive sector, thus contributing to the industry’s sustainability. 

The partnership declaration presents a common diagnosis of the issues facing the sector. It 
outlines the role and responsibilities of each actor (the EU, governments, companies, trade 
unions  and  regions)  in  the  common  mission  of:  maintaining  and  strengthening  the 
competitive  position  of  EU  automotive  companies;  creating  high-quality 
jobs;  and 
reinforcing the employability of the sector’s workers, seen as a precondition for sustainable 
growth and social cohesion. The declaration sets out ‘key factors of success to overcome the 
challenges’ facing the industry, as follows: 

●  mutual trust and partnership are essential between all the actors; 

●  there  must  be  better  regulation  and  policy  coordination,  particularly  relating  to 

competitiveness, environment and employment; 

●  innovation is the key factor for competitiveness; 

●  investment in employees’ skill enhancement is vital; 

The challenges of the automotive industry — Towards a European partnership for the anticipation of 

61 
change: http://www.anticipationofchange.eu/fileadmin/anticipation/Logos/EU_partnership_en.pdf. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  115 

●  improvements in productivity must continue; and 

●  it is necessary to continue to facilitate anticipation, preparation and good management 

of change and restructuring. 

The  parties  agreed  to  work  together  in  order  to  support  the  creation  of  analysis  and 
forecasting tools, cooperate in the dissemination and discussing of the findings, and ensure 
the provision of accurate anticipation and adaptation tools. 

Two  12-month  projects  have  been  conducted  by  CLEPA  and  EMF  —  with  ACEA  and  the 
Council of European Employers of the Metal, Engineering and Technology-Based Industries 
(CEEMET)  acting  as  observers  —  with  the  aim  of  implementing  the  partnership’s  work 
plan.62 The European Commission’s Directorate-General for Employment, Social Affairs and 
Inclusion  provided  financial  support.  The  first  project  focused  on  good  practices  in  the 
anticipation  of  change  and  skills  needs  and  the  enhancement  of  employability,  while  the 
second  tackled  issues  such  as  sustainable  mobility,  evolving  societal  demands,  energy 
supply and efficiency, and electric cars. For more details, see box 2.7. 

Box  2.7:  European  partnership  for  the  anticipation  of  change  in  the 
automotive industry — main outcomes of projects, 2008-2011 

First project, 2008-2009 

The project produced three studies, dealing with: 

●  good practices in anticipating and managing change within companies and regions; 

●  good  practices  in  increasing  skills  levels  and  employability  within  companies, 

regions and sectors; and 

●  an analysis of automotive regions. 

Two dissemination events were held to mobilise the actors around the main principles 
and objectives of the project: 

●  a  forum  on  good  practices  in  anticipating  and  managing  change  within  companies 
and regions in the automotive industry, held on 15 June 2009 at the Committee of 
the Regions, Brussels; and 

●  a  forum  on  anticipation  of  change  in  the  automotive  sector,  held  on  14  October 

2009 at the European Parliament, Brussels. 

On  the  occasion  of  the  forum  in  October  2009,  CLEPA  and  EMF  presented  a  joint 
declaration 63  which  addressed  the  key  issues  currently  faced  by  the  automotive 

62  For more details, see http://www.anticipationofchange.eu/. 

63  CLEPA and EMF joint declaration: http://www.clepa.eu/index.php?id=388. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  116 

industry and identified the main actions to be taken in order to tackle them. The joint 
declaration recommended action in the following areas: 

●  the  creation  of  a  Pan  European  Observatory  that  draws  upon  the  best  practices  of 
government  bodies,  consultancy  companies,  and  research  institutes  and  acts  to 
coordinate  activity  between  the  existing  observatories;  builds  on  a  network  of 
international  agencies;  conducts  primary  research,  and  makes  policy  options 
available to key stakeholders. The ‘European Observatory’ would in this way provide 
analysis  of  drivers  of  the  long  term  eg  consumer  attitudes,  changing  life  style, 
urbanisation,  that  can  also  be  fed  into  the  national  observatories  and  so  inform 
European, regional and company decision-making; 

●  the financing of primary research on the objectives and challenges (eg environment, 
pricing, 
Social 
sustainable 
Responsibility,  and  the  relationships  between  them)  of  the  industry  so  firms  can 
better align themselves strategically; 

development,  Corporate 

adaptation, 

urban 

●  the  setting  up  of  specific  partnerships,  with  European  Social  Fund  support,  to 
minimise social impact ie specific action plans and burden sharing agreements with 
regional and local authorities; and 

●  the financing through the European Social Fund of business and education initiatives 
that focus on the tools and techniques of anticipation in the automotive industry. 

Second project, 2010-2011 

The second project focuses on actions on three issues: 

●  mobility, quality of life and societal demands; 

●  the impact of regulatory changes; and 

●  integration of the supply chain. 

Main events under the project include: 

●  a  conference  entitled  What  future  for  transport?  Beyond  challenges,  towards  a 
shared  vision  for  mobility,  held  on  27  April  2010  at  the  European  Economic  and 
Social Committee, Brussels. This conference debated the question of future mobility 
and its impact on the automotive sector with a view to deepening collaboration of 
the  sector’s  main  actors  and  developing  a  joint  policy  approach  to  enhance  the 
future  competitiveness  of  this  industry.  The  project  participants  believe  that  only 
by  anticipating  future  changes  in  mobility  and  transportation  needs,  can  the 
European  Automotive  Industry  generate  growth,  efficiently  reallocate  labour  to 
relevant  activities  and,  at  the  same  time,  upgrade  workers’  skills  to  contribute  to 
their long-term employability; 

●  a  forum  on  electro-mobility,  held  on  30  June  2010  at  the  European  Economic  and 
Social  Committee,  Brussels.  This  forum  provided  high-level  discussions  among  all 

 
 
 
 
Restructuring in Europe  117 

relevant  stakeholders  with  a  view  to  fostering  an  ‘integrated  approach’  that  will 
enable electro-mobility to achieve the expected results in terms of competitiveness 
and  employability  of  the  workforce.  In  terms  of  future  action,  the  following  areas 
are  a  priority:  ensuring  that  alternative  propulsion  vehicles  are  at  least  as  safe  as 
conventional  ones;  fostering  education  and  training  practices  to  ensure  the 
transition  of  the  workforce  through  new  green  jobs;  promoting  common  standards 
that will allow all electric vehicles to be charged anywhere in the EU; encouraging 
installation  of  publicly  accessible  charging  points;  ensuring  the  development  of 
smart electricity grids; and updating the rules and promoting research on recycling 
of batteries; and 

●  two  more  public  events  on  the  impact  of  the  regulatory  framework  (27  October 

2010) and integration of the supply chain (January 2011). 

These two projects can be seen as an important contribution to the debate about the 
key  issues  facing  the  automotive  industry  in  the  future.  They  have  brought  together 
the  main  actors  concerned  with  this  sector  and  have  brought  relevant  issues  to 
prominence at EU level. The main stakeholders have formulated a plan of action that 
will now take these issues forward. 

5.2: ANTICIPATION OF SKILLS NEEDS — TOWARDS A EUROPEAN SECTOR COUNCIL 

As part of the European partnership for the anticipation of change in the automotive sector, 
the EMF and CLEPA called in October 2009 for the creation of a pan-European observatory 
on  skills  issues.  In  an  April  2010  Communication  entitled  European  strategy  on  clean  and 
energy-efficient  vehicles,64 the  European  Commission  stated  that,  based  on  this  request,  it 
would  establish  a  European  sectoral  skills  council  for  the  automotive  industry,  involving  a 
network  of  national  observatories.  The  initiative  forms  part  of  the  Commission’s  current 
initiative to launch European Sector Councils on Jobs and Skills in a number of pilot sectors 
— see section 4.3 of this chapter for details. 

The context for the automotive initiative is that the sector is increasingly being affected by 
technological changes, which are themselves closely linked to new societal demands. These 
technological changes imply renewed efforts in research and development and create high 
pressure in terms of new skills requirements and qualification needs. Adverse demographic 
trends also constitute a major challenge. 

Automotive  industry  stakeholders  therefore  see  it  as  very  important  to  anticipate  these 
changes and prepare companies and workers well in advance, in particular to ensure that 
the  sector  has  a  suitably  skilled  workforce  throughout  Europe.  Any  successful  business 
innovation policy depends on accurate anticipation of the skills needs and on avoiding skills 

64  European 

and 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0186:FIN:EN:PDF. 

energy-efficient 

strategy 

vehicles 

clean 

on 

COM(2010) 

186 

final: 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  118 

shortages.  New  tasks,  new  skill  profiles  and  new  working  arrangements  will  be  needed  in 
the  automotive  sector,  and  it  is  thus  necessary  to  reflect  on  how  to  manage  the 
transformation  process.  Anticipating  needs  and  reinforcing  investment  in  education  and 
training are essential to give the European automotive industry a suitably skilled workforce, 
thus guaranteeing its future competitiveness. 

The European-level automotive social partners and industry organisations are now working 
on  concrete  ways  of  establishing  a  European  sectoral  skills  council,  by  mapping  existing 
national  and  regional  sector  councils  and  labour  market  intelligence  concerning  the 
automobile industry throughout the European Union. 

The  role  of  this  council  would  be  to  help  existing  national  observatories  on  skills  and 
qualifications  in  the  automotive  sector,  facilitate  the  exchange  of  information  between 
them,  and  allow  its  dissemination  to  a  wider  audience.  The  participants  would  be  the 
European  social  partners  and  representatives  from  national  sectoral  observatories.  The 
Commission would act as an observer and support the initiative financially. 

A  European  sectoral  skills  council  will  not  bring  about  ground-breaking  technological 
innovations  but  it  will  provide  the  necessary  information  and  exchanges  of  good  practice. 
This will help to ensure that the European automotive industry’s workforce can rapidly and 
effectively adapt to technological innovations and challenges. 

Aside  from  sector-specific  concerns,  SMEs  have  particular  needs  and  are  in  a  different 
situation  from  larger  companies  when  it  comes  to  maintaining  and  improving  the  skills 
levels of their workforce. Therefore, in the final part of this chapter, we turn to the specific 
challenges faced by SMEs. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  119 

6: TRAINING IN SMALL AND MEDIUM-SIZED ENTERPRISES 

6.1: SMEs IN EUROPE 

Small and medium-sized enterprises (SMEs) are the backbone of the EU economy. In 2008, 
according  to  Eurostat  figures,65 of  nearly  20.8  million  companies  in  the  EU,  99.8 %  were 
SMEs,  defined  officially  in  employment  terms  as  those  with  fewer  than  250  employees  — 
see table 2.3. SMEs are further divided by the EU into medium-sized enterprises, with 50-
249 employees, small enterprises with 10-49 employees, and micro enterprises, with fewer 
than 10 employees. Micro enterprises made up 91.8 % of EU companies in 2008. 

In 2008, SMEs accounted for around two-thirds (67.4 %) of all employment by enterprises, 
while micro enterprises employed around three out of 10 (29.7 %) of the total. 

The  relative  importance  of  SMEs  —  and  of  the  various  size  categories  of  SME  —  varies 
considerably  between  countries  and  between  economic  sectors.  Average  firm  size  is 
smallest, in employment terms, in Greece and Malta, followed by the Czech Republic, Italy 
and Portugal. It is largest in Slovakia, followed by Germany, Ireland and the UK. 

In sectoral terms, in 2008 SMEs accounted for 88 % of all employment in construction, and 
83 %  in  hotels  and  restaurants.  However,  they  employed  only  22 %  of  the  workforce  in 
electricity, gas and water supply, and 31 % in mining and quarrying. 

65  European Commission (2010), ‘European SMEs under Pressure, Annual Report on Small and Medium-sized 
Industry: 

Enterprises 
Enterprise 
http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-
review/pdf/dgentr_annual_report2010_100511.pdf. 

Directorate-General 

2009’, 

and 

for 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  120 

Table 2.3: Enterprises and occupied persons, by size class, in the non-financial business 
economy, EU 27, 2008 estimates 

Size class 

Enterprises 

Employment 

Average occupied 
persons per 
enterprise 

Micro 

Small 

Medium 

SMEs 

Large 

Total 

No. 

19 058 000 

1 424 000 

226 000 

20 709 000 

43 000 

% 

91.8 

6.9 

1.1 

99.8 

0.2 

No. 

39 630 000 

27 652 000 

22 665 000 

89 947 000 

43 414 000 

% 

29.7 

20.7 

17.0 

67.4 

32.6 

20 752 000 

100.0 

133 362 000 

100.0 

No. 

2.1 

19.4 

100.3 

4.3 

1 006.1 

6.4 

Source: Eurostat, as elaborated by EIM Business & Policy Research for European Commission (2010), 
‘European SMEs under Pressure, Annual Report on Small and Medium-sized Enterprises 2009’, 
Directorate-General for Enterprise and Industry. 

SMEs are a key driver of economic growth, innovation, employment and social integration, 
and  the  European  Commission  sees  it  as  vital  to  mobilise  and  adapt  to  small  business  all 
existing  policies  and  tools,  at  both  European  and  national  levels.  The  Commission  has 
developed and implements a range of policy measures specifically meant to assist SMEs in 
Europe.66 These  policies  aim  to  create  conditions  in  which  small  firms  can  be  created  and 
thrive. If the EU is to achieve its goals of speeding up economic growth and creating more 
and  better  jobs,  it  will  be  SMEs  which  will  play  the  most  important  role,  in  particular 
because these firms are the main source of new jobs in Europe. In order to better integrate 
the  SME  dimension  into  EU  policies,  a  special  SME  envoy67 was  appointed  within  the 
Commission’s Directorate-General for Enterprise and Industry. In addition, in June 2008, the 
Small Business Act for Europe was adopted as a comprehensive policy framework for the EU 
and its Member States. 

Box 2.8: EU measures to help SMEs 

The  European  Commission  has  developed  and  implements  a  range  of  policy  measures 
specifically  meant  to  assist  SMEs  in  Europe.  These  policies  are  aimed  at  creating 
conditions in which small firms can be created and can thrive. EU policy in relation to 
SMEs is concentrated in five key areas: 

●  promotion of entrepreneurship and skills; 

66  For further information, see http://ec.europa.eu/enterprise/policies/sme/index_en.htm. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  121 

●  improvement of SMEs’ access to markets; 

●  cutting red tape; 

●  improving the growth potential of SMEs; and 

●  consultation with SME stakeholders. 

The  Small  Business  Act  (SBA)  for  Europe,  adopted  in  2008,  aims  to  put  into  place  a 
comprehensive  policy  framework  for  the  EU  and  its  Member  States.  The  SBA  is  an 
ambitious package of policies designed to put SMEs’ interests at the centre of decision-
making. At the height of the economic and financial crisis, SBA implementation in the 
first year focused delivery on the following priorities: 

●  reducing administrative burden for SMEs; 

●  access to finance; 

●  access to markets; and 

●  promoting entrepreneurship. 

6.2: GUIDE FOR TRAINING IN SMEs 

A recent specific initiative by the European Commission to assist small business is a Guide 
for  training  in  SMEs,  published  in  June  2009.68 The  guide  illustrates  how  training  and  skills 
development can be successfully developed and implemented in SMEs despite the internal 
and external barriers that these firms face in this area. It is based on work carried out in the 
context of the Restructuring Forum on the adaptation of SMEs to change, held in November 
2007,  and  was  prepared  by  the  Directorate-General  for  Employment,  Social  Affairs  and 
Inclusion,  in  cooperation  with  other  Commission  Directorates-General,  key  institutions  in 
European training policy and the European-level social partners. 

Based  on  an  evaluation  of  practical  experience  and  innovative  solutions  to  address  major 
challenges  and  problems  (with  references  to  50  cases  of  good  practice),  the  guide  for 
training in SMEs provides a comprehensive and systematic overview of concrete solutions 
and  key  elements  in  various  areas  where  SMEs  typically  face  problems  and  obstacles  in 
preparing,  implementing  and  managing  training  appropriately.  It  groups  the  various 
challenges and solutions around three basic aspects: 

●  addressing internal barriers and obstacles to training facing SMEs; 

●  finding suitable methods and techniques for training; and 

67  For further information, see http://ec.europa.eu/enterprise/entrepreneurship/sme_envoy.htm. 

68  European  Commission  (2009)  Guide  for  training  in  SMEs,  DG  Employment,  Social  Affairs  and  Inclusion  

http://ec.europa.eu/social/main.jsp?langId=en&catId=782&newsId=544&furtherNews=yes. 

 
 
 
 
 
 
                                                                                                                                                                         
 
Restructuring in Europe  122 

●  coping with current and structural challenges of competence development. 

For each topic covered, the guide highlights major lessons to be learned, crucial factors of 
success and aspects of transferability. In the next sections, we summarise some of the main 
challenges and solutions identified by the guide. 

Box 2.9: Other studies on the skills needs of SMEs 

Report on the identification of future skills needs in micro and craft (-type) 
enterprises up to 2020 

Industry  Directorate  General  has 
The  European  Commission,  Enterprise  and 
commissioned  a  major  research  study  focusing  on  the  identification  and  analysis  of 
skills  needs  in  micro  and  craft  (-type)  companies. 69  The  research  study  aims  to 
contribute  to  a  better  understanding  of  current  and  future  skills  needs  of  micro  and 
craft enterprises in Europe and to mainstream better the needs of these enterprises in 
existing  policy  initiatives  at  EU  level  aiming  at  anticipating  and  matching  labour 
market  and  skills  needs,  identification  of  skills  needs  and  mismatches,  and 
strengthening the links between vocational education and training (VET) and the labour 
market. This study is regarded as a part of the New Skills for New Jobs initiative and it 
should support the implementation of the Small Act for Europe. 

This  study  identified  future  skills  needs  in  micro  and  craft  enterprises  up  to  2020  in 
three  important  economic  sectors:  construction,  food  and  private  personal/health 
services.  Recommendations  are  summarised  with  a  focus  on  three  main  areas  of 
practice:  future  skills  forecasting,  communicating  future  skills  needs  and  integrating 
future skills into training programmes. 

The  qualifications-supporting  company  —  How  do  small  and  medium  sized 
enterprise support formal adult education? 

 analysed 
The  EC-funded 
participation  by  employees  of  small  and  medium  enterprises  (SMEs)  in  formal 

‘Lifelong  Learning  2010’ 

research  project 70

69 For more details, see http://ec.europa.eu/enterprise/policies/sme/index_en.htm. 

70 The  LLL2010  project  (supported  by  the  EC’s  6th  Framework  Programme  for  Research,  2006-2011  — 
http://lll2010.tlu.ee/)  studied  lifelong  learning  through  a  network  of  fourteen  institutions  in  different 
countries/regions: Austria, Belgium, Bulgaria, Czech Republic, England, Estonia, Hungary, Ireland, Lithuania, 
Norway,  Scotland,  Slovenia  and  Russian  Federation.  It  conducted  research  with  adults  who  are 
participating in formal education (or studies the reasons for non-participation), within small and medium 
enterprises (SMEs) and within schools, universities and other providers of adult education. 

A  summary  of  the  research  on  formal  LLL  practices  within  SMEs  was  published  in  the  Journal  of  Workplace 
Learning (Vol. 22 No 1/2, 2010, pp. 79-93): ‘Formal adult learning and working in Europe: a new typology of 
participation  patterns’  by  Günter  Hefler  and  Jörg  Markowitsch,  Danube  University,  Krems,  Austria.  This 
paper was the winner of the Best Paper Award at the 6th International Conference on Researching Work 
and Learning, Denmark, June 2009. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  123 

adult  education  (education  and  training  in  the  regular  system  of  schools, 
universities  and  colleges).  Based  on  89  case  studies  of  SMEs  in  12  European 
countries  (covering  113  employees)  the  researchers  developed  a  typology  of 
adult participation in LLL, identifying five basic types of participation patterns: 

o  Completing  —  these  are  adults  usually  aged  between  15  and  25  years  who 
combine working and studying for economic reasons. Their main focus is on 
completing their education. 

o  Returning — these are adults who have stopped their education in the past 

and, having worked for some years, decide to take up education again. 

o  Transforming — these are adults who are making a fundamental change in 
career. Their current employment is considered temporary and will be left 
when a position comes up in the new field. 

o  Reinforcing — these are adults who enter education to progress within their 
chosen career and generally this provides the greatest potential for support 
from  employers.  [Four  subtypes  are  distinguished:  progressing,  adapting, 
specialising and peaking.] 

o  Compensation  —  these  are  adults  who  engage  in  education  because  their 
career is unsatisfactory and education benefits them on a personal level. 

The  research  provides  a  deeper  insight  into  the  individual  and  organisational 
interests  of  adult  education,  as  well  as  on  the  interaction  (and  barriers) 
between workplaces and educational institutions. 

OECD project leveraging training: skills development in SMEs 

The  OECD  LEED  programme  is  conducting  a  project  to  identify  ways  to  overcome  the 
barriers to workforce development faced by SMEs. The project aims to analyse formal 
education  and  training  programmes  and  alternative  ways  of  learning  through 
knowledge-intensive  service  activities  (KISA).  The  project  examines  local  skills  and 
training ecosystems of selected countries; it also analyses the relevance of green skills 
for  SMEs,  making  an  important  contribution  to  the  OECD  green  growth  strategy  by 
exploring the transformation and greening of SMEs towards a low-carbon economy.71  

6.3: TRAINING — A KEY TO SUCCESS AND ADAPTATION 

The  skills,  motivation  and  activation  of  employees  are  crucial  preconditions  for  the 
sustainable success, productivity and innovation of enterprises. However, SMEs in Europe — 

71  The 

first 

from  New  Zealand, 
http://www.oecd.org/document/46/0,3343,en_2649_34417_44999662_1_1_1_1,00.html. 

is  available  under 

country 

report, 

the 

following 

link: 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  124 

and in particular micro and small enterprises — face many challenges and difficulties with 
regard to continuing training and the development of their human resources. For example: 

●  how to identify a training programme suited to the company’s specific needs? 

●  how to find financing for training courses? 

●  how  to  organise  training,  for  example  further  training  for  workers  in  micro  companies 

where each worker is needed every day? 

●  how to attract more qualified young people? 

The  situation  of  SMEs  with  regard  to  training  is  characterised  by  a  paradox.  On  the  one 
hand, continuing training and lifelong learning (for both workers and managerial staff) are 
regarded  as  crucial  elements  of  competitiveness  for  SMEs  against  the  backdrop  of 
globalisation.  On  the  other  hand,  however,  statistics  show  that  continuing  training  and 
qualifications are less likely to be available to employees working in SMEs than to those in 
large companies. 

6.4: FINANCIAL AND ORGANISATIONAL MEANS 

A lack of financial means and organisational reasons are the first obstacles to training faced 
by many SMEs. There are, however, many examples of good practices that can help SMEs, 
alone  or  in  cooperation,  to  develop  training  without  disturbing  their  organisation  too 
greatly. E-learning or distance learning, for instance, are particularly well adapted. Thanks to 
information and communications technology (ICT), training can be provided at the time that 
suits managers and employees best. To help employers to launch training, there are several 
tools offering organisational advice that seem particularly adapted to SME culture. 

 
 
 
 
 
 
Restructuring in Europe  125 

Box 2.10: Supporting training in French SMEs 

In France, Agefos-PME is a collection body dedicated to SMEs. It has developed several 
innovative tools for SMEs, with the aim of facilitating their access to training. Among 
the initiatives proposed by the regional agencies of Agefos-PME is the ‘Training Pack’ 
(Pass’  Formation).  This  is  a  series  of  training  modules  sometimes  wholly  financed  by 
Agefos-PME  for  its  members  (with  the  participation  of  the  ESF,  the  State  and  local 
authorities)  —  or  offered  at  a  very  low  cost  (€ 200  a  day  for  example).  More 
importantly,  Agefos-PME  covers  100 %  of  wages  during  training  and  100 %  of  any 
additional  costs  (travel  and  accommodation).  In  order  to  overcome  organisational 
barriers, the training modules are short, lasting a maximum of five days. The contents 
of these training modules have been specifically designed for SMEs and focus on areas 
such as management, HR, commercial issues, languages, and law. 

Regarding  the  lack  of  financial  means,  SMEs  can  be  helped  in  several  ways,  for  example 
through  the  sectoral  joint  bodies  that  collect  special  taxes  for  training  measures  in  some 
Member States, or other public organisations. However, it is also important to support SME 
managers, employees and entrepreneurs by other means, for instance in looking for public 
subsidies or European funding, as access to information is often complex. Public aid can also 
help SMEs with related organisational matters. For instance, a company may be reimbursed 
for the absence of an employee. Many other initiatives exist that can address the issue of 
cost  for  SME  managers  and  entrepreneurs,  such  as  training  vouchers  or  qualification 
cheques. 

SMEs  do  not  generally  have  the  means  to  send  their  experienced  staff  on  longer  training 
courses.  The  training  programmes  and  methods  available  on  the  market  are  too  often 
unsuited to the size and needs of this type of company. Short training programmes (a few 
days that can be split over the whole year) that are ‘straight to the point’ can be very helpful 
from this perspective. It is important to note that training does not have to be expensive to 
work well. Informal or on-the-job forms of training can also address the needs of skills and 
competence  development,  if  they  are  well  organised  and  their  needs  and  objectives  are 
clearly identified. 

All over the EU, initiatives are being implemented in order to adapt the content of training 
to  the  needs  of  SMEs.  Examples  include:  the  development  of  quality  labels  and  the 
enhancement of skills through informal learning or ‘communities of practice’ for SMEs in the 
tourism industry; the upgrading of employees’ skills in the textiles and leather industry to 
help  companies  facing  internationalisation;  or  increasing  employees’  ICT-related  skills  in 
SMEs. 

6.5: HR AND SKILLS DEVELOPMENT POLICY 

Although  human  resources  and  the  skills  base  are  the  most  important  factors  in 
competitiveness  and  success  for  many  SMEs,  HR  and  skills  development  are  often  not 

 
 
 
 
 
 
 
 
Restructuring in Europe  126 

organised in a systematic way or with a medium- and long-term approach. This situation can 
be  helped  by  the  use  of  external  advisory  services,  diagnostic  tools  and  other  practical 
instruments. External public or private actors can offer guidance and access to financing and 
aid  for  HR  and  skills  development,  which  may  target  people  with  specific  needs  on  the 
labour  market,  such  as  less  qualified  workers,  older  workers  or  women  returning  to 
employment. In the frequent absence of personnel resources in SMEs, external or internal 
facilitators,  advisers,  coaches,  enablers  and  counsellors  can  help  to  develop  a  culture  of 
training and, beyond that, a culture of anticipation and management of change. An example 
of  an  innovative  awareness-raising  approach  is  to  appoint  ‘ambassadors’  with  the  task  of 
promoting  training  to  help  keep  older  workers  in  employment.  Equally,  training  for 
managers and entrepreneurs should be given close attention. 

Perceptions of training needs 

For many reasons — including a lack of opportunities, information and resources — in many 
SMEs training is not perceived as important by managers, entrepreneurs and workers alike, 
and  it  is  often  thought  that  existing  training  programmes  are  not  suitable  for  SMEs.  This 
makes it important to stress that there are many examples of good practice with regard to 
making suitable training and skills development possible in SMEs. For example, specific tools 
adapted  to  SMEs  can  identify  a  company’s  training  or  skills  needs,  while  initiatives  can 
inform  SME  managers,  entrepreneurs  and  workers  about  existing  opportunities,  thereby 
raising the awareness of training opportunities. 

Resource pooling and cooperation 

Involvement  in  networks,  cooperation  or  cluster  activities  with  other  SMEs  can  enable 
companies  to  engage  more  effectively  in  ongoing  training  and  competence  development. 
Such  networks  can  help  them  to  find  access  to  information,  increase  awareness  of  the 
importance  of  anticipating  change  and  develop  training.  Networks  can  be  organised  on  a 
local  basis,  generally  with  a  sectoral  dimension,  while  wider  communities  of  practice  can 
also  be  set  up  through  online  forums.  An  example  of  a  network  approach  is  the  state-
funded  Skillnets  in  Ireland,  which  supports  the  development  of  enterprise-led  learning 
networks  dedicated  to  the  promotion  and  facilitation  of  in-employment  training  and 
upskilling as key elements in sustaining national competitiveness. 

Attracting young workers 

Increasingly,  SMEs  are  facing  significant  challenges  due  to  demographic  change.  An 
important  issue  is  that  many  qualified  young  people  prefer  large  companies,  and 
consequently SMEs need to do more to attract and retain young workers. There are a range 
of innovative experiences in the EU that illustrate how they can do this. For example: joint 
apprenticeships programmes can be developed on a territorial basis, corresponding to the 
needs  of  SMEs;  networks  can  be  set  up  to  exchange  good  practice  in  the  successful 
management  of  demographic  change;  or  practical  courses  to  attract  younger  workers  can 
be introduced in sectors facing recruitment difficulties. 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  127 

6.6: LESSONS LEARNED 

The guide for training in SMEs shows that there is a wide and rich diversity of practices and 
experiences  in  this  area  in  Europe.  However,  in  the  end,  they  all  lead  to  the  same 
conclusion:  if  SMEs  see  training  simply  as  an  obstacle  course,  the  obstacles  can  be  easily 
overcome. However, this can be achieved only if SMEs receive help, support and guidance in 
approaching training measures. 

Many  SMEs  are  confused  and  not  that  well  informed  about  the  large  range  of  training 
opportunities  in  their  countries.  The  existence  of  a  large  body  of  different  training 
programmes has often hindered entrepreneurs and employees in SMEs in making decisions 
on  training.  Further,  organisational  barriers,  a  lack  of  financial  resources  or  a  mismatch 
between actual training needs and supply are widespread barriers. However, as highlighted 
by  the  guide,  innovative  solutions  exist,  addressing  the  common  constraints  of  SMEs  with 
regard  to  training.  While  each  company’s  situation  varies  according  to  its  sector,  size  and 
region and there is no universal solution to all their problems, each case has its solution. The 
factors of success identified in the guide (see box 2.11) highlight important lessons that may 
facilitate better and more successful training methods in the future. 

Box  2.11:  The  key  messages  of  the  guide  for  training  in  SMEs,  drawn  from 
experience across the EU 

Anticipation.  In  a  rapidly  changing  economy,  anticipation  of  skills  and  competence 
should become second nature to SMEs. They need to be equipped with the appropriate 
tools and advice in human resource management. 

Social  dialogue.  Anticipating  skills  and  competence  implies  a  considerable  degree  of 
dialogue  between  workers  and  employers.  Assessment  tools  can  offer  an  initial  basis 
for this dialogue to be implemented. The proximity between managers/entrepreneurs 
and  employees  in  SMEs  provides  many  opportunities  for  a  common  construction  of 
company plans with regard to human capital. 

Assessment. A permanent, lifelong, culture of assessment should be promoted. In the 
context of a knowledge society, skill needs are rapidly changing. Needs assessment is 
therefore a first step to anticipating needs and relevant social dialogue. Evaluation of 
the results regarding the chosen objectives is also an element of a permanent culture 
of  assessment.  Modifying  the  perception  of  needs  is  an  important  challenge,  but 
European SMEs can do it. 

Collective  approach.  SMEs  should  not  be  left  alone:  they  are  often  at  the  centre  of 
networks, including other SMEs and larger companies, public institutions in the field of 
training  or  employment,  professional  bodies  and  federations,  and  social  partners. 
These networks need to be active. In view of the current economic crisis, a collective 
investment in SMEs will prepare them for the future. 

 
 
 
 
 
 
 
Restructuring in Europe  128 

Guidance and tools. When they step forward beyond their initial reluctance to receive 
external  guidance  offered  by  professional  or  public  actors,  SMEs  can  benefit  from 
tailor-made  tools  to  overcome  obstacles  (financial  or  organisational)  in  the  field  of 
training.  Whether  they  are  within  or  outside  a  company  (or  both),  facilitators  and 
enablers correctly trained to do their job can be promoted in their function. 

Opportunities.  Plenty  of  opportunities  exist  for  SMEs,  but  the  right  information  is 
often  lacking.  SMEs  might  not  always  be  aware  of  these  opportunities,  considering 
them  inaccessible  or  not  intended  for  them.  This  is  not  the  case.  When  correctly 
equipped  and  enabled,  SMEs  can  more  easily  take  advantage  of  these  training 
opportunities,  eventually  resulting  in  new  economic  and  social  opportunities  for  the 
company and its workers. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  129 

CHAPTER 3: EU ROLE  WITH REGARD TO RESTRUCTURING SUPPORT 

The  EU  plays  an  important  role  in  the  restructuring  process,  by  means  such  as  regulating 
and endorsing state aid packages and the specific help given by the European Social Fund 
(ESF)  and  the  European  Globalisation  Adjustment  Fund  (EGF).  During  the  crisis,  the 
Commission’s policy response has centred on a number of Communications setting out how 
it  intended  to  apply  state  aid  rules  to  government  measures  aimed  at  supporting  the 
banking sector and the real economy. 

Most specifically, temporary measures, adopted under Article 107(3)(b) of the Treaty, have 
proved to be an important tool in coping with the crisis. The Commission does not impose 
any specific restructuring measure from the outset and there is no specific business model 
that is rejected in principle. The starting point of the analysis is always the restructuring plan 
submitted  by  a  Member  State.  A  temporary  framework  for  state  aid  has  been  prolonged 
until  2011,  which  will  maintain  some  measures  that  facilitate  access  to  finance,  especially 
for  SMEs,  ie  subsidised  state  guarantees  and  subsidised  loans,  for  example  for  green 
products. 

The ESF has been the EU’s main financial instrument for the anticipation and management 
of change since its creation in 1957. Its specific aim is to render the employment of workers 
easier and to increase their geographical and occupational mobility within the Union, and to 
facilitate  their  adaptation  to  industrial  changes  and  to  changes  in  production  systems,  in 
particular  through  vocational  training  and  retraining.  Over  400 000  enterprises  have 
benefited  from  ESF  interventions  in  the  field  of  adaptability,  and  the  ESF  has  been 
particularly supportive to actions anticipating economic change. 

More  specifically,  in  the  context  of  restructuring  and  change,  the  EGF  was  established  in 
2007  to  help  workers  made  redundant  due  to  structural  changes  in  world  trade  patterns, 
assisting  them  in  finding  alternative  employment.  The  EGF  can  co-finance  active  labour 
market  measures  to  benefit  redundant  workers,  such  as  job-search  assistance,  training, 
incentives  to  take  up  alternative  employment  and  the  promotion  of  entrepreneurship.  A 
total of 29 applications for an EGF contribution were submitted to the Commission in 2009, 
representing a significant increase on previous years. 

Change and restructuring, in the context of globalisation, has a significant impact in the EU 
regions.  Globalisation  brings  about  rapid  changes  and  an  increasing  speed  of  structural 
adjustment. In particular, low-skilled labour as well as low value-added economic activities 
have felt the force of global competition in recent years. Many regions throughout the EU 
will  therefore  have  to  restructure  their  economy  and  promote  continuous  innovation  in 
products,  management  and  processes,  as  well  as  human  and  social  capital,  in  order  to 
remain competitive. The crisis has had a varying impact and additional disparities for long-
term growth perspectives. Particularly negatively affected are regions in the UK, Spain, Italy 
and Greece, which have become more vulnerable compared with their situation before the 
crisis. The European Regional Development Fund (ERDF) has played a vital role in facilitating 
structural adjustments initially induced by internal factors such as the establishment of the 

 
 
 
 
 
 
 
 
Restructuring in Europe  130 

Single Market and industrial restructuring, and will most likely continue to play a particular 
role in supporting adjustments of particular EU regions. There are a number of examples of 
specific success stories in terms of regional adjustment and regeneration, from all parts of 
the European Union. 

1: THE ROLE OF STATE AID 

The concept of state aid is defined in Article 107(1) of the Treaty on the Functioning of the 
European  Union  (TFEU)72 and  covers  all  aid  granted  by  Member  States  or  through  state 
resources in any form whatsoever which distorts or threatens to distort competition on the 
internal market. Member States’ interventions designed to help ailing companies can take 
different forms, but tend to include, in particular: 

●  capital injections; 

●  debt waivers; 

●  debt rescheduling; 

●  debt to equity swaps; 

●  soft loans; and 

●  loan guarantees. 

If  the  public  authorities  claim  that  they  are  prepared  to  grant  the  above  measures  to 
companies on the same conditions as market operators, and thus these interventions do not 
grant any economic advantage to the company, the Commission will verify the existence of 
an advantage under the so called market economy operator principle.73 Provided this test is 
not  satisfied  and  the  measure  constitutes  state  aid,  its  compatibility  with  the  internal 
market is assessed by the Commission under the Rescue and Restructuring Guidelines.74 The 
Rescue and Restructuring Guidelines are based on Article 107(3)(c) of the TFEU and apply to 
all sectors, except the coal and steel sector. 

Rescue aid to firms in difficulty can only be awarded as a temporary assistance in the form 
of a loan or guarantee to keep an ailing company afloat for a period of six months during 
which a restructuring plan or liquidation plan is devised. Restructuring aid can be granted in 
any form on the basis of a restructuring plan fully endorsed by the Commission which would 

72  Treaty 

on 

the 

Functioning 

of 

the 

European 

Union: 

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:115:0047:0199:EN:PDF. 

73   The market economy operator principle is a test based on the conduct of a reasonable private investor or 
private  creditor  and  consists  of  determining  whether  the  undertaking  which  benefits  from  any  state 
support measure could have obtained the same economic advantage this measure brings on the market. 

74   Community guidelines on State aid for rescuing and restructuring firms in difficulty, OJ C 244, 01.10.2004, 

p. 2. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  131 

lead  to  long-term  viability  of  the  company  on  the  basis  of  realistic  assumptions  and  in  a 
reasonable  timescale.  The  restructuring  plan  should  include  compensatory  measures,  in 
particular divestment of assets, reductions of capacity or market presence or entry barriers 
to the market concerned, in order to compensate for the distortive effect of the aid on the 
market.  Write-offs  and  closure  of  loss-making  activities  which  would  at  any  rate  be 
necessary  to  restore  viability  cannot  be  considered  reduction  of  capacity  or  market 
presence for the purpose of the assessment of compensatory measures. 

The  underlying  principle  of  both  rescue  and  restructuring  aid  is  ‘the  one-time-last-time 
principle’  which  means  that  a  company  in  difficulty  which  has  benefited  from  a  rescue  or 
restructuring aid in the past 10 years, is not eligible to receive further state support. 

The  Rescue  and  Restructuring  Guidelines  take  into  consideration  policy  objectives  such  as 
social  and  regional  policy  and  recognise  the  beneficial  role  played  by  small  and  medium 
enterprises  in  the  economy.  On  the  other  hand,  the  Rescue  and  Restructuring  Guidelines 
clearly  underline  that  rescue  and  restructuring  aid  cannot  be  justified  to  keep  ailing 
companies  artificially  alive  in  a  sector  with  long-term  structural  overcapacity  or  allow 
companies to survive only as a result of repeated state interventions.75 

1.1: THE COMMISSION’S POLICY RESPONSE TO THE FINANCIAL CRISIS 

In  order  to  assist  Member  States  in  taking  urgent  measures  to  preserve  financial  stability 
and  provide  legal  certainty,  the  Commission  adopted  a  number  of  Communications 
between  October  2008  and  July  2009,  setting  out  how  it  would  apply  state  aid  rules  to 
government measures aimed at supporting the banking sector and the real economy (which 
is  that  part  of  the  economy  which  is  concerned  with  producing  goods  and  services,  in 
contrast to that which is concerned with buying and selling on the financial markets) in the 
context  of  the  economic  crisis.  The  primary  rationale  of  this  guidance  was  to  ensure  that 
emergency  measures  taken  for  reasons  of  financial  stability  maintain  a  level  playing  field 
between  firms  which  receive  public  support  and  those  which  do  not,  as  well  as  between 
companies  located  in  different  Member  States.  These  rules  were  adopted  under  Article 
107(3)(b)  of  the  Treaty  in  the  light  of  the  seriousness  of  the  crisis  and  its  impact  in  the 
overall economy of the Member States. An overview of these Communications is provided 
below. 

1.1.1: STATE AID TO THE FINANCIAL SECTOR 

The  Commission’s  Communication  entitled  The  application  of  State  aid  rules  to  measures 
taken in relation to financial institutions in the context of the current global financial crisis ,76 

75  

 An  overview  of 
http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=3. 

rescue  and 

restructuring 

can  be 

cases 

the 

found  under 

this 

link: 

76 The application of State aid rules to measures taken in relation to financial institutions in the context of 
global 
the 
http://ec.europa.eu/competition/state_aid/legislation/banking_crisis_paper.pdf. 

financial 

current 

crisis: 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  132 

issued in 2008, was the Commission’s first response to the worsening financial crisis. Based 
on  the  principles  of  the  existing  guidelines  on  rescue  and  restructuring  aid,  this 
Communication provided guidance on the criteria for determining the compatibility of state 
support  measures  for  the  financial  sector  within  the  special  circumstances  of  the  crisis.  In 
particular,  the  Communication  provided  detailed  guidance  on  government  guarantees  for 
bank liabilities, which were the most widespread initial response to the crisis, when it was 
necessary to re-start the interbank lending markets. 

The Communication of October 2008 recognised the importance of recapitalisation schemes 
in  preserving  the  stability  and  proper  functioning  of  financial  markets.  In  response  to 
requests  for  detailed  guidance  on  the  compatibility  of  recapitalisation  schemes,  the 
Commission 
issued  a  further  Communication  on  5  December  2008,  entitled  The 
recapitalisation of financial institutions in the current financial crisis: limitation of aid to the 
minimum  necessary  and  safeguards  against  undue  distortions  of  competition  . 77  The 
Communication  recognised  that  the  recapitalisation  of  banks  could  serve  a  number  of 
purposes, including not only the restoration of financial stability, but also the preservation 
of lending to the real economy. 

Subsequently,  several  Member  States  announced  an  intention  to  complement  guarantee 
and  recapitalisation  measures  by  providing  some  form  of  relief  for  impaired  bank  assets.    
In  its  February  2009  Communication  on  impaired  assets, 78 the  Commission  provided 
guidance on the treatment of asset relief measures by the Member States. This guidance is 
based on the principles of transparency and disclosure, adequate burden-sharing between 
the state and the beneficiary and prudent valuation of assets based on their real economic 
value. 

The Communication of October 2008 made clear that a far reaching restructuring would be 
required  for  financial  institutions  with  problems  resulting  from  their  particular  business 
model or business practices, whose weaknesses had been exposed and exacerbated by the 
crisis. Other, fundamentally sound institutions might require less substantial restructuring in 
order  to  ensure 
July  2009  Restructuring 
Communication79 clarifies  some  aspects  of  restructuring  in  the  context  of  the  present 
financial crisis. In particular, it gives detailed guidance on how restructuring plans need to 
address  long-term  viability,  burden-sharing  between  the  bank,  its  shareholders  and  the 
state, and distortions of competition created by the aid. 

long-term  viability.  The  Commission’s 

77  The recapitalisation of financial institutions in the current financial crisis: limitation of aid to the minimum 
10/03: 

necessary 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:010:0002:0010:EN:PDF. 

competition, 

safeguards 

distortions 

2009/C 

against 

undue 

and 

of 

78  Communication  from  the  Commission  on  the  treatment  of  impaired  assets  in  the  Community  banking 

sector: http://ec.europa.eu/competition/state_aid/legislation/impaired_assets.pdf. 

79  Communication  from  the  Commission  on  the  return  to  viability  and  the  assessment  of  the  restructuring 
in  the  current  crisis  under  the  State  aid  rules:  http://eur-

measures 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:195:0009:0020:EN:PDF. 

in  the  financial  sector 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  133 

The  Commission  does  not  impose  any  specific  restructuring  measure  from  the  outset  and 
there  is  no  specific  business  model  that  is  rejected  in  principle.  The  starting  point  of  the 
analysis is always the restructuring plan submitted by a Member State. In that respect, the 
first priority when dealing with the restructuring of banks is to ensure that they can operate 
profitably without state support. The benchmark of long-term viability may call for different 
solutions across banks, ranging from limited restructuring with no divestments to an orderly 
winding-down of unviable entities. 

Any  restructuring  plan  has  to  adequately  address  measures  to  limit  distortions  of 
competition. Taking account of the market circumstances of each case and the scale of State 
intervention, measures to limit competition distortion may include divestments, temporary 
restrictions on acquisitions by beneficiaries and other behavioural safeguards. 

If, in all restructuring cases that have been dealt with by the Commission, the principles of 
the Restructuring Communication have been carefully applied, account has also been taken 
of the specificities of each individual case. Reaching the right balance between the multiple 
aspects of a restructuring case requires thorough knowledge of the facts and specificities of 
each  bank.  However,  the  principles  guiding  the  Commission’s  approach  are  clear  and 
consistently applied across cases. 

1.1.2: STATE AID TO THE REAL ECONOMY 

In  parallel  to  the  measures  directly  addressing  financial  institutions,  the  Commission  also 
adopted  a  temporary  framework80 for  state  aid  measures  in  order  to  counteract  the 
increasing  difficulty  of  the  real  economy  in  obtaining  credit  and  other  types  of  financial 
support,  while  maintaining  a  level  playing  field  and  avoiding  undue  restrictions  of 
competition. 

The  additional  state  aid  measures  provided  for  by  the  temporary  framework  basically 
pursued two objectives: 

●  to  immediately  unblock  bank  lending  and  thereby  help  provide  continuity  in  company 

access to finance; and 

●  to  encourage  companies  to  continue  investing  into  a  sustainable  future,  including  the 

development of green products. 

The temporary framework provides for a number of new measures that could be applied by 
Member States for a limited period of time, until the end of 2010, as well as a number of 
temporary derogations from existing state aid rules: 

80  Communication  from  the  Commission  —  Temporary  Community  Framework  for  State  aid  measures  to 

support access to finance in the current financial and economic crisis. 

 
 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  134 

●  a  lump  sum  of  aid  of  up  to  € 500 000  per  company  for  two  years,  which  can  cover 
investments  and/or  working  capital.  In  October  2009,  the  Commission  introduced  an 
amendment  to  the  Temporary  Framework  in  order  to  allow  for  a  compatible  limited 
amount of aid of € 15 000 for the agricultural sector,81 which was initially excluded from 
the scope of application of this measure; 

●  subsidised  guarantees  for  loans  at  a  reduced  premium.  The  guarantee  can  cover  up  to 

90 % of the loan and it may relate to both investments and working capital loans; 

●  aid in the form of a subsidised interest rate; 

●  subsidised loans for the production of green products (meeting environmental protection 

standards early or going beyond such standards); and 

●  a  risk  capital  injection  for  SMEs  of  up  to  € 2.5  million  per  year  (an  increase  on  the 
previous € 1.5 million per year) in cases where at least 30 % (instead of the previous 50 %) 
of the investment cost comes from private investors. 

Further, Member States can benefit from a simplification of the ‘escape clause’ contained in 
the Communication on short-term export-credit insurance.82 This clause gives the possibility 
of using public funds to cover marketable risks, which are usually excluded from this benefit. 

The  temporary  framework  is,  in  principle,  of  general  application  to  all  types  of  firms. 
However,  a  significant  exception  was  that  it  was  not  applicable  to  firms  that  were  in 
difficulties  on  1  July  2008.  Aid  to  companies  where  difficulties  date  from  before  the 
economic crisis had to be assessed exclusively on the basis of general rules regarding rescue 
and  restructuring  aid  (see  above).  This  rule  acknowledged  that  a  number  of  companies 
might  have  found  themselves  cut  off  from  financing  due  to  the  drying  up  of  the  lending 
market,  although  they  had  a  sound  business  plan.  The  temporary  framework  could 
therefore be applied to relieve temporary financial difficulties. If the difficulties arose before 
the crisis, however, the normal rules of rescue and restructuring aid had to be applied. In 
this  way,  the  Commission  ensured  that  over-protective  aid  measures  devised  by  the 
Member  States  would  not  revitalise  structurally  failing  firms  to  the  detriment  of 
competition and healthier firms. 

By way of example, the Commission approved guarantees to be issued by the Swedish state 
as  collateral  for  a  loan  from  the  European  Investment  Bank  to  finance  green  projects  by 
Volvo  cars,  after  concluding  that  this  company  was  not  in  difficulty  on  1  July  2008.83 The 

81  Communication  from  the  Commission  amending  the  Temporary  Community  Framework  for  State  aid 
crisis: 
in 

financial  and  economic 

the  current 

measures 
http://ec.europa.eu/competition/state_aid/legislation/atf_en.pdf. 

support  access 

finance 

to 

to 

82  Communication of the Commission applying Articles 92 and 93 of the Treaty to short-term export- credit 

insurance: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31997Y0917(01):EN:NOT. 

83   Case N 80/2009 — State guarantees in favour of Volvo cars (OJ C 172, 24.07.2009). 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  135 

Commission,  following  a  notification  by  the  United  Kingdom,  also  approved  rescue  aid  to 
the  LDV  Group.84 Since  that  company  had  been  in  difficulties  for  some  time,  the  measure 
was based on the Rescue and Restructuring Guidelines. 

Between  17  December  2008  and  1  October  2010,  the  Commission  approved  73  schemes 
under the Temporary Framework, and 4 ad hoc aid measures, including: 

●  23 schemes for aid up to € 500 000 per company; 

●  18 subsidised guarantee measures; 

●  eight schemes for subsidised loan interests; 

●  five schemes offering reduced interest loans to businesses investing in the production of 

green products; and 

●  six risk-capital schemes and 13 export-credit schemes.85  

Financial  support  from  public  authorities  in  the  context  of  restructuring,  including  labour 
market  measures  that  are  undertaken  by  the  public  authorities  particularly  at  regional 
and/or local level, may involve state aid. Care must therefore be taken to ensure that such 
support complies with the applicable rules on state aid. 

1.2: WAY FORWARD 

On  1  December  2010,  the  Commission  prolonged  into  2011  the  crisis-related  state  aid 
measures  that  enable  Member  States  to  support  their  financial  sector  as  well  as  the 
temporary framework, in both cases on stricter conditions. 

The  Commission  believed  there  were  still  grounds  to  deem  the  requirements  for  the 
application of crisis-related rules fulfilled. But the continued punctual availability of specific 
crisis aid measures must go hand in hand with a gradual disengagement from the temporary 
extraordinary support86. 

For the financial sector, this approach had already started with the tightening of conditions 
for new government guarantees from July 2010 through a fee increase and a closer scrutiny 
of the viability of heavy guarantee users. It is now required that, as of 1 January 2011, every 
bank  in  the  EU  having  recourse  to  state  support  in  the  form  of  capital  or  impaired  asset 

84 Case NN 41/2009 — Rescue Aid to LDV (OJ C 212, 05.09.2009). 

85

 State 

Aid 

Scoreboard, 

Autumn 

2010 

Update, 

p.11. 

See 

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0701:FIN:EN:PDF. 

86  The Temporary Framework for the real economy has not been prolonged after 1st January 2012. From this 

date, normal State aid rules should apply. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  136 

measures will have to submit a restructuring plan. Until now this was limited to distressed 
banks, ie banks that, in particular, received support above 2 % of their risk-weighed assets. 

The prolonged temporary framework maintained some measures facilitating the access to 
finance, especially for SMEs, ie subsidised state guarantees and subsidised loans, inter alia 
for  green  products.  In  these  areas,  the  market  is  not  yet  able  to  entirely  meet  small 
companies’  financing  needs.  The  introduction  of  stricter  conditions  for  those  measures 
aimed at facilitating a gradual return to normal state aid rules while limiting the impact of 
their  prolonged  application  on  competition.  This  includes  that,  in  2011,  for  large  firms 
working capital loans were excluded from the application of the Temporary Framework and 
that firms in difficulty could no longer benefit from the framework. 

As  companies  still  have  difficulties  in  finding  adequate  trade  insurance  coverage  from 
private  insurers  in  many  sectors  and  Member  States,  the  Commission  also  extended  the 
procedural  simplifications  on  short-term  export  credit  insurance  that  were  introduced  by 
the Temporary Framework. 

The  next  section  of  this  chapter  looks  in  detail  at  the  role  of  the  European  Social  Fund  in 
providing help to organisations to enable them to better anticipate and manage change. 

 
 
 
 
 
 
 
Restructuring in Europe  137 

2: THE ROLE OF THE EUROPEAN SOCIAL FUND 

The  European  Social  Fund  (ESF)87 has  been  the  EU’s  main  financial  instrument  for  the 
anticipation and management of change since its creation in 1957. Under Article 162 of the 
Treaty on the Functioning of the European Union, the ESF aims ‘to render the employment 
of  workers  easier  and  to  increase  their  geographical  and  occupational  mobility  within  the 
Union, and to facilitate their adaptation to industrial changes and to changes in production 
systems, in particular through vocational training and retraining’. 

In  the  context  of  globalisation,  continuous  innovation  in  technology,  the  occurrence  of 
major  change  in  consumer  demand  and  new  business  models,  anticipating  and  managing 
change  has  become  a  key  issue  in  the  employment  strategies  of  both  companies  and 
authorities  in  the  past  decade.  One  of  the  key  challenges  for  the  ESF  in  2007-2013  is  to 
reconcile security for workers with the flexibility which companies need (which forms part 
of the flexicurity debate). 

Acknowledging and responding to these needs, the ESF for the period 2000-2006 placed the 
development of employment through improving the adaptability and skills of people among 
its chief priorities (see box 3.1 below). 

Box 3.1: The 2000-2006 programming period 

23  out  of  25  Member  States  used  the  ESF  for  actions  supporting  the  adaptability  of 
their companies and their workers. Between 2000 and 2006, almost € 12 billion in total 
was  invested  to  support  the  anticipation,  management  and  mitigation  of  economic 
change. The ESF contributed € 5.2 billion, 43 % of the total expenditure in the area of 
adaptability. 

More than 7 million people have been supported through ESF-funded actions, mainly in 
the UK and Italy (1 million participants in each of these countries). Most beneficiaries 
were  people  between  the  ages  of  26  and  54  and  one  in  seven  beneficiaries  was  an 
older  worker.  This  share  is  almost  twice  as  high  as  their  average  involvement  in  ESF 
actions.  In  some  Member  States,  they  represent  a  very  significant  part,  such  as  in 
Finland (40 %) and Belgium (35 %). 

Over 400 000 enterprises have benefited from ESF interventions in this field. ESF has been 
particularly supportive to actions anticipating economic change. Special attention was given 
to actions in support of SMEs. ESF support for adaptability has been further enhanced for 
the  2007-2013  programming  period.  The  ESF 
is  currently  supporting  adaptability 
interventions  in  all  27  EU  Member  States.  It  is  making  major  contributions  in  the 
anticipation  and  management  of  change,  providing  support  for  individuals,  systems  and 

87  http://ec.europa.eu/employment_social/esf/index_en.htm. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  138 

companies.  This  contribution  is  presented  in  more  detail  in  the  following  sections  of  this 
chapter. 

2.1: ADAPTABILITY IN THE ESF OPERATIONAL PROGRAMMES FOR DURING 2007-2013 

In  the  programming  period  2007-2013,  the  ESF  is  supporting  interventions  under  the 
following six policy fields: 

●  adaptability of workers and companies; 

●  access to employment for jobseekers and inactive people; 

●  social  inclusion  of  disadvantaged  people  with  a  view  to  their  sustainable  integration  in 

employment; 

●  development  of  human  capital  through  the  promotion  of  reform  of  education  and 

training systems and learning; 

●  promotion of partnership and the involvement of the social partners; and 

●  strengthening  of  the  institutional  capacity  and  the  efficiency  of  public  administrations 

and public services at national, regional and local level. 

During this period, the ESF budget has been significantly increased, to € 13.5 billion, to co-
finance  adaptability  interventions.  This  represents  18 %  of  the  total  ESF  investment  across 
the EU (€ 76 billion), almost one fifth of ESF funds.  For an overview of ESF expenditure by 
category during this period, see figure 3.1 below. 

 
 
 
 
 
 
 
Restructuring in Europe  139 

Figure 3.1: ESF expenditure by category, 2007-2013 

Pacts and 
partnerships
1%

Institutional 
capacity 
3%

Adaptability of 
workers and firms
18%

Human capital
33%

Social inclusion of 
less-favoured 
persons
13%

Access to 
employment 
28%

A  detailed  mapping  of  interventions  to  support  the  anticipation  and  management  of 
economic  change  and  restructuring  was  carried  out  in  2009.88 This  exercise  identified  106 
operational  programmes  addressing  adaptability  out  of  a  total  of  117  operational 
programmes for the entire programming period 2007-2013. 

In the period 2000-2006 there were no adaptability operational programmes in Cyprus and 
Latvia.  Now  interventions  are  foreseen  in  all  Member  States.  However,  there  are 
considerable  differences  between  Member  States,  when  it  comes  to  the  ESF  allocations 
dedicated to adaptability in relation to all ESF subsidies for the period 2007-2013, ranging 
from 7 % in Portugal to 76 % in Ireland. 

Table 3.1 below gives an overview of the three main categories of measures that the fund 
may support and the financial allocation to each of these categories of measures, based on 
the ESF regulation that was adopted in 2006.89 

88    Report on ‘The European Social Fund: adaptability and continuing training of workers’, Bernard Brunhes 

International, 2010. 

89  Regulation  (EC)  No  1081/2006  of  the  European  Parliament  and  of  the  Council  (5  July  2006)  on  the 

European Social Fund and repealing Regulation (EC) No 1784/1999. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  140 

Table 3.1: ESF allocations aimed at increasing the adaptability of workers and firms, 
enterprises and entrepreneurs by categories 

Category 

Development of lifelong learning systems and strategies in 
firms; training and services for employees 

Design and dissemination of innovative and more productive 
ways of organising work 

Development of special services for employment, training 
and support in connection with restructuring of sectors 

Financial allocation in 
Million Euros 

Percentage

9.4 

1.6 

2.5 

69.6 % 

11.8 % 

18.6 % 

Total 

13.5 

100 % 

The improvement of human resources planning and development in companies accounts by 
far for the largest part of ESF support in this area, with around € 9.4 billion (almost 70 % of 
the total expenditure). € 2.5 billion (18.6 % of the total expenditure) is more directly linked 
to  sector  and  company  restructuring  through  the  development  of  systems  to  effectively 
anticipate change. Finally, innovative and more productive ways of organising work account 
for almost € 1.6 billion (12 % of total expenditure). 

2.2:  ESF  INTERVENTIONS  AT  THE  DIFFERENT  STAGES  OF  THE  RESTRUCTURING  AND 
CHANGE PROCESS 

ESF interventions can be distinguished according to the different stages of the restructuring 
and economic change processes: 

●  anticipation of economic change and skills needs; 

●  managing economic change and promoting adaptability; and 

●  mitigating  the  effects  of  economic  change  and  restructuring  processes.  The  individual 
stages  of  anticipation,  management  and  mitigation  are  addressed  in  19,  23  and  17 
Member States respectively. 

Anticipation of economic change and skills needs 

The  ESF  supports  various  activities  in  the  context  of  the  anticipation  of  economic  change 
and  skills  needs,  such  as  forecasting,  analysing  skills  gaps  and  future  skills  requirements 
and/or early warning diagnosis. 

These  measures  mainly  focus  on  enterprises  as  a  main  target  group,  for  example  by 
providing  information,  counselling,  and  aid  with  work  organisation  and  working  time. 
However, there are also some targeted actions for workers, for example by providing career 
development, guidance, counselling, and individual skill development plans, and supporting 
professional mobility. 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  141 

Box 3.2: National occupational skills needs forecasting (Finland) 

The  national  occupational  skills  needs 
(Valtakunnallinen 
ammatillisten osaamistarpeiden ennakointi, VOSE) is one of several projects developing 
anticipation  methods  in  Finland  currently  underway,  many  of  which  receive  funding 
from  the  ESF.  The  Finnish  National  Board  of  Education  initiated  the  project,  focusing 
on anticipating future competences and skills needs. The VOSE project has a budget of 
1 million euros for three years, from 2008 to 2011. 

forecasting  project 

The  aim  of  the  project  is  to  develop  procedures  which  enable  the  anticipation  of 
competences  and  skills  needs  for  the  future  for  post-compulsory  education  and  in  all 
vocational and professional fields. These include methods for anticipating competences 
and  skills  needs,  anticipation  processes  and  networking  of  the  institutions  involved. 
The  procedures  will  be  tested  in  the  social  and  health  care,  real  estate  and 
construction sectors. The VOSE project also aims to create a web-based tool that works 
in social media. 

VOSE  is  a  cooperation  project  engaging  several  stakeholders,  including  the  state 
administration,  social  partners,  vocational  education  providers,  polytechnics, 
universities, local authorities, research institutes and student organisations. 

http://www.oph.fi/tietopalvelut/ennakointi/osaamistarpeiden_ennakointi/vose-
projekti 

Managing economic change and promoting adaptability 

The  ESF  finances  different  activities  in  the  context  of  managing  economic  change  and 
promoting  adaptability.  These  include  measures  to  help  companies  to  keep  pace  with 
modern  technologies  by  developing  their  research  and  development  capability  (through 
actions such as research grants and pre- and post-doctoral training), activities in the field of 
innovative  and  modern  types  of  work  organisation  to  enhance  company  competitiveness 
(for example in the area of working time and work-life balance), further training, skills and 
competence  development,  targeting  addressing  managers,  entrepreneurs  and  individual 
workers. 

Box  3.3:  Devising  the  Romanian  labour  market’s  response  to  the  economic 
crisis  —  enhancing  company  flexibility  and  the  security  of  the  workforce 
(Romania) 

The stated goal of this project is to contribute to the promotion of the core concept of 
flexicurity in the Romanian economy. 

The objectives of the project are: 

 
 
 
 
 
 
 
Restructuring in Europe  142 

●  to analyse various scenarios of growth and job creation for the Romanian economy 
and  to  explore  ways  and  means  of  exiting  the  crisis  and  resuming  growth  with  job 
creation; 

●  to  devise  for  this  purpose  an  ‘anticipation  tool  kit’  using  both  enterprise 

investigation as well as modelling techniques; and 

●  to  explore  and  implement  at  enterprise  level  innovative  ways  by  which  the 
incorporation of flexicurity could help in boosting the chances of corporate entities 
in a global, highly competitive environment. 

Activities  of  the  project  include:  studies  and  analyses  of  good  practices  at  European 
level and the likelihood of transferability into national practice, an in-depth analysis of 
the national context, a preliminary assessment of available anticipation tools, scenario 
analysis,  development  of  anticipation  instruments,  activities  to  devise  tailored 
flexicurity arrangements and set the stage for their subsequent application, training in 
internal  flexibility  arrangements  for  45  line  managers  and  human  resources  managers 
in  the  two  selected  enterprises,  a  number  of  dissemination  activities  and  the 
publication of the results of the first test run of the anticipation instrument, based on 
the outputs of scenario analysis. This project was launched at the end of 2009 and will 
run until the end of 2011, with a total budget of € 3 million. 

www.flexicovery.ro (under construction) 

In  43  operational  programmes,  the  specific  needs  of  small  and  medium-sized  enterprises 
(SMEs)  are  addressed  explicitly,  with  actions  foreseen  to  support  the  development  of 
adequate  training  and  competence  development  structures  and  systems  such  as  tailor-
made training programmes, job rotation schemes and/or pooling of resources. 

Box 3.4: The Working Skills for Adults initiative (Wales, UK) 

A £ 15 million scheme to increase the skills of over 16 000 workers across six counties in 
south-east Wales was launched in June 2010. Led by Torfaen County Borough Council in 
collaboration  with  three  other  local  authorities  and  three  further  education  colleges, 
the Working Skills for Adults initiative will help employees gain new qualifications and 
skills as well as help employers identify training to boost business productivity. 

Operating  across  Torfaen,  Blaenau  Gwent,  Bridgend,  Caerphilly,  Merthyr  Tydfil  and 
Rhondda Cynon Taf, it will address the general skills that employees need and that can 
be transferred between jobs, such as basic skills training, ICT and Welsh language. 

In addition, specialised support for small- to medium-sized enterprises (SMEs) will help 
identify  specific  skills  gaps  and  supply  national  vocational  qualification  (NVQ) 
programmes to address them. 

 
 
 
 
 
 
Restructuring in Europe  143 

Working Skills for Adults is backed by £ 8.8 million from the European Social Fund, with 
further  funding  from  the  local  authorities  and  further  education  colleges  who  will 
deliver the scheme. 

Training  and  support  will  be  offered  in  a  wide  range  of  community,  college  and 
workplace settings and through a range of channels, including online and face-to-face, 
to meet individual needs and reduce barriers to learning. 

Mitigating the effects of economic change and restructuring processes 

The  ESF  funds  many  interventions  which  accompany  restructuring  and  structural  change, 
both at the enterprise level as well as helping individual employees to cope with the effects 
of restructuring and change. 

At  the  enterprise  level,  particular  activities  such  as  advice  and  studies  are  being 
implemented throughout the European Union to support social dialogue and improve crisis 
management.  Other  actions  have  been  focusing  more  on  the  consolidation  of  sectors’ 
competitiveness  or  the  redeployment  of  companies  in  sectors  in  decline  (through  actions 
such as consulting, guidance and re-qualification). 

Box  3.5:  Evolution  of  organisational  culture  in  times  of  restructuring: 
research and information project (Poland) 

This project was implemented from January 2009 to March 2010 by the social partners 
in  Poland.  Its  principal  objective  was  to  raise  awareness  of  the  importance  of 
organisational culture in the process of restructuring and to deliver model solutions of 
organisational  culture  in  order  to  improve  the  competitiveness  of  companies  facing 
change. The project was based on a diagnosis and has delivered a model of adaptable 
organisation and standard measures which should be carried out during the process of 
restructuring. Employers, employees and social partners participated in designing and 
delivering  standards,  which  were  disseminated  at  conferences  and  meetings  with 
employers  and  employees  throughout  the  entire  country.  It  is  estimated  that  70 %  of 
participating  employers  and  employees  raised  their  awareness  of  their  role  in  the 
design of the culture of organisation. Further, representatives of 40 trade unions and 
at  least  10 regional  organisations  of  employers  were  targeted  by  the  information  and 
promotion campaign, which was one of the elements of the project. The total budget 
of this project was 807 000 PLN. 

http://www.fzz.org.pl/index.php?option=com_content&view=article&id=110&Itemid=7
6 

At  individual  employee  level,  assistance  includes  advice,  tailored  help  and  training  (often 
through  dedicated  structures)  for  individuals  who  have  been  made  redundant,  and 
promotion of professional mobility, self-employment and start-ups. 

 
 
 
 
 
 
 
 
Restructuring in Europe  144 

Box 3.6: Restart — Vysočina / Restart — Highlands (Czech Republic) 

This project aims to assist 1 000 employees who are under threat of redundancy or who 
are  already  under  notice,  working  in  companies  in  sectors  undergoing  structural 
changes. 

The project consists of a mix of activities — from introductory consultancy through to 
training  and  re-qualification  until  individuals  find  alternative  employment  —  designed 
to  help  participants  potentially  before  their  employment  is  terminated.  Employers 
receive  partial  reimbursement  of  salary  and  social  and  health  insurance  costs  during 
the period in which the employees participate in the activities (which are free of cost 
for the employees). 

The project is implemented by Regional Labour Offices in the Highlands region of the 
Czech Republic from October 2009 to February 2012. Its  total budget is € 2.6 million, 
with € 2.2 million from the European Social Fund. 

http://www.esfcr.cz/zakazky/restart-vysocina 

As  the  length  and  significance  of  each  stage  varies  greatly  according  to  Member  States’ 
characteristics, ESF measures address each stage of the change process in a different way in 
individual Member States. In some cases, measures are concentrated on one stage only, and 
in others they cover two or three stages of the process (see box 3.7 below). 

Box  3.7:  Rapid  reaction  to  change,  including  prevention  and  crisis 
intervention measures (Poland) 

This project was launched in April 2009 and will be terminated in December 2013 with 
the  establishment  of  the  centre  of  Monitoring  of  Economic  Change.  Its  budget  is  56 
million PLN. Based on a comprehensive system of indicators for anticipation of change 
and through the analysis of sensitive sectors (12 reports), the three sectors that are in 
most need will be identified. 

A total of 200 companies (10 micro enterprises, 130 SMEs and 60 large enterprises) will 
receive  support  in  the  framework  of  individual  development  plans  drawn  up  on  the 
basis of indexes of early warning. 

A total of 4 000 workers and employees will receive support: at least 80 % will increase 
qualifications  and/or  change  jobs;  at  least  50 %  will  benefit  from  outplacement 
schemes, including 30 % who will find a job after six months. 

Support for business creation and self-employment 

The European Social Fund has a long history of supporting people who want to start their 
own companies and be self-employed. Supporting self-employment and new businesses is 

 
 
 
 
 
 
 
Restructuring in Europe  145 

one  of  the  priorities  of  the  European  Social  Fund  2007-2013  programming  period. 
Seventeen  Member  States  have  included  this  priority  in  their  Operational  Programmes 
which  set  out  the  employment  and  social  priorities  they  have  selected  for  ESF  funding. 
Overall, this priority is receiving some € 2.75 billion of ESF funding although the total spend 
will be higher as matching national funding is added. 

Much  of  this  funding  is  devoted  to  supporting  would-be  entrepreneurs  according  to  their 
needs. They can obtain training, advice and mentoring through ESF programmes which will 
help them set up their companies. Once up and running, training, guidance and consulting 
can contribute greatly to the new business’ survival through the first months — providing 
the  new  entrepreneur  with  the  skills  and  advice  to  avoid  common  pitfalls.  As  well  as 
providing new entrepreneurs with the skills and advice they need, the ESF also helps them 
surmount the other main obstacle many face — access to finance. Several Member States 
deploy  ESF  funding  to  support  micro-credit  lending  aimed  at  raising  employment  and 
promoting entrepreneurship. 

The  other  main  EU-level  fund  to  which  actors  can  turn  to  help  them  in  their  efforts  to 
anticipate and manage change is the European Globalisation Adjustment Fund (EGF), which 
is discussed in detail in the next part of this chapter. 

 
 
 
 
 
 
Restructuring in Europe  146 

3: THE ROLE OF THE EUROPEAN GLOBALISATION ADJUSTMENT FUND 

The  European  Globalisation  Adjustment  Fund  (EGF)90 was  established  in  2007  to  help 
workers made redundant due to structural changes in world trade patterns, so that they can 
find  alternative  employment.  The  EGF  can  draw  down  funds  from  a  maximum  annual 
reserve  of  € 500 million,  with  which  it  can  co-finance  active  labour  market  measures  to 
benefit  redundant  workers,  such  as  job-search  assistance,  training,  incentives  to  take  up 
alternative employment and the promotion of business creation. 

The  EGF  was  designed  as  a  means  of  reconciling  the  overall  long-term  benefits  of  open 
trade  in  terms  of  growth  and  employment  with  the  short-term  adverse  effects  which 
globalisation may have, in particular in relation to the employment of the most vulnerable 
and  lowest-skilled  workers.  In  addition  to  the  EU’s  Structural  Funds,  the  programmes  of 
which are carried out over multi-annual periods, the EGF was intended as an instrument to 
be available in situations where mass redundancies were caused by globalisation and were 
likely to have a severe impact on the local, regional or national economy. 

In its European Economic Recovery Plan of 26 November 2008, the Commission stated that 
it  would  revise  the  rules  of  the  EGF  so  that  workers  affected  by  the  global  financial  and 
economic crisis would also be in a position to benefit from EGF assistance; the rules of the 
EGF were amended accordingly in 2009. This resulted in a steep increase in the number of 
applications for EGF funding as well as a rise in the number of workers targeted for help. 

3.1: THE FUNCTIONING OF THE EGF 

The  rules  governing  the  EGF  are  laid  down  in  Regulation  (EC)  No  1927/2006,  which  was 
adopted by the European Parliament and the Council on 20 December 2006. This Regulation 
states that a Member State (not a company or an individual) can submit an application for a 
contribution  from  the  EGF  when  redundancies  within  one  company  and  its  suppliers  and 
customers,  or  in  an  economic  sector  within  one  or  two  contiguous  regions,  have  a 
significant adverse impact on the regional or local economy. 

Originally,  the  EGF  could  intervene  only  in  cases  where  at  least  1 000  workers  had  been 
made  redundant  because  of  structural  changes  in  world  trade  patterns  (eg  a  substantial 
increase of imports into the European Union, or a rapid decline of the EU market share in a 
given sector or a delocalisation to third countries). A consultation of stakeholders (the EGF 
national contact persons, social partners,  and academics) in September 2008 showed that 
the threshold of 1 000 redundancies was considered too restrictive since mass redundancy 
events affecting fewer than 1 000 workers still have a European scale, which would justify 
the involvement of the EU as they can cause severe effects at the level of the regional or 
local labour market. 

90  For more details, see: http://ec.europa.eu/social/main.jsp?catId=326&langId=en. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  147 

In the light of the scale and the speed of development of the global economic and financial 
crisis, the Commission announced in its European Economic Recovery Plan91 its intention to 
extend the scope of the EGF as part of European response to the crisis and to transform it 
into an early, more effective intervention instrument in line with the fundamental principles 
of solidarity and social justice. 

The intention to improve the EGF resulted in an amendment92 to the 2006 EGF Regulation, 
which  applied  to  new  cases  from  1  May  2009  and  introduced  both  temporary  and 
permanent modifications. The permanent changes focus in particular on: a reduction in the 
number of redundancies required to trigger EGF assistance (500 instead of 1 000); and the 
extension of the period in which the measures may be implemented (24 months instead of 
12 months). The temporary provisions — until the end of 2011 — broaden the scope of the 
EGF to cover redundancies caused by the financial and economic crisis in addition to those 
due to world trade slowdown between 2008 and 2009, and they also increase the EGF co-
financing  rate  from  50 %  to  65 %.  For  an  overview  of  the  provisions  contained  in  the  EGF 
Regulation as amended, see table 3.2 below. 

Table 3.2: Main provisions of the 2009 EGF Regulation 

Intervention criterion 

Enterprises concerned 

Art. 2(a) of EGF Regulation 
2009 

Art. 2(b) of EGF Regulation 
2009 

One enterprise and its 
suppliers/downstream 
producers 

Enterprises operating in the 
same economic sector93 
(typically SMEs) 

Geographical scope 

National 

Regional (one or two 
contiguous regions94) 

Number of redundancies 

500 or more 

Period to count redundancies 

4 months 

9 months 

An EGF contribution can be sought only for active labour market policy measures such as: 

91   Communication  from  the  Commission  to  the  European  Council  on  A  European  Economic  Recovery  Plan, 

COM(2008) 800. 

92   Regulation  (EC)  No  546/2009  amending  Regulation  (EC)  No  1927/2006  on  establishing  the  European 

Globalisation Adjustment Fund. 

93  For the purpose of the EGF the economic sector is defined as a NACE Revision 2 Division, Regulation (EC) 
No  1893/2006  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. 

94  For  the  purpose  of  the  EGF  the  region  is  defined  at  NUTS  II  level,  Regulation  (EC)  No  1059/2003  on  the 

establishment of a common classification of territorial units for statistics (NUTS). 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  148 

●  occupational  guidance,  tailor-made  training  and  retraining  (eg  ICT  skills,  certification  of 
acquired  experience),  outplacement  assistance,  entrepreneurship  promotion  or  aid  for 
self-employment; 

●  special  time-limited  measures,  such  as  job-search  allowances,  mobility  allowances  or 
allowances to individuals participating in lifelong learning and training activities; and 

●  measures  to  stimulate  in  particular  disadvantaged  or  older  workers,  to  remain  in  or 

return to the labour market. 

All  of  the  above  measures  are  eligible  for  EGF  assistance,  as  long  as  they  do  not  replace 
measures  provided  for  under  national  law  or  collective  agreements.  Only  the  targeted 
workers can benefit from EGF assistance. The EGF does not co-finance the restructuring of 
companies or sectors. 

3.2: OVERVIEW OF APPLICATIONS RECEIVED IN 2009 

A  total  of  29  applications  for  an  EGF  contribution  were  submitted  to  the  Commission  in 
2009,  of  which  27  were  received  after  1  May  2009  when  the  amended  rules  of  the  EGF 
entered into force. By comparison, the EGF had received only 14 applications in its first two 
years of operation. 

The applications received in 2009 were submitted by 13 Member States (seven applications 
were  from  the  Netherlands,  four  from  Lithuania,  three  from  Ireland,  two  from  Portugal, 
Germany, Belgium, Spain, and Denmark, and one each from Italy, Sweden, Austria, France 
and Bulgaria) and aimed at helping almost 29 000 redundant workers for a total requested 
amount of € 164.7 million. These applications related  to 17 different sectors, of which the 
printing  industry  (5  applications),  the  automotive  sector  (4)  and  the  textiles  industry  (3) 
were the most prominent. It must be noted that  the  EGF  Regulation does not restrict the 
scope of the EGF to specific economic activities, meaning that any worker from any type of 
enterprise  —  be  it  operating  in  industry,  the  services  or  in  primary  sectors  —  can  benefit 
from its assistance, provided the intervention criteria are met. 

EGF applications by amount requested 

The  Member  State  applying  for  EGF  support  must  design  a  coordinated  package  of 
measures that best fits the targeted workers’ profile, and decide on the level of assistance 
to  request.  The  EGF  Regulation  does  not  limit  the  amount  requested  per  measure  or  per 
application,  but  the  Commission’s  assessment  of  an  application  may  raise  issues  which 
cause the applicant Member State to revise its package of measures, thereby affecting the 
level requested. 

In  2009  the  contributions  requested  from  the  EGF  ranged  from  € 258 164  to  € 56 385 144, 
with an average of € 5.5 million. 

In  terms  of  categories  of  measures  provided  to  the  targeted  workers,  most  of  the 
expenditure  relates  to  training  and  retraining,  job-search  assistance  and  allowances  while 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  149 

workers  are  involved  in  an  active  labour  market  measure.  In  2009,  for  instance,  the 
breakdown of estimated costs per type of actions for the 10 applications approved by the 
Budgetary Authority that year is set out in table 3.3 below. 

Table 3.3: EGF co-financed measures approved in 2009 according to EUROSTAT 
classification 

Estimated cost EGF + 
Member State (€) 

% of total 

Sub-total Labour market policy services 

1 

Individual job-search assistance & case 
management and general information 
services95 

Job-search allowances 

Mobility allowances 

Other allowances (eg apprenticeship 
schemes) 

Sub-total Labour market policy measures 

2 

3 

4 

5 

6 

7 

Training and retraining 

Training allowances 

Subsistence allowances while in training or in 
other active labour market measures 

Job rotation and job sharing 

Employment and recruitment incentives 

Supported employment and rehabilitation 

Direct job creation 

Start-up incentives to promote 
entrepreneurship 

12 954 880 

9 406 680 

174 600 

2 528 400 

845 200 

69 664 315 

35 806 540 

12 579 650 

13 077 200 

N/A 

2 577 500 

281 600 

594 000 

4 747 825 

10.91 % 

0.20 % 

2.93 % 

0.98 % 

41.51 % 

14.58 % 

15.16 % 

N/A 

2.99 % 

0.33 % 

0.69 % 

5.50 % 

Expenditure for implementing EGF (Art. 3 of EGF 
Regulation) 

Total 

3 635 200 

4.21 % 

86 254 395 

100 % 

In qualitative terms, the feedback provided by the applicant Member States suggests that 
the  EGF  contributions  they  received  allowed  them  to  intensify  the  assistance  provided  to 
redundant  workers  and  to  extend  the  duration  of  support  beyond  what  would  have  been 

95  This category consists in particular in career guidance, skills certification, personalised action plans, open 

information services for jobseekers, etc. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  150 

available  without  the  EGF.  In  other  cases,  the  EGF  made  it  possible  to  use  successful  new 
approaches (eg interaction in peer groups, increased guidance and counselling) specifically 
designed for low-skilled or older workers. 

EGF applications by workers targeted for assistance 

The number of workers affected by redundancies in an EGF application can differ from the 
number of workers actually being helped. Depending on the intervention criterion used, the 
applicant Member State has the possibility of including among the target group the workers 
made redundant because of the same global event, but before and/or after the reference 
period (ie the period during which the redundancies triggering the EGF application are being 
counted). Furthermore, the Member State can also decide to focus the EGF assistance on a 
reduced number of workers, for instance on those facing exceptional difficulty in remaining 
in the labour market or those who are deemed to be most in need of support. 

In 2009 the number of workers targeted for EGF support in individual cases ranged from 139 
to 3 582, with an average of just under 1 000. 

EGF applications by amount requested per worker 

The package of individualised services that a Member State may propose to the redundant 
workers concerned is at its discretion, within the terms of the EGF Regulation. The amount 
requested per worker affected can therefore vary according to the scale of the redundancy 
event,  the  labour  market  situation  in  the  region  affected,  the  individual  circumstances  of 
the workers concerned, or even the general cost structures in the Member State or region 
affected. Applications received in 2009 were submitted under two consecutive sets of rules 
(ie  an  implementation  period  of  12  or  24  months,  or  a  co-financing  rate  of  50 %  or  65 %) 
depending  on  whether  they  were  submitted  before  or  after  the  entry  into  force  of  the 
revised EGF Regulation. This had an impact on the contents of the applications submitted. 

In 2009 the amount requested per worker varied from slightly above € 500 to over € 15 700, 
with an average of € 5 698. 

Box 3.8 below contains a summary of cases for which the EGF received final reports in 2009, 
following  the  original  12-month  implementation  period.  These  describe  how  the  EGF  has 
helped  Member  States  to  re-integrate  redundant  workers  into  employment,  to  intensify 
their  assistance  for  these  workers  and  to  extend  the  duration  of  support  beyond  what 
would have been available without the EGF contribution. 

Box 3.8: Case studies of EGF funding in Member States 

EGF/2007/004 Perlos/Finland 

Of  the  921  workers  who  benefited  from  the  measures  co-funded  by  the  EGF,  56.9 % 
were  in  work  again  at  the  end  of  the  implementation  period.  Training  for  new  jobs 
with a future was a significant benefit not only for the workers but also for the region 

 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  151 

as a whole, which is remote and threatened with depopulation. The development and 
maintenance of a broad network of stakeholders supported the redundant workers and 
put  them  back  into  work  more  quickly.  Early  collaboration  with  the  Commission 
allowed  a  more  ambitious  package  of  measures  to  be  designed  for  the  workers  than 
would  otherwise  have  been  possible.  The  final  report  contained  a  SWOT  analysis 
(strengths  and  weaknesses,  opportunities  and  threats)  of  the  case  which  may  be 
helpful in planning future cases. The measures co-funded by the EGF enabled the North 
Karelia authorities to draw up contingency plans for future large-scale redundancies. 

EGF/2007/006 Piemonte/Italy 

Of  the  1 298  workers  who  benefited  from  the  measures  co-funded  by  the  EGF,  48.9 % 
were  in  work  again  at  the  end  of  the  implementation  period  (including  five  who 
created  their  own  businesses).  The  employment  status  of  the  other  51.1 %  was  not 
reported. The intervention paid special attention to incentives to women and workers 
older  than  55  to  participate  and  not  leave  the  labour  market.  A  high  percentage  of 
workers over 40 were able to find new employment, and the rate of re-employment of 
older workers achieved by these measures was especially high for the area. Thanks to 
retraining,  workers  were  moved  from  the  textile  sector  to  other,  more  competitive, 
sectors of production. 

EGF/2007/008 Textiles/Malta 

Of  the  672  workers  who  benefited  from  the  measures  co-funded  by  the  EGF,  65.5 % 
were in work again at the end of the implementation period (including 24 who started 
their  own  businesses).  The  intervention  meant  that  the  workers  affected  received 
more  personalised  assistance  to  re-enter  the  labour  market.  Consequently,  it  also 
helped them to face fewer social and economic difficulties. Malta found occupational 
guidance  very  useful,  as  it  enabled  many  workers  who  were  unaware  of  job 
opportunities in other sectors to consider employment outside the textiles sector. Most 
of  the  workers  had  limited  transferable  skills,  so  the  wage  subsidy  encouraged 
employers  to  give  them  job  opportunities.  The  use  of  the  start-up  grant  scheme  was 
also considered an achievement. 

EGF/2007/010 Lisboa-Alentejo/Portugal 

Of  the  558  workers  who  benefited  from  the  measures  co-funded  by  the  EGF,  19.5 % 
were in work again at the end of the implementation period (including 11 who started 
their  own  businesses).  This  fairly  low  percentage  should  be  seen  in  the  light  of  the 
structural problems of the automotive sector, which pre-dated the global financial and 
economic  crisis  and  were  exacerbated  by  it.  In  the  last  quarter  of  2008,  when  the 
measures  ended,  new  car  registrations  in  Europe  fell  by  an  average  of  20 %.  Despite 
this unfavourable situation, individual skills recognition and validation programmes for 
those  workers  with  the  lowest  educational  qualifications  gave  them  a  better  start  in 
finding a new job. The EGF measures were usefully complemented by other measures, 
including some co-funded by the European Social Fund. 

 
 
 
 
Restructuring in Europe  152 

EGF/2008/002 Delphi/Spain 

Of  the  1 589  workers  who  benefited  from  the  measures  co-funded  by  the  EGF,  10.7 % 
were  in  work  again  at  the  end  of  the  implementation  period  (including  eight  who 
started their own businesses). According to the final report, this low percentage should 
be seen against the rapid deterioration of the labour market in Andalusia at that time. 
In  February  2009,  when  the  implementation  period  ended,  employment  was  6.6 % 
lower  than  in  February  2008.  The  Spanish  authorities  continued  to  provide  training 
measures for specific target groups, using their own means, until 31 July 2009. Despite 
the unfavourable economic background, by the end of July 2009 there were thus good 
prospects  of  re-entering  the  labour  market  for  about  600  of  the  dismissed  Delphi 
workers. 

This  information  is  taken  from  the  report  on  the  activities  of  the  European 
Globalisation Adjustment fund in 2009, COM(2010) 464 final. 

3.3: NEXT STEPS 

The  sharp  increase  in  the  number  of  applications  submitted  to  the  EGF  shows  that  the 
improvements  brought  to  the  EGF  Regulation  in  2009  met  the  expectations  of  the 
stakeholders  and  provided  the  European  Union  with  an  additional  instrument  to  mitigate 
the employment consequences of the economic crisis. The crisis derogation of the EGF will 
come  to  an  end  on  31  December  2011,  while  full  economic  recovery  may  take  longer  to 
achieve.  The  Commission  is  therefore  considering  proposing  to  the  European  Parliament 
and  to  the  Council  an  extension  of  the  temporary  crisis  derogation  until  the  end  of  2013 
(which is when the EGF as set in the current Regulation must be reviewed). 

A  review  of  the  EGF  Regulation  will  be  necessary  to  coincide  with  the  next  multi-annual 
financial  framework  (2013-2020).  Several  options  are  currently  being  considered  to 
streamline  the  functioning  of  the  EGF,  aiming  in  particular  to  simplify  the  budgetary 
procedure  necessary  to  grant  a  contribution,  with  the  possibility  of  converting  it  into  a 
permanent fund with its own budget line under the multi-annual financial framework. 

These technical improvements could also be implemented together with a further extension 
of its scope to meet the objectives set in the Europe 2020 strategy.96 In this, the Commission 
explicitly referred to the EGF in its Flagship Initiative An industrial policy for the globalisation 
era: 

‘At EU level, the Commission will work (…) to promote the restructuring of sectors in 
difficulty towards future oriented activities, including through quick redeployment of 
skills to emerging high growth sectors and markets and support from the EU’s state 
aids regime and/or the Globalisation Adjustment Fund.’ 

96   Communication  from  the  Commission  ‘Europe  2020  —  A  strategy  for  smart,  sustainable  and  inclusive 

growth’, COM(2010) 2020.  

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  153 

This means that the EGF could act in synergy with European industrial policy to mitigate its 
potential  adverse  effects  and  encourage  the  integration  of  redundant  workers  in  sectors 
with  a  brighter  future,  just  as  it  has  been  doing  so  far  for  those  negatively  affected  by 
change in world trade patterns. 

The impact of restructuring on the EU regions is diverse, a trend which has continued during 
the  recent  crisis.  The  next  part  of  this  chapter  looks  in  more  detail  at  the  impact, 
anticipation and management of restructuring in the EU regions. 

 
 
 
 
 
Restructuring in Europe  154 

4: THE IMPACT OF RESTRUCTURING IN THE EU REGIONS 

Globalisation creates increased opportunities for producers and entrepreneurs as well as for 
consumers.97 It  is  also  a  motor  for  growth  and  creating  jobs.  However,  globalisation  also 
brings about rapid changes and an increasing speed of structural adjustment. In particular, 
low-skilled  labour  as  well  as  low  value-added  economic  activities  have  felt  the  force  of 
global competition. Many regions throughout the EU will therefore have to restructure their 
economy and promote continuous innovation — in products, management and processes, 
as  well  as  human  and  social  capital  —  to  turn  globalisation  challenges  into  opportunities. 
Globalisation  creates  pressure  for  rapid  structural  change  in  order  to  adjust  regional 
development  paths  and  preferably  stay  ahead  of  competitive  pressures.  This  will  become 
ever more important in the years to come, particularly as regions begin to exit the crisis. 

4.1: THE INFLUENCE OF GLOBALISATION 

The  globalisation 
index,  as  set  out  below,  measures  regional  opportunities  and 
vulnerabilities  by  looking  at  long-term  structural  conditions.  The  Europe  2020  agenda 
identifies  low  employment  rates  as  being  as  one  of  the  main  structural  weaknesses  of 
Europe.  Consequently,  the  globalisation  index  contains  employment  as  well  as  indicators 
measuring educational attainment and general growth perspectives. 

97  This  contribution  is  based  on  Regions  2020:  Regional  vulnerability  —  Globalisation  (Update  of  the 
Commission  Staff  Working  Paper:  Regions  2020  ‘An  Assessment  of  Future  Challenges  for  EU  Regions’, 
which was published in November 2008). 

 
 
 
 
 
 
                                                       
 
Figure 3.2: Globalisation vulnerability index, 2020 

Restructuring in Europe  155 

 
 
 
 
 
 
Restructuring in Europe  156 

A  number  of  studies  and  economic  forecasts  suggest  that  the  economic  crisis  has 
diminished overall growth perspectives over the medium term in all European regions. The 
crisis  has  had  a  differentiated  impact  and  additional  disparities  for  long-term  growth 
perspectives. Particularly negatively impacted are regions in the UK, Spain, Italy and Greece, 
which have become more vulnerable compared with their situation before the crisis. On the 
other  hand,  a  number  of  central  and  western  regions  appear  less  weak  than  before  the 
crisis.98 

Many  regions  located  in  the  northern  periphery  of  the  EU,  as  well  as  some  central  and 
western regions, appear in a rather favourable position. Capital and metropolitan regions, 
including  London,  Paris,  Hamburg,  Madrid,  Bucharest,  Sofia,  Prague  and  Warsaw,  appear 
among those regions which are likely to turn the globalisation challenge into opportunities. 
All of these regions have a highly educated workforce and a high share of employment. In 
addition,  these  regions  display  good  framework  conditions  for  supporting  innovation.  In 
sum,  these  regions  are  on  an  economically  sustainable  path  of  development  with 
reasonable long-term growth perspectives. 

By  contrast,  most  regions  located  in  the  southern  and  south-eastern  parts  of  the  EU,  in 
addition to Latvia and Lithuania, appear to be highly vulnerable. A high share of low-skilled 
workers,  combined  with  low  value-added  economic  activities  characterise  southern  and 
south-eastern  regions.  Some  of  these  regions,  particularly  in  the  eastern  parts  of  the  EU 
experienced  high  growth  in  the  past,  despite  these  structural  disadvantages.  The  basis  of 
these  gains  has  been  structural  adjustment  from  agriculture  and  heavy  industry  towards 
basic industrial activities and basic services. However, these activities are subject to largely 
cost-driven intense competition from other emerging economies. The stability of the future 
growth  path  of  these  regions  will  therefore  depend  on  improving  the  value-added  in 
regional economic activities. Improving the conditions of innovation will be key. 

4.1.1: RESTRUCTURING IN OBJECTIVE 2 REGIONS 

An ex post evaluation of cohesion policy programmes 2000-200699 examined restructuring in 
Objective 2 regions in the context of globalisation. This consisted, first, of an overall analysis 
of structural change over the period 1990-2005 across regions in the EU15 in order to try to 
detect  differences  in  performance  between  regions  with  different  sectoral  specialisations, 
distinguishing between those specialising in traditional industries, those in capital-intensive 
—  or  heavy  —  industries  and  those  in  equipment,  or  engineering,  industries.  The  second, 
and  main,  part  of  the  analysis  consisted  of  case  studies  of  regions  receiving  Objective  2 
funding. These included Tuscany (Italy), Brittany (France), North West England, North East 
England,  North  Netherlands,  Basque  Country  (Spain),  Rhône-Alpes  (France),  Southern 

98   Crips,  F.  et  al.  (2009),  Regional  challenges  in  the  perspective  of  2020.  Regional  disparities  and  future 
challenges. Background paper Globalisation. Study carried out for the European Commission. Brussels. 

99  For more details, see: http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2006/ 

wp4_exec_summary_en.pdf. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  157 

Finland,  North  Rhine-Westphalia  (Germany),  Bavaria  (Germany),  and  Styria  (Austria).  The 
aim in each case was to examine the efforts of the regions concerned to restructure in the 
face of increased competitive pressure from globalisation and the contribution of Objective 
2 funding in this regard. 

The main findings of the analysis can be summarised as follows: 

●  a  number  of  Objective  2  regions  (defined  at  the  NUTS  2  level)  across  the  EU  changed 
their  specialisation  over  the  period  examined,  shifting  from  traditional  to  capital-
intensive industries or from capital-intensive to equipment industries. In both cases, this 
in  most  cases,  an 
was  associated  with  a  positive  economic  performance  and, 
improvement in their estimated international trade balance; 

●  of  the  case  study  regions,  only  Styria  (Austria)  had  succeeded  over  recent  years  in 
changing  its  area  of  specialisation,  emphasising  the  difficulties  of  achieving  this  and 
breaking  free  from  an  historical  development  path.  The  strategy  adopted  in  the  region 
succeeded  in  building  an  automotive  sector  almost  from  scratch  based  on  inward 
investment,  with  the  regional  agency  pursuing  a  selective  policy  of  attracting  suitable 
foreign companies; 

●  the  experience  of  Styria  as  compared  with  that  of  the  Ruhr  area  of  North  Rhine-
Westphalia in Germany highlights two important aspects of restructuring. The first is that 
it  takes  many  years,  and  even  decades,  to  bring  about  an  effective  change  in  areas  of 
specialisation,  even  with  continuous  support.  The  second  is  that  this  is  easier  to 
accomplish if the area concerned is smaller rather than larger; 

●  long-standing policy efforts to diversify the economies in many of the industrial Objective 
2  regions  have  not  led  to  the  intended  shifts  in  their  sectoral  pattern  of  economic 
activity.  The  pattern  inherited  from  the  past,  and  often  in  place  for  a  century  or  more, 
has  proved  highly  resistant  to  change.  In  North  Rhine-Westphalia,  the  Ruhr  remains 
adversely  affected  by  the  past  dominance  of  heavy  industry,  despite  numerous  policy 
initiatives and substantial investment aimed at developing and expanding new activities. 
Even in Styria, the case study found no evidence so far for the further diversification of 
the  economy  away  from  relative  reliance  on  the  automotive  industry  into  higher-tech 
and more knowledge-intensive sectors; 

●  the  case  studies  demonstrated  that  enterprise  support  focused  on  increasing  the 
innovation  capacity  of  firms,  especially  SMEs,  and  their  performance  on  international 
markets can strengthen competitiveness and assist restructuring, as in Styria, the Basque 
Country (Spain) and, to a lesser extent, Tuscany (Italy). Measures that proved to be the 
most  effective  were  those  aimed  at  encouraging  new  clusters  of  activity  in  specific 
sectors and in particular areas of technology; 

●  in  some  case  study  regions  (Brittany  and  Rhône-Alpes  in  France,  for  example),  the 
regional  development  strategy  was  not  so  much  directed  at  structural  change  as  at 
maintaining  the  internal  territorial  balance  and  safeguarding  employment.  Since  the 

 
 
 
 
 
 
Restructuring in Europe  158 

evaluation  was  concerned  explicitly  with  restructuring  and  with  the  development  of 
regional economies, it did not investigate the effectiveness of this strategy; 

●  the evidence is that three regions which showed the clearest signs of restructuring were 
also  the  ones  where  the  regional  authorities  were  aware  the  earliest  of  the  need  for 
structural  change.  They  accordingly  reacted  to  the  threat  of  globalisation  sooner  than 
those 
in  other  regions  by  promptly  developing  strategies  for  encouraging  the 
diversification  of  their  economies.  This  demonstrates  the  importance  of  looking  ahead 
and trying to anticipate the need for change in areas of specialisation; 

●  analysis  of  the  relationship  between  Objective  2  programmes  and  the  broader  set  of 
regional policy measures suggest that the most effective programmes were those which 
were in line with and, therefore, reinforced, the main thrust of development strategies 
being  pursued  in  the  regions.  Support  of  the  European  Regional  Development  Fund 
than  where  additional 
(ERDF) 
‘complementary’ objectives were pursued; 

‘mainstream’  measures  contributed  more 

for 

●  at  the  same  time,  the  possibility  of  using  ERDF  finance  to  support  these  strategies  was 
hampered in some regions by ‘micro-zoning’, which concentrated funding on small areas 
with very specific territorial needs; 

●  the effectiveness of intervention was closely related to the competence and expertise of 
local  institutions  and  their  strategic  vision.  The  evidence  is  that  these  attributes  can 
change  the  path  of  development  —  and  overcome  historical  ‘path  dependency’  —  by 
persistent, focused and concentrated policy effort; and 

●  the  evidence  from  the  evaluation  is  that,  despite  its  small  scale,  the  funding  provided 
under Objective 2 was of major importance for the regions examined. A large majority of 
those  interviewed  in  the  course  of  the  case  studies  confirmed  that  ERDF  support  was 
instrumental in encouraging the adoption of a long-term strategic view of development, 
which  was  vital  for  both  designing  and  building  effective  support  for  restructuring.  It, 
accordingly,  played  a  key  role  in  setting  the  agenda  for  change  as  well  as  providing 
valuable funding which could be used to lever larger-scale financial support. In short, it 
acted as a catalyst for change, encouraging regional authorities to prioritise and enabling 
them to innovate as well as to put in place long-term action programmes. 

4.1.2: ANALYSIS OF RESTRUCTURING IN THE EU REGIONS 

DG Regio has produced an analysis of the effect of restructuring on the increase in labour 
productivity in 2000-2007. Restructuring in this context means the shift of labour from less 
to more productive sectors, for example between agriculture and industry or services.100  

100  The  contribution  of  restructuring  to  labour  productivity  is  calculated  by  dividing  an  adjusted  figure  for 
labour productivity in 2007 by productivity in 2000. The adjusted productivity figure in 2007 is calculated 
by  combining  sectoral  productivity  of  2000  with  the  distribution  of  sectoral  employment  in  2007. 
Productivity is calculated as GDP in constant prices divided by employment. Sectoral GDP is adjusted to the 

 
 
 
 
                                                       
 
Restructuring in Europe  159 

Figure  3.3  presents  the  average  annual  change  in  labour  productivity  due  to  employment 
shifts  between  sectors.  Restructuring  occurs  mostly  in  countries  at  an  earlier  stage  of 
economic development. As a result, its effects are strongest in the Convergence regions101 
where nearly half of the increase in labour productivity came from the shifts of employment 
between sectors. The more developed regions are usually much more productive and have 
a higher share of employment in high value-added sectors. Employment shifts occur mainly 
within  sectors,  eg  from  low  to  high-tech  industry.  Employment  shifts  in  the  Regional 
Competitiveness  and  Employment  (RCE)  regions  contributed  only  11 %  to  the  increase  in 
labour  productivity.  In  the  Transition  regions,  which  occupy  a  middle  stage  of  economic 
development,  the  contribution  of  restructuring  to  the  increase  in  labour  productivity  was 
28 %. 

In  the  EU27,  where  labour  productivity  grew  1.4 %  annually  between  2000  and  2007,  the 
growth  of  productivity  due  to  restructuring  was  0.4 %  a  year,  thus  employment  shifts 
contributed  around  30 %  to  the  total  growth  in  labour  productivity.  The  remainder  came 
from productivity increases within sectors which is a result of innovation in a broad sense. 
Table  3.4  shows  the  contribution  of  restructuring  to  the  growth  in  labour  productivity 
between 2000 and 2007. 

Table 3.4: Contribution of restructuring to the growth in labour productivity, 2000-2007 

Total growth of 
labour productivity 

Growth of productivity 
due to restructuring 

Contribution of restructuring to 
productivity growth 

EU-27 

CONV 

TRANS 

RCE 

1.4 

2.5 

1.0 

1.1 

0.4 

1.2 

0.3 

0.1 

Source: DG REGIO calculations, Eurostat. 

31 % 

46 % 

28 % 

11 % 

sectoral share of GVA. The analysis is based on a six-sector breakdown: Agriculture, Industry, Construction, 
Trade, Financial and business services and Public services. 

101  Regions with a GDP per capita which is below 75 % of the EU average. 

 
 
 
 
 
 
 
                                                                                                                                                                         
 
Figure 3.3: Productivity through employment shifts between sectors, 2000-2007 

Restructuring in Europe  160 

4.1.3: ‘SMART SPECIALISATION STRATEGIES’ AND THE SMART SPECIALISATION FORUM 

‘Smart  specialisation  strategies’  and  the  smart  specialisation  forum,  that  REGIO  is 
promoting  as  a  policy  priority,  can  be  an  important  tool  for  regions  to  use  in  their 
restructuring process. 

The  establishment  of  a  ‘Smart  Specialisation  Platform’  (S³P)  was  announced  in  the 
communication of the European Commission ‘Regional Policy contributing to smart growth 
in Europe 2020’ (COM(2010) 553 final) with the purpose of assisting regions and Member 

 
 
 
 
 
 
Restructuring in Europe  161 

States  to  develop,  implement  and  review  regional  smart  specialisation  strategies.  The 
Commission  staff  working  document  (SEC(2010)  1183)  accompanying  the  communication 
added more details on the form, structure and components of the S³P. 

The process of establishing and implementing smart specialisation strategies is expected to 
lead  to  a  and  more  strategic  and  efficient  use  of  national,  regional  and  EU  funding  the 
current programming period 2007-2013 and to provide a quick-start for the future Cohesion 
Policy ) along the lines of the Europe 2020 strategy and priorities. 

Smart  specialisation  is  an  important  policy  rationale  and  concept  for  innovation  policy.  It 
promotes efficient, effective and synergetic use of public investments and supports Member 
States  and  regions  in  diversifying  and  upgrading  existing  sectors  that  are  the  basis  of  their 
economies and in strengthening their innovation capacity. 

It aims to harness regional diversity by avoiding uniformity and duplication. It combines goal-
setting  (EU  2020,  Innovation  Union)  with  a  dynamic  and  entrepreneurial  discovery  process 
involving  key  stakeholders  from  government,  business,  academia  and  other  knowledge-
creating institutions. 

A  smart  specialisation  strategy  is  a  multi-annual  strategy  aimed  at  developing  a  well-
performing  national  or  regional  research  and  innovation  system,  which  can  be  assessed 
through  the  self  assessment  tool  proposed  by  the  Innovation  Union  flagship.  It  defines  a 
policy mix and budgetary framework focusing on a limited number of priorities targeted at 
stimulating smart growth. 

The  strategy  is  preceded  by  sound  analyses  of  the  assets  of  the  region  and  technology 
foresight studies focusing on the relevant sectors identified with a view to access emerging 
markets  and  niche  markets.  It  includes  the  analysis  of  potential  partners  in  other  regions 
and avoids unnecessary duplication and fragmentation of efforts. 

It  is  based  on  a  strong  partnership  between  business,  public  entities  and  knowledge 
institutions, that need to work together to produce the above mentioned analyses, and on 
the  setting-up  of  adequate  bodies  responsible  to  implement  them.  The  ‘quality’  of  this 
partnership is essential for its success. 

The EU Regional Policy and EU innovation policy have a long experience of working with a 
large  number  of  regions  on  developing  regional  innovation  strategies,  through  several 
Community  initiatives  as  for  example,  the  Innovative  Actions.  This  initiative  led  to  an 
appreciable  impact  in  all  regions  assisted.  In  a  number  of  cases  this  impact  has  led  to 
sustained  structural  changes  to  the  way  regional  policy  is  designed  and  delivered, 
specifically by establishing the bases of high quality partnerships that in the most developed 
regions became sustainable and developed the strategic intelligence bodies that achieve to 
reconvert  the  economy  and  lead  regions  to  competitive  growth,  even  during  the  present 
crises. Nevertheless those with shorter involvement in these processes struggled to sustain 
these partnerships and hence results waver or fade. 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  162 

Aiming  at  developing  the  strategic  intelligence  needed  in  each  region/Member  State  and 
keeping  it  in  a  sustainable  way  the  S³P  will  act  as  a  facilitator  in  bringing  together  the 
relevant EU funding programmes and policy support activities in research, SMEs, innovation, 
clusters,  digital  agenda,  health,  climate  change,  creative  industries  and  cooperation 
universities  business.  It  includes  high  level  experts  in  these  fields,  including  the  OECD  and 
networks  of  regions,  of  representatives  of  SMEs  and  other  business  bodies  that  focus  on 
innovation and on targeted support measures to innovate. 

It  intends  to  develop  the  critical  mass  at  EU  level  to  provide  direct  feed-back  and 
information  to  regions,  Member  States  and  their  bodies,  provide  a  learning  platform  that 
speed-up the learning process between regions and develop processes of peer review that 
assess the strategies, establish criteria of assessment and lead to the improvement of these 
strategic documents. 

The S³P is run by a steering team that gathers representatives of DG REGIO, RTD, ENTR, EAC, 
INFSO,  EMPL,  SANCO,  CLIMA  and  the  JRC.  A  mirror  group  for  advise  and  follow-up 
composed by high-representatives of networks and bodies took their functions in June 2011 
(for example, EURADA, ERRIN, EBN, OECD). 

4.2:  MANAGEMENT  OF  RESTRUCTURING  UNDER  THE  EUROPEAN  REGIONAL 
DEVELOPMENT FUND 

Since its inception, the European Regional Development Fund (ERDF) has played a vital role 
in  facilitating  structural  adjustments  initially  induced  by  internal  factors  such  as  the 
establishment  of  the  Single  Market  and  industrial  restructuring.  In  recent  years,  external 
challenges have shifted the focus of the ERDF to supporting adaptations triggered by rapid 
globalisation and the integration of new Member States in the Single Market. Subsequently, 
the  ERDF  has  increasingly  focused  on  investments  facilitating  a  move  up  the  value  chain, 
such as research and development innovation and ICT. 

In  the  future,  the  ERDF  will  most  likely  continue  to  play  a  particular  role  in  supporting 
adjustments to smart, sustainable and inclusive growth in Europe. 

The boxes below contain examples of restructuring and reaction to change. 

Box  3.9:  UNIC  —  URBACT  Fast  track  network  on  restructuring  of  European 
ceramics cities 

Economic  change  has  left  visible  footprints  in  cities  with  a  strong  industrial  history. 
The  process  of  transition  from  heavy  resource-intensive  production  to  innovation-
driven and high-technology systems is ongoing, and will remain a challenge in years to 
come. 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  163 

The  development  of  cities,  the  home  of  most  industrial  sites  in  Europe,  is  strongly 
bound to the economic success of their industries. Modern industry, on the other hand, 
relies  on  competitive  business  locations  and  innovating  environments.  Ceramics  cities 
from all over Europe are showcases of this dependency. The consequences of industrial 
reorganisation  (concentration,  relocation)  are  felt  largely  in  cities  with  a  strong 
ceramics  industry,  and  a  lively  history  in  ceramics  manufacturing.  This  not  only 
requires cities to reshape and adapt, but also industries to collaborate with cities. It is 
also  vital  to  keep  and  develop  specific  urban  identities,  building  upon  prestigious 
manufacturing tradition. 

This  example  of  ceramics  cities  illustrates  the  fact  that  strong  dependencies  on  one 
sector of the urban economy constitute a significant risk to the economic well-being of 
cities  as  a  whole.  Negative  developments  have  a  strong  and  widespread  impact,  not 
only on the employees in the industry itself, but also on those in the supply companies, 
and  this  has  wide-ranging  effects  on  social  and  economic  cohesion  within  cities  and 
regions. 

The  UNIC 102 (Urban  Network  for  Innovation  in  Ceramics)  network  links  nine  leading 
ceramics  cities  in  Europe  (Limoges,  Aveiro,  Delft,  Pécs,  Castellòn,  Stoke-on-Trent, 
Faenza, Cluj Napoca and Seville) — cities with long and vivid histories in the ceramics 
industry  and  manufacturing.  UNIC  is  designed  to  focus  on  re-inventing  the  image  of 
ceramics  cities  and  on  reinforcing  their  attractiveness  by  offering  good  living 
conditions,  interesting  business  locations  and  professional  development  perspectives 
for more social and economic cohesion at local level. In this context, close cooperation 
with local stakeholders and interest groups is just as vital as strong links with relevant 
regional, national and European authorities. 

The  network  is  financed  under  the  URBACT  II  programme  (2007-2013)  and  has  been 
selected  by  the  European  Commission  as  a  fast  track  network.  Under  active 
participation  of  Commission  Services  these  nine  cities  have  designed  their  future 
strategies  in  the  form  of  local  action  plans,  which  identify  possible  paths  from 
traditional industry towards a sustainable innovation-driven economy, while preserving 
and  using  the  cities’  asset  of  a  common,  strong  industrial  heritage.  Implementation 
projects evolving from this network will focus on effective links between research and 
education,  and  between  innovation  and  local  traditions.  The  nine  local  action  plans 
were launched in Brussels on 20 May 2010, and will — with support of structural funds 
— help to drive forward innovation and economic competitiveness. 

In  times  of  economic  crisis  in  particular,  a  dependence  on  traditional  industries  is 
usually seen as a major risk. However, the UNIC network demonstrates that this does 
not need to be the case: cities can build on their technological and cultural know-how 
in order to branch into long-term, sustainable paths of innovation. 

102  More information can be found at www.urbact.eu/unic. 

 
 
 
 
                                                       
 
Restructuring in Europe  164 

Box 3.10: REGIO STARS 2011103 — anticipating economic change category 

The Europe 2020 strategy proposed that the exit from the current crisis should be the 
point  of  entry  into  a  new  sustainable  social  market  economy.  Future  prosperity  will 
come from innovation, where the key input will be knowledge, and the more efficient 
use of resources. Crises have always shown that regional economies must permanently 
transform and renew in order to tackle future challenges. 

The  objective  of  the  RegioStars  Awards  is  to  identify  good  practices  in  regional 
development  and  to  highlight  original  and  innovative  projects  which  could  be 
attractive and inspiring to other regions. 

Projects  proposed  for  an  award  under  the  Region  Stars  scheme  should  describe  the 
policy  tools  that  have  underpinned  the  economic  transformation  agenda  and  regional 
adaptability to change in the recent past. 

Examples of projects that could be submitted include: 

●  use of dedicated innovation strategies, economic intelligence or foresight exercises 
to  anticipate  and  adapt  to  economic  change,  thus  promoting  improvements  of 
productivity within a sector; 

●  use of innovative policy tools in order to promote productivity growth within sectors 
and/or  shifts  between  sectors  (ie  restructuring,  diversification)  through  innovation 
in a broad sense, including better use of existing technology and resources, and new 
management and organisation techniques; and 

●  successful  development  of  entrepreneurship  and  innovation-based  incubation 
policies  to  promote  economic  transformation  and  renewal  by  developing  new, 
future-oriented economic activities in the region. 

The winners of the ‘RegioStars’ 2010 were announced on 20 May in Brussels during the 
annual  ‘Regions  for  Economic  Change’  conference.  Awards  were  given  to  the  most 
innovative regional projects which had received funding from the EU’s cohesion policy. 
A jury made up of professionals in regional development chose the six winners from the 
record 87 applications, as follows: 

●  the  C-Mine  Centre,  Genk,  Belgium  (€ 3.2  million  in  EU  funding  from  the  ERDF),  for 
innovative use of brownfield sites in an urban context. Building upon the legacy of 
Genk’s  mining  foundations,  the  multi-purpose  C-Mine  centre  has  transformed  a 
former industrial site into a hub for entrepreneurs and visitors alike. It includes two 
concert halls, exhibition space and a design centre; 

103  http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/ 

regiostars_11_en.cfm?nmenu=4. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  165 

●  the  Micro-Finance  Institute,  East-Mid-Sweden  (€ 340 000  in  EU  funding  from  the 
ERDF), for the integration of migrants or marginalised groups in urban areas. Set up 
in 2008, this project focuses on improving access to finance for migrant women who 
often  face  difficulties  in  trying  to  secure  capital  to  start-up  or  develop  their  own 
business. The main aim of the project was to establish a permanent micro-finance 
institute to help overcome these barriers. At the time of the award, the project had 
supported 80 new female entrepreneurs and contributed to the start-up of 15 micro 
enterprises, creating 20 jobs; 

from 

the  ESF). 

●  computer  literacy  basics  for  a  Lithuanian  e-citizen,  Lithuania  (€ 2  million  in  EU 
In  2002,  a  group  of  companies,  banks,  and 
funding 
telecommunications and IT businesses formed the Langas j Ateitj alliance. The aim 
was to provide training, establish public internet access points and stimulate growth 
in e-services, to enhance computer literacy skills. The main target groups were the 
elderly,  disabled  and  people  living  in  remote  areas  with  little  access  to  digital 
services. In total, 50 400 adults completed courses over the two years; 

●  new  business  model  for  ambulatory  monitoring  of  patients,  Brandenburg,  Germany 
(€ 86 000 in EU funding from the ERDF), for ICT applications by or for SMEs. The first 
of its kind in Brandenburg, this project  combined the expertise of various  regional 
partners  in  using  tele-medicine  to  monitor  and  treat  people,  outside  a  traditional 
medical environment, who have suffered from a heart attack. Its overall aim was to 
reduce  the  number  of  hospital  admissions  per  patient.  At  the  time  of  the  award, 
over 100 patients had benefited; 

●  high-speed  broadband  in  Auvergne,  France  (€ 10  million  in  EU  funding  from  the 
ERDF). High-speed broadband is an essential ingredient in ensuring competitiveness 
in  today’s  world.  But  in  sparsely  populated  areas,  private  telecommunication 
operators are frequently reluctant to take  on all the risks of investing in these so-
called  ‘white  areas’.  Faced  with  this  challenge,  Auvergne  established  a 
public/private partnership (PPP) in 2005 to extend high-speed broadband coverage 
to 100 % of households, which was achieved by early 2009; and 

●  www.esparama.lt,  Lithuania  (€ 110 000  in  EU  funding).  ‘Esparama’  in  Lithuanian 
means EU assistance — this official website provides information on all EU structural 
funding  in  the  country  from  data  supplied  by  content  administrators  in  15 
government  institutions.  The  site’s  easily  navigable  homepage  clearly  presents 
separate  sections  for  funding  applicants,  beneficiaries,  media  and  general  public, 
institutions and news. 

Four other projects received special mentions from the 2010 jury: 

●  Pieper  Site,  Wallonia,  Belgium.  Part  of  a  wider  urban  business  renovation  process, 
this  project  took  an  innovative  approach  in  re-developing  a  former  industrial 
brownfield  site  into  a  business  park.  The  main  aim  of  the  site  has  been  to  attract 
companies compatible with the surrounding urban residential area; 

 
 
 
 
Restructuring in Europe  166 

●  successful  integration  of  Roma  children,  Ljubljana,  Slovenia.  The  Roma  constitute 
the  largest  ethnic  minority  in  central  and  eastern  European  countries,  and  often 
struggle with discrimination and social exclusion. This project seeks to address some 
of these problems with the help of Roma teaching assistants, aiming to strengthen 
the links between Roma children, their schools and their parents; 

●  eREGIO,  North  Karelia,  Finland.  This  project  aimed  at  extending  high-speed 
broadband  coverage  in  rural  and  very  remote  areas  of  Finland.  Despite  the 
challenge, eRegio achieved excellent results, with almost 99 % of the region having 
broadband access by 2008; and 

●  entdecke-efre  website,  Brandenburg,  Germany.  The  website  ‘entdecke-efre’  — 
‘discover ERDF’ — sets out, in an easily navigable format, a range of information on 
EU-funded projects and processes involved to benefit from the funds. 

 
 
 
 
 
Restructuring in Europe  167 

CHAPTER 4: DIALOGUE AND LAW 

The anticipation and management of restructuring in the European Union takes place within 
a  legislative  framework  comprising  a  number  of  EU  Directives,  largely  in  the  field  of 
informing  and  consulting  with  the  workforce  on  changes  that  are  likely  to  affect  them.  In 
particular,  through  the  implementation  of  the  Directive  establishing  a  general  framework 
for  informing  and  consulting  employees,  which  was  due  in  March  2005,  there  has  been 
significant progress in certain Member States regarding the national level of the anticipation 
of  change  in  companies.  Nevertheless,  in  the  context  of  the  increased  challenges  of 
corporate restructuring, the European Commission believes that the operation of the set of 
Directives  dealing  with  information  and  consultation  at  company  level  needs  to  be 
evaluated, and this led to a review of the European Works Councils Directive in 2008-2009. 
Further,  the  crisis,  the  increasing  pace  and  cross-border  dimension  of  change,  the 
emergence of innovative ways to protect transitions from job to job, promote anticipation 
and develop constructive dialogue between stakeholders, and the importance given to skills 
adaptation  bring  new  challenges  and  new  prospects  for  EU  labour  law  in  the  area  of 
corporate restructuring. 

The legislative framework is complemented by a range of joint texts agreed by the EU-level 
social  partners  at  both  cross-sector  and  sector 
level.  Social  dialogue  between 
representatives  of  management  and  labour  can  be  a  powerful  means  of  successfully 
anticipating and managing change and restructuring, given the participants’ specific insight 
into  the  reality  of  workplaces  and  their  responsibility  for  many  of  the  issues  concerned. 
Most  recently,  between  2004  and  2009,  the  cross-industry  social  partners  carried  out  a 
project  in  26  Member  States,  which  looked  at  the  role  of  the  social  partners  at  national, 
sectoral, regional and enterprise levels in economic restructuring. 

Social  dialogue  also  takes  place  at  sectoral  level,  and  a  wide  variety  of  sectors  have 
embarked upon joint actions or concluded joint texts aimed at improving the management 
of change, notably in railways, the sugar industry, civil aviation, postal services, chemicals, 
and local and regional government. This is a valuable level for social dialogue on this theme, 
as the actors understand the very specific factors that are relevant to the organisations that 
operate in their sector. 

Social dialogue in the form of transnational agreements has gained in importance in recent 
years,  due  to  the  growth  of  social  dialogue  in  transnational  companies,  the  rise  in  the 
number of European Works Councils, and deliberate moves on the part of trade unions to 
provide  a  counterweight  to  the  increasing  global  dimension  of  the  employer  side.  Many 
such agreements with European scope tend to have as their core aim the establishment of 
partnerships  to  deal  with  company  restructuring  and  anticipate  change,  and  these 
agreements are thought to constitute some of the most innovative and positive examples of 
actions  in  this  area.  The  types  of  transnational  agreements  in  existence  address  specific 
restructuring  events,  provide  for  the  socially  responsible  management  of  potential  future 
restructuring, anticipate change in a longer-term perspective, and deal with restructuring as 
part of a broader global accord on workers’ rights or corporate social responsibility. 

 
 
 
 
 
 
 
Restructuring in Europe  168 

Social  dialogue  and  worker  participation  also  plays  a  role  in  European  Companies  (SEs), 
although this varies according to a range of factors, such as the type of company and origin 
of participating companies. 

1: EU LABOUR LAW AND RESTRUCTURING 

Corporate  restructuring  has  been  an  area  dealt  with  by  EU  labour  law  since  the  first  oil 
shock  and  difficult  economic  conditions  of  the  1970s,  when  Directives  were  adopted 
ensuring  the  protection  of  workers  in  the  event  of  collective  redundancies,  transfers  of 
undertakings  and  employer  insolvency.  The  growing  cross-border  dimension  of  such 
processes was first addressed in the 1990s with the Directive on European Works Councils, 
and in the past decade by generalised provisions on forward-looking employee information 
and consultation at both national and transnational level. 

The ongoing economic crisis, the increasing pace and cross-border dimension of change, the 
emergence of innovative ways to protect transitions from job to job, promote anticipation 
and develop constructive dialogue between stakeholders, and the importance given to skills 
adaptation in the EU’s new Europe 2020 strategy (see chapter 2), bring new challenges and 
new prospects for EU labour law related to corporate restructuring. This relates in particular 
to: 

●  the  effectiveness  and  linkage  of  employee  information  and  consultation  rights  at 

transnational and national levels; 

●  the protection of workers making transitions between companies; 

●  the adaptation of skills, and anticipation of employment and skills needs in companies; 

●  the promotion of European social dialogue and transnational company agreements; and 

●  fair conditions for the cross-border mobility of workers. 

Here, we review the existing framework and fresh developments relating to EU labour law 
on corporate restructuring. 

1.1: MAIN EU LABOUR LEGISLATION RELATING TO RESTRUCTURING 

The provisions of several labour law Directives relate to corporate restructuring. Their aim is 
to  ensure  the  protection  of  workers’  rights  and  provide  for  the  involvement  of  workers’ 
representatives  in  the  restructuring  process.  They  play  a  crucial  role  in  promoting  an 
approach aimed at anticipating change and encouraging cooperation in responding to it. 

Like  all  Directives,  these  Directives  are  binding  on  the  Member  States  as  regards  the 
objective  to  be  achieved,  although  Member  States  are  free  to  determine  the  form  and 
methods  with  which  to  fulfil  Community  obligations  under  their  internal  legal  order.  In 
addition,  in  the  areas  to  which  the  Directives  apply,  national  legislation  and  practice  may 
provide for a higher level of protection for workers than stipulated by these Directives. 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  169 

The protection of workers’ rights is ensured in the event the employer becomes insolvent or 
changes, under the Directives set out below: 

●  the Directive on employer insolvency (2008/94/EC) aims to provide minimum protection 
for employees in the event of the insolvency of their employer. It obliges Member States 
to  establish  a  body  (a  guarantee  institution)  to  guarantee  the  payment  of  employees’ 
outstanding  claims.  Moreover,  Member  States  must  take  the  necessary  measures  to 
ensure  that  non-payment  of  compulsory  contributions  due  from  the  employer,  before 
the onset of its insolvency, does not adversely affect employees’ benefit entitlements in 
as  much  as  the  employees’  contributions  were  deducted  at  the  source  from  their 
remuneration; and 

●  the Directive relating to the safeguarding of employees’ rights in the event of transfers of 
undertakings,  businesses  or  parts  of  businesses  (2001/23/EC)  provides  that  rights  and 
obligations  that  arise  from  a  contract  of  employment  or  employment  relationship  that 
exists on the date of a transfer, shall be transferred from the transferor (the party that 
ceases  to  be  the  employer),  to  the  transferee  (the  ‘new’  employer,  in  short).  The 
Directive further provides that the transfer must not constitute grounds for dismissal by 
either the transferor or the transferee. 

Special  information  and  consultation  procedures  are  established  by  EU  Directives  in  the 
event of collective redundancies or transfers of undertakings, as set out below: 

●  the  Directive  relating  to  collective  redundancies  (98/59/EC)  provides  that  an  employer 
which  envisages  collective  redundancies  must  provide  workers’  representatives  with 
specified information concerning the proposed redundancies and must consult with the 
workers’  representatives  in  good  time  with  a  view  to  reaching  an  agreement.  These 
consultations  should  cover  ways  of  avoiding  or  of  reducing  the  redundancies,  and  of 
mitigating  their  consequences  by  recourse  to  social  accompanying  measures  aimed,  in 
particular,  at  aid  for  redeployment  and  retraining  of  the  redundant  workers.  The 
Directive also provides for the public authorities to be notified of any projected collective 
redundancies,  and  requires  that  these  redundancies  cannot  take  effect  earlier  than  30 
days after this notification; and 

●  in  addition  to  the  protection  of  workers’  rights,  the  Directive  on  transfers  of 
undertakings,  businesses  or  parts  of  businesses  provides  that  both  the  transferor  and 
transferee  must  provide  specified  information  to  the  representatives  of  employees 
affected by the proposed transfer and, if either party envisages measures in relation to 
the  employees,  their  representatives  must  be  consulted  with  a  view  to  reaching 
agreement. 

Moreover, a set of Directives provides for the information and consultation of workers on a 
regular basis, at both national and transnational levels, as set out below: 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  170 

●  the Directive establishing a general framework for informing and consulting employees in 
the European Community (2002/14/EC) seeks to strengthen dialogue within enterprises 
and  ensure  employee  involvement  upstream  of  decision  making  with  a  view  to  better 
anticipation of problems and the prevention of crises. It applies to undertakings with at 
least  50  employees  or  establishments  with  at  least  20  employees  and  provides  for 
employee  representatives  to  be  informed  and  consulted  on  developments  in  the 
undertaking’s economic situation, the development of employment and decisions likely 
to lead to changes in work organisation or contractual relations; 

●  the  Directive  providing  for  the  establishment  of  a  European  Works  Council  (EWC)  or  a 
procedure for informing and consulting employees in Community-scale undertakings and 
groups (94/45/EC, recast by Directive 2009/38/EC) applies to undertakings or groups with 
at  least  1 000  employees  and  at  least  150  employees  in  each  of  two  Member  States.  It 
allows for the establishment of a European Works Council, representative of employees 
in the Member States where the group has operations, to be informed and consulted on 
the progress of the business and any significant changes envisaged; and 

●  three Directives provide for the involvement of employees (ie information, consultation 
and  in  some  cases  participation  on  the  supervisory  board  or  board  of  directors)  in 
companies  adopting  the  European  Company  Statute  (Directive  2001/86/EC)  or  the 
European  Cooperative  Society  Statute  (2003/72/EC)  or  deriving  from  a  cross-border 
merger (2005/56/EC). 

1.2: IMPLEMENTING AND ADAPTING LEGISLATION 

Through the implementation of the Directive establishing a general framework for informing 
and  consulting  employees,  which  was  due  in  March  2005,  there  has  been  important 
progress in certain Member States regarding the national level of the anticipation of change 
in  companies. 104  However,  in  the  context  of  the  increased  challenges  of  corporate 
restructuring, the European Commission believes that the operation of the set of Directives 
dealing with information and consultation at company level needs to be evaluated. 

The  main  area  of  concern  over  recent  years  has  related  to  the  effectiveness  of  the 
transnational level of information and consultation in case of restructuring operations in the 
context of EWCs established by Directive 94/45/EC, and this led to its review in 2008-2009. 
In addition, the crisis revealed growing concerns over the legislation applied in the event of 
an  employer’s  insolvency.  These  initiatives  add  to  the  permanent  monitoring  that  the 
Commission undertakes in order to ensure that the Directives are properly implemented by 
Member States. 

104  See European Commission (2008) Communication on the review of the application of Directive 2002/14/EC 
in 
http://eur-lex.europa.eu/LexUriServ/ 
COM(2008) 146, 
LexUriServ.do?uri=CELEX:52008DC0146:EN:HTML, and accompanying Commission staff working document, 
SEC(2008) 334, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC0334:EN:HTML. 

EU, 

the 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  171 

Legislative  action  complements  non-legislative  measures  in  this  area,  for  which  the  EU 
continues  to  provide  substantial  support,  especially  through  budget  line  04.03.03.03.  This 
budget  line  provides  support  for  measures  to  promote  best  practice  in  the  field  of 
information,  consultation  and  participation  of  representatives  of  undertakings.  A  sum  of 
€ 7.3 million was allocated to this for 2010. 

Implementation of the recast Directive on European Works Councils (EWCs) 

Directive  2009/38/EC,  adopted 
in  May  2009  following  a  2008  proposal  from  the 
Commission,105 recasts the 1994 Directive on EWCs. The main provisions concern: concepts 
of  information  and  consultation;  the  link  between  national  and  European  levels  of 
information and consultation; a right to training for employee representatives; the role of 
trade  unions;  the  adaptation  of  EWCs  to  change;  and  a  two-year  window  to  conclude  or 
renew anticipatory agreements on EWCs. 

The  Commission  is  assisting  the  Member  States  in  the  implementation  process  of  this 
Directive, which must be completed by June 2011. 

Together  with  the  promotion  of  best  practice,  the  new  legal  framework  should  meet  the 
following objectives: 

●  ensuring  the  effectiveness  of  employees’  transnational  information  and  consultation 

rights in existing EWCs; 

●  increasing  the  take-up  rate  (the  proportion  of  EWCs  established  compared  with  the 

number of companies falling within the scope of the Directive); 

●  ensuring legal certainty in the setting up and operation of EWCs; and 

●  achieving  a  better  coherence  and  interplay  between  EU  legislative  instruments  on  the 

information and consultation of employees. 

Evaluation  and  ‘fitness  check’  of  Directives  on  information  and  consultation  at  national 
level 

As  outlined  above,  the  provisions  of  several  labour  law  Directives  provide  for  information 
and consultation of employees in the context of corporate restructuring. Special procedures 
have applied to collective redundancies and transfers of undertakings since the 1970s, while 
the  2002  framework  Directive  on  information  and  consultation  secured  a  right  to  regular 
the 
information  and  consultation 
implementation in national legal orders of the individual Directives, which has already been 

in  undertakings/establishments.  Going  beyond 

105  Proposal for a Directive on the establishment of a European Works Council or a procedure in Community-
scale  undertakings  and  Community-scale  groups  of  undertakings  for  the  purposes  of  informing  and 
419: 
consulting 
http://ec.europa.eu/prelex/detail_dossier_real.cfm?CL=en&DosId=197188. 

COM(2008) 

employees 

(Recast) 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  172 

reviewed  in  Commission’s  reports,106 an  ‘ex-post’  evaluation  will  investigate  how  these 
Directives  are  being  applied  at  present,  as  well  as  any  shortcomings  and  room  for 
improvement.  These  Directives  are  also  among  the  first  clusters  of  Directives  to  be 
examined by the Commission under a new ‘fitness check’ of EU legislation. This process aims 
to determine whether Directives are fit for purpose, in terms of meeting their objectives in 
an  efficient  way  (looking  at  issues  such  as  implementation,  infringements,  complaints,  ex-
post  evaluations  and  administrative  burdens),  and  to  design  further  actions  that  may  be 
required, notably simplification. 

Implementation and application of legislation on employer’s insolvency 

As described above, Directive 2008/94/EC aims to protect employees’ rights in the event of 
the insolvency of their employer, in particular by guaranteeing payment of their outstanding 
claims  (wages,  pensions  and  other  benefits).  The  Commission  will  report  on  the 
implementation  and  application  of  several  of  the  Directive’s  provisions.  It  has  also 
commissioned  a  study  on  the  protection  of  defined-benefit  pension  schemes  and  book-
reserve  schemes,  in  relation  to  the  Directive’s  Article  8  on  protection  of  supplementary 
occupational  entitlements  to  pensions.  The  Commission  will  also  launch  a  study  on 
measures and practices relating to transfers of undertakings (under Directive 2001/23/EC) in 
insolvency or similar situations. 

Box 4.1: Interpretation of Directives by the European Court of Justice 

The European Court of Justice (ECJ) had the opportunity to interpret several provisions 
of  EU  labour  law  Directives  relating  to  restructuring  in  a  number  of  judgments 
rendered between 2008 and early 2010. 

In relation to Directive 98/59/EC on collective redundancies, the ECJ delivered three 
judgments.  Most  importantly,  it  ruled  in  case  C-44/08  on  the  question  of  who  should 
consult employees on collective dismissals in the case of a group of undertakings, and 
at what time.107 In its judgment, the Court ruled as follows: 

The  adoption  within  a  group  of  undertakings  of  strategic  decisions  or  of  changes  in 
activities  that  compel  the  employer  to  contemplate  or  to  plan  for  collective 
redundancies,  gives  rise  to  an  obligation  on  that  employer  to  consult  with  workers’ 
representatives. 

The  consultation  procedure  must  be  started  by  the  employer  once  a  strategic  or 
commercial  decision  compelling  it  to  contemplate  or  to  plan  for  collective 
redundancies has been taken. 

106  Available at: http://ec.europa.eu/social/main.jsp?catId=707&langId=en. 

107  Judgment  of  10  September  2009,  Akavan  Erityisalojen  Keskusliitto  AEK  ry  and  Others  v  Fujitsu  Siemens 

Computers Oy. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  173 

The  obligation  to  start  negotiations  does  not  depend  on  whether  the  employer  is 
already able to supply to the workers’ representatives all the information required by 
the  Directive  —  the  information  can  be  provided  during  the  consultations  and  not 
necessarily at the time when they start. 

In the case of a group of undertakings consisting of a parent company and one or more 
subsidiaries,  the  obligation  to  hold  consultations  with  the  workers’  representatives 
falls  on  the  subsidiary  which  has  the  status  of  employer  only  once  that  subsidiary, 
within which collective redundancies may be made, has been identified. 

In the context of a group of undertakings, a decision by the parent company that has 
the  direct  effect  of  compelling  one  of  its  subsidiaries  to  terminate  the  contracts  of 
employees affected by the collective redundancies can be taken only on the conclusion 
of  the  consultation  procedure  within  that  subsidiary,  failing  which  the  subsidiary,  as 
the employer, is liable for the consequences of failure to comply with that procedure. 

In  case  C-12/08,  the  Court  clarified  that  the  collective  redundancies  Directive  allows 
national  legislation  that  subjects  the  exercise  of  the  rights  of  individual  workers  to 
certain requirements.108  

In  case  C-323/08,  the  Court  clarified  the  scope  of  the  Directive  in  the  event  of  the 
employer’s death.109 

The ECJ delivered one judgment relating to Directive 2002/14/EC on information and 
consultation,  clarifying  in  case  C-405/08  the  extent  of  the  protection  granted  to 
employees’ representatives.110 

The  Court  issued  four  judgments  relating  to  Directive  2001/23/EC  on  transfers  of 
undertakings. In case C-313/07, it clarified that the Directive does not have effects on 
contracts other than employment contracts.111 In case C-396/07, the ECJ clarified the 
effects  of  the  termination  of  an  employment  contract  because  a  transfer  involved  a 
substantial  change  of  working  conditions. 112 In  case  C-466/07,  the  Court  ruled  that 
where  the  transfer  concerns  only  part  of  an  undertaking,  for  the  Directive  to  be 
applicable it is not required that this part retains organisational autonomy.113 In case C-
561/07, the Court ruled that Italy had infringed the Directive through its legislation on 

108  Judgment of 16 July 2009, Mono Car Styling SA, in liquidation v Dervis Odemis and Others. 

109  Judgment of 10 December 2009, Ovido Rodríguez Mayor and Others v Herencia yacente de Rafael de las 

Heras Dávila and Others. 

110  Judgment of 11 February 2010, Ingeniørforeningen i Danmark v Dansk Arbejdsgiverforening. 

111  Judgment of 16 October 2008, Kirtruna SL and Elisa Vigano v Red Elite de Electrodomésticos SA and Others. 

112  Judgment of 27 November 2008, Mirja Juuri v Fazer Amica Oy. 

113  Judgment of 12 February 2009, Dietmar Klarenberg v Ferrotron Technologies GmbH. 

 
 
 
 
                                                       
 
Restructuring in Europe  174 

undertakings  in  critical  difficulties,  which  relieved  these  undertakings  from  certain 
obligations resulting from the Directive.114 

As  far  as  the  Directive  on  employer  insolvency  is  concerned,  two  judgments  were 
handed  down.  This  Directive  requires  Member  States  to  establish  institutions  that 
guarantee  the  payment  of  unpaid  salaries.  In  case  C-310/07,  the  Court  clarified  the 
conditions for the competence of the guarantee institution in a Member State in cases 
where the insolvent company had activities in more than one Member State.115 In case 
C-69/08,  the  ECJ  clarified  the  conditions  that  national  law  can  impose  for  limitation 
periods on making claims to the guarantee institution.116  

1.3: PREPARATION OF NEW INITIATIVES 

The  main  new  initiatives  of  the  Commission  regarding  dialogue  and  law  relate  to  the 
European  Code  of  conduct  and  to  transnational  company  agreements.  Challenges  and 
proposals relating to labour law and restructuring will also be addressed as part of a series 
of initiatives taken by the Commission, notably in the areas of employment, internal market 
and transport. 

114  Judgment of 11 June 2009, Commission of the European Communities v Italian Republic. 

115  Judgment of 16 October 2008, Svenska staten v Anders Holmqvist. 

116  Judgment of 16 July 2009, Raffaello Visciano v Istituto nazionale della previdenza sociale (INPS). 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  175 

2:  EUROPEAN-LEVEL  SOCIAL  DIALOGUE  ON  MANAGEMENT  AND  ANTICIPATION  OF 
CHANGE 

The legislative framework set out above is complemented by a range of joint texts agreed by 
the  EU-level  social  partners  at  both  cross-sector  and  sector  level.  Overall,  social  dialogue 
between representatives of management and labour at all levels (company, sector, national 
and European) can be a powerful means of successfully anticipating and managing change 
and restructuring, given the participants’ specific insight into the reality of workplaces and 
their  responsibility  for  many  of  the  issues  concerned.  Here  we  look  at  relevant  initiatives 
taken recently within the social dialogue at European level. This dialogue, supported by the 
European Commission, encompasses: 

●  the  cross-industry  dialogue,  which  involves  the  European  Trade  Union  Confederation 
(ETUC)  — plus the Eurocadres/CEC liaison committee, which represents managerial and 
professional  staff  unions  —  BusinessEurope,  the  European  Centre  of  Employers  and 
Enterprises providing Public Services (Ceep) and the European Association of Craft, Small 
and Medium-sized Enterprises (Ueapme); and 

●  the  sectoral  social  dialogue,  based  on  40  sectoral  social  dialogue  committees  brings 
together  European-level  representatives  of  management  and  labour  in  the  industry 
concerned. 

The focus here is mainly on developments over 2008-2010. For more information on earlier 
initiatives  —  including  Commission  consultations  of  the  cross-industry  social  partners  on 
tackling restructuring in 2002 and 2005, and a set of ‘orientations for reference in managing 
change  and  its  social  consequences’  on  which  the  cross-industry  partners  have  worked  in 
2003 without having reached a formal agreement on the issue– and on the European social 
dialogue more generally, see the Restructuring in Europe 2008 report.117 

2.1: UNDERSTANDING WHAT HAPPENS 

Between  2004  and  2009,  the  cross-industry  social  partners  carried  out  a  project  in  26 
Member States, which looked at the role of the social partners at national, sectoral, regional 
and enterprise levels in economic restructuring. The first phase of the project, undertaken in 
2005 and 2006, covered 10 new Member States (Cyprus, Czech Republic, Estonia, Hungary, 
Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia).118  

117  European  Commission  (2009)  ‘Restructuring  in  Europe  2008.  A  review  of  EU  action  to  anticipate  and 
106-113. 

manage 
http://ec.europa.eu/social/main.jsp?langId=en&catId=103&newsId=434&furtherNews=yes. 

employment 

change’ 

pp. 

118  For  details,  see  European  Commission  (2009)  ‘Restructuring  in  Europe  2008.  A  review  of  EU  action  to 

anticipate and manage employment change’ p. 109. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  176 

The second phase of the project, conducted in 2007 and 2008, involved 10 more Member 
States: Austria, Denmark, France, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and 
the  UK.  It  found  that  the  restructuring  that  took  place  in  many  sectors  in  most  of  these 
countries  reflected  a  growth  in  the  importance  of  services  and  a  parallel  reduction  of 
employment in manufacturing. Whilst job reductions took place, the overall background to 
restructuring was one of economic and employment growth, with Europe as a whole adding 
7 million new jobs over the period 2000 to 2005. The burden of job loss did not fall evenly 
between  sectors  and  regions  and  there  were  often  clear  distinctions  between  those  who 
gained and those who did not. 

The third phase of the project, covering six countries, took place against the background of 
the financial and economic crisis that took hold towards the end of 2008. Discussions with 
the social partners in Belgium, Finland, Germany, Luxembourg, Portugal and Romania were 
dominated by the impact of the crisis and the design and adoption of anti-crisis measures to 
the exclusion of virtually all other issues. 

The project concluded with a final conference and an expert report in January 2010 — see 
Box 4.2. No further follow-up has yet taken place. 

Box  4.2:  Excerpt  from  the  final  expert  report*  of  the  European  cross-
industry social partners’ project on social dialogue and restructuring (2005-
2009) 

The  macro  themes  that  together  make  up  an  agenda  for  successful  social  partner 
engagement  in  the  management  of  change  and  which  are  common  to  any  national 
system are: anticipation and shared diagnosis; managing job transitions; preparing the 
workforce  of  the  future;  and  restructuring,  social  dialogue  and  the  crisis.  Second, 
there  are  very  specific  and  practical  micro-level  examples  from  a  country,  sector  or 
organisation that are capable of adaptation and adoption in differing environments and 
circumstances. 

A ‘road map’ identifying a number of areas for successful social partner engagement in 
the management of change, is meant to work in any national context and includes the 
following: 

Assuring  timely  and  relevant  information  and  consultation.  This  is  one  of  the  areas 
where  the  engagement  of  the  social  partners  is  currently  weakest.  Anticipation  of 
change  is  crucial  if  sudden  and  unexpected  workforce  shocks  are  to  be  avoided  and 
restructuring  take  place  against  timescales  that  facilitate  both  organisational  change 
objectives  and  the  delivery  of  acceptable  solutions  for  affected  workers.  In 
organisations where works councils are present and, in the case of large organisations, 
a European Works Council (EWC), these bodies can play an important role in the prior 
information and consultation process. 

Anticipating  change  and  developing  a  shared  diagnosis  and  agenda.  The  specific 
concern expressed was that information was provided to workers’ representatives too 

 
 
 
 
 
 
 
Restructuring in Europe  177 

late,  and  that  consultation  was  frequently,  at  best,  peremptory.  Where  this  question 
was  raised  it  was  pointed  not  only  toward  employers  but  also  toward  governments  in 
their  consultation  related  to  employment  policy  and  restructuring  related  laws  or 
projects. 

Managing  job  transitions.  It  appeared  from  the  discussions  that  took  place  in  the  26 
countries that interest is being shown by both workers’ and employers’ representatives 
in  job  transition  schemes.  In  countries  where  job  transition  arrangements  have  not 
traditionally been commonplace, considerable interest is shown in the Trygghetsrådet 
in  Sweden  (which  have  generally  been  inappropriately  translated  as  ‘job  security 
councils’  whilst  in  reality  they  are  about  ‘career’  rather  than  ‘job’  security),  the 
Danish model of flexicurity, Finnish job foundations, or German transfer enterprises. 

Preparing  the  workforce  of  the  future.  The  social  partners  in  every  participating 
country highlighted current skills mismatches and/or the future skills needs to support 
the changing economy as key issues for the social partners and for government. 

Addressing the specificities of SMEs. In the national seminars, the amount of discussion 
and  focus  on  small  and  micro  enterprises  was  limited  and  indicates  a  need  for  more 
substantive work to be undertaken. 

Transformational change. An important objective of this project has been to go beyond 
defining economic restructuring in terms of mass job losses in single large enterprises. 
Better  practice  is  to  anticipate  and  manage  change  incrementally  over  a  more 
extended  timescale.  Where  change  anticipation  in  social  dialogue  processes  is 
inadequate,  social  partner  engagement  typically  occurs  only  at  the  time  when 
dramatic job loss is almost inevitable. 

Restructuring,  social  dialogue  and  the  crisis.  The  discussions  centred  on  the  broad 
areas  of  government  job  protection  schemes,  improving  job  security  through  pay 
moderation and flexibility, and the ‘post crisis’ world. 

The points above lead to an important conclusion of the project as a whole. Whatever 
the  national  framework  for  the  management  of  change,  we  found  that  the  active 
engagement of the social partners in the anticipation and management of change at all 
levels improved performance in the design of change management architecture and in 
restructuring practice. Within every national framework, the role and influence of the 
social  partners  on  restructuring  the  enterprise  or  sectoral  level  varied  widely.  It  was 
clear  that  the  potential  for  adopting  good  practice  was  not  chronically  inhibited  by 
national employee relations systems. 

* Aritake-Wild (2010) ‘Joint European Level Social Partners’ Study on Restructuring in 
the EU — Improving the anticipation and management of restructuring … adding value 
through social partner engagement’, Brussels. 

 
 
 
 
Restructuring in Europe  178 

2.2: SECTOR-LEVEL SOCIAL DIALOGUE 

Social dialogue at sector level has also focused on understanding the reality of restructuring, 
using  its  potential  to  develop  tailored,  sector-specific  responses.  The  following  section 
describes some of the main sectoral initiatives relating to a range of restructuring issues in 
the following sectors: 

●  railways; 

●  the sugar industry; 

●  civil aviation; 

●  postal services; 

●  chemicals; and 

●  local and regional government. 

Railways — impact of freight restructuring 

The  social  partners  in  the  railway  sector  published  a  joint  report  in  February  2009  on  the 
impact of European rail freight restructuring on employment. The fundamental objective of 
this report was to provide input for social dialogue, which was achieved by the organisation 
of discussion seminars and visits to freight sites in six Member States. This was the first time 
that the social partners had addressed this subject on a European scale. 

The  social  partners  concluded  that  staff  numbers  in  the  rail  freight  sector  have  been  cut 
substantially due to insufficient productivity improvements and a decline in market share. 
Railway  companies  have,  with  some  exceptions,  introduced  social  support  measures. 
Restructuring  has  taken  place,  new  job  configurations  have  emerged,  and  training  has 
fostered  enhanced  competences.  Outright  dismissals  have  been  avoided  through 
redeployment  and  early  retirement.  In  addition  to  these  changes  for  employees,  the 
European Transport Workers’ Federation (ETF), representing trade unions, emphasised the 
spread  of  job  insecurity,  and  the  increase  in  geographical  mobility  and  in  working  time  in 
certain  Member  States,  along  with  the  coexistence  of  different  contractual  status  for 
workers  within  the  same  company.  Employers  stressed  the  survival  of  their  companies, 
performance improvements and cost control, notably through greater flexibility in order to 
respond  to  demand  more  effectively  and  withstand  the  impact  of  cyclical  economic 
changes, and on efforts to find solutions for employees. 

The social partners’ joint objective is to use social dialogue to strike a balance that can be 
acceptable  for  both  parties,  notably  between  the  economic  and  the  social  perspectives, 
occupational  and  family  life  etc.  However,  they  fear  that  the  pressure  of  lower  transport 
prices  on  the  whole  and  for  rail  transport  in  particular  may  make  certain  developments 
more difficult. 

Civil aviation — worker involvement in development of functional airspace blocks 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  179 

In  the  civil  aviation  social  dialogue  committee,  the  development  of  functional  airspace 
blocks  (airspace  blocks  based  on  operational  requirements,  regardless  of  national 
boundaries) has been a key topic in the context of sectoral restructuring affecting air-traffic 
management. The relevant working group of the committee issued a joint statement in the 
framework  of  a  European  conference  on  functional  airspace  blocks  in  October  2007,  in 
which the social partners agreed to assess annually the progress made by their members in 
terms of consultation of workers on the new system. To this end, the social partners jointly 
drafted  a  first  questionnaire  to  assess  the  consultation  process  concerning  functional 
airspace blocks during the feasibility study stage. 

levels  of  worker 

involvement  were  needed,  although 

In  their  assessment  of  progress,  the  social  partners  found  that  more  precise  and  joint 
definitions  of 
in  general  an 
information  process  had  been  activated.  Social  dialogue  needed  to  be  reinforced  in  the 
implementation  phase.  The  trade  unions  felt  informed  and  involved  but  not  always 
sufficiently  consulted  nor  treated  as  real  partners,  leading  to  dissatisfaction  with  the  way 
that the views of the employees were considered. On the other side, the providers were of 
the  view  that  the  level  of  involvement  of  staff  representatives  was  adequate,  since  no 
decisions  had  yet  been  taken,  and  said  that  further  consultations  were  foreseen  on  the 
possible  social  consequences  of  the  development  of  functional  airspace  blocks.  Based  on 
these  results,  the  social  partners  suggested  discussing  possible  joint  recommendations  in 
the social dialogue committee. 

Postal services — examining the development of the sector 

In postal services, the economic crisis that took hold in late 2008 compounded the ongoing 
decline  in  mail  volumes  due  to  electronic  substitution  and  the  opening  of  the  market  to 
create additional pressure on postal operators. Accordingly, the social partners in the sector 
treated the crisis as an integral part of their work on the evolution of the sector (an issue on 
which  they  had  agreed  a  joint  statement  in  2007),  discussing  how  postal  services  are 
regulated  with  respect  to  their  employment  and  social  dimension  in  different  Member 
States, and working towards an up-to-date ‘dashboard’ on this area of regulation across the 
entire EU. 

Chemicals industry — the nature of restructuring 

In 2007-2008, the sectoral social dialogue committee for the chemicals industry carried out 
a  project  on  restructuring,  managing  change,  competitiveness  and  employment.  Many 
different types of restructuring were identified, such as merger and acquisition, change of 
ownership,  delocalisation/offshoring,  outsourcing,  relocation,  closure  and  expansion.  All 
these  types  of  restructuring  are  becoming  more  complex,  which  led  to  various  different 
viewpoints being expressed by the social partners. Contrary to initial plans, it was therefore 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  180 

not  possible  to  prepare  general  guidelines  on  restructuring  in  the  sector.  However,  the 
social partners agreed a set of ‘joint lessons learned’ in May 2008.119 

Local and regional government — social dialogue on reform 

The  European  Federation  of  Public  Service  Unions  (EPSU)  and  the  Council  of  European 
Municipalities  and  Regions  (CEMR),  the  European  social  partner  organisations  involved  in 
the sectoral social dialogue covering local and regional government, completed a reflection 
on social dialogue in public services reforms with a study published in 2008.120 It identifies 
the main drivers of reform and seeks to raise the understanding of main trends by putting 
into  perspective  10  case  studies  of  reform  approaches  in  different  countries.  It  concludes 
that  only  in  a  few  countries  has  information  and  consultation  of  trade  unions  had  a  real 
impact on restructuring. Therefore, the document puts forward points for reflection on how 
the potential of a constructive social dialogue could be better used. 

2.2.1: KEEPING WORKERS EMPLOYABLE AND COMPANIES COMPETITIVE 

How to ensure that workers keep their skills up to date and therefore remain employable is 
a key issue in today’s globalised economy. Companies need to engage with this issue in 
order to ensure that they remain competitive. The following are sectoral examples of 
initiatives that aim to increase worker employability and company competitiveness. 

Sugar industry — improving employability 

In 2009, in a context of substantial instability due to restructuring, the social partners in the 
sugar  sector  focused  on  the  need  to  improve  employability  in  their  industry.  To  this  end 
they organised a conference on employability in October 2009 in Brussels in the framework 
of a project co-financed by the European Commission. This project: 

●  defined the concept of employability; 

●  highlighted good practices in the sugar and  agro-food industry, as well as from outside 

these sectors; 

●  made recommendations concerning success and employability factors; 

●  listed skills that should be developed and that are required in the sugar sector; 

●  gave an overview of European and national financing possibilities in 20 sugar-producing 

countries; and 

119  The 

available 
http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8735. 

text 

is 

120  The 

available 
http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8711. 

study 

is 

here: 

here: 

 
 
 
 
 
 
 
 
 
                                                       
 
●  provided a practical dictionary defining concepts connected with employability. 

Restructuring in Europe  181 

This  information  is  presented  in  the  form  of  an  interactive  computer-based  tool,  allowing 
the  content  to  be  progressively  enriched  by  new  contributions.  The  tool  is  available  in 
the  sugar  social  dialogue  committee 
multiple 
(www.eurosugar.org). 

the  website  of 

languages  on 

Railways — employability as a common challenge 

In the railways sector, the social partners organised a conference on employability in 2008, 
designed to implement the joint recommendations on the concept that they had approved 
in  late  2007. 121 This  conference  allowed  employers,  trade  unions,  experts  and  other 
stakeholders to exchange views on the current status and progress in the implementation of 
the  strategy  of  employability.  With  the  help  of  specific  examples  of  good  practice, 
participants discussed the significance of this approach for European railway companies and 
their  employees.  The  unanimous  acknowledgement  that  employability  is  a  common 
challenge  for  corporate  management,  employees,  trade  unions  and  works  councils  was  a 
clear  signal  for  the  European  social  dialogue  committee  to  continue  working  on  this  issue 
and  to  closely  support  and  promote  the  process  of  implementing  the  strategy  of 
employability in the various national contexts. 

Civil aviation — best practices on training and qualifications 

In  the  ground-handling  working  group  of  the  civil  aviation  social  dialogue  committee,  the 
European  social  partners  jointly  organised  a  conference  on  best  practices  on  training  and 
qualifications  in  the  ground-handling  sector  in  2008.  The  conference  highlighted  the 
evolution  of  the  sector  and  the  link  between  training,  safety  and  the  quality  of  service. 
Following  the  conference,  the  European  social  partners  acknowledged  that  the 
development of staff skills is an essential factor to deliver safe and high-quality services. A 
priority  is  to  recognise  the  proficiency  of  the  employees,  thereby  improving  their 
employability  and  facilitating  the  adaptation  of  companies,  which  are  confronted  by  new 
challenges in an international economy. The European social partners generally agreed that 
it  is  vitally  important  to  their  industry  that  workers  have  the  necessary  skills  and 
qualifications  to  meet  the  challenges  of  a  sustainable  aviation  market.  They  therefore 
decided to examine several examples of good  practice  in  a  study  conducted in 2008. As a 
result,  the  social  partners  signed  a  joint  declaration  in  2009,  outlining  their  common 
understanding and examining joint initiatives deriving from the study.122 

of 

121  The 

concept 

sector. 
http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8555. 
 Joint 

122
http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8773. 

employability 

qualification 

declaration 

training 

railway 

and 

the 

the 

on 

in 

in 

Recommendations. 

ground-handling 

sector: 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  182 

2.2.2: ANTICIPATION OF FUTURE SKILLS NEEDS 

Faced  with  increasing  globalisation,  the  social  partners  in  the  textile  and  clothing  sector 
agree  on  the  crucial  importance  of  early  anticipation  and  training  to  optimise  the 
management of jobs and skills of European workers and companies. In 2009, in the context 
of the European Commission’s proposal to establish European Sector Councils on Jobs and 
Skills,  they  finalised  a  project  studying  good  practices  in  this  area  and  the  feasibility  of 
establishing  a  network  of  existing  skills  observatories.  As  a  follow-up,  the  social  dialogue 
committee  has  started  to  explore  the  creation  and  working  arrangements  of  a  possible 
sector  council.  Similarly,  the  commerce,  postal  services  and  tanning  and  leather  sectoral 
social dialogue committees have also expressed an interest in becoming pilot sectors for the 
proposed European Sector Councils on Jobs and Skills. 

In a January 2010 joint appeal on ‘Emerging from the crisis: fostering growth and jobs for a 
sustainable construction industry’, the European social partners in the construction industry 
called  for  a  substantial  increase  in  efforts  for  sector-specific  vocational  and  professional 
training facilities. The aim would be: on the one hand, to help ensure that workers have the 
required  skills  to  carry  out  energy-efficiency  upgrades  in  the  housing  sector;  and,  on  the 
other  hand,  to  facilitate  labour  market  transition  and  the  strengthening  of  construction 
workers’ skills. At the time of writing this report, the social partners in this sector had not 
yet published any evaluation of actions in this area. 

Box 4.3: Guiding restructuring — a toolkit in the electricity sector 

To  help  employers  and  trade  unions  better  manage  restructuring  processes,  the 
European social partners in the electricity sector published in December 2008 a toolkit 
for socially responsible restructuring, including a best practice guide.123  

This toolkit builds on in-depth case studies and analyses the context of restructuring in 
the  industry  (such  as  liberalisation  and  technological  change),  and  the  importance  of 
social  dialogue  and  of  anticipation  and  transparency  in  the  process.  It  addresses  the 
questions of: 

●  outsourcing and offshoring; 

●  training, lifelong learning and redeployment; 

●  health and psychosocial issues; 

●  the role of public authorities; and 

●  cross-border learning. 

123  Restructuring  in  the  Electricity  Industry:  A  Toolkit  for  Socially  Responsible  Restructuring  with  a  Best 

Practice Guide: http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8751. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  183 

A practical checklist on each of these topics for the design of restructuring strategies 
complements  the  explanations.  The  toolkit  is  published  in  English,  Polish,  Romanian 
and Bulgarian. 

 
 
 
 
Restructuring in Europe  184 

3: TRANSNATIONAL COMPANY AGREEMENTS AND RESTRUCTURING 

3.1: AN EMERGING PHENOMENON 

Since the early 2000s, there has been an increasing tendency for multinational companies, 
and  especially  those  headquartered  in  Europe  (or  with  major  European  operations),  to 
engage  in  transnational  negotiating  activity  with  workers’  representatives,  resulting  in  the 
conclusion of agreements dealing with issues common to all or some of the countries where 
the  multinational  operates.  Some  200  transnational  company  agreements  (TCAs,  a  term 
used here also to include other transnational joint texts not labelled as agreements) have so 
far been recorded by the European Commission in around 100 companies employing a total 
of 9.8 million employees.124 

TCAs may be of global scope or focus on European countries. On the employee side, their 
signatories  are  usually  global  or  European  trade  union  federations,  European  Works 
Councils  (EWCs),  or  a  combination  of  these  parties,  sometimes  alongside  national  unions 
and  works  councils.  While  global  TCAs  typically  focus  on  fundamental  rights  or  aspects  of 
corporate social responsibility, many TCAs with European scope tend to have as their core 
aim  the  establishment  of  partnerships  to  deal  with  company  restructuring  and  anticipate 
change.  Indeed,  these  agreements  constitute  some  of  the  most  innovative  and  positive 
examples of actions in this area. 

Here we outline the main ways in which TCAs deal with restructuring and change, often in a 
very innovative way. Broadly, they may: 

●  address specific restructuring events; 

●  provide for the socially responsible management of potential future restructuring; 

●  anticipate change in a longer-term perspective; or 

●  deal with restructuring as part of a broader global accord on workers’ rights or corporate 

social responsibility. 

3.2: ADDRESSING SPECIFIC RESTRUCTURING EVENTS 

A number of TCAs have been negotiated after the announcement of a specific restructuring 
plan, in order to lay down a set of guarantees for the employees affected by this operation, 
and sometimes also addressing economic issues. For example, specific circumstances have 
prompted  the  negotiation  and  adoption  of  TCAs  at  companies  such  as  Danone  (France, 
food) and DaimlerChrysler (at the stage when it was a single German/US automotive group), 
while  a  series  of  important  European-level  agreements  on  specific  restructuring  exercises 
have  been  concluded  at  General  Motors  and  Ford  (both  US,  automotive)  since  2000, 

124  See http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=214. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  185 

providing  for  alternatives  to  closures  and  dismissals  as  well  as  pan-European  social 
guarantees. 

The  most  common  contents  of  this  type  of  specific  restructuring  agreement  are  set  out 
below. 

Avoiding redundancies 

When  plant  closures  and  workforce  reductions  are  planned,  agreements  often  include 
commitments  to  avoid  compulsory  redundancies.  For  example,  the  series  of  agreements 
concluded at General Motors Europe played a key role in avoiding plant closures and large-
scale, concentrated job losses between 2000 and 2010. 

Guarantees linked with transfer and redeployment 

When  closures  and/or  redundancies  are  unavoidable,  agreements  sometimes  provide  for 
internal and/or external redeployment. Employees who are transferred after a plant closure 
often  benefit  from  the  maintenance  of  employment  terms  and  conditions  and/or  job 
security.  The  same  applies  when  employees  are  transferred  to  another  company  as  a 
consequence  of  a  spin-off,  alliance  or  sale.  Several  TCAs  of  this  type  also  contain  a 
commitment  to  ensure  the  return  of  transferred  employees  in  their  former  company  in 
some  circumstances.  For  an  example  of  a  recent  agreement  containing  guarantees  on 
transfer and redeployment for the integration of a branch of Areva in Alstom and Schneider 
Electric, see Box 4.4. 

Other accompanying measures 

Other accompanying measures are generally offered by agreements to employees affected 
by the restructuring plan, especially in the case of redundancies. These may include: part-
time  work  programmes;  outplacement  assistance;  support  in  starting  up  a  business; 
compensation payments on termination of contract; compensation for shortfalls in earnings 
in a new job; training to attain the necessary skills to find jobs with a new employer; or a 
priority right of application in future new recruitment. Social and employment guarantees 
can  also  result  indirectly  from  agreements’  provisions  addressing  economic  issues,  for 
example commitments to provide sourcing or investments. 

Procedural rules and social dialogue 

Agreements may provide for information, consultation and dialogue over the restructuring 
in question and, in cases of transfers, deal with the consequences for collective agreements 
and representation. For example, they may provide that the existing collective agreements 
will  stay  in  force  (one  states  that  a  divested  company  will  join  the  industry’s  employers’ 
association so that the relevant sectoral collective agreements will continue to apply). Some 
agreements contain rules on employee representation during the restructuring and/or after 
the  transfer  of  employees,  maintaining  the  rights  of  the  EWC  and  national  trade  unions. 

 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  186 

Others adapt representation to the new situation or provide for the creation of a new EWC. 
An example of a TCA of this type is an agreement signed in March 2010 by Air France-KLM 
(Netherlands/France,  civil  aviation)  and  its  EWC,  which  lays  down  the  information  and 
consultation arrangements to apply at various levels over the reorganisation of the airline’s 
sales agencies at European airports. 

Box 4.4: European agreement on social guarantees following the acquisition 
of Areva T&D 

Two  France-based  multinationals,  Alstom  (power)  and  Schneider  Electric  (electrical 
engineering),  jointly  acquired  in  2010  the  energy  transmission  and  distribution  (T&D) 
business  of  Areva  (France,  nuclear  power).  Alstom  will  integrate  Areva’s  transmission 
activities into its own operations, and Schneider Electric will integrate the distribution 
activities. 

In  July  2010,  Alstom  and  Schneider  Electric  signed  a  European  agreement  with  the 
European Metalworkers’ Federation (EMF), which provides social guarantees for former 
Areva T&D employees and the rest of the Alstom and Schneider Electric workforces. 

The  agreement  guarantees  former  Areva  T&D  staff  throughout  Europe  continued 
employment  at  Alstom  or  Schneider  Electric  in  an  equivalent  job  in  the  same 
geographical  area,  and  on  the  same  pay.  There  will  be  no  compulsory  redundancies 
before March 2013 affecting either the former Areva T&D staff or the existing Alstom 
and  Schneider  Electric  employees  in  the  same  divisions,  unless  economic  conditions 
deteriorate  significantly.  The  agreement’s  commitments  to  former  Areva  T&D 
employees will not be detrimental to other Alstom or Schneider Electric employees. 

The  accord  also  sets  out  provisions  on  integration  and  training  for former  Areva  T&D 
staff,  social  dialogue  (including  the  integration  of  former  Areva  T&D  activities  into 
dialogue structures at all levels, including the Alstom and Schneider Electric EWCs) and 
collective bargaining (including the adaptation of agreements at Alstom and Schneider 
Electric to reflect those formerly applicable at Areva T&D). 

3.3: SOCIALLY RESPONSIBLE MANAGEMENT OF FUTURE RESTRUCTURING 

Some  TCAs  jointly  plan  for  potential  future  restructuring  in  advance,  setting  out  general 
rules  and/or  more  concrete  measures  to  apply  to  employees  when  restructuring  occurs. 
Agreements of this type have, for example, been signed at Axa (France, insurance), Danone, 
Deutsche Bank (Germany, finance), Dexia (Belgium/France, finance), Diageo (UK, food and 
drink), EADS (Netherlands, aerospace), General Motors, RWE (Germany, utilities) and Total 
(France,  petrochemicals).  These  agreements  seek  to  ensure  that  restructuring  occurs  in  a 
socially responsible manner, explaining the companies’ social and employment policy in the 
event  of  restructuring  and  change,  and  setting  Europe-wide  guidelines  and  minimum 
standards,  often  with  a  particular  focus  on  business  disposals.  The  aim  is  generally  to 
promote  job  security  and  employability  and  to  mitigate  the  impact  of  restructuring  on 

 
 
 
 
 
Restructuring in Europe  187 

employees. A recent agreement at ArcelorMittal contains provisions of this type (as well as 
on other aspects of restructuring) — see box 4.5. 

Avoiding redundancies 

In this type of agreement, companies often pledge to avoid, as far as possible, job losses and 
to  seek  alternatives  to  compulsory  redundancies.  These  alternatives  include:  internal 
redeployment;  geographical  mobility;  part-time  work;  redistribution  and  reduction  of 
working  hours;  cuts  in  overtime;  voluntary  departures  or  early  retirement  (often  with 
financial compensation). 

Accompanying measures 

In  future  cases  where  job  reductions  are  unavoidable,  agreements  often  stipulate 
accompanying  measures,  such  as  practical  and  financial  assistance  in  internal  and/or 
external  redeployment,  notably  through  vocational  training  and  outplacement  assistance. 
Where  business  disposals  occur,  agreements  may  provide  for  the  maintenance  of  rights, 
employment  terms  and  conditions,  and  pay-bargaining  arrangements,  or  even  give 
employees a right to return to the original employer within a certain period. Where plants 
close,  some  agreements  provide  for  site  rehabilitation  aimed  at  creating  new  jobs  or 
stimulate  economic  development  (for  example  through  consulting  services,  market  or 
feasibility studies and financial assistance). 

Social dialogue procedures 

These  agreements  usually  establish  procedural  rules  on  social  dialogue  over  restructuring. 
The  companies  commit  themselves  to  informing  and  consulting  employee  representatives 
—  the  EWC  and/or  local  trade  unions  and  representatives  —  on  restructuring  plans  and 
their  social  impact.  At  the  planning  stage,  one  agreement  provides  for  the  company  and 
workers’  representatives  to  examine  potential  business  opportunities  jointly  in  order  to 
lessen the impact on employees and to favour joint ventures. 

Box 4.5: Managing and anticipating change at ArcelorMittal 

In November 2009, ArcelorMittal (Luxembourg, steel) and the European Metalworkers’ 
Federation (EMF) signed a European agreement on ‘managing and anticipating change’, 
prompted  by  the  economic  crisis  and  the  global  fall  in  demand  for  steel.  The 
agreement both deals with the immediate effects of the crisis and lays down minimum 
Europe-wide  principles  with  a  view  to  anticipating  and  managing  change  in  a  socially 
responsible manner. 

agreement 

commits  ArcelorMittal 

plants 
The 
currently temporarily  closed  because  of  the  fall  in  demand  and  reopening  them  in 
future, while drawing up industrial plans for the future, covering matters such as: the 
upgrade and renewal of machinery and tools; the preservation of critical skills; and the 

to  maintaining 

European 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  188 

role of key contractors. Compulsory redundancies will be avoided and workers will be 
trained during periods of short-time working. 

In  a  longer-term  perspective,  the  agreement  stipulates  a  range  of  policies  aimed  at 
anticipating changes in jobs and skills needs, and training and developing employees to 
improve  their  employability.  It  also  promotes  social  dialogue  on  anticipation  and 
management  of  change  at  local,  national  and  European  level,  and  creates  a  formal 
European-level union-management consultative committee. 

3.4: ANTICIPATING CHANGE 

The TCAs that seek to anticipate change and manage jobs and skills in a forward-looking way 
are  among  the  most  innovative  company-level  initiatives  relating  to  restructuring.  Rather 
than  dealing  with  specific  instances  of  restructuring  or  laying  down  principles  or  rules  to 
guide  future  restructuring,  they  establish  a  long-term  employment  policy  with  a  view  to 
ensuring the future of employees, whatever organisational changes occur. Examples of such 
agreements have been signed at Danone, Dexia, Eni (Italy, energy), Schneider Electric, PSA 
Peugeot  Citroën  (France,  automotive),  Total,  and  Thales  (France,  technology).  A  recent 
example is at GDF Suez — see box 4.6. 

Planning 

Agreements of this type usually put in place a planning process to assess current and future 
jobs  and  training  needs  in  a  context  of  change,  for  example  putting  in  place  a  system  to 
monitor anticipated technological and labour market developments. 

Management of employment and skills 

Based on assessments of future developments in occupations and work, agreements seek to 
manage  employment  and  skills.  The  Europe-wide  agreement  on  this  anticipation/training 
policy  may  take  the  form  of  a  framework  that  sets  orientations  for  subsequent  national 
agreements,  or  contain  more  concrete  and  detailed  provisions,  dealing  with  matters  such 
as: 

●  general  forward  planning  tools,  with  assessments  for  each  country,  group  company, 

workplace and/or job; 

●  professional  development  for  employees,  for  example  through  individual  competence 

reviews, vocational training, mobility or validation of work experience; 

●  an active training policy open to all employees, defined through local annual discussions; 

●  aspects  of  recruitment  policy,  such  as  giving  priority  to  internal  candidates,  integrating 

new recruits or transferring skills between generations; 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  189 

●  mobility 

issues,  such  as  anticipating  compulsory 

internal  and  external  mobility, 
encouraging  and  accompanying  voluntary  internal  mobility,  and  disseminating  job 
vacancies within the group; and 

●  specific measures to manage the future careers or retrain employees who have reached 

mid-career or work in physically strenuous occupations. 

Social dialogue procedures 

These  agreements  highlight  the  importance  of  information  and  consultation  at  European 
and local level in enabling an anticipatory social dialogue. They may enhance the scope of 
information  given  to  the  EWC,  link  the  European  dialogue  with  the  information  and 
consultation  of  representative  bodies  at  local  level,  or  establish  specific  committees  at 
different levels. 

Box 4.6: European employment and expertise plan agreed at GDF Suez 

GDF Suez (France, energy and utilities) signed in February 2010 a European agreement 
introducing an ‘employment and expertise plan’, with a negotiating group made up of 
national  trade  union  representatives  and  the  European  Federation  of  Public  Service 
Unions  (EPSU).  The  accord  introduces  a  Europe-wide  system  of  forward-looking 
management of jobs and skills. 

The  agreement  establishes  a  ‘stock-taking  exercise’  of  human  resources,  HR 
management  systems  and  practices,  and  company  activities  in  all  GDF  Suez 
subsidiaries,  followed  by  regular  monitoring,  as  a  basis  for  forecasts  of  future 
employment and skill needs. It lays down Europe-wide principles and policies in areas 
such as career development, skills assessment, vocational training, internal advertising 
of  vacancies,  recruitment,  equal  opportunities,  mobility,  mentoring,  older  workers, 
and tackling the issues associated with physically demanding work. 

The  agreement  provides  for  information  and  consultation  on  relevant  issues  for  the 
EWC  and  national  employee  representative  bodies,  and  creates  specific  joint 
committees at European and national levels to monitor the employment and expertise 
plan. 

3.5: ADDRESSING RESTRUCTURING IN GLOBAL AGREEMENTS 

Many TCAs, generally those with worldwide scope, are ‘global agreements’ or ‘international 
framework agreements’, dealing with fundamental workers’ rights and/or corporate social 
responsibility  issues.  Some  of  these  agreements,  while  not  specifically  focusing  on 
restructuring or accompanying and anticipating change, include references to these issues. 
Examples  of  such  global  agreements  include  those  at  EADS,  EDF  (France,  electricity),  Eni, 
Generali  (Italy,  insurance),  Lukoil  (Russia,  energy),  Rhodia  (France,  chemicals),  Pfleiderer 
(Germany, wood) and Renault (France, automotive). 

 
 
 
 
 
 
 
Restructuring in Europe  190 

A number of these agreements refer explicitly to the social management of restructuring by 
committing the company to: protecting jobs through training and mobility; minimising the 
impact of restructuring on employment and working conditions; ensuring the employability 
of employees in a long-term perspective; or providing for the information and consultation 
of  employee  representatives  on  restructuring.  Some  global  agreements  contain  specific 
commitments  by  the  company  to  anticipate,  as  far  as  possible,  economic  and  industrial 
changes and their consequences in terms of human resources. The most common means of 
implementing this ‘anticipation principle’ include the management of skills and training, and 
a forward-looking and permanent social dialogue. 

Box: 4.7: Two examples of global agreements 

The  international  framework  agreement  at  the  German  wood  and  by-product 
wholesaler  Pfleiderer  AG,  signed  in  November  2010  between  the  company’s  Works 
Council,  the  German  metal  union,  IG  Metall,  and  the  Building  and  Wood  Workers 
International  (BWI),  commits  the  company  to  respect  the  international  labour 
standards  of  the  International  Labour  Organisation  (ILO)  for  all  its  employees.  It  also 
commits to applying, on its German sites and elsewhere, minimum standards in terms 
of  working  conditions,  in  keeping  with  the  ILO’s  international  labour  standards.  The 
agreement,  in  the  form  of  a  social  charter,  also  contains  other  commitments  on  the 
health  and  safety  of  workers,  the  protection  of  the  environment,  learning  and 
vocational training, and a commitment to work only with contractors, sub-contractors 
and suppliers who recognise and implement these social principles. 

The  international  framework  agreement  at  the  European  Aeronautic  Defence  and 
Space  Company  (EADS  NV),  which  also  dates  from  2005,  makes  a  commitment  to 
promoting  the  employment  of  the  company’s  workforce.  Specifically,  in  the  case  of 
company ‘re-orientation’ or restructuring, the agreement says that it will do ‘all it can 
to  protect  employment  by  means  of  all  possible  measures,  including  training  and 
mobility,  whenever  appropriate’.  The  accord  was  concluded  between  the  European 
Works Council and management at the company. 

3.6: COMMISSION’S ROLE IN PROMOTING TRANSNATIONAL COMPANY AGREEMENTS 

Since  2005,  the  European  Commission  has  been  active 
in  promoting  TCAs. 125  The 
Commission  started  organising  ‘stock-taking’  activities  on  TCAs  as  a  contribution  to  the 
implementation of the Social Agenda 2005-2010, which included plans for the drafting of a 
proposal  for  an  optional  legal  framework  for  transnational  collective  bargaining.  In  2006, 
the  Commission  organised  study  seminars  for  governmental  experts,  social  partners, 
academics and company actors to analyse the emerging TCA phenomenon, its background 
and the first experiences with this kind of joint text. The seminars were complemented by 

125  See http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=214. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  191 

background reports, company case studies and interviews with company actors. In 2008, a 
company workshop was held, which allowed for an in-depth exchange between Commission 
experts  and  management  and  EWC  representatives  from  multinationals  with  such 
agreements.  The  findings  of  this  workshop  contributed  to  a  wider  conference,  organised 
with  the  French  Presidency  of  the  Council  in  November  2008,  on  the  transnational 
dimension of social dialogue and restructuring. 

In  the  framework  of  the  2008  renewed  social  Agenda,  the  Commission  issued  a  report126 
analysing  the  role  of  TCAs  in  the  context  of  increasing  international  integration,  and  the 
issues  to  be  addressed  (actors  involved,  effects  of  agreements,  transparency  and  dispute 
settlement). This report was accompanied by a mapping of existing TCAs. 

Since 2008, the Commission’s promotion of TCAs has included support for initiatives aimed 
at: 

●  facilitating  the  identification  of  the  actors,  approaches  or  mechanisms  that  could  be 

promoted in this area; 

●  identifying ways of ensuring that the texts agreed are more transparent; and 

●  determining conciliation or mediation mechanisms that could be promoted with a view 

to facilitating dispute settlement. 

Specific actions launched with the aim of supporting TCAs have included: 

●  financial support for social partner projects on TCAs under budget heading 04.03.03.03 
on information, consultation and participation of representatives of undertakings;127 

●  the  commissioning  of  studies  on  international  private  law  rules  and  on  the  effects 

produced by company agreements; 

●  the creation of a database of transnational texts (under way); and 

●  the  establishment  in  2009  of  an  expert  group  on  TCAs  made  up  of  social  partners, 
governmental experts and experts from other institutions, to monitor developments and 
discuss ways to best support TCAs — the Commission will draw conclusions from its work 
and propose future steps in 2011. 

An  extensive  range  of  further  documentation  on  transnational  company  agreements  is 
available at: http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=214 

126  Commission  staff  working document  —  The  role  of transnational  company  agreements  in  the context  of 
final. 

increasing 
http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=214. 

international 

COM(2008) 

integration 

419 

127  http://ec.europa.eu/social/main.jsp?catId=157&langId=en&furtherCalls=yes&callType=2. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  192 

4: CROSS-BORDER MERGERS 

Many  transnational  companies  are  created  as  a  result  of  cross-border  mergers,  and  these 
can have complicated provisions regulating the information, consultation and participation 
of workers. This section looks at issues surrounding cross-border mergers. 

Since  15  December  2007  (the  date  by  which  Member  States  should  have  adopted  the 
national implementing legislation), cross-border mergers have been facilitated by European 
legislation.  Directive  2005/56/EC  of  26  October  2005  on  cross-border  mergers  of  limited 
liability  companies  sets  out  the  conditions  and  procedures  for  these  restructuring 
operations,  building  on  the  national  requirements  for  domestic  mergers.  The  Directive 
responded  to  strong  demand  from  businesses  to  facilitate  cross-border  mergers  in  the 
European  Union,  which  had  previously  been  impossible  or  very  difficult  and  expensive.  It 
aimed  to  reduce  costs  and  guarantee  legal  certainty  for  companies  taking  part  in  these 
procedures. 

The rules apply to limited-liability companies which were formed in accordance with the law 
of a Member State and have their registered office, central administration or principal place 
of business within the Community. The merging companies need to be governed by the laws 
of at least two Member States. 

The procedure of carrying out a cross-border merger is developed to protect the rights and 
interests of shareholders, creditors and employees. The participating companies must draw 
up and publish common draft terms of mergers that set out, inter alia, the ratio applicable 
to the exchange of shares, the terms of the allotment of the shares of the resulting company 
and information on the evaluation of the assets and liabilities which are transferred to this 
company  (the  acquiring  company  or  a  new  company).  The  draft  terms  must  also  describe 
the likely repercussions of the cross-border merger on employment and, where appropriate, 
information on the procedures by which arrangements for the involvement of employees in 
determining their participation rights in the resulting company. 

The  management  of  the  merging  companies  must  draw  up  a  report  to  explain  and  justify 
not  only  the  legal  and  economic  aspects  of  the  merger  but  also  the  implications  for 
shareholders,  creditors  and  employees.  The  report  must  be  made  available  to  the 
shareholders,  as  well  as  to  the  representatives  of  the  employees  or  the  employees 
themselves,  one  month  before  the  general  meeting  that  decides  on  the  merger.  If  the 
management receives an opinion from the employees in good time, it has to be attached to 
the report. 

4.1: EMPLOYEE PARTICIPATION IN CROSS-BORDER MERGERS 

As  a  general  rule,  employees’  participation  rights  in  the  board  of  the  company  resulting 
from  the  cross-border  merger  are  governed  by  national  law.  However,  there  are  three 
exceptions: 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  193 

●  if at least one of the merging companies has, in the six months before the publication of 
the draft terms of the merger, an average number of employees exceeding 500 and it is 
operating under an employee participation system; 

●  if the law applicable to the resulting company does not provide for at least the same level 

of employee participation as operated in the merging companies; and 

●  if  the  national  law  applicable  to  the  resulting  company  does  not  provide  for  the 
employees of the foreign establishments of the resulting company the same entitlement 
to exercise participation rights as enjoyed by the employees in the company’s country of 
registration. 

In these cases, the merging companies must start negotiations with the employees (or their 
representatives) in order to find an agreement on the exercise of participation rights in the 
board  of  the  resulting  company.  The  detailed  rules  of  the  negotiation  follow  the 
requirements  of  Directive  2001/86/EC  that  govern  the  involvement  of  employees  in  a 
European Company (SE). 

The Directive also makes sure that Member States protect employee participation rights, in 
the  event  of  subsequent  domestic  mergers,  for  a  period  of  three  years  after  the  cross-
border merger has taken effect. 

4.2: EUROPEAN COMPANIES (SEs) 

Council Regulation (EC) No 2157/2001128 establishes a Statute for a European Company with 
a  view  to  creating  a  uniform  legal  framework  enabling  companies  from  different  Member 
States  to  plan  and  carry  out  the  reorganisation  of  their  business  on  a  Community  scale. 
Council  Directive  2001/86/EC129 supplements  the  Regulation  as  far  as  the  involvement  of 
employees130 is  concerned,  with  the  aim  of  ensuring  that  the  establishment  of  an  SE  does 
not entail the reduction of practices of employee involvement existing within the companies 
participating in the creation of the SE. 

involvement 

The fundamental principle and stated aim of the Directive is to secure employees’ rights as 
regards 
in  force  before  the 
in  company  decisions.  Employee  rights 
establishment of SEs should provide the basis for employee rights of involvement in the SE 
(the  ‘before  and  after’  principle).  This  aim  is  sought  primarily  by  means  of  an  agreement 
negotiated  between  the  management  of  the  companies  concerned  and  the  employees’ 

128  Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE). 

129  Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with 

regard to the involvement of employees. 

130  Involvement  of  employees  means  any  mechanism,  including  information,  consultation  and  participation, 
through  which  employees’  representatives  may  exercise  an  influence  on  decisions  taken  within  the 
company. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  194 

representatives.  In  the  absence  of  agreement  within  a  six-month  period  (which  can  be 
extended  to  up  to  12  months  by  agreement),  the  Directive  establishes  a  set  of  standard 
rules. Furthermore, employees’ representatives may decide not to open negotiations or to 
terminate  negotiations  already  opened,  and  simply  rely  on  the  rules  on  information  and 
consultation  of  employees  in  force  in  the  Member  States  where  the  SE  has  employees. 
According  to  the  SE  Regulation  (Article  12(2)),  an  SE  cannot  be  registered  unless  one  of 
these conditions is met (ie an agreement on employee involvement is reached, or standard 
rules, or national information and consultation rules, apply). 

In 2008, the European Commission commissioned an external study on the operation and 
impact  of  the  SE  Statute.131 The  study,  which  was  published  in  March  2010,  was  based  on 
questionnaires and interviews with stakeholders. In May 2010, the Commission launched a 
consultation  on  the  results  of  the  study  in  order  to  test  the  study’s  results  with  a  wider 
audience  and  provide  the  Commission  with  stakeholders’  views  on  issues  relevant  in 
assessing  the  SE  Statute.  In  November  2010,  the  Commission  issued  a  report  on  the 
application of the SE Statute,132 accompanied by a Staff Working Document, which, among 
other  things,  makes  an  inventory  of  the  existing  SEs,  presents  trends  on  SEs’  distribution 
throughout  the  EU,  and  analyses  the  main  problems  encountered  when  setting  up  and 
running an SE.133 

As  to  the  current  state  of  play  as  regards  agreements  on  worker  involvement  in  SEs,  the 
European Trade Union Institute (ETUI) reports that by November 2010, 67 agreements on 
worker involvement could be identified from the 658 SEs established.134 The agreements of 
the larger SEs, in particular, are generally in line with good ‘EWC practice’ and, on certain 
points, go beyond the provisions of the SE Directive. 

In  32  SEs  the  rights  enshrined  in  the  agreement  include  board-level  participation,  thereby 
adding an important dimension for workers’ voice in company decision-making. 

At  present,  more  than  90  employee  board  members  represent  the  interests  of  the 
workforce on SE supervisory or administrative boards. A fundamental innovation introduced 
by  the  SE  legislation  is  the  transnational  component  of  participation  at  board  level.  In  a 
number of SEs (eg Allianz SE, BASF SE and MAN Diesel SE) employee representatives from 
several countries sit on the board and represent the interests of the European workforce as 
a whole. SE employee board-level representatives today come from 10 different countries 
(AU, BE, DK, FR, DE, IT, NL, NO, PL, UK). For more information, see box 4.8. 

131  Study  on  the  operation  and  the  impacts  of  the  Statute  for  a  European  Company  (SE)  —  2008/S  144-
2010. 

192482. 
http://ec.europa.eu/internal_market/consultations/docs/2010/se/study_SE_9122009_en.pdf. 

December 

Young. 

Ernst 

& 

132  Report 

of 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52010DC0676:EN:NOT. 

application 

Statute 

(COM(2010) 

the 

the 

on 

SE 

676 

final: 

http://eur-

133  http://ec.europa.eu/internal_market/company/docs/se/report112010/sec2010_1391_en.pdf. 

134  Information from the ETUI’s worker participation website: http://www.worker-participation.eu/. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  195 

Box 4.8: Worker involvement in ‘normal’ SEs (those operating and employing 
5 or more employees) 

At  least  67  SEs  have  arrangements  on  information  and  consultation  at  transnational 
level. 

32 SEs have board-level representation (participation): 

●  24  companies  registered  in  Germany:  Allianz,  ASIC,  BASF,  BP  Europa,  Clariant, 
Dekra, DVB  Bank, E.on-Energy Trading, Fresenius, GfK,  Knauf Interfer, Lenze, MAN 
Diesel & Turbo, MAN, Porsche Automobil Holding, SGLCarbon, SCA Hygiene Products, 
Q-Cells, RKW, Surteco, Tesa, Warema, WILO, Wacker Neuson 

●  3 companies registered in Austria: STRABAG, Plansee, Conwert Immobilien Invest 

●  3 companies registered in France: SCOR (3 SEs) 

●  1 company registered in Cyprus: Prosafe 

●  1 company registered in Hungary: Wamsler 

Source: ETUI November 2010. 

Box 4.9: Examples of worker involvement in SEs 

MAN Diesel SE, Germany 

MAN affiliate MAN Diesel SE, founded in August 2006, made history as the first SE. As a 
result of this, German co-determination was spread to other EU member states: on the 
SE supervisory board the German workforce representatives now share the 50 % of the 
seats  formerly  reserved  for  them  in  accordance  with  German  co-determination  law 
with  their  colleagues  from  Denmark.  No  less  important,  the  SE  works  council  is  now 
much more European than the previous European Works Council. This Europeanisation 
of  interest  representation  to  the  highest  achievable  extent  is  well  in  line  with  the 
objectives of the European Metal Workers Federation (EMF). 

MAN  Diesel  SE  was  set  up  by  a  national  conversion,  and  is  registered  in  Augsburg, 
Germany. According to the SE statute, the management decided to retain the existing 
two-tier corporate structure and, consequently, the German form of co-determination, 
giving  the  workers  50 %  of  the  seats  on  the  supervisory  board.  At  the  same  time,  the 
management used the founding of  the SE to  reduce the size of  the supervisory  board 
from  12  to  10  members.  This  was  not  considered  a  reduction  of  participation  at  this 
level  by  IG  Metall,  however:  only  the  employee  seat  reserved  for  the  management 
staff representative was lost (according to German co-determination law this person is 
considered as being on the employees’ side). At the time of SE establishment MAN B&W 
Diesel  —  mainly  the  result  of  a  German–Danish  merger  of  heavy  diesel  machinery 

 
 
 
 
 
 
Restructuring in Europe  196 

production in 1980 — the company employed 6 423 people, mainly in Germany (2 875) 
and in Denmark (2 362), but also in France, the UK and the Czech Republic, with some 
service departments in Greece, Norway and Sweden. The transformation of MAN B&W 
Diesel  into  an  SE  may  be  seen  as  only  a  first  step  against  a  broader  background  of 
reorganising the company’s whole machinery  and truck branch in Europe, making it a 
bigger,  globally  more  competitive  player.  Meanwhile,  negotiations  have  commenced 
with  the  workers  as  the  company  has  decided  to  convert  into  an  SE  wholesale  (Oct 
2008).  Although  the  outcome  was  received  positively  by  the  workers’  national 
representatives,  in  the  course  of  the  negotiations  a  number  of  difficulties  arose, 
caused by the different standpoints and backgrounds of the employee representatives. 
These difficulties concerned the character and consequences of the particular form of 
foundation  and  the  location  of  the  company’s  registered  seat  in  Germany,  and  the 
understanding of board-level participation, particularly between representatives of the 
two strong legal systems involved, the German and the Danish. 

Elcoteq, Finland 

Finnish-owned Elcoteq opened a new chapter of high company mobility and flexibility 
in Europe by taking advantage of the SE legislation. But its employees are dependent 
on  cross-border  information  and  consultation  only  somewhat  above  the  standard 
provisions. No board-level representation has been introduced by negotiating workers’ 
involvement in Elcoteq SE. 

Elcoteq SE was set up by a conversion of the parent company effective from 1 October 
2005  and  registered  in  Helsinki/FI.  At  the  time  of  establishment  c.  7 500  employees 
from five EU member states were represented by the special negotiating body: c. 860 
from Finland, c. 3 340 from Estonia, c. 2 700 from Hungary, c. 550 from Germany and 7 
from  Sweden.  Elcoteq  is  an  electrical  manufacturing  services  company  supplying 
customers such as Nokia and Ericsson. Worldwide Elcoteq has c. 20 000 employees and 
operates in 15 countries. 

According  to  management  the  foundation  of  an  SE  was  motivated  by  the  desire  to 
adopt  a  European  identity.  Since  Elcoteq  publicly  announced  it  would  move  its 
headquarters  from  Helsinki  to  Luxembourg,  however,  other  considerations  have 
emerged  as  important  motives  for  using  this  new  opportunity  to  increase  company 
mobility throughout Europe, probably including tax savings. 

The negotiations between management and employee representatives were used to set 
up a cross-border interest representation  body  — the SE  works council — for the first 
time.  Because  of  a  peculiarity  of  Finnish  law  on  worker  participation  no  board-level 
presentation  had  been  established  in  the  previous  parent  company.  Accordingly,  no 
board-level representation could be introduced (on the basis of the standard rules) in 
the  administrative  board  of  Elcoteq  SE.  Given  the  fundamental  resistance  of 
management  to  the  board-level  representation  of  employees  and  the  heterogeneous 
composition of the special negotiating body, however — particularly the weak interest 
representation of the Estonian workforce (only 100 trade union members out of 3 340 

 
 
 
 
Restructuring in Europe  197 

employees)  —  the  make-up  of  the  transnational  interest  representation  agreed  upon 
can be regarded a remarkable success. The SE works council obtained rights somewhat 
above the standard provisions: in addition to its information and consultation rights it 
has the right to be informed about and to discuss, both in advance and afterwards, the 
agenda of meetings of the administrative board. This could be perceived as a kind of 
‘informal participation’. 

The negotiation process was characterised by the important role of the external expert 
working for the Finnish trade unions, serving as facilitator, legal adviser and educator 
at the same time. Cultural differences and lack of language competence turned out to 
be particular obstacles to achieving a common understanding and a mutually agreeable 
outcome.  Not  surprisingly,  the  agreement  also  contains  provisions  and  days  off  for 
taking  language  courses  (English).  Finally,  all  parties  involved  were  by  and  large 
content with the agreement. 

Case study source: ETUI. 

 
 
 
 
 
Restructuring in Europe  198 

CHAPTER 5: MEMBER STATE ACTIONS TO SUPPORT RESTRUCTURING 

The  response  of  individual  Member  States  to  anticipating  and  managing  restructuring, 
particularly  over  the  past  two  years,  has  been  mapped  by  a  number  of  recent  EU-wide 
research  projects.  These  projects  add  a  great  deal  of  value  to  the  debate  in  terms  of 
enabling key actors and policy makers to understand the main challenges involved, and how 
they have been overcome. 

There are a range of schemes, instruments and mechanisms of support available to workers 
who  have  been  affected  by  restructuring  and  which  have  been  set  up  in  parallel  to  and 
complementing  the  typical  support  mechanisms  of  public  employment  services  (PES). 
Overall, the emphasis, or certainly the desired emphasis, of measures is moving away from 
the more traditional passive measures, towards active measures that involve an element of 
training  and  active  support  in  the  search  for  alternative  employment.  These  can  include 
schemes  such  as  outplacement  and  measures  designed  to  support  occupational  and 
geographical mobility. Studies of the measures available conclude that there is a common 
objective  which  is  shared  by  national  key  actors:  in  times  of  globalisation  and  accelerated 
change  in  every  part  of  the  EU’s  economy  and  society,  an  efficient  system  to  organise 
professional and job transfer seems to be crucial. 

The role of flexicurity in easing the transition of workers into alternative employment is a 
growing issue. Overall, the flexicurity concept moves away from a job security mentality to 
an  employment  or  employability  security  mentality.  It  is  a  policy  approach  geared  less 
towards the protection of jobs, and more towards the protection of people, and therefore 
can provide a useful framework for actions designed to support workers facing the need to 
make the transition into alternative employment. 

Flexicurity has a specific role to play in the current crisis, and recent studies have highlighted 
the ways in which many of the EU Member States have been trying to implement flexicurity 
principles in order to try to weather the crisis. This has been undertaken in varying ways and 
to varying degrees, depending on a range of factors, including national social security and 
industrial relations systems, culture, traditions of social dialogue and economic governance 
systems.  Short-time  working  schemes  provide  numerical  flexibility  for  the  employer, 
together with job and income security for the employee and so can as such be considered as 
a flexicurity measure. However, the uptake is limited and workers are not always motivated 
to  take  part.  Further,  firms  may  have  limited  experience  of  providing  training  to  workers 
and the capacity for training, particularly in SMEs, is very problematic, as is the fragmented 
nature of training systems in some countries. Nevertheless, the consensual nature of short-
time working schemes provides a promising basis for further tripartite cooperation. 

1: RESTRUCTURING IN THE MEMBER STATES 

To  support  knowledge-sharing  on  restructuring,  in  2009,  the  European  Commission 
launched  an  initiative  for  disseminating  the  lessons  learnt  on  existing  and  innovative 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  199 

measures  being  carried  out  in  all  EU  Member  States  for  anticipating  and  managing 
restructuring at the national, regional and local levels and across specific economic sectors. 
This was carried out through the project Anticipating Restructuring in Enterprises: National 
Seminars  (ARENAS),  which  was  managed  by  the  International  Training  Centre  of  the 
International  Labour  Office  (ITC-ILO)  and  funded  by  the  Directorate-General  for 
Employment, Social Affairs and Inclusion. 

The  overall  objective  of  this  project  was  to  further  advance  the  debate  and  the 
dissemination  of  good  practices  and  innovative  measures  and  tools  for  anticipating  and 
managing restructuring. This was to be achieved by holding national seminars in each of the 
27 EU Member States, organised by national experts, who were also responsible for drafting 
a  national  background  paper  for  their  country  in  order  to  support  debate  during  the 
seminar. 

The  exchanges  during  the  national  seminars  aimed  at  focusing  on  the  effectiveness  and 
usefulness  of  specific  measures  and  tools,  taking  into  consideration  the  current  economic 
downturn. Each national seminar aimed to add to the existing body of knowledge on how to 
its  negative  social  and 
anticipate  and  manage  restructuring  and  how  to  mitigate 
employment  impacts.135 The  seminars  also  showcased  case  studies  of  good  practice  in 
anticipating  and  managing  restructuring.  They  were  tripartite  in  nature,  attended  by 
representatives  of  central,  regional  and  local  government  authorities,  trade  unions, 
employers’  organisations,  companies,  chambers  of  commerce,  universities,  research 
networks,  and  other  relevant  bodies.  The  seminars  were  held  in  each  EU  Member  State 
between April 2009 and June 2010. 

The  main  purpose  of  the  seminars  was  to  allow  participants  to  share  their  views  on  the 
effectiveness of the different measures available in their countries to anticipate and manage 
restructuring.  Seminar  participants  were  given  the  opportunity  to  discuss  the  case  studies 
and assimilate the lessons learnt, with a view to applying this to their own organisations and 
disseminating the ideas more widely. 

A  final  synthesis  report  of  the  entire  project  draws  out  the  project’s  main  themes.  This 
report also provides an overview of the main measures that are available to anticipate and 
manage  restructuring  in  all  of  the  27  Member  States.  The  aim  of  the  report  was  to 
contribute  to  better  understanding  the  various  tools  available  to  anticipate  and  manage 
restructuring,  in  addition  to  identifying  which  lessons  could  be  disseminated  to  other 
countries in Europe. The intention was also that this exercise might contribute to debates 
on  how  the  European  Union  could  facilitate  the  development  of  sustainable  measures  to 
anticipate and manage restructuring across Europe. 

Measures to anticipate and manage restructuring in the 27 EU Member States share many 
similar  features,  which  may  be  capable  of  being  transferred  between  Member  States.  For 

135  All of the national background papers can be found on the following website: http://arenas.itcilo.org/. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  200 

example,  in  all  Member  States  there  are  some  measures  available  to  anticipate  economic 
and  labour  market  developments,  all  countries  have  legal  frameworks  that  regulate  how 
restructuring should be managed and all have public authorities that initiate labour market 
in  the  best  possible  way  given  each  country’s 
policies  to  reduce  unemployment 
circumstances.  These  policies  operate  in  the  context  of  a  variety  of  traditions,  cultures, 
economic  structures,  industrial  relations  systems  and  the  differing  roles  of  actors  such  as 
the  state,  the  social  partners  and  the  nature  of  the  legal  framework  that  supports 
restructuring. 

This project did not set out to evaluate the legal frameworks and labour market policies of 
the  27  EU  Member  States,  but  rather  to  describe  and  discuss  the  measures  related  to 
anticipating  and  managing  restructuring.  Box  5.1  below  sets  out  some  examples  of  early 
warning and anticipation systems from EU Member States. 

 
 
 
 
 
Restructuring in Europe  201 

Box  5.1:  Examples  of  measures  to  anticipate  economic  and  labour  market 
developments 

Government Foresight Network in Finland 

The  Government  Foresight  Network  is  an  inter-ministerial  forum  for  cooperation  and 
exchange  of  information  in  issues  relating  to  the  anticipation  of  the  future. 
Anticipation  of  the  future  refers  to  a  systematic  and  inclusive  process  involving  the 
collection,  assessment  and  analysis  of  information.  It  also  includes  outlining 
projections and visions for the future in the medium and long term. 

All  ministries  are  involved  in  anticipation  activities  relevant  to  their  appropriate 
administrative  sector.  Anticipation  activities  undertaken  by  the  ministries  serve  the 
strategic  planning  and  direction  of  the  administrative  sector  as  well  as  the 
Government’s  decision-making.  The  Government  Foresight  Network  is  a  forum  for 
discussing the results of the anticipation work carried out in the administrative sectors. 
Appointed by the Prime Minister’s Office, the Network’s term lasts until the end of the 
Government’s term of office. The Network includes members from all ministries, and 
its presidency rotates among the ministries. 

Regional economic forums in the UK 

The South West Regional Economic Task Group, chaired by the government minister for 
the region, has a remit to: 

●  assess the regional impact of current economic uncertainties; 

●  provide  a  conduit  for  the  Regional  Minister  to  discuss  economic  challenges  with 
private  and  public  sector  bodies,  and  for  the  views  of  South  West  regional 
stakeholders to be represented at national level; and 

●  provide  a  structure  through  which  problems  affecting  particular  sectors  or  sub-
regions/localities  can  be  addressed,  ideas  can  be  harnessed,  and  public  sector 
intervention can be coordinated to optimum effect. 

It has considered detailed reports of the economic situation in the region. In May 2009, 
for  example,  a  report  to  the  Task  Group  identified  four  sectors  which  were  both 
vulnerable and of particular importance to the region: engineering, construction, retail 
and  business  services.  The  report  suggested  particular  localities  that  might  then  be 
particularly impacted by the recession, in order to plan appropriate responses. 

In  terms  of  managing  restructuring,  there  is  a  wide  range  of  measures  in  existence  in  EU 
Member  States,  ranging  from  those  that  aim  to  prevent  redundancies,  those  that  aim  to 
mitigate  the  effects  of  redundancy  and  those  that  support  redundant  workers.  Box  5.2 
below gives an overview of these measures, their advantages and disadvantages. 

 
 
 
 
 
 
Restructuring in Europe  202 

Box 5.2: Overview of the main measures designed to manage restructuring 

Measure 

Advantages 

Disadvantages 

Wage and labour 
cost reduction 

●  Redundancies may be 

avoided 

●  Difficult to come to agreement 
with workers’ representatives 

●  Wage subsidies provide 

distorted incentive structure for 
employers 

Short-time work 

●  Quick adjustment 

●  Reduced income for workers 

●  Termination of contracts 

●  Long-term effects not clear 

avoided 

●  Recruitment and training 
not necessary when 
demand resumes 

●  Redundancies cannot be 

avoided 

●  Risk of postponing redundancies 

Partial 
unemployment 

●  Quick adjustment 

●  Reduced income for workers 

●  Termination of contracts 

●  Long-term effects not clear 

avoided 

●  Recruitment and training 
not necessary when 
demand resumes 

●  Redundancies cannot be 

avoided 

●  Risk of postponing redundancies 

●  Risk of misuse 

Temporary lay-offs  ●  Quick adjustment 

●  Reduced income for workers 

●  Termination of contracts 

●  Long-term effects not clear 

avoided 

●  Recruitment and training 
not necessary when 
demand resumes 

●  Redundancies cannot be 

avoided 

●  Risk of postponing redundancies 

Early retirement 

●  Quick adaptation 

●  Risk of losing skilled employees 

●  Can be regarded as 

●  Passive measure 

compensation for long 
tenure 

●  High costs 

●  Negative effect on pension 

system 

 
 
 
 
Dismissal and 
severance pay 

●  Can be preferred by 

●  Passive 

workers 

Restructuring in Europe  203 

●  High costs for employers when 

least able to pay 

●  Reduces attraction to activating 

measures 

Dismissal and 
transition to new 
job 

●  Activates workers 

●  Limited coverage and availability 

●  Unemployment can be 

avoided 

●  Temporary workers excluded 

in member states 

Training for 
transition and re-
integration  

●  Increase employability 

●  Prepare for future jobs 

●  Costly for employers 

●  Not always well perceived by 
employers and employees 

●  Funding often available 

methods, contents) 

●  Lack of adaptation (time, access, 

●  Costly for employers 

●  Redundant workers are not 

always motivated to take part in 
training 

This project culminated in the production of a final synthesis report, which highlighted the 
main themes to emerge from the project, and the lessons learned. It covers the following 
areas: 

●  an overview of the context and regulation of restructuring and on the actors involved in 
restructuring. It sets out the EU regulatory context governing restructuring, largely in the 
area of the information and consultation of workers regarding any changes that are likely 
to  affect  the  workforce.  It  also  gives  an  overview  of  the  main  actors  involved  in 
restructuring,  which  include  the  employer,  company-level  workforce  representatives, 
national  governments,  regional  authorities,  joint  tripartite  bodies,  public  employment 
services,  social  partners,  training  providers,  external  consultants  and 
individual 
employees; 

●  the  main  measures  and  tools  that  are  in  place  to  anticipate  restructuring  in  the  EU, 
drawing  out  the  communalities  and  highlighting  innovative  practices.  These  measures 
focus  on  economic  and  labour  market  forecasting  tools,  and  tools  that  anticipate  and 
support transition; 

 
 
 
 
 
 
Restructuring in Europe  204 

●  the  main  measures  and  tools  that  are  in  place  to  manage  restructuring  in  the  EU, 
identifying  the  main  common  elements  and  showcasing  differences  and  innovative 
elements.  Management  measures  focus  on:  ways  to  avoid  redundancies,  such  as  wage 
reduction,  short-time  working  and  temporary  lay-offs;  ways  to  manage  redundancies, 
such as early retirement, severance pay, and transition to alternative employment; and 
training measures for transition and re-integration; 

●  the  dynamics,  trends,  issues  and  dilemmas  related  to  the  measures  outlined  in  the 
previous chapters of the report. This covers issues such as the role of the social dialogue 
process,  issues  surrounding  state  intervention  and  the  changing  role  of  the  public 
impact  of 
employment  services, 
restructuring on health, and the effects of the crisis; and 

issues  surrounding  training  and  education,  the 

●  conclusions, including thoughts on future policy emphasis. This final section of the report 
contains a number of key findings, such as the need for the collection of data in order to 
allow measures to be evaluated, the fact that, although there is a diversity of measures in 
place around the EU to anticipate and manage restructuring, they share some common 
elements  that  may  be  capable  of  transfer  across  national  borders,  and  the  need  for 
measures to stimulate demand for transition services in some countries. 

The  report  also  contains  an  annex  which  gives  a  brief  description  of  the  main  existing 
measures  for  anticipating  change  and  for  managing  restructuring  processes  in  all  EU 
Member States. 

Box 5.3: Highlights of the European Synthesis Report 

The  range  of  information  gathered  by  this  project  confirms  and  underlines  the  work 
that has been developed in previous years by the European Commission and the social 
partners.  Although  there  are  differences  in  the  systems  and  tools  of  anticipation  and 
management of restructuring that are in place in the Member States, it is nevertheless 
possible to identify similar features amongst the existing systems and tools that could 
form the basis of convergence of practice in this area. 

Anticipation of restructuring: 

●  almost  all  countries  have  been  developing  anticipatory  measures.  Examples:  (1) 
forecasting  and  early  warning  systems;  (2)  measures  aimed  at  enhancing  skills  and 
competences levels in order to (i) strengthen employability and thus mobility, (ii) as 
well  as  avoiding  skills  shortages  or  skills  mismatches.  Those  measures  are 
particularly important to workers as they allow them to be in the strongest position 
to  react  to  any  future  restructuring  event  and  not  to  be  absent  from  the  labour 
market as a consequence of a restructuring event; and 

●  the  importance  of  social  dialogue  in  the  context  of  an  anticipatory  approach. 
Regular  exchanges  of  information  in  the  context  of  collective  bargaining  and  a 

 
 
 
 
 
 
Restructuring in Europe  205 

permanent and effective information sharing and consultation at company level are 
a key element and work as the main anticipatory measures. 

Management of restructuring: 

●  all countries have been developing measures for managing restructuring, and while 
there  are  some  national  differences,  the  majority  of  countries  give  priority  to 
measures  aimed  at  avoiding  redundancies,  such  as  short-time  work,  partial 
unemployment or temporary lay-offs; and 

●  there is state involvement in restructuring in all Member States, although the extent 

of state involvement varies. 

The 
European 
http://arenas.itcilo.org/ 

Synthesis  Report 

European Conference 

is 

available 

via 

the 

following 

link: 

The  synthesis  report  was  presented  at  a  European-level  conference  co-organised  by  the 
Belgian Presidency of the EU Council and the European Commission and held in Brussels on 
18-19 October 2010. 

The event gathered all the actors that had played a part in this project, in order to review 
best  practices  in  anticipating  change  and  managing  restructuring  in  a  socially  responsible 
way  and  to  consider  the  future,  and  most  specifically  the  role  of  the  European  Union  in 
adding value in this domain. This final gathering of all the participants was considered to be 
essential to develop a common view of the evolution of national systems in anticipating and 
managing restructuring, as well as to allow conclusions to be drawn up at European level. 

The conference consisted of a series of workshops at which the project’s national country 
expert  for  each  of  the  27  EU  Member  States  gave  a  presentation  of  the  main  issues  that 
were relevant for their country, in order to stimulate debate. An overview was also given of 
the debates that were held in each of the national seminars, which drew out useful issues 
and  themes  that  were  relevant  for  each  of  the  countries.  The  national  seminars  brought 
together representatives of government, trade unions and employers for each country, and 
served to stimulate debate on the issue of restructuring in each country. 

The next part of this chapter looks more closely at the tools that are available to support the 
transition of redundant workers to new employment. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  206 

2: ORGANISING TRANSITIONS 

There are a range of schemes, instruments and mechanisms of support available to workers 
who  have  been  affected  by  restructuring  and  which  have  been  set  up  in  parallel  to  and 
complementing  the  typical  support  mechanisms  of  public  employment  services  (PES).  A 
recent  study  carried  out  between  August  and  November  2009  for  the  European 
Commission, DG Employment, Social Affairs and Inclusion presents a stock-taking analysis of 
these tools.136  

Before  the  global  financial  and  economic  crisis  took  hold,  the  dynamics  of  restructuring 
resulted  in  a  growing  variety  of  activities  at  different  levels  supplementing  as  well  as 
improving  ‘traditional’  public  employment  services  (PES)  by  more  suitable  instruments 
focusing  in  particular  on  the  employability  of  workers  and/or  the  effectiveness  of  re-
conversion and re-deployment. In addition, flexicurity as a guiding principle of European and 
national  labour  market  policy  reforms  has  contributed  to  change  in  employment  policies 
and public employment services in many European countries.137  

While in the past such measures were often of a passive nature (such as early retirement, 
‘golden handshakes’, ie severance payment packages and voluntary redundancies) learning 
processes,  both  in  the  context  of  previous  local  and  sectoral  crisis  situations  as  well  as 
learning  from  good  and  innovative  practice  throughout  Europe  have  resulted  in  the 
development  of  more  proactive  measures.  Accordingly,  schemes  of  re-conversion  and  job 
transition are now often connected to occupational re-orientation, training and qualification 
as well as outplacement. 

While this seems to be a common trend throughout the EU, there is a significant variety of 
country-specific  backgrounds  and  experiences,  depending  very  much  on  the  respective 
traditions  and  frameworks  of  welfare  state  rationales  and  industrial  relations.  In  Nordic 
Countries such as Sweden for example, restructuring processes at the company level have, 
since  the  1970s,  been  accompanied  by  measures  to  support  professional  re-organisation 
and transition. In countries with a high share of part-time work and fixed-term employment 
contracts  such  as  the  Netherlands  or  Belgium,  there  is  a  strong  tradition  of  outplacement 
support measures. Outplacement, job transition as well as occupational and professional re-
conversion also have become an important field of labour market policy in countries such as 
France,  Austria  or  Germany  in  the  context  of  structural  change  in  manufacturing  or 
restructuring in public services since the 1990s. 

136  ‘Organising  transitions  in  response  to  restructuring.  Study  on  instruments  and  schemes  of  job  and 
professional  transition  and  re-conversion  at  national,  sectoral  or  regional  level  in  the  EU.’  Eckhard  Voss, 
Wilke, Maack and Partner. 

137  See  ‘The  role  of  Public  Employment  Services  related  to  ‘Flexicurity’  in  the  European  Labour  Markets’, 

Report for DG Employment, Social Affairs and Inclusion, March 2009. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  207 

Although active measures of occupational and professional transition and re-conversion in 
Southern Europe and the new EU member states in Central and Eastern Europe have been 
less important in the past, this has changed in recent years within the context of structural 
changes  in  the  context  of  globalisation  (for  example  in  textile  and  other  manufacturing 
sectors). 

2.1: CLASSIFYING EXISTING SCHEMES AND MECHANISMS 

The above-mentioned study covers a wide variety of different economic and social national 
contexts  and  identifies  27  instruments  and  schemes  as  relevant,  which  show  significant 
differences with regard to legal sources, types of support measures, scope, co-financing by 
enterprises  or  the  status  of  workers.  However,  if  the  notion  of  ‘transition’  with  regard  to 
professional  orientation  and  employment  is  taken  into  account,  there  are  three  major 
groups or clusters of schemes that can be identified: 

A  first  group  of  mechanisms  and  schemes  which  proactively  seek  to  organise  ‘transitional 
labour  markets’,  job  transition,  re-employment  and  outplacement,  often  in  the  context  of 
dealing  with  redundancies  in  the  context  of  restructuring.  This  could  be  company  based, 
sector/region  based  or  even  covering  —  at  least  by  nature  —  a  whole  country.  Table  5.1 
below  gives  an  overview  of  the  measures  available  for  improving  professional  and  job 
transition. 

Table 5.1: Overview and Classification of measures for improving professional and job 
transition 

Type 

Characteristics 

Schemes, funds, mechanisms 

Focus transition, 
outplacement and re-
employment 

●  Either temporarily (in the case 

●  DK: Flexicurity operational 

of restructuring or 
continuously) focusing on 
supporting and actively shaping 
‘transitional labour markets’ 

●  Social partners and collective 

agreements at national, sector 
or company level playing a key 
role in designing and 
implementing measures 

●  Often co-financing and clear 
obligations of employers in 
restructuring situations 
foreseen 

model 

●  SE: Job Security Councils 

●  FI: Change Security 
operational model 

●  FR: Occupational transition 

contracts (CTP) 

●  FR: Mobility Leave 

●  NL: Mobility Centres 

●  BE: Outplacement and 
Employment Cells 

●  LU: Job Retention Plan 

●  DE: Transfer Companies 

 
 
 
 
 
 
Type 

Characteristics 

Schemes, funds, mechanisms 

Restructuring in Europe  208 

Focus training and skills  ●  Based on the idea of 

professional/occupational 
mobility and very much 
orientated towards the 
individual jobseeker and 
effective professional transition

●  In the context of larger 

restructuring/globalisation also 
targeting those workers who 
are threatened by 
unemployment 

●  Often state- or social partners 

driven approaches 

●  AT: Labour Foundations 

●  IT: Wage Guarantee Funds 

●  ES: Occupational 
Observatories 

●  NL: Sectoral Training Funds

●  DK: Competence 

Development Fund 

●  IT: Sectoral Training Fund 

●  IE: Skillsnet Scheme 

●  PL: Enterprise Training 

Fund 

●  RO: Enterprise Training 

Fund 

●  BG: Training vouchers 

scheme 

●  LV: Training and retraining 

programme 

Focus efficiency of 
systems 

●  Improving the capacity of PES 

●  UK: Rapid Response 

to organise response to 
restructuring situations more 
efficiently 

●  Often driven by PES itself 

●  Central and Eastern European 
Countries (CEEC): important 
role of European Funds 

Service Teams 

●  PT: Integrated Intervention 

Offices 

●  EL: Strengthening the 
efficiency of PES 

●  CY: Individualised Public 
Employment Service 

●  SK: Employing the 

disadvantaged jobseeker 

●  EE: Reacting to Mass 

Redundancies 

●  LT: Mini Labour Exchange 

 
 
 
 
 
Restructuring in Europe  209 

Secondly,  there  is  a  type  of  mechanisms,  schemes,  programmes  and  funds  which  are  not 
focused  on  actively  implementing  and  organising  transitions  but  rather  on  improving  the 
capacity for job and professional transition by training, ie the capacity of workers as well as 
unemployed  persons  to  find  a  new  job.  Here  too,  there  are  sectoral  as  well  as  company-
based and national approaches, mechanisms and initiatives. These include initiatives such as 
sectoral training funds in the Netherlands and Italy, the Enterprise Training Fund in Poland, 
and the Skillsnet Scheme in Ireland. For more examples, see table 5.1 above. 

Thirdly, there is a group of measures and schemes presented in this report which are mainly 
aiming at improving the efficiency of systems and their institutions (in particular the PES). 
The objective here is either to better support professional and job transition or to improve 
the efficiency of dealing with restructuring and mass redundancies in general. These include 
the Rapid Response teams in the UK, the Mini Labour Exchange in Latvia, and measures to 
employ disadvantaged jobseekers in Slovakia. For further examples, see table 5.1 above. 

2.1.1: TRANSITION AND OUTPLACEMENT 

There are a wide range of schemes in place in EU Member States that are designed to help 
workers  to  make  the  transition  from  one  job  to  another,  and  to  provide  outplacement  to 
help them to update and improve their skills levels and employability. The example below in 
box  5.4  is  taken  from  France,  where  there  are  a  large  number  of  schemes  in  place  to 
support occupational mobility and transition. 

Box 5.4: Supporting occupational mobility and transition in France 

In the context of French social law, a number of schemes have been implemented to 
facilitate  the  return  to  employment  and/or  transition  to  new  occupations  for 
redundant  workers.  Often,  these  schemes  take  place  in  the  context  of  a  social  plan 
(plan  de  sauvegarde  de  l’emploi), which must be drawn  up when at least 10 workers 
are  made  redundant  in  companies  with  more  than  50  workers.  The  social  law 
regulation  of  social  plans  imposes  the  setting  up  of  a  redeployment  plan  aiming  at 
facilitating  the  return  to  work  of  the  employees  made  redundant.  Until  relatively 
recently,  the  main  mandatory  schemes  have  only  concerned  large  companies  of  over 
1 000  employees  (‘redeployment  leave’  —  congé  de  reclassement).  However,  in  order 
to  offer  a  similar  approach  to  every  worker,  a  redeployment  scheme  was  recently 
created,  in  2005,  for  employees  from  companies  with  fewer  than  1 000  workers 
(‘personalised redeployment contract’ — convention de reclassement personnalisée). A 
reinforced version of the latter scheme was put into place in 2006, in 25 employment 
areas  hampered  by  industrial  restructuring,  following  an  original  ‘transitional’ 
approach (‘occupational transition contract’ — contrat de transition professionnelle). 

Another scheme, which is not mandatory, shows another approach to job anticipation, 
transition opportunities and redeployment. The ‘mobility leave’ (congé de mobilité) is 
a  measure  open  to  companies  with  more  than  1 000  employees.  In  contrast  to  the 

 
 
 
 
 
 
 
 
Restructuring in Europe  210 

former  schemes,  which  are  defined  by  law  and  put  into  practice  through  the  public 
employment  service,  this  scheme  relies  on  company-based  anticipatory  agreements 
(GPEC) between the social partners. The logic of this scheme is to anticipate, for jobs 
and  occupations  threatened  by  economic  change,  the  ending  of  the  contract  and  the 
transition  towards  new  jobs,  through  a  reinforced  personalised  guidance,  training 
measures,  and possible  work periods in other companies  while still keeping — for the 
duration foreseen by the agreement — the individual’s own wage and labour contract. 
The  employee  is  given  a  significant  level  of  security  to  face  the  coming  change,  and 
can prepare in advance of their redeployment with the help of the company. 

Figure 5.1: Overview of major French schemes to support occupational mobility and 
transition 

2.1.2: IMPROVING TRANSITION CAPACITY BY TRAINING AND SKILLS 

A number of schemes aim specifically to train workers, with the aim of improving their skills 
levels and thus allowing them to move on to alternative employment. This is an important 

 
 
 
 
 
 
 
Restructuring in Europe  211 

factor in ensuring the overall employability of workers, enabling them to move jobs within 
sectors and even across sectors where necessary. This will become increasingly important in 
the  future  context  of  increasing  globalisation  and  competitiveness.  The  example  below, 
detailing the provision of training vouchers for employees, is taken from Bulgaria. 

Box 5.5: Training voucher scheme in Bulgaria 

Up until recently in Bulgaria, only unemployed persons were entitled to receive active 
labour market support such as vocational training programmes. Up until the economic 
crisis, Bulgaria enjoyed a relatively good economic situation: in 2008 the employment 
rate reached 64 %, compared to 58.6 % in 2006, while the unemployment rate declined 
to 5.6 % in 2008 compared to 9 % in 2006. However, long-term unemployment is still a 
serious problem for the Bulgarian labour market — the relative share of the long-term 
unemployed  of  the  total  number  of  registered  unemployed  people  is  high  and  rising 
(53 % in 2004 and 57.8 % in 2007). 

Together  with  accession  to  the  EU  in  2007,  the  situation  started  to  change,  as  more 
funds  became  available  for  training  and  employment  purposes.  Significant  changes 
were introduced in 2009 on the basis of the Employment Promotion Act. The purpose 
of this was to ensure employment retention in companies facing economic problems (in 
industry  and  services,  excluding  agriculture).  According  to  the  measures,  employers 
facing economic problems could reduce the working time of employees by 50 % in the 
context of a partial unemployment scheme. New regulations allow employers to extend 
the  period  of  reduced  working  time  up  to  six  months,  while  at  the  same  time 
companies  are  reimbursed  partially  regarding  expenses  linked  to  employees’  salaries 
(the  reimbursement  amounts  to  50 %  of  the  minimum  wage  for  three  or  six  months). 
Further,  companies  are  entitled  to  receive  support  for  the  training  of  their  workers 
during the reduced working time. This support is financed by the European Social Fund. 

Employers  may  receive  partial  reimbursement  (up  to  50 %)  of  training  costs  of 
employees, provided they keep the jobs of trained employees for at least six months. 
But it is the individual decision of each employer as how to organise the training. Most 
recently,  the  Bulgarian  government  decided  to  guarantee  more  incentives  to 
employees to invest in their human capital with a view to developing or changing their 
qualifications  in  order  to  adapt  to  the  labour  market  situation  or  to  increase  their 
competitiveness. Based on the use of the ESF support, the new instrument is a training 
voucher, forming a kind of individual training account for each employee who decides 
to  take  up  training.  The  employee  is  free  to  choose  the  training  programme  (with 
assistance  of  the  labour  office)  as  well  as  training  provider.  There  are  two  types  of 
training  to  which  the  voucher  applies:  training  of  key  competences;  and  vocational 
training. In order to use the voucher, the employee must go to the local labour office 
which  will  assist  them  in  choosing  training  as  well  as  in  choosing  a  training  provider. 
The voucher can be used under the condition that the training should take place after 
working  hours,  in  the  employee’s  own  time.  The  instrument  is  to  be  financed  by  the 

 
 
 
 
 
 
Restructuring in Europe  212 

EFS up to 2013, but there are proposals to finance it beyond 2013 from other sources, 
in order for it to become a permanent measure. 

2.2: RESULTS OF A COMPARATIVE EVALUATION 

The  in-depth  analysis  of  the  schemes  and  instruments  contained  in  the  above-mentioned 
study has revealed an impressive plurality of mechanisms throughout the European Union. 
There are mature mechanisms, funds and instruments that have existed for decades, rather 
recent ones and a large group of mechanisms which have been subsequently adjusted and 
reformed  in  accordance  with  new  challenges  and  framework  conditions  (eg  the  current 
economic crisis). In fact, the picture of practice and systems in a constant state of flux seems 
to be a significant result of this study — only a few mechanisms remained unchanged over a 
longer period of time. 

The study also shows that no common path exists with regard to inventing, organising and 
funding  employment  and  professional  transition  in  response  to  restructuring.  Instead,  the 
27 schemes presented in the study display specific national framework conditions of both 
labour  policy  and  industrial  relations,  in  particular  the  state  of  social  dialogue  and 
partnership.  If  any  underlying  ‘driving  factor’  for  certain  types  and  models  of  transfer 
regimes should be identified, then it is the conditions of social dialogue and labour relations. 
The  main  structural  factors,  such  as  the  organisation  of  collective  bargaining  at  various 
levels,  the  role  of  social  partners  in  labour  market  policy,  and  the  tradition  of  co-
determination and employee participation, seem to be an important factor of influence for 
certain  kinds  and  types  of  transfer  practice.  This  is  particularly  illustrated  by  the  sectoral 
initiatives  and  funds  on  skills  and  training  which  exist  in  various  countries.  It  is  clear  that 
most  of  the  schemes  and  programmes  presented  in  the  study  would  simply  not  exist  and 
would  not  be  able  to  be  run  efficiently  without  active  social  partner  involvement  at  all 
levels. 

A  major  result  of  the  study  is  that  there  is  a  common  objective  which  is  also  shared  by 
national key actors: throughout the EU there is a common trend of acknowledging transition 
as a major challenge of labour market policy in today’s context. In times of globalisation and 
accelerated  change  in  every  part  of  the  EU’s  economy  and  society,  an  efficient  system  in 
place of organising professional and job transfer seems to be crucial. Here, the survey shows 
that  this  challenge  is  felt  not  only  in  the  well-known  cases  of  labour  market  innovation  in 
Northern and Continental Europe but also in countries which normally are not quoted in this 
context. 

A further important result of the study is the fact that both sides of the industry are sharing 
responsibilities both in terms of co-financing (eg employers pay fees, employees resign from 
severance payments rights) as well as in terms of active involvement in the organisation and 
management  of  mechanisms  and  instruments.  In  the  majority  of  examples  analysed  this 
also implies certain obligations of the restructuring company, in terms of following certain 
procedures,  financial  contributions  and/or  other  duties.  However,  only  a  few  schemes 

 
 
 
 
 
 
 
 
Restructuring in Europe  213 

analysed  in  the  study  display  a  clear  ‘mutualisation  of  risks’,  that  is,  co-financing  job  and 
professional  transition  practice  or  company-based  outplacement  services  on  a  permanent 
basis. 

Though  the  study  presents  a  comprehensive  overview  and  in-depth  analyses  of  schemes 
and  mechanisms  supporting  job  and  professional  transition  processes  in  the  context  of 
restructuring, the analysis — carried out in a relatively short period of time — leaves open 
some major questions and also raises issues for further activities. In particular, two follow-
up activities would be very valuable. 

First,  the  issues  of  ‘costs  and  efficiency’  in  order  to  assess  the  success  and  effects  of  a 
scheme/mechanism/fund  should  be  studied  more  thoroughly.  Though  the  study  presents 
on  a  case-by-case  basis  existing  financial  figures  and  major  results  of  evaluations  (if  they 
exist), knowledge here is limited. 

A second — and even more important — issue for follow-up activities would be to organise 
an exchange of experience and information of actors directly involved in the schemes and 
mechanisms presented in this study in order to identify current trends, increase knowledge 
and draw conclusions from the EU-level point of view. 

2.3: THE ROLE OF FLEXICURITY IN SECURING TRANSITIONS 

Flexicurity  can  play  an  important  role  in  easing  the  transition  of  workers  into  alternative 
employment. Flexicurity is a policy strategy to enhance, at the same time and in a deliberate 
way,  the  flexibility  of  labour  markets,  work  organisations  and  labour  relations  on  the  one 
hand,  and  security  —  employment  security  and  income  security  —  on  the  other.138 
Companies are under increasing pressure to adapt and develop their products and services 
more  quickly.  If  they  want  to  stay  in  the  market,  they  have  to  continuously  adapt  their 
production  methods  and  their  workforce.  This  is  placing  greater  demands  on  business  to 
help  their  workers  acquire  new  skills.  It  is  also  placing  greater  demands  on  workers  with 
regards to their ability and readiness for change. At the same time, workers are aware that 
company  restructurings  no  longer  occur  incidentally,  but  are  becoming  a  fact  of  everyday 
life. Protection of the specific job they have may no longer be sufficient, and might indeed 
be counterproductive. In order to plan their  lives and careers, workers need new kinds of 
security that help them remain in employment, and make it through all these changes. New 
securities  must  go  beyond  the  specific  job  and  ensure  safe  transitions 
into  new 
employment. 

138  For 

information 
http://ec.europa.eu/employment_social/employment_strategy/flex_meaning_en.htm. 

flexicurity, 

more 

on 

see: 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  214 

In  its  Communication  Towards  Common  Principles  of  Flexicurity:  More  and  better  jobs 
through  flexibility  and  security,139 the  Commission  defined  some components  of  successful 
flexicurity policies, including:140 

●  flexible  and  secure  contractual  arrangements  and  work  organisations,  both  from  the 
perspective of the employer and the employee, through modern labour laws and modern 
work organisations; 

●  effective  active  Labour  Market  Policies  (ALMPs)  which  effectively  help  people  to  cope 
with rapid change, unemployment spells, re-integration and, importantly, transitions to 
new jobs — ie the element of transition security; 

●  reliable  and  responsive  lifelong  learning  (LLL)  systems  to  ensure  the  continuous 
adaptability and employability of all workers, and to enable firms to keep up productivity 
levels; and 

●  modern  social  security  systems  which  provide  adequate  income  support  and  facilitate 
labour  market  mobility.  They  will  include  provisions  to  help  people  combine  work  with 
private and family responsibilities, such as childcare. 

The  flexicurity  concept  moves  away  from  a  job  security  mentality  to  an  employment  or 
employability security mentality. It is a policy approach geared less towards the protection 
of  jobs,  and  more  towards  the  protection  of  people.  Encouraging  flexible  labour  markets 
and ensuring high levels of security will only be effective if workers are given the means to 
adapt to change, to stay on the job market and make progress in their working life. For this 
reason,  the  flexicurity  model  also  includes  a  strong  emphasis  on  active  labour  market 
policies,  and  motivating  lifelong  learning  and  training,  improving  customised  support  to 
jobseekers, supporting equal opportunities for all and equity between women and men. 

2.3.1: FLEXICURITY IN THE CRISIS 

The past 18 months have proved to be extremely challenging for the EU, and the financial 
crisis and ensuing recession experienced by most EU Member States has had an inevitable 
impact on labour markets and employment. 

The  European  Council  adopted  a  set  of  Conclusions  on  the  issue  of  flexicurity  in  times  of 
crisis  at  a  sitting  of  the  employment,  social  policy,  health  and  consumer  affairs  council  in 
June  2009.  These  Conclusions  contained  a  set  of  policy  measures  based  on  flexicurity 

139  Towards  Common  Principles  of  Flexicurity:  More  and  better  jobs  through  flexibility  and  security 
http://eur-

(COM(2007) 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0359:FIN:EN:PDF. 

final), 

359 

140  Flexicurity  Pathways.  Turning  hurdles  into  stepping  stones.  Report  by  the  European  Expert  Group  on 

Flexicurity, June 2007. http://ec.europa.eu/social/BlobServlet?docId=1519&langId=en. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  215 

principles, aimed at helping Member States and social partners to manage the impact of the 
crisis. These include: 

●  maintaining employment, where at all possible, for example through helping companies 
operate alternatives to redundancy such as flexible working patterns and the temporary 
adjustment  of  working  time,  where  applicable,  and  other  forms  of  internal  flexibility 
measures within the companies; 

●  creation of a better entrepreneurial environment through a labour market which ensures 
at  the  same  time  the  necessary  flexibility  and  security,  benefits  systems  which  provide 
work  incentives,  appropriate  levels  of  non-wage  labour  costs,  especially  for  the  low-
skilled  and  other  vulnerable  groups,  as  well  as  through  better  regulation  and  the 
reduction of the administrative burden for businesses; 

●  enhancing  and  improving  activation  measures  and  providing  adequate  income  support 
and access to quality services to people who are hit by the impacts of the crisis, through 
full utilisation of modern social protection systems in line with the principle of flexicurity, 
subsidiarity and sustainability of public finances; 

●  increased investment in human capital, especially retraining, skills upgrading and labour 
market needs-matching, including for persons working part-time or other flexible forms 
of employment and low-skilled workers. Here in particular, the Council notes that further 
support should be provided for reducing  youth unemployment and other groups which 
encounter  difficulties  in  (re)entering  the  labour  market.  In  this  context,  those  young 
people who are entering the labour market for the first time require particular attention 
and targeted measures; 

●  improving  the  effectiveness  of  the  Public  Employment  Services  in  order  to  be  able  to 

tackle the increased levels of unemployment; 

●  adhering  to  the  principle  of  gender  mainstreaming  in  all  responses  to  implementing 
flexicurity  principles  in  order  to  tackle  the  crisis.  It  is  important  that  the  responses 
support both women and men in their labour market participation; 

●  facilitating  the  free  movement  of  workers,  in  accordance  with  the  Treaties  and  the 
Community acquis, and promoting mobility within the EU single market can contribute to 
tackling  the  persisting  mismatch  between  existing  skills  and  labour  market  needs,  also 
during the economic downturn; 

●  implementing adequate responses with a view to adapting, if relevant, employment and 
labour  market  provisions  in  the  framework  of  the  flexicurity  approach  in  order  to 
promote  flexible  but  secure  transitions  from  unemployment  to  employment  as  well  as 
from one job to another, while supporting reliable contractual arrangements for those in 
work; 

●  integrating all flexicurity elements and pillars should focus on reducing segmentation and 

improving the functioning of the labour market; and 

 
 
 
 
Restructuring in Europe  216 

●  further  attention  needs  to  be  paid  to  enhancing  the  quality  of  working  life  and  to 

increasing productivity. 

Within  this  European  framework,  many  of  the  EU  Member  States  have  been  trying  to 
implement flexicurity principles in order to try to weather the crisis, in varying ways and to 
varying  degrees,  depending  on  a  range  of  factors,  including  national  social  security  and 
industrial relations systems, culture, traditions of social dialogue and economic governance 
systems. 

A recent study on flexicurity and the crisis, focusing on short-time working, was published 
by  the  European  Foundation  for  the  Improvement  of  Living  and  Working  Conditions  in 
November  2010.141 The  study  examined  15  short-time  working  schemes  across  Europe, 
which  cut  working  time  from  between  10 %  and  100 %  and  compensated  workers  for 
between 55 % and 80 % of the pay lost as a consequence. 

One key finding was that short-time working  schemes provide numerical flexibility for the 
employer, together with job and income security for the employee and so can as such be 
considered  as  a  flexicurity  measure.  During  the  period  of  short-time  working,  all  parties 
involved  agree  that  training  should  be  provided  and  in  some  schemes,  training  is 
mandatory. Despite this, however, the study found that the uptake is limited and there are 
quality  concerns.  Workers  are  not  always  motivated  to  take  part;  firms  may  have  limited 
experience  of  providing  training  to  workers  and  the  capacity  for  training,  particularly  in 
small and medium-sized enterprises (SMEs) is very problematic, as is the fragmented nature 
of training systems in some countries. 

The study’s overarching policy conclusion is that ‘the consensual nature of these short-time 
working  schemes  provides  a  promising  basis  for  further  tripartite  cooperation.  Just  as  the 
last two decades saw a re-orientation from passive to active labour market policy, so should 
a  flexicurity-aligned  system  of  short-time  working  adopt  a  more  active  stance.  This 
facilitates the internal restructuring of the firm during the downturn and is a useful means 
of inducing a more counter-cyclical emphasis to training. It also improves employability on 
the external labour market, should dismissals eventually become necessary.’ 

BOX  5.6:  Feelings  of  employment  insecurity  of  european  individuals  during  the  financial 
crisis 

In the aftermath of the financial crisis, researchers in the EC funded network of excellence 
on  ‘Reconciling  Work  and  Welfare  in  Europe’  (RecWoWe)  have  analysed  how  European 

141  Extending 

short-time  working 
http://www.eurofound.europa.eu/publications/htmlfiles/ef1071.htm. 

importance  of 

flexicurity: 

the 

schemes.  ERM 

report  2010. 

 
 
 
 
 
 
 
 
 
                                                       
 
individuals  subjectively  perceived  their  employment  security  within  different  countries  in 
the crisis years 2008/2009.142 

Restructuring in Europe  217 

Figure 5.2: Cross-national variance in the percentage of individuals subjectively perceiving 
employment insecurity (%) across Europe for 2008/2009 

At the country level, people in Central, Eastern and Southern Europe appear to experience 
much  higher  feelings  of  insecurity  than  those  living  in  Nordic  or  Western  European 
countries. 18 % of the total variance in individuals’ employment insecurity can be attributed to 
the country level, which is quite a large variance. 

Institutional factors (employment protection legislation, active & passive labour market policies) 
are  important  for  the  economic  performance  of  a  country,  correspond  positively  with 
employment  rates  and  impact  on  individuals’  human  capital.  These  institutional  factors, 
however,  seem  to  have  little  (statistical)  significance  for  individuals’  feelings  for  employment 
(in)security, which are much more driven by the overall economic and labour market situation. 

142   ‘Employment insecurity of European individuals during the financial crisis. A multi-level approach’ (Heejung 
Chung  —  Wim  van  Oorschot,  Tilburg  Univeristy,  The  Netherlands),  undertaken  in  the  framework  of 
www.RecWoWe.eu research project (FP6 project 2006-2011) on the basis of the 4th wave of the European 
Social Survey for 22 countries for the year 2008/2009 [ESS question D47: ‘How likely is it that during the 
next 12 months you will be unemployed and looking for work for at least four consecutive weeks?’].– see 
also European Data Centre on Work and Welfare www.EdacWoWe.eu. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  218 

At the individual level, various demographic, human and social capital characteristics have 
been  considered,  as  well  as  attitude  variables  help  to  explain  why  an  individual  feels 
employment insecure: 

o  Education and training are important, since those with tertiary education seem to be more 
employment secure, as well as those who have taken some sort of courses or training in the 
past 12 months. 

o  Emloyees with permanent contracts and with a high degree of job control are more likely to 
feel  employment  security.  Surprisingly,  perceived  employment  insecurity  by  part-time 
workers is quite limited. 

o  People  from  a  minority  or  discriminated  group  feel  less  secure,  but  these  correlate  with 
other  individual  characteristics,  and  appear  to  be  an  individual  rather  than  group 
characteristic. 

o  Company  size  and  type  (private/public)  do  not  impact  insecurity  perception,  but  there 
appears  to  be  a  sectoral  edge:  unsurprisingly,  workers  in  public  administration  feel  most 
secure,  followed  by  the  electricity  and  mining  sectors.  Employment  insecurity  is  most 
acutely felt in manufacturing and construction sectors, followed by transport and real estate 
sectors.  Employees  in  the  financial  sector,  which  was  so  crucial  to  the  financial  and 
economic crisis, do not feel more insecure than the ‘average employee’ (but may feel more 
insecure than before the crisis erupted). 

 
 
 
 
 
Restructuring in Europe  219 

CHAPTER 6: ISSUES AND CHALLENGES 

The future holds a great many issues and challenges for the European Union, which come 
from a wide range of areas. One major aspect of restructuring, and particularly of the levels 
of  restructuring  that  the  EU  has  experienced  over  the  past  two  years,  is  its  psychosocial 
effects.  These  effects  can  be  severe,  with  significant  consequences  not  only  for  the 
individual,  but  also  for  the  organisations  in  which  they  work  or  have  worked,  unless  this 
issue is recognised, anticipated and managed effectively. There is a legislative framework at 
EU level in the area of managing occupational health and safety, and ensuring that workers 
are adequately informed and consulted about restructuring plans. There is also an EU-level 
social partners’ agreement on the management of stress and on violence and harassment at 
work.  In  recognition  of  the  importance  of  this  topic,  there  have  also  been  a  range  of 
initiatives and actions taken at EU level, such as seminars and conferences, culminating in a 
high-level  conference  in  November  2010  and  a  planned  conference  for  March  2011.  This 
issue remains a challenge and therefore is likely to remain in the spotlight for some time. 

One  of  the  most  pressing  challenges  for  the  EU  and  for  the  rest  of  the  world  is  climate 
change. This is likely to have a major impact on employment in the EU in terms of its impact 
on specific sectors and its implications for skills policies. Moving to a green and low-carbon 
economy is therefore likely to be one of the most significant challenges that the EU will face 
in  the  medium  and  long  term.  There  are  potentially  positive  benefits  of  moving  to  a  low-
carbon economy, but these can only be harnessed if the labour force is equipped with the 
right  skills  to  take  advantage  of  the  opportunities.  Skills  shortages  in  areas  such  as 
renewable  energy,  energy  and  resource  efficiency,  building  renovation,  construction, 
environmental  services  and  manufacturing  are  likely  to  be  a  problem  unless  there  is  a 
coordinated policy response. 

In particular, renewable energy sources are a potential source of job creation, as there is a 
target  to  achieve  20 %  of  energy  from  renewable  sources  by  2020.  The  employment 
potential of this could be significant and this should be fully exploited. 

Another key sector in the future low-carbon economy is the transport sector. This sector is 
one  of  the  EU  sectors  that  is  most  exposed  to  changes  relating  to  climate  change  and 
changes  in  energy  sourcing  and  use,  and  is  likely  to  restructure  along  two  dimensions: 
globalisation  and  decarbonisation.  The  move  towards  greener  vehicles,  for  example,  will 
have significant implications for the sector’s workforce and for the skills that this workforce 
will need in the future. It is thought that labour and skills shortages are a real possibility for 
this  sector  in  the  future.  Therefore,  significant  efforts  need  to  be  made  in  the  field  of 
training,  in  collaboration  with  the  social  partners  and  the  Member  States,  with  the 
objectives of increasing the labour supply and adapting skills to emerging needs. 

The  overarching  framework  for  many  of  the  issues  faced  by  specific  sectors  is  the  EU’s 
industrial  policy,  which  provides  a  backdrop  to  virtually  all  the  issues  discussed  in  this 
report. There is a real link between industrial policy and employment and skills policies, and 
this  is  explored  in  the  Commission’s  2010  Communication  on  industrial  policy  and 

 
 
 
 
 
 
 
 
Restructuring in Europe  220 

globalisation.  This  focuses  on  issues  such  as  how  to  improve  the  conditions  in  which 
industry  operates,  how  to  encourage  innovation  and  how  to  improve  the  skills  base.  The 
role of management and worker representatives is highlighted as being of prime importance 
in the anticipation and management of restructuring and there will be a continued focus on 
this theme through the publication of a Green Paper on ‘ Restructuring and anticipation of 
change: what lessons from the economic crisis? ‘ in 2011. 

1: PSYCHOSOCIAL EFFECTS OF RESTRUCTURING AND MENTAL HEALTH IN THE WORKPLACE 

This  part  looks  at  the  issue  of  psychosocial  risks  of  restructuring,  with  a  focus  on  stress-
related  problems  as  well  as  mental  health  related  to  the  workforce.  It  examines  the 
European  legislative  framework,  the  psychosocial  risks  of  restructuring  and  change,  and  a 
range of issues relating to mental health and well-being at work. It also gives a number of 
policy recommendations. 

1.1: THE EU FRAMEWORK, STRATEGIES AND ACTIONS 

Improving  working  conditions  and  occupational  health  and  safety  is  a  key  concern  for  the 
EU. The Union complements through its action the activities of Member States and of the 
social  partners.  It  provides  a  legal  framework  and  a  number  of  support  activities  that  can 
help to address these issues. 

1.1.1: THE EUROPEAN LEGISLATIVE FRAMEWORK 

From a safety and health at work perspective, it is important to note, firstly, that the issue 
of mental health in the workplace and restructuring should be seen within the wider context 
of  the  EU  role  concerning  the  protection  of  workers’  health  from  risks  that  may  have  an 
impact on their mental health. 

The legal framework dealing with restructuring, organisational change, and health and well-
being at EU level consists of three areas of legislation: 

●  occupational  health  and  safety.  Framework  Directive  (89/391/EC) 143  states  that 
‘employers  have  a  duty  to  ensure  the  safety  and  health  of  workers  in  every  aspect 
related to the work’, as well as the Community Strategy 2007-2012 on health and safety 
at  work.144 The  framework  directive  on  the  introduction  of  measures  to  encourage 
improvements  in  the  safety  and  health  of  employees  at  the  workplace  lays  down 

143  Council Directive 89/391/EC on the introduction of measures to encourage improvements in the safety and 
work: 

health 
workers 
http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=3
1989L0391&model=guichett. 

of 

at 

144  Community 

Strategy 

2007-2012 

on 

health 

and 

safety 

at 

work: 

http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=C
OMfinal&an_doc=2007&nu_doc=62. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  221 

legislation  was  the 

prevention principles. It contains a wide definition of occupational health, in particular in 
Article 5: ‘… a duty to ensure the safety and health of workers in every aspect related to 
the work’. One of the most significant new developments of European Union health and 
introduction  of  risk  assessment  and  the  systematic 
safety 
documentation  of  the  results  as  a  foundation  for  the  establishment  of  a  prevention 
programme  of  technical  and/or  organisational  measures  to  combat  these  risks.  These 
tasks also include the information and consultation of workers in order to allow them to 
take part in discussions on all questions relating to safety and health at work, the regular 
supervision  of  the  efficiency  of  the  measures  put  into  place  and  the  continuous 
improvement  of  the  situation  according  to  the  provisions  of  the  framework  Directive. 
Prevention  programmes  must  be  continuously  updated  as  long  as  the  risk  situations 
persist.  Change  may  have  multiple  positive  aspects,  but  it  may  also  entail  numerous 
negative  facets,  which  are  all  the  more  important  if  the  person  is  not  adequately 
prepared for that change. Therefore, organisational change can be seen as a relevant risk 
for the health of the individual; 

●  restructuring.  There  are  a  number  of  Directives  that  are  relevant  in  this  area.  For 
example,  the  collective  redundancies  Directive  (98/59/EC),145 which  aims  to  regulate 
redundancies, introduce special obligations for employers (information, consultation and 
encouragement  to  set  up  social  measures  covering  issues  ranging  from  prevention  to 
compensation)  and  provide  information  to  national  public  authorities.  Further,  the 
Directive  safeguarding  employees’  rights  in  the  case  of  transfers  of  undertakings 
(2001/23/EC)146 introduces  obligations  upon  employers  to  respect  labour  contracts  and 
their  related  rights,  giving  specific  rights  to  workers  affected  by  such  operations.  The 
Directive  governing  cross-border  mergers  of  limited  liability  companies  also  contains  a 
range of rights for workers affected by cross-border mergers (2005/56/EC147); and 

●  information and consultation. Two main Directives are relevant here. The first relates to 
European  Works  Councils  (EWCs)  (2009/38),148 the  main  aim  of  which  is  to  make  sure 
that management informs and consults with members of EWCs in exceptional situations 
affecting the interests of workers, especially in terms of relocation, closure or mass lay-
offs.  The  second  is  the  Directive  providing  a  general  framework  for  informing  and 

145  Council Directive 98/59/EC on the approximation of the laws of the Member States relating to collective 

redundancies: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31998L0059:EN:HTML. 

146  Council  Directive  2001/23/EC  on  the  approximation  of  the  laws  of  the  Member  States  relating  to  the 
safeguarding  of  employees’  rights  in  the  event  of  transfers  of  undertakings,  businesses  or  parts  of 
http://eur-
or 
undertakings 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001L0023:EN:HTML. 

businesses: 

147  Directive  2005/56/EC  of  the  European  Parliament  and  of  the  Council  on  cross-border  mergers  of  limited 
http://eur-
companies: 

liability 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:310:0001:01:EN:HTML. 

148  Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment 
of  a  European  Works  Council  or  a  procedure  in  Community-scale  undertakings  and  Community-scale 
groups of undertakings for the purposes of informing and consulting employees. 

 
 
 
 
                                                       
 
Restructuring in Europe  222 

consulting  employees  in  the  European  Community  (2002/14) 149  with  the  aim  of 
encouraging social dialogue on issues that affect employees. 

1.1.2: SOCIAL PARTNER AGREEMENTS 

Since the early 2000s, the EU social partners have been involved in a range of negotiations 
related  to  occupational  health  in  response  to  Commission  consultations  based  on  Article 
154 of the EU Treaty, launched in the framework of the EU Health and Safety Strategy 2002-
2006.  Most  specifically,  the  EU  social  partners  have  signed  and  implemented  two 
framework agreements: 

●  the  framework  agreement  on  work-related  stress,150 signed  on  8  October  2004,  which 
marks a significant step towards action to tackle work-related stress. This is a topic that 
was first discussed as an occupational health risk in some Member States 20 years ago, 
and the Commission placed psychosocial risks centre stage in the EU Health and Safety 
Strategy  2002-2006,  following  this  up  with  consultations  of  the  EU  social  partners.  The 
social partners have made a decisive step in concluding this framework agreement and 
making the commitment to implement it at national level. To a greater extent than with 
other  occupational  safety  and  health  risks,  tackling  psychosocial  risks  requires  not  only 
rules but also awareness and a shared understanding. This implies dialogue and worker 
involvement; and 

●  the  framework  agreement  on  harassment  and  violence  at  work,151 signed  on  26  April 
2007,  and  which  came  into  effect  in  April  2010.  This  agreement  provides  a  method  to 
prevent, identify and manage problems of harassment and violence at work. 

These agreements were to be implemented by the constituent member organisations of the 
signatory parties within three years. 

These  two  framework  agreements  do  not  deal  explicitly  with  restructuring  and 
organisational changes but are nevertheless useful in helping to tackle these issues. Among 
the  potential  risk  factors  for  work-related  stress,  the  2004  agreement  refers  to 
communication, including uncertainty about employment prospects or forthcoming change. 
However, the national implementation measures for these agreements rarely address these 
issues  specifically.  Other  forms  of  social  dialogue  activities  may  be  helpful  in  this  regard, 
starting with the common social dialogue which should take place at company level when 
collective dismissals or major changes are taking place. 

149  Directive  2002/14/EC  of  the  European  Parliament  and  of  the  Council  of  11  March  2002  establishing  a 
general  framework  for  informing  and  consulting  employees  in  the  European  Community  —  Joint 
declaration of the European Parliament, the Council and the Commission on employee representation. 

150  Framework 

agreement 

on 

work-related 

stress: 

http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=10402. 

151  Framework 

agreement 

on 

harassment 

and 

violence 

at 

work: 

http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8446. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  223 

It is also important to highlight the tripartite mechanism characterising the workings of the 
EU  advisory  Committee  on  Safety  and  Health  at  Work,  in  which  workers,  employers  and 
Member  States  are  represented.  This  advisory  body  may  play  a  role  in  the  future  with 
regard to psychosocial risks in the workplace aiming at a balanced occupational health and 
safety perspective of psychosocial risks. 

1.1.3: EU STRATEGIES AND ACTIONS 

The principal relevant strategy in relation to the mental health of workers is the EU Strategy 
on Safety and Health at Work 2007-2012. This Strategy states that: 

●  the  Commission  will  ensure  that  initiatives  concerning  health  and  safety  at  work  are 
developed  in  a  manner  consistent  with  public  health  policies  which  aim  to  prevent  ill 
health  and  prolong  a  healthy  working  life.  In  particular,  the  implementation  of  the 
present strategy will take account of the results of the consultation which was completed 
in May 2006 on Promoting the Mental Health of the Population. Towards a strategy for 
mental  health  for  the  EU152 under  the  responsibility  of  the  Commission  Directorate 
General for Health and Consumers, DG SANCO; 

●  at the present time, problems associated with poor mental health constitute the fourth 
most  frequent  cause  of  incapacity  for  work.  The  World  Health  Organisation  (WHO) 
estimates  that  depression  will  be  the  main  cause  of  incapacity  by  2020.  The  workplace 
can  be  an  appropriate  place  in  which  to  prevent  psychological  problems  and  promote 
better mental health; 

●  the Commission encourages Member States to incorporate into their national strategies 
specific  initiatives  aimed  at  preventing  mental  health  problems  and  promoting  mental 
health  more  effectively,  in  combination  with  Community  initiatives  on  the  subject, 
including the employment of persons with a mental disability; and 

●  the Commission stresses the importance of negotiations between the social partners on 
preventing  violence  and  harassment  at  the  workplace  and  encourages  them  to  draw 
conclusions  from  the  assessment  of  the  implementation  of  the  European  framework 
agreement on work-related stress (see below). 

The Charter of Fundamental Rights of the European Union153 also makes reference to the 
health of workers. In Article 31, paragraph 1, it states that: ‘every worker has the right to 
working conditions which respect his or her health, safety and dignity.’ This section of the 
Charter is based on the Framework Directive 89/391/EC on health and safety at work (see 

152  Promoting the Mental Health of the Population. Towards a strategy for mental health for the EU. European 
2005: 

Commission 
Paper 
http://ec.europa.eu/health/ph_determinants/life_style/mental/green_paper/mental_gp_en.pdf. 

issued 

Green 

in 

153   Charter 

of 

Fundamental 

Rights 

of 

the 

European 

Union: 

http://www.europarl.europa.eu/charter/pdf/text_en.pdf. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  224 

above), which places on the employer the explicit obligation to assess risks to the health and 
safety  of  workers.  The  provisions  of  the  1989  Framework  Directive  imply  that  this  risk 
assessment  should  cover  any  risks  to  health  and  safety  of  workers,  including  psychosocial 
risks.  Following  this  assessment,  the  employer  must  take  adequate  preventive  and 
protection measures, including with regard to the risks that could cause psychological harm 
to workers. 

Most recently, the European Commission’s 2020 Strategy states that: 

●  a major effort will be needed to combat poverty and social exclusion and reduce health 
inequalities to ensure that everybody can benefit from growth. Equally important will be 
[the  ability  of  the  EU]  to  meet  the  challenge  of  promoting  a  healthy  and  active  ageing 
population to allow for social cohesion and higher productivity; and 

●  efforts  will  be  made  to  adapt  the  legislative  framework,  in  line  with  ‘smart’  regulation 
principles, to evolving work patterns, such as working time and the posting of workers, 
and new risks for health and safety at work. 

However, within the context of this EU-level framework, it should be remembered that it is 
the  responsibility  of  national  authorities  to  control  and  monitor  the  implementation  of 
legislation transposing EU Directives. It is therefore the national labour inspectorates which 
have the responsibility for ensuring that these provisions are fully effective. 

It follows from the above that the existing European legislation on health and safety at work 
contains provisions designed to protect workers effectively against occupational hazards of 
these  provisions  are  effectively  and 
If 
all  kinds, 
comprehensively  implemented  at  national  level,  they  will  help  to  prevent  psychological 
problems among workers. 

including  psychosocial 

risks. 

The  Committee  of  Senior  Labour  Inspectors  has  decided  to  organise  an  information  and 
awareness campaign on psychosocial risks at work at European level in 2012. 

A  European  campaign  on  the  protection  of  workers  against  stress  at  work  was  also 
conducted by the European Agency for Safety and Health at Work in 2002.154 This campaign 
provided practical and useful information about stress and other psychosocial risks at work, 
including tips and strategies to address this issue. 

Finally,  the  Commission  has  developed  guidelines  on  stress  at  work  addressed  to  national 
governments,  trade  unions  and  employers. 155  The  guidelines  contain  a  range  of 

154  Information 

is 

publicly 

available 

on 

the 

website 

of 

the 

Bilbao 

Agency: 

http://osha.europa.eu/fr/topics/stress. 

155  European Commission Guidance on work-related stress — Spice of life or kiss of death?, Office for Official 
at: 
Communities, 

Luxembourg, 

Available 

2002. 

Publications 
http://www.isma.org.uk/pdf/publications/ke4502361_en.pdf. 

European 

the 

of 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  225 

recommendations designed to help reduce the incidence of stress at work. For example, on 
an organisational level, they maintain that stress can be reduced by changes such as: 

●  allowing adequate time for the worker to perform their work satisfactorily; 

●  providing the worker with a clear job description; 

●  rewarding the worker for good job performance; 

●  providing ways for the worker to voice complaints and have them considered seriously 

and swiftly; 

●  harmonising the worker’s responsibility and authority; 

●  clarifying  the  work  organisation’s  goals  and  values  and  adapting  them  to  the  worker’s 

own goals and values, whenever possible; 

●  promoting the worker’s control, and pride, over the end product of their work; 

●  promoting tolerance, security and justice at the workplace; 

●  eliminating harmful physical exposures; 

●  identifying failures, successes, and their causes and consequences in previous and future 

health action at the workplace; and 

●  learning how to avoid the failures and how to promote the successes, for a step-by-step 

improvement of occupational environment and health. 

1.2. THE PSYCHOSOCIAL RISKS OF RESTRUCTURING AND CHANGE 

Restructuring  is  becoming  a  part  of  normal  business  life,  but  the  sheer  pace  of 
organisational  change  is  resulting  in  increasing  pressure,  in  both  the  private  and  public 
sectors. Beyond major restructuring, whether or not it is related to the crisis, many so-called 
silent restructurings affect SMEs, fixed-term contract workers, temporary workers and small 
businesses, which can experience severe problems in coping with restructuring and change. 

In the context of change, psychosocial problems may take place and in some cases lead to 
incapacity for work. This is first and foremost a problem for public health authorities, but its 
economic consequences should not be underestimated. Uncertainty and job insecurity also 
represent an important link between restructuring programmes and effects on employees’ 
health.  Depression,  absence,  sleep  difficulties,  and  even  suicides  have  been  identified  as 
major  symptoms  of  psychosocial  difficulties.  However,  there  is  a  risk  that  health  issues 
related  to  restructuring  may  be  treated  in  the  same  way  as  the  risks  related  to  asbestos, 
where  the  health  effects  were  known  but  appropriate  measures  were  only  taken  after  a 
considerable  delay.  A  concerted  effort  to  tackle  health  and  restructuring  is  therefore 
needed, not just because restructuring can have a negative impact on health, but also as a 
useful investment in the future of the European workforce and a way of ensuring that the 
European model is sustainable and competitive. It should be noted that the World Health 

 
 
 
 
 
 
Restructuring in Europe  226 

Organisation (WHO) defines health as ‘a state of complete physical, mental and social well-
being and not merely the absence of disease or infirmity’. 

1.2.1: EMPIRICAL RESULTS OF THE HEALTH DIMENSION OF RESTRUCTURING 

Direct victims of downsizing: workers facing redundancy 

A long tradition of unemployment research has highlighted the detrimental effects that job 
loss  and  persistent  unemployment  can  have  on  the  individuals  affected.  In  addition,  it  is 
generally acknowledged that being in work, as opposed to being out of work, is beneficial to 
an  individual’s  physical  and  mental  health  and  well-being.156 Redundant  individuals  often 
experience this as a trauma and shock, depending on the availability of offers of help, and 
sometimes face great difficulties in coping with their situation. The main effects of this are 
psychosocial  distress,  depression  and  anxiety,  and  psychosomatic  diseases,  such  as 
cardiovascular  illness.  These  types  of  outcomes  can  even  trigger  suicidal  behaviour.  The 
impact on the morbidity and even mortality of those who have faced job loss is well proven. 
A  deterioration  of  health  behaviours  (increased  drug  use,  bad  diet,  physical  inactivity  and 
poorer  standard  of  sleep)  can  have  an  impact  on  workers´  long-term  health.  Social 
withdrawal  caused  by  lack  of  self-esteem  and  feelings  of  stigmatisation  can  further 
aggravate the health situation of individuals and lead to a downward spiral into long-term 
unemployment.  Even  those  who  have  managed  to  find  alternative  employment  but  are 
under-employed (for example, if they are in a job that does not match their expectations or 
qualifications) display a lower level of health even after re-employment. 

Workers who remain in the organisation: the ‘survivors’ of restructuring 

Those who were in the past considered to be the lucky ones — ie those who have kept their 
jobs  —  are  now  the  object  of  empirical  research  that  has  led  to  the  term  ‘layoff  survivor 
sickness’  (Noer,  1997).  This  is  defined  as  feelings  of  guilt  and  continued  uncertainty  over 
individuals’ health situation, leading to strain or fatigue which can be related to an increase 
in  long-term  sickness  absence,  the  use  of  psychotropic  drugs  (sleeping  pills  and  drugs  to 
manage  anxiety),  increased  nicotine  and  alcohol  consumption,  impaired  self-rated  health 
and emotional exhaustion. Lower levels of self-efficacy and lack of social support, together 
with  increases  in  perceived  job  insecurity,  can  contribute  further  to  these  problems. 
Further, increased work pressure and intensification can be responsible for the increase in 
occupational accidents and diseases observed in several cases of reorganisation. 

Issues facing line managers in charge of the execution of restructuring 

Those responsible for implementing restructuring decisions — the middle or line managers 
as  executors  of  change  —  face  a  certain  amount  of  distress  and  extra  workload  that  can 

156  See,  for  example:  ‘Is  work  good  for  your  health  and  wellbeing?’  Waddell  and  Burton,  2006: 

http://www.dwp.gov.uk/docs/hwwb-is-work-good-for-you.pdf. 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  227 

negatively  affect  their  well-being.  They  are  caught  between  the  decisions  of  senior 
management  and  the  concerns  and  often  negative  responses  of  the  workforce.  As  a 
response  to  this,  increased  levels  of  stress  and  burnout,  physical  and  psychological  health 
complaints, emotional instability, sleep disturbances and increased alcohol consumption as 
coping mechanisms are most common among line managers. 

1.2.2: INTEGRATING HEALTH: THE BUSINESS CASE FOR HEALTHIER RESTRUCTURING 

To make the business case for a health-friendly restructuring the HIRES project157 collected 
and  combined  all  aspects  of  the  health  impact  of  restructuring  into  one  template.  This 
provides  a  consistent  message  to  many  audiences  and  helps  the  leadership  team  of  a 
company  to  prioritise  health  in  restructuring  against  the  many  other  initiatives  in  the 
business that may require capital investment. It is a perspective on the entire restructuring 
process  and  enables  all  organisational  bodies  affected  to  be  knowledgeable  about  the 
changes  that  result  from  restructuring.  Figure  6.1  shows  the  main  restructuring  risks  for 
individual and organisational health. 

157  Health 

Restructuring 
rehs.org/uk/newsevents/files/restructuring.pdf. 

(HIRES), 

in 

funded 

by 

DG 

Employment. 

http://hesa.etui-

 
 
 
 
 
                                                       
 
Restructuring in Europe  228 

Figure 6.1: Restructuring risks for individual and organisational health 

Organisational factors 

Dimensions of change 
- work task changes 
- work group changes 
- increased working 

time 

- staff reductions 
- salary cuts 
- enforced flexibility 
- short-term contracts 
- duration of insecurity 

Legitimacy of change 
- crisis prevention or 
short-term profit ? 
- negative changes as 
last resort only? 

Procedures of change 
- delayed 

communication of 
changes 

- veiled and non-

participative decision 
making procedures 
- unfair distribution of 

changes 

Source: HIRES 

Individual  psychosocial 
effects 

Organisational 
health effects 

Short term 
- absenteeism 
- presenteeism´ 
- negative reputation 
effects: decreased 
sales 

- unintended 

turnover (creaming-
off) 

- mobbing (bullying) 
- negative work 

climate 
- decreased 

productivity 

- decreased quality of 

products 

- long term sickness 
rates of victims & 
survivors 

- negative reputation 

effects: 
attractiveness as 
employer 

Long term 

- perceived job 

insecurity (qualitative 
and quantitative) 

- perceived 

organisational 
unfairness 

- lower commitment 
- decreased motivation, 

confidence, 
concentration and 
persistence on tasks 
d
d

lf

Individual 
effects 

health 

- stress and burn out
- sleeping disorders 
- changes in health 

relevant behaviours 
(drug abuse, unhealthy 
diet, lack of physical 
activities) 

- work related accidents 
- musculoskeletal 

morbidity 
- cardiovascular 

morbidity & mortality 

1.2.3: HIGH-LEVEL CONFERENCE ON WELL-BEING AT WORK 

The  Belgian  EU  Presidency  organised  in  November  2010,  together  with  the  European 
Commission,  an  EU  Restructuring  Forum  ‘Investing  in  well-being  at  work  —  Addressing 
psychosocial risks in times of change’.158  

158  For 

more 

information: 

http://ec.europa.eu/social/main.jsp?catId=88&langId=en&eventsId=290&furtherEvents=yes. 

 
 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  229 

The objective of the Forum was to hear and discuss latest research findings on the health 
impact of restructuring, on stress at work, and on the reality of risk assessments in Europe’s 
workplaces,  as  well  as  the  tools  available  to  different  stakeholders  in  the  management  of 
the  psychosocial  health  risks  related  to  work  and  restructuring.  New  information  on  the 
implementation  of  the  European  social  partners’  framework  agreement  on  work-related 
stress, including the Commission’s report, was presented at the Forum. 

This Forum was part of the EU Presidency’s week dedicated to health and safety at work and 
provided  practitioners,  policy  makers,  social  partners  and  experts  with  the  opportunity  to 
hear  and  discuss  latest  research  findings  as  well  as  the  tools  available  for  managing 
psychosocial  health  risks  related  to  work  and  restructuring.  A  total  of  10  policy 
recommendations were outlined during this conference. For details, see box 6.1. 

Box 6.1: Policy recommendations 

1.  Health and restructuring: a key issue for structural change? 

Tackling  health  in  restructuring  is  needed  not  just  because  restructuring  can  have  a 
detrimental impact on health but also because it is a useful investment in the future of 
the European workforce and can help to defend the European model as sustainable and 
competitive.  However,  the  right  combination  of  legislative  instruments,  social 
dialogue,  training,  investments,  commitments  and  operational  tools  needs  to  be 
determined. 

2.  Groups at risk: trust and justice as a critical issue? 

Scientific  and  empirical  evidence  show  that  the  main  groups  at  risk  of  the  health 
consequences  of  restructuring  are:  the  redundant  workers,  the  survivors,  contingent 
workers, middle managers and small businesses threatened by bankruptcies. The issue 
of  justice  is  a  major  concern  during  significant  organisational  change.  The  extent  to 
which  transparent  communication,  cooperation  and  trust  between  employers  and 
employees occurs in company restructuring needs to be examined. 

3.  Data and studies: how to improve data, awareness and monitoring? 

Data  related  to  health  and  restructuring  are  widely  lacking  and  fragmented  at  both 
national  and  European  levels.  In  order  to  better  assess  the  real  situation  and  to  plan 
future activities, thought needs to be given to how consistent collection and evaluation 
of  data  connected  with  employee  health  in  restructuring  processes  can  be  achieved, 
and this is a particular difficulty in the case of SMEs. 

4.  What are the responsibilities of companies and managers? 

The  protection  of  health  is  an  employer’s  obligation  in  all  aspects  related  to  work 
including organisational change. In case the employment relationship comes to an end, 
what  is  the  shared  responsibility  in  transitions?  There  do  not  seem  to  be  distinct 

 
 
 
 
 
 
 
Restructuring in Europe  230 

borders  between  corporate  responsibility  for  promoting  health  in  the  workplace  and 
the  responsibility  of  public  actors  to  ensure  the  health  of  the  workforce.  The 
appropriate  level  of  managerial,  professional  and  financial  responsibilities  for 
promoting  health  in  the  anticipation,  preparation  and  management  of  change, 
including its impact on the value chain and on outsourcing, needs to be determined. 

5.  Social dialogue: next steps? 

Social dialogue is central for tackling restructuring and occupational health and safety, 
and  used  as  such.  Further  steps  for  the  social  partners  in  terms  of  joint  actions, 
collective  bargaining  on  changes  in  all  dimensions  and  increasing  awareness  among 
employers, unions and employees’ representatives now need to be determined. 

6.  Legislation: to be reconsidered? 

EU  Legislation  does  not  explicitly  mention  the  link  between  health  and  restructuring 
but such a cause and effect relationship seems to be clear. Thought needs to be given 
to  whether  it  is  necessary  to  act  at  EU  level  and  review  existing  legislation  and 
instructions  or 
frameworks,  or  whether 
recommendations  at  EU  and/or  national  level.  It  may  be  necessary  to  develop  a  new 
role for labour inspections by including restructuring and organisational change in their 
emerging  approach  to  psychosocial  risks,  and  it  may  also  be  necessary  to  consider 
including  restructuring-related  forms  of  ill-health  under  the  scope  of  any  future  EU 
instruments on occupational diseases. 

is  necessary  to 

issue  additional 

it 

7.  Restructuring  in  the  public  sector:  can  approaches  from  the  private  sector  be 

transferred? 

Public  authorities  are  not  only  responsible  for  policies  and  legislation  but  also  for 
managing  public  bodies  and  organisations.  As  the  public  sector  in  Europe  is  now 
undergoing  major  changes,  thought  needs  to  be  given  to  the  responsibilities  and 
actions that need to be taken by public authorities at central as well as at regional or 
local  level  regarding  organisational  changes  in  maintaining  the  health  of  their 
workforce. 

8.  The role of occupational health services and partnering with the health sector: 

can this be improved? 

A  ‘healthy’  restructuring  might  benefit  from  targeted  health  measures,  although  it 
should  rely  more  on  better  anticipation,  preparation,  management  and  follow-up. 
Some consideration should be given to how the role of occupational health services in 
times  of  change  can  be  developed  in  terms  of  training  and  expertise  to  face  the 
specific  health  dimensions  that  are  related  to  change  and  restructuring.  Further,  the 
role  of  social  security  and  healthcare  providers  in  supporting  the  prevention  of  the 
negative health impacts of restructuring should be examined. 

 
 
 
 
Restructuring in Europe  231 

9.  Employment, health approaches and flexicurity: new bridges? 

The health consequences of restructuring may be mitigated by actions such as modern 
employment approaches, including those based on better employability and flexicurity. 
One  question  is  whether  flexicurity  approaches  should  be  extended  towards  better 
adaptation  of  organisations  and  individuals  to  change,  and  whether  employment 
services have a role to play in managing the impact of change on employees’ health. 

10. Operational tools, networks and education: how can they be developed? 

Operational  tools  will  be  efficient  only  if  they  are  congruent  with  other  aspects  of 
restructuring,  such  as  legislation,  social  dialogue,  commitment,  training,  exchange  of 
good  practices,  investment  and  a  clear  Occupational  Safety  and  Health  (OSH)  role. 
Thought  should  be  given  to  the  approach  to  be  taken  in  terms  of  developing 
operational  guidelines  for  companies  and  organisations,  taking  into  account  the 
specificities of SMEs, and the way in which risk assessment tools can be reviewed, with 
a view to including the impact of restructuring and changes in work organisation. 

1.3: MENTAL HEALTH AND WELL-BEING AT WORK 

Earlier  economic  crises  have  shown  the  profound  and  lasting  impact  that  crises  have  on 
people’s health. Job insecurity is associated with a higher risk of mental disorders, such as 
depression  and  anxiety,  and  recent  data  from  Germany  shows  that  mental  disorders  are 
three  to  four  times  more  prevalent  in  unemployed  people  than  in  people  who  work. 
Unemployed  people  spent  7.5  times  more  days  in  hospital  care  than  others  because  of 
depression and alcohol addiction. In such difficult circumstances, people are also more likely 
to abuse alcohol or smoke or even take up drugs. Workers who may have to cope with high 
levels of stress at work are at a greater risk of developing cardiovascular diseases. The WHO 
estimates that depression will be the main cause of incapacity by 2020. 

All  this  materialises  into  poor  health,  diseases  and  suffering  for  the  EU’s  citizens.  It  also 
materialises into higher demand for healthcare and social care at a time when budgets are 
particularly stretched. 

To build a sustainable economy, Europe needs a healthy workforce. People in good health 
work better, longer and are more likely to continue working as they grow older. Bad health, 
in the contrary, translates into higher levels of absence from work; lower productivity; early 
retirement; and high social and healthcare costs. 

Problems  associated  with  poor  mental  health  constitute  a  major  and  increasing  share  of 
absence  from  work  and  work  incapacity.  The  workplace  can  be  an  appropriate  place  in 
which to prevent psychological problems and promote better mental health. This is why it is 
important to invest in people’s health at work. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  232 

There  have  been  a  range  of  actions  at  EU  level  on  the  issue  of  mental  health  and 
psychosocial risks over the past few years. The European Pact for Mental Health and Well-
Being, 159 launched  in  June  2008  by  a  high-level  conference  hosted  by  the  European 
Commission,  provides  an  EU-framework  enabling  exchange  and  cooperation  between 
stakeholders  in  different  sectors  including  health,  employment  and  education  on  the 
challenges and opportunities in promoting better mental health. 

The Parliament expressed its support for the Pact through the Tzampazi report on mental 
health. 160 In  February  2009,  the  European  Parliament  issued  a  Resolution  on  mental 
health,161 welcoming the Pact as ‘as a basic priority for action’. In the area of mental health 
in the workplace, the Resolution states that the workplace plays a central role in the social 
integration  of  people  with  mental  health  problems  and  calls  for  support  for  their 
recruitment, retention, rehabilitation and return to work. 

For details of the Pact, see box 6.2 below. 

Box 6.2: Main points of the European Pact for Mental Health and Well-Being 

The Pact calls for action in five priority areas: 

●  prevention of depression and suicide; 

●  mental health in youth and education; 

●  mental health in workplace settings; 

●  mental health of older people; and 

●  combating stigma and social exclusion. 

In  the  area  of  mental  health  in  the  workplace,  the  Pact  states  that  employment  is 
beneficial to physical and mental health and that the mental health and well-being of 
the workforce is a key resource for productivity and innovation in the EU. However, it 
notes  that  the  pace  and  nature  of  work  is  changing,  leading  to  pressures  on  mental 
health  and  well-being.  Action  is  therefore  needed  to  tackle  the  steady  increase  in 
absence  from  work  and  incapacity,  and  to  utilise  the  unused  potential  for  improving 
productivity that is linked to stress and mental disorders. It states that the workplace 

159  The 

European 

Pact 

for 

Mental 

Health 

and 

Well-Being: 

http://ec.europa.eu/health/ph_determinants/life_style/mental/docs/pact_en.pdf. 

160  Tzampazi 

report 

on 

mental 

health 

— 

2008/2209 

(INI): 

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+REPORT+A6-2009-
0034+0+DOC+XML+V0//EN. 

161  European 

mental 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2009-
0063+0+DOC+XML+V0//EN. 

Parliament 

Resolution 

on 

health: 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  233 

plays  a  central  role  in  the  social  inclusion  of  people  with  mental  health  problems.  It 
therefore invites policy makers, social partners and further stakeholders to take action 
on mental health at the workplace, including the following: 

●  improve work organisation, organisational cultures and leadership practices to pro-
mote  mental  well-being  at  work,  including  the  reconciliation  of  work  and  family 
life; 

●  implement  mental  health  and  well-being  programmes  with  risk  assessment  and 
prevention programmes for situations that can cause adverse effects on the mental 
health of workers (stress, abusive behaviour such as violence or harassment at work, 
alcohol, drugs) and early intervention schemes at workplaces; and 

●  provide measures to support the recruitment, retention or rehabilitation and return 

to work of people with mental health problems or disorders. 

The Pact was launched at a high-level conference held on 12/13 June 2008, at which 
participants called on the Member States, together with further relevant actors across 
sectors and civil society in the EU and international organisations, to join this Pact and 
to contribute to its implementation. 

They  also  called  on  the  European  Commission  and  Member  States,  together  with  the 
relevant international organisations and stakeholders: 

●  to establish a mechanism for the exchange of information; 

●  to  work  together  to  identify  good  practices  and  success  factors  in  policy  and 
stakeholder  action  for  addressing  the  priority  themes  of  the  Pact,  and  to  develop 
appropriate recommendations and action plans; and 

●  to  communicate  the  results  of  such  work  through  a  series  of  conferences  on  the 

Pact’s priority themes over the coming years. 

1.3.1: CONFERENCE ON MENTAL HEALTH IN 2011 

As  part  of  the  above-mentioned  European  Pact  for  Mental  Health  and  Well-Being,  a  high-
level  conference  on  the  promotion  of  mental  health  and  well-being  at  work  took  place  in 
Berlin on 3-4 March 2011.162 The conference was the last of a series of five events organised 
around different themes in the Pact. It was being organised by the European Commission, 
together with the German Federal Ministry of Health and the Ministry of Labour and Social 
Affairs. 

162  More 

the 
http://ec.europa.eu/health/mental_health/policy/conferences/index_en.htm. 

information 

available 

under 

is 

following 

link: 

 
 
 
 
 
                                                       
 
Restructuring in Europe  234 

It will create an opportunity to raise awareness about the prevalence of mental health and 
well-being for workplaces, as well as exchange and improve cooperation on the challenges 
and opportunities in workplace mental health and well-being. 

 
 
 
 
 
Restructuring in Europe  235 

2: THE IMPACT OF CLIMATE CHANGE ON EMPLOYMENT 

This  section  examines  the  impact  of  climate  change  on  employment,  looking  at  its  overall 
impact,  impact  on  specific  sectors,  and  changes  that  will  need  to  be  made  to  skills  levels. 
With  the  issue  of  climate  change  becoming  ever  more  prominent,  companies  will  have  to 
adapt  to  evolving  regulatory  frameworks,  such  as  constraints  on  CO2  emissions  for  car 
manufacturers and the EU’s CO2 Emissions Trading Scheme (ETS). These policies are likely to 
lead to restructuring, at least in some sectors and for some businesses. 

The  adjustments  needed  to  respond  to  climate-change  polices  aimed  at  cutting  CO2 
emissions provide a clear example of a restructuring process. There are many opportunities 
—  for  example  through  the  early  adoption  of  innovative  new  technology  —  to  place 
European  firms  ahead  of  global  competitors  that  are  slower  to  anticipate  change. 
Conversely, a failure to anticipate by European firms may lead to hasty, reactive and forced 
later adjustment, which could damage companies and leave their employees inadequately 
prepared,  or  trained,  for  alternative  employment.  Companies  will  need  to  adapt  their 
current  products,  processes  and  technology  to  develop  new  innovative  solutions  and 
workers will also need to acquire new skills. These issues are also dealt with in chapter 3 of 
the  European  Commission’s  Employment  in  Europe  2009  Report,  which  focuses  on  green 
jobs.163 

To support workers, companies and their representatives in their efforts to anticipate and 
cope with climate-change implications, the European Commission organised a Restructuring 
Forum  on  the  impact  of  climate  change  on  employment  on  22-23  June  2009.  It  was 
attended  by  around  300  stakeholders,  including  representatives  of  Member  States,  social 
partners and academic experts. In preparation for the Forum, a study analysing the Impact 
of  climate  change  on  employment  was  carried  out  by  GHK  Consulting  on  behalf  of  the 
Commission’s  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion.164 Below, 
the main findings of the report and Forum are summarised. 

2.1: OVERALL IMPACT OF CLIMATE CHANGE ON EMPLOYMENT 

Climate  change  can  have  two  kinds  of  impact  on  employment.  First,  there  are  the  direct 
physical effects, caused by factors such as changes in temperatures and precipitation levels, 
rising  sea  levels  and  changes  to  the  frequency  of  extreme  climatic  events.  Due  to  the 
gradual  warming  process  over  many  decades,  most  of  these  impacts  will  be  felt  in  the 
medium  to  long  term.  In  April  2009,  the  European  Commission  presented  a  policy  White 

163  Employment in Europe 2009: http://ec.europa.eu/social/BlobServlet?docId=4196&langId=en. 

164  GHK (2009), ‘The Impacts of Climate Change on European Employment and Skills in the Short to Medium-
2): 

Term: 
http://ec.europa.eu/social/main.jsp?catId=103&langId=en&eventsId=172&furtherEvents=yes. 

Literature. 

(Volume 

Review 

Report 

Final 

the 

of 

A 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  236 

Paper,  Adapting  to  climate  change:  Towards  a  European  framework  for  action ,165 which 
presents  the  framework  for  adaptation  measures  and  policies  to  reduce  the  EU’s 
vulnerability to the impacts of climate change. 

Second,  in  the  short  to  medium  term,  most  of  the  impact  will  come  from  the  effects  of 
climate-change-related  policies.  Climate-change  policies  will  lead  to  restructuring  by 
affecting both the supply side and the demand side of businesses. 

Climate-change  mitigation  and  adaptation  policies  will  lead  to  higher  compliance  costs 
(especially in the form of higher energy prices ADD "in the mid-term"), which may lead to 
international 
competitive  disadvantages,  especially  for  businesses  subject  to  strong 
competition with countries where climate-change policies differ significantly from those in 
the EU 

Companies will have to respond to changing customer demands that reflect climate-change 
policies, taking measures to reduce barriers and promote innovation in response to market 
threats and opportunities. Climate-change policies are therefore likely to have an impact on 
all businesses in some way. On the macroeconomic level, there have been a few estimates 
of what the impact might be of meeting carbon reduction targets, in terms of the net effect 
on GDP levels (global, European or national) and the potential level of investment required 
to  attain  these  levels  of  reduction.  These  suggest  that  in  aggregate  the  overall  impact  is 
modest and that costs will largely be compensated by the opportunity to take competitive 
advantage from the structural changes triggered by climate-change policies. 

2.2: SECTORAL IMPACT OF CLIMATE-CHANGE POLICIES 

Although climate-change policies seem likely to have only a small net effect on employment 
overall, there are likely to be significant gross impacts, in terms of both job creation and job 
destruction.  Managing  these  processes  will  pose  a  major  challenge  to  labour  markets  and 
stakeholders, and this was the main focus of the Commission’s Restructuring Forum in June 
2009.166 

The  different  employment  impacts  of  climate-change  policy  and  the  transition  to  a  low-
carbon  economy  are  illustrated  by  a  2008  analysis  from  the  United  Nations  Environment 
Programme (UNEP), which found that the ‘greening’ of the economy will affect employment 
in four ways: 

165   Adapting  to  climate  change:  Towards  a  European  framework  for  action  COM(2009)  147  final: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0147:FIN:EN:PDF. 

166  Commission  Restructuring Forum:  Impact of  climate  change  on  employment. For  more  information,  see: 

http://ec.europa.eu/social/main.jsp?catId=88&langId=en&eventsId=172. 

 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  237 

Employment effect of greening 
of the economy 

Example 

Additional employment created 

Additional insulation fitters for retrofitting homes 

Employment substituted 

Manufacturing hybrid cars instead of inefficient cars 

Eliminated jobs 

Reduction in packaging of products 

Transformation of existing jobs 

Gas-fitters installing gas combined heat and power instead of 
traditional systems 

Source: Adapted from UNEP/ILO (2009) ‘Green Jobs: Towards decent work in a sustainable, low-
carbon world’.167 

At  the  same  time,  climate-change  policies  will  affect  every  sector  differently.  Some  may 
simply  absorb  the  impacts  (such  as  higher  energy  prices)  in  their  normal  business  model. 
However, some sectors are more susceptible to these polices. There are four main sector-
specific economic impacts of climate-change policy: 

●  comparative  advantage  for  some  industries  —  marginal  reallocation  of  resources  from 
those  sectors  financing  a  policy  (paying  its  costs)  to  sectors  that  benefit  from  the 
intervention.  More  bluntly,  the  main  impact  is  to  just  shift  resources  from  polluting 
sectors to more environmentally friendly sectors; 

●  increase in value added — a transfer of demand to higher-value ‘green’ industries, which 

could finance an expansion in net employment; 

●  increase  in  investment  —  this  could  come  from  government  or  from  the  private  sector 

(eg clean-technology venture capital); and 

●  first  mover  or  fast  follower  advantage  —  a  firm  or  sector  may  gain  a  first  mover 
advantage  under  certain  market  conditions,  for  example  where  significant  barriers  to 
entry  exist,  such  as  strong  intellectual  property  rights  or  large  economies  of  scale;  in 
other situations, it may be more efficient to be a fast follower, taking advantage of the 
work  done  by  the  first  mover.  This  may  be  the  case  where  there  are  much  lower  R&D 
costs for followers, and where there are high initial marketing costs for the first mover in 
order to educate the public. 

167  UNEP/ILO 

(2009)  Green 

Jobs:  Towards  decent  work 

in  a  sustainable, 

low-carbon  world: 

http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---
webdev/documents/publication/wcms_098487.pdf. 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  238 

A  2008  analysis  by  the  consultancy  KPMG,  entitled  Climate  changes  your  business,168 used 
this approach to come up with four main groups of sectors where the employment impact 
can be expected to be largest: 

●  the  energy  (carbon)  generating  sectors,  which  are  likely  to  be  the  direct  subject  of 

climate-change policies; 

●  the  employment-intensive  sectors,  where  changes  in  policies  might  trigger  significant 

employment change; 

●  the  competition-intensive  sectors,  where  small  changes  in  energy  costs  or  products 

translate into significant market impacts; and 

●  the vulnerable sectors, where the scope for major revisions to the cost base or service 

offers in response to climate-change polices is limited. 

Case  studies  were  carried  out  by  the  consultancy  GHK  for  the  European  Commission  in 
sectors thus identified as exposed to the impact of climate change — electricity generation, 
air  transport,  cement,  retail,  consumer  goods,  construction  and  haulage.169 The  results  of 
the case studies were presented and discussed at the June 2009 Restructuring Forum. The 
most common actions already taken by companies include: 

●  researching their carbon impacts in detail, using carbon accounting, carbon footprinting 
and  life-cycle  methodologies  to  establish  where  the  main  impacts  are  within  the 
company and its supply chains; 

●  increasing their energy efficiency (that is, the ratio of output to energy input); and 

●  engaging with the policy process (through lobbying). 

In  terms  of  employment,  companies  have  tended  to  adapt  the  skills  of  their  existing 
workforce, rather than increasing or decreasing the number of jobs. 

2.3: CLIMATE-CHANGE POLICIES AND SKILLS 

The  developments  described  above  can  bring  positive  results  only  if  the  labour  force  is 
equipped with the right skills to take advantage of the opportunities. Indeed, the greening 
of the European economy will lead to a redefinition of many jobs across almost all sectors. 
Identifying  the  skills  required  to  adapt  to  climate  change  and  to  reduce  greenhouse  gas 
emissions therefore has an important role to play in policy development. Moreover, this is 

168  KPMG 

(2008) 

‘Risk 

Preparedness 

Framework: 

Climate 

Changes 

Your 

Business’: 

http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Climate-changes-
your-business.pdf. 

169  GHK (2009), ‘The Impacts of Climate Change on European Employment and Skills in the Short to Medium-
1): 

Literature. 
Term: 
http://ec.europa.eu/social/main.jsp?catId=103&langId=en&eventsId=172&furtherEvents=yes. 

Company 

(Volume 

Studies 

Review 

Case 

the 

of 

A 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  239 

not only a medium- to long-term issue. Already, climate-change policies have led to certain 
skill  shortages  in  a  number  of  sectors,  such  as  renewable  energy,  energy  and  resource 
efficiency,  building  renovation,  construction,  environmental  services  and  manufacturing. 
Clean  technologies  require  skills  in  the  application,  adaptation  and  maintenance  of 
technology. 

The  requirements  for  green  skills  will  change  progressively  as  climate-change-related  jobs 
change. This will happen in three ways (which link to the quantitative impacts identified by 
UNEP — see above): 

●  some  skills  will  become  obsolete  due  to  structural  changes  in  the  labour  market  and 
employment  shifts  both  within  and  across  sectors  owing  to  demands  for  a  greener 
economy  (for  example,  as  utility  meter  reading  services  are  rendered  obsolete  by  the 
introduction  of  ‘smart’  household  meters  that  automatically  relay  data  to  utility 
companies); 

●  demand for some new skills will be created as new ‘green-collar’ occupations emerge to 
support  adaptation  to  and  mitigation  of  climate  change  (for  example,  support  and 
servicing of solar, wind and other renewable energy technologies); and 

●  the  skills  required  for  existing  jobs  will  have  a  stronger  green  element  as  existing 
occupational profiles change (for example, bottle manufacturers learning new technical 
skills to reduce carbon emissions from production). 

New  jobs  in  ‘green’  sectors  can  lead  to  increased  investment  in  the  skills  of  the  workers 
concerned. There are examples where demand for employees with environmental skills has 
involved (re)training schemes for workers. Moreover, some sources suggest that there will 
be  a  shift  towards  integrated  technology  and  away  from  ‘end-of-pipe’  through  natural 
market  changes  but  also  though  policies.  As  a  consequence,  high-skill  jobs  would  be 
promoted at the expense of low-quality jobs.170  

2.4: THE TRANSITION TO A LOW-CARBON ECONOMY 

The  transition  from  high-carbon  to  low-carbon  employment  is  not  without  its  difficulties. 
Even if all of the above analysis is correct — that is, the most affected sectors are correctly 
identified,  the  kind  of  job  changes  (destruction,  creation  and  modification)  is  correctly 
analysed  and  the  needs  for  skills  development  are  appropriately  addressed  by  adequate 
training offers — there will still be a significant amount of friction on the labour market. For 
example: there is a potential cost of the transition for employees in ‘losing’ sectors; some 
categories  of  workers  may  have  difficulties  in  seizing  the  opportunities  for  reskilling;  new 
jobs may not be located in the same areas where the old jobs were lost; training will take 

170  European  Commission  (2005)  ‘Commission  Staff  Working  Document  on  the  links  between  employment 
policies’: 

policies 
http://ec.europa.eu/environment/integration/pdf/sec_2005_1530_en.pdf. 

environment 

and 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  240 

time; and there may be potential obstacles to the development of new jobs in the ‘winning’ 
activities (access to raw materials, high barriers to entry, low salaries etc.). As a result, there 
is a danger that unemployment of displaced workers could become structural. 

It is therefore paramount that the social partners engage in a permanent analysis of ongoing 
climate-change-related  industrial  restructuring  within  the  existing  framework  of  social 
dialogue, trying to anticipate potential problems and jointly developing solutions that take 
account of both businesses’ needs for flexibility and workers’ needs for security. 

Renewable energy stands at the heart of a low-carbon economy. The next section therefore 
discusses the implications of the growing renewable energy sector for employment and the 
labour market as a whole. 

 
 
 
 
 
 
 
Restructuring in Europe  241 

3: THE IMPACT OF RENEWABLE ENERGY POLICY ON EMPLOYMENT 

Policies  that  support  renewable  energy  sources  (RES)  give  a  significant  boost  to  the 
economy and the number of jobs in the EU. Improving current policies so that the target of 
20 % of RES in final energy consumption in 2020 can be achieved will, it is estimated, provide 
a net effect of about 410 000 additional jobs and a 0.24 % increase in gross domestic product 
(GDP)  in  the  EU.  This  is  therefore  an  important  policy  issue  and  this  section  looks  more 
closely at the impact that RES policy is likely to have on the EU’s labour markets, in terms of 
the volume of the workforce and the skills that are likely to be necessary in the future. 

The  Commission  Communication  An  energy  policy  for  Europe171 identifies  the  points  of 
departure for a European energy policy as: 

●  combating climate change; 

●  limiting the EU’s external vulnerability to imported hydrocarbons; and 

●  promoting growth and jobs. 

The  likely  positive  effect  of  the  increased  use  of  renewable  energy  sources  on  efforts  to 
combat  climate  change  and  to 
imported 
hydrocarbons is largely undisputed. It has been clearly shown that renewable energy makes 
an indispensable contribution to greenhouse gas reductions and to the increased security of 
energy supply in Europe. 

limit  the  EU’s  external  vulnerability  to 

There  is,  however,  still  uncertainty  about  the  exact  contribution  of  renewables  to  the 
promotion  of  growth  and  jobs  in  terms  of  the  objectives  of  the  EU’s  Lisbon  Strategy.  As 
stated  in  the  Commission’s  RES  roadmap:172 ‘Studies  vary  in  their  estimates  of  the  GDP 
impact of increasing the use of renewables, some suggesting a small increase (of the order 
of 0.5 %), and others a small decrease’. While most policy makers believe that increased use 
of RES and job creation can go hand in hand, others assume that the distribution and the 
budget effects might result in turning a large gross employment effect into a small or even a 
negative net employment effect. 

171   An 

energy 

final:
http://www.ipex.eu/LexUriServipex/webdav/site/myjahiasite/groups/CentralSupport/public/2007/COM_2
007_0001/COM_COM(2007) 0001_EN.pdf.

COM/2007/0001 

Europe. 

policy 

for 

172   Communication from the Commission to the European Council and the European Parliament — Renewable 
Energy Road Map Renewable energies in the 21st century: building a more sustainable future, COM(2006) 
848 final: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0848:FIN:EN:PDF. 

 
 
 
 
 
 
 
 
                                                       
 
 
 
Restructuring in Europe  242 

The Renewable Energy Directive for 2020 was adopted by the European Parliament and the 
European  Council  in  December  2008.173 This  Directive  sets  ambitious  targets  for  each  EU 
Member State with the aim of achieving a 20 % share of renewable energy in Europe’s final 
energy consumption by 2020. 

The European Environment Council of March 2008 issued a number of conclusions regarding 
energy efficiency, climate change and renewable energy, urging the Member States and the 
Commission  to  ensure  a  better  coordination  between  the  Lisbon  and  the  EU  Sustainable 
Development  Strategies  and  to  pay  increased  attention  to  environmental  technologies, 
resource efficiency and biodiversity. It stated further that the EU should foster an ‘ambitious 
global  and  comprehensive  post-2012  agreement’  containing  goals  such  as  global  emission 
reductions to at least 50 % by 2050 compared to 1990 levels and in line with the European 
Council’s reaffirmation that developed countries should continue to take the lead also with 
a view to collectively reducing their emissions by 60 % to 80 % by 2050 compared to 1990. It 
also  stated  that  the  EU  should  step  up  to  the  more  ambitious  30 %  reduction  as  part  of  a 
global  and  comprehensive  agreement,  as  set  out  in  the  European  Council  conclusions  of 
March 2007. 

The  Council  also  stressed  the  importance  of  environmental  technologies  as  one  of  the 
fastest  growing  markets  and  of  eco-design  and  a  life-cycle  approach  in  supporting  eco-
innovation. It also recognised the importance of small and medium-sized enterprises for the 
EU economy as well as their significant impact on the environment and particular challenges 
related to increasing energy and resource efficiency. In terms of regulation, it called on the 
Commission  and  the  Member  States  to  increase  efforts  to  consider  implementation 
measures  in  their  impact  assessment  of  new  legislation,  and  to  share  best  practice  on 
implementation and enforcement. 

The Commission’s main thinking in the area of renewable energy was set out in its January 
2009  Communication,  Towards  a  comprehensive  climate  change  agreement 
in 
Copenhagen, 174  which  was  issued  ahead  of  the  United  Nations  Copenhagen  climate 
conference. The Commission sets out ways in which to limit global warning to less than two 
degrees above the pre-industrial temperature, stating that developed countries must take 
the  lead  and  cut  their  collective  emissions  by  30 %  of  1990  levels  by  2020  and  that 
developing  countries,  except  the  poorest  ones,  should  limit  growth  in  their  collective 
emissions to 15-30 % below business as usual levels by 2020. In particular, the Commission 
states that the EU should seek to build, by 2015, an OECD-wide carbon market in order to 
mitigate  and  to  raise  funds  to  fight  climate  change.  The  market  should  be  expanded  to 
include major emerging economies by 2020 with a view to building a global carbon market. 

173  Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and 
http://eur-

subsequently 
Directives 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:en:PDF. 

2003/30/EC: 

2001/77/EC 

repealing 

and 

174  Towards  a 

comprehensive 

climate 

change  agreement 

in  Copenhagen,  COM(2009)  39: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0039:FIN:EN:PDF. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  243 

The Copenhagen Summit on climate change, which took place in December 2009 resulted in 
a  non-binding  accord  that  limits  temperature  rises,  but  does  not  include  any  emissions 
targets, which was seen as a poor outcome by those advocating the introduction of controls 
on emissions. 

3.1: THE BENEFITS OF THE RES SECTOR 

In  order  to  reach  the  target  of  achieving  a  20 %  share  of  renewable  energy  by  2020,  it  is 
important to gain further understanding and awareness of the economic and employment 
benefits  of  renewables.  A  recent  study  entitled  The  impact  of  renewable  energy  policy  on 
economic  growth  and  employment  in  the  European  Union  2009175 provides  a  first  detailed 
analysis of the full macroeconomic effects of renewable energy deployment at EU level. The 
study analyses the past, present and future impacts of renewable-energy policies in the EU 
on  employment  and  the  economy,  looking  at  the  gross  and  net  effects  (including  both 
conventional replacement and budget effects). It was conducted on behalf of the European 
Commission’s Directorate-General Energy and Transport. 

This  study  finds  that  the  renewable  energy  sector  is  already  very  important  in  terms  of 
employment and value added. New industries with strong lead market potential have been 
created,  which  contribute  about  0.6 %  to  total  GDP  and  employment  in  Europe.  This 
development  is  likely  to  accelerate  if  current  policies  are  improved  in  order  to  reach  the 
agreed target of 20 % renewable energies in Europe by 2020 (see above). 

However, despite large gross figures in terms of employment and value added, net figures 
are  significantly  smaller,  due  to  replaced  investments  in  conventional  energy  technologies 
as  well  as  the  dampening  effect  of  the  higher  cost  of  renewable  energies  compared  with 
conventional alternatives. Currently, strong investment impulses — based on installations in 
Europe and exports to the rest of the world — dominate the economic impact of renewable 
energy  policies  and  therefore  lead  to  positive  overall  effects.  In  order  to  maintain  this 
positive balance in the future, it will be necessary to uphold and improve the competitive 
position of European manufacturers of RES technology and to reduce the costs of renewable 
energies  by  exploiting  their  full  learning  potentials.  Therefore,  policies  which  promote 
technological innovation in RES technologies and lead to a continuous and sufficiently fast 
reduction  of  the  costs  will  be  of  major  importance.  Besides  the  implementation  of  strong 

175  The  impact  of  renewable  energy  policy  on  economic  growth  and  employment  in  the  European  Union. 
2009: http://ec.europa.eu/energy/renewables/studies/doc/renewables/2009_employ_res_report.pdf. 

The  study  is  based  on  an  analysis  of  the  historic  situation,  based  on  an  input-output  model  (MULTIREG) 
that  was  used  to  assess  the  effect  of  developments  in  the  RES  sector  on  other  economic  sectors.  With 
regard  to future  developments,  the  analysis  employs  a  RES-sector  bottom-up  model  (GREEN-X)  that  was 
designed  to  simulate  the  effect  of  RES  support  policies  to  2030.  In  order  to  calculate  future  economic 
effects,  two  well-established,  independent  macroeconomic  models  (NEMESIS  and  ASTRA)  were  used  in 
parallel and their results were compared for maximum reliability. Both the approach and the results have 
been peer-reviewed. 

 
 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  244 

policies  in  the  EU,  it  will  be  of  key  relevance  to  improve  the  international  framework 
conditions  for  renewable  energies  in  order  to  create  large  markets,  exploit  economies  of 
scale and accelerate research and development. 

Three projections for the RES deployment in the EU are: 

●  no-policy — the no-policy scenario serves as a hypothetical reference by modelling the 

situation in which all existing policies are abandoned; 

●  business  as  usual  (BAU)  —  the  BAU  scenario  extrapolates  on  current  policies  in  all 
Member States, which are inadequate to achieve the agreed target of 20 % RES in the EU-
27 by 2020; and 

●  accelerated deployment policy (ADP) — the ADP scenario includes strengthened national 

policies and is consistent with reaching the 2020 target. 

Three projections of European companies’ global market share in RES are made: 

●  pessimistic (PE); 

●  moderate (ME); and 

●  optimistic (OE). 

3.1.1: THE EMPLOYMENT BENEFITS OF RES 

Since 1990, the RES industry has seen substantial growth, mainly due to public promotion 
policies. The fivefold increase in investment expenditures for new RES plants to almost € 30 
billion  in  2005  was  the  main  driver  for  this  expansion.  However,  operational  and 
maintenance  expenditures  also  increased  continuously,  due  to  the  growing  number  of 
plants  in  operation.  Furthermore,  European  suppliers  gained  considerable  global  market 
shares in booming RES technology fields such as wind and photovoltaics. Total value added 
generated by RES deployment has roughly doubled since 1990. 

Due to increasing labour productivity, total employment has grown by approximately 40 %. 
This  development  has  led  to  the  establishment  of  a  strong  cross-sectoral  RES  industry  in 
Europe.  It  comprises  all  the  activities  needed  for  planning,  manufacturing  and  installing 
facilities  that  use  RES,  for  operating  and  maintaining  them  and  for  supplying  them  with 
biomass (direct economic impact). It is furthermore connected with several industries that 
form its upstream supply chain (indirect economic impact). In 2005, building and operating 
RES facilities contributed about 0.6 % to total GDP and employment in Europe. About 55 % 
of this impact is directly related to the RES industry, with 45 % related to the supply chain 
industries. In absolute numbers, RES deployment leads to a gross value added of € 58 billion 
and  1.4  million  people  employed.  With  0.9  million  people  employed,  small  and  medium-
sized  enterprises  have  a  significant  share  of  two-thirds  of  this  employment  impact.  As 
important  suppliers  of  biomass,  agriculture  and  forestry  roughly  employ  200 000  people. 
Other  important  economic  sectors  involved  are  the  investment  goods  manufacturing 
industry, construction and trade. 

 
 
 
 
 
 
 
 
Restructuring in Europe  245 

The  contribution  of  the  respective  RES  technologies  to  employment  in  the  EU  Member 
States is shown in figure 6.2 below. In most countries, biomass use has a high relevance for 
employment.  Wind  technology  is  an  important  contributor  to  employment  in  Germany, 
Denmark and Spain and photovoltaics is relevant in Germany. 

Figure 6.2: Total employment induced by RES deployment in 2005, by country and RES 
technology 

s
n
o
s
r
e
p
d
e
y
o
p
m
e
0
0
0
1

l

350

300

250

200

150

100

50

0

Heat pumps
Geothermal
Solar thermal heat
Photovoltaics
Wind
Hydro S
Hydro L
Biofuels
Biowaste
Biomass Non-Grid
Biomass grid
Biogas

AT BE DE DK ES FI FR GB GR IE IT LU NL PT SE BG CY CZ EE HU LV LT MT PL RO SI SK

Source: European Commission. 

3.1.2: THE FUTURE IMPACT OF RES ON EMPLOYMENT 

The above-mentioned study indicates that employment levels would be slightly stimulated 
by  RES  policies,  but  the  effects  would  be  moderate  compared  to  the  effects  on  GDP.  The 
main results can be summarised as follows: 

●  ‘business  as  usual’  (BAU)  RES  policies  in  EU  Member  States  combined  with  moderate 
export  expectations  result  into  a  roughly  constant  positive  employment  effect  of 
115 000-201 000 employees in 2020 and 188 000-300 000 employees in 2030; 

●  an  accelerated  deployment  policy  (ADP)  scenario  combined  with  moderate  export 
expectations  leads  to  a  slightly  higher  increase  of  averaged  employment  by  396 000-
417 000  employees  by  2020  and  by  59 000-545 000  employees  in  the  last  years  before 
2030. In general, the models generate comparable results, apart from those for 2030; 

●  the shifts of demand between different economic sectors as well as the moderate energy 
cost increase in the ADP scenario result in additional employment caused by RES policies 
not growing compared to GDP growth; 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  246 

●  the  effect  on  employment  strongly  depends  on  the  energy  cost  increase.  If  there  are 

significant cost increases, these may dampen the employment increase; and 

●  at  the  sectoral  level,  the  areas  in  which  employment  increases  most  due  to  RES  policy 
would be the agriculture and the energy sector, the former due to increased demand for 
biomass, the latter due to the higher labour intensity of RES and increased expenditures 
on  electricity.  Sectors 
losing  employment  would  suffer  from  the  higher  energy 
expenditures of households, the higher sectoral elasticities in response to higher goods 
prices  driven  by  energy  cost  increases  and  the  prevailing  budget  constraint  of 
households.  Examples  would  be  the  trade  and  retail  sector  as  well  as  the  hotels  and 
restaurant sector. 

Figure  6.3  below  presents  the  results  on  employment  of  different  policy  scenarios.  It  is 
apparent that employment increases in all the scenarios, but to a smaller extent than GDP. 
In  BAU  scenarios,  employment  increases  by  0.08 %  in  the  moderate  (ME)  scenario  and 
0.12 %  in  the  optimistic  (OE)  one;  this  represents  187 000  and  262 000  new  jobs  created, 
respectively. In the ADP scenarios, the additional investments and demands bring about a 
0.24 % increase in employment (545 000 jobs) in the ME scenario and a 0.29 % (656 000 jobs) 
in the OE scenario. 

Figure 6.3:  Employment change for Europe in thousands 

Employment change due to RES policy for Europe in thousands

BAU-ME BAU-OE ADP-ME ADP-OE

s
d
n
a
s
u
o
h
t
n

i
e
g
n
a
h
c

700.00

600.00

500.00

400.00

300.00

200.00

100.00

0.00

2010

2015

2020

2025

2030

Source: European Commission. 

In terms of the distribution of total employment by technology, there is a significant role for 
biomass technologies in terms of employment generation and especially decentralised non-
grid use. Over 60 % of the total impact is due to biomass technologies. The major share of 
employment  is  triggered  by  the  supply  of  biomass  for  fuel  use.  This  share  is  subject  to 
considerable uncertainty, since significant amounts of biomass for non-grid use appear not 
to  be  purchased  at  market  prices,  but  may  be  obtained  from  own  resources  or  informal 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  247 

channels,  especially  by  private  households.  This  study  assumes  that  50 %  of  biomass 
obtained by private households is purchased at market prices. 

Regarding the employment effects per technology, it becomes clear that current ‘business 
as usual’ RES policies do not provide sufficient impulses to push future development of and 
employment in research and knowledge-intensive technology while a strong RES promoting 
policy,  such  as  in  the  accelerated  deployment  policy  scenario,  triggers  development  and 
employment  in  knowledge-intensive  and  competitive  technologies  in  the  future.  A  strong 
increase in RES technologies such as wind power, photovoltaics and solar thermal electricity 
is responsible for roughly 50 % of the gross employment increase in 2030 compared to a no-
policy  situation.  The  technology  pattern  of  RES  deployment  under  this  accelerated 
deployment  policy  scenario  reflects  (and  justifies)  the  high  promotion  and  hence  the 
additional  generation  costs  for  these  knowledge-intensive  technologies  which  are  being 
established  successfully 
in  the  market,  contributing  to  export  and  technological 
competitiveness and thus also to employment. 

3.1.3: LOOKING TO THE FUTURE 

The RES sector is already very important in terms of employment and value added in the EU. 
This  sector’s  contribution  to  GDP  and  employment  in  Europe  is  likely  to  be  accelerated  if 
current policies are improved in order to reach the agreed target of 20 % RES in Europe by 
2020. 

Two objectives for increasing the share of RES are the reduction of CO2 emissions and other 
environmental impacts and the increased security of supply due to reduced dependency on 
imported  fossil  fuels.  It  is  often  stressed  that  these  two  key  energy  policy  objectives  — 
security of supply and environmental sustainability — should be targeted without sacrificing 
the  third  —  economic  sustainability.  It  is  therefore  of  immense  value  that  increasing  the 
share of RES not only does not harm the economy, but actually benefits it by creating jobs 
and increasing GDP. 

After  considering  the  renewable  energy  sector,  this  report  now  turns  to  the  transport 
sector,  which  is  one  of  the  key  sectors  that  will  be  affected  by  climate  change  and  the 
pressure to change energy production and consumption. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  248 

4: CHALLENGES FOR THE TRANSPORT SECTOR 

This section examines the main challenges, in terms of restructuring, faced by the transport 
sector  in  the  coming  years.  This  sector  is  one  of  the  EU  sectors  that  is  most  exposed  to 
changes  relating  to  climate  change  and  changes  in  energy  sourcing  and  use.  Overall,  the 
economic integration of Europe is set to continue over the next years and this, coupled with 
accelerated  globalisation,  will  lead  to  increased  momentum  in  transport  activity.  The 
transport sector is likely to restructure along two dimensions: integration at European and 
global level and decarbonisation. Failure to combine progress along these two dimensions 
will result in the European transport sector losing the technological leadership that it enjoys 
today,  and  failing  to  support  the  competitiveness  of  European  businesses,  with  European 
logistics  companies,  which  heavily  rely  on  the  excellent  connections  to  world  transport 
networks, likely to being affected in first place. 

Led  by  strong  economic  forces  and  policies,  the  EU  is  beginning  to  look,  in  terms  of 
transport,  like  a  continental,  interconnected  market,  even  if  much  remains  to  be  done. 
While  the  integration  of  air  and  road  transport  systems  is  well  advanced,  rail  and 
waterborne  modes  still  suffer  from  numerous  persisting  regulatory,  administrative  and 
technical barriers which jeopardise their efficiency for cross-border transport. 

The  transport  sector  is  still  very  far  from  becoming  a  low-carbon  system  as  it  relies  up  to 
95 %  on  oil.  The  Commission’s  objective  of  decarbonisation  of  the  transport  system176 
requires a substantial transformation of the sector although this is a long-term objective. A 
roadmap to achieve this objective has been proposed by the Commission in the Transport 
White  Paper  ‘Roadmap  to  a  Single  European  Transport  Area-  Towards  a  competitive  and 
resource  efficient  transport  system’.  The  three  basic  elements  of  this  strategy  are  the 
creation of a Single Transport Area, the promotion of new technologies and the completion 
and upgrading of European network infrastructure. Given the surrounding technological and 
economic  uncertainty,  it  is  likely  that  this  path  will  have  to  be  regularly  readjusted  in  the 
future, in accordance with technological and economic realities. 

The  decarbonisation  objective  implies  that  a  gradual  but  significant  restructuring  of  the 
sector  is  needed.  Within  this  context,  it  is  important  to  ensure  that  social  cohesion  is 
respected or enhanced during the process of restructuring. The White Paper expresses the 
willingness of the Commission ‘to align the competitiveness and the social agenda, building 
on social dialogue’. It is to be expected that the forecast growth in activity in the transport 
sector will help to make restructuring and social cohesion compatible. During the process of 
restructuring, it is crucial to raise the right expectations among entrepreneurs and investors 

176 The  Transport  White  Paper  ‘Roadmap  to  a  Single  European  Transport  Area-  Towards  a  competitive  and 
resource efficient transport system’ sets as an objective to reduce the GHG emissions of transport by 60 % 
in 2050. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  249 

about  the  future  of  European  transport  policies  which  shape  the  transport  system  of 
tommorow, given that expectations can attract or deter investments. 

The  WP  will  build  over  many  steps  taken  by  the  EU  transport  policy,  thus  the  internal 
market is well advanced in the EU, with decisive steps having been taken recently. Railway 
freight  market  was  opened  to  competition  in  2007,  international  passenger  rail  market  in 
2010 and new rules for public transport procurement under Public Service Obligations (PSO) 
apply  from  December  2009.    However,  technical  and  regulatory  barriers  still  effectively 
reduce competition on the Single Market and constitute obstacles to the provision of cross-
border services. In aviation, Open Skies agreements with the USA and other countries are 
being  concluded,  increasing  competition  on  the  market  for  intercontinental  travel. 
International road transport is also liberalised within the EU, while cabotage rules have been 
recently  clarified.  Maritime  transport  is  open  to  competition  according  to  international 
rules.  Nevertheless,  administrative  barriers  remain  for 
intra-EU  maritime  transport, 
affecting the competitiveness of short sea shipping compared to land-based modes. Market 
integration  is  backed  by  the  growing  trans-European  network  and  by  a  substantial 
regulatory  ‘acquis’  both  of  which  are  far  from  being  completed.  All  these  measures  take 
time to percolate into market realities, but the process is ongoing, not least because strong 
economic forces and actors are pushing in the direction of a low carbon, integrated and high 
quality mobility system by 2050. 

The main economic actors in a market economy are the firms. The current structure of the 
transport services sector includes a large volume of SMEs and individual operators, notably 
in road transport and inland waterways177. They share the market with a number of global 
giants  and  large  European  firms,  whose  activities  cover  different  modes  of  transport  and 
different countries. First among them are AP Moller-Maersk and Deutsche Post (DHL) which 
appear  in  the  2011  list  of  the  FT  global  500  largest  companies  by  market  capitalisation 
(ranking 194 and 424). 

A  step  that  was  to  prove  decisive  concerning  the  integration  of  the  European  transport 
sector  and  its  global  projection  has  been  taken  over  the  past  20  years  in  the  form  of  the 
process  of  liberalisation  of  national  postal  services.  This  triggered  the  creation  of  global 
transport and logistics giants such as DHL or  TNT, which were acquired by the public mail 
services  of  Germany  and  the  Netherlands,  respectively.  In  this  way,  two  pre-internet  era 
communications firms positioned themselves as ‘just in time’ global delivery experts. 

This mention of the enterprise structure of the sector is necessary as neither consolidation 
nor restructuring takes place in a vacuum — both are first of all the responsibility of firms. 
The  success  of  the  co-modality  concept  (meaning  the  most  efficient  use  of  all  transport 
modes  on  their  own  or  in  combination),  the  efficiency  of  multi-modal  chains  and  the 

177  Out of the 1 064 696 enterprises which existed in the transport sector in 2008, a large majority belonged to 
the atomised road transport sector (600 000 to road freight transport and 325 728 to road passenger 
transport). 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  250 

development and adoption of new technologies also depend on the decisions of companies 
reacting to market and policy incentives. 

Consolidation is needed to reap the economies of scale and scope that are made possible by 
a  very  large  market.  lf  the  European  transport  market  appears  at  first  sight  to  be  highly 
fragmented along national lines, this is mostly due to the railways sector, the problems of 
which,  concerning  lack  of  interoperability  and  difficult  access  to  some  markets,  are  well-
known. 

 
 
 
 
 
 
Restructuring in Europe  251 

Table 6.1: Employment and number of companies operating in the transport sector, 2008, EU27 (1000 persons) 

Year 

TRANSPORT 

I60 - Land transport; 
transport via 
pipelines 

I61 - Water 
transport 

I62 - Air transport 

I63 - Supporting and auxiliary 
transport activities; activities of 
travel agencies 

2008 
2009 

10301.4 
10097.0 

6393.8 
6313.6 

226.4 
222.7 

381.0 
370.7 

3300.2 
3190.0 

 
 
 
 
 
 
Restructuring in Europe  252 

In addition the well-established regulated market opening, other integration drivers are 
at play. The enlargement of the EU has provided a relatively low-cost workforce, of which 
firms  from  the  older  Member  States  take  advantage  by  establishing  subsidiaries  in  the 
newer Member States, or by buying their transport services. In addition, globalisation has 
created a high level of activity, notably in seaports, where container terminals are largely 
internationalised.  Further  consolidation  in  all  modes  seems  inevitable  as  a  single 
European  transport  market  continues  to  emerge  in  line  with  the  Transport  2050  White 
Paper objective of full modal integration. 

4.1: OVERVIEW OF THE EU TRANSPORT SECTOR 

In  2009,  the  transport  sector  directly  employed  10.1  million  people,178 which  accounted 
for 4.5 % of the total employment in the EU. This employment level fell by 2% between 
2008 and 2009, however once the crisis is overcome, employment growth in the sector is 
expected to resume, together with transport activity, especially if the recovery is export-
led. It is likely, therefore, that restructuring in all transport sub-sectors and modes will be 
facilitated by the expected sustained growth in activity. 

Projections for transport activity estimate that, based on current transport policies, most 
modes of transport will considerably increase their activity up to 2030 (in this case 34 % 
for  passengers  and  38 %  for  freight  —  see  table  6.2).179 However,  growth  in  activity  will 
require either increases in productivity of the existing labour force, which is already highly 
productive,180 or increases in employment. 

Further, an active policy of decarbonisation may imply higher employment needs in low-
carbon transport modes such as railways, inland waterways, short sea shipping and public 
transport,  as  well  as  in  intermodal  logistics.  It  should  be  highlighted,  moreover,  that  a 
modal  shift  from  the  car  to  public  transport  will  produce  net  increases  in  jobs  as  the 
transport  services  which  private  drivers  produce  are  not  accounted  for  in  general 
employment and GDP statistics. 

The  introduction  of  the  White  Paper  Transport  2050  policies  will  boost  the  rates  of 
growth of the more energy efficient modes. Road transport will still grow, but at a slightly 

178 Source:  Eurostat  -  National  Accounts  (table  6.1).  This  figure  does  not  include  own  account  transport 
which  corresponds  to  the  transport  services  that  firms  in  all  sectors  provide  for  themselves  (16 %  of 
total activity in tkm). The construction and to a large extent maintenance of transport infrastructure and 
of transport means (i.e. road vehicles, ships, trains) is not included either. 

179  European 

2030  —  Update 
http://ec.europa.eu/energy/observatory/trends_2030/doc/trends_to_2030_update_2009.pdf. 

Commission 

(2010), 

energy 

trends 

EU 

to 

2009: 

180  The transport sector is a dynamic sector from an economic point of view, which has managed to attain 
rapid productivity growth. Annual labour productivity in the transport services sector has grown more 
than  in  the  rest  of  the  economy.  The  COMPETE  study  shows  that  the  sectors  that  have  recorded  the 
highest  levels  of  productivity  growth  are  maritime  and  air  transport.  COMPETE.  ‘Analysis  of  the 
contribution of transport policies to the competitiveness of the EU economy and comparison with the 
USA’: http://ec.europa.eu/transport/wcm/infrastructure/studies/2006_10_compete.zip. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  253 

lower  rate  than  in  a  ‘no  policy  change  scenario’  The  development  of  a  dense  and 
extensive  HST  network  favoured  by  the  White  Paper  will  help  to  bring  the  very  high 
growth of aviation (100 %) to more manageable proportions.   

Table 6.2: Projections in passenger and freight growth, 2005-2030, by transport sub-
sector without policy changes 

Transport activity projections (% growth) 2005-2030 

Passenger transport activity 

Public road transport 

Passenger cars 

Powered two-wheelers 

Rail 

Aviation 

Inland navigation 

Freight transport activity 

Trucks 

Rail 

Inland navigation 

34 % 

22 % 

28 % 

31 % 

39 % 

100 % 

17 % 

38 % 

40 % 

40 % 

22 % 

4.2: DECARBONISATION AND GREEN JOBS 

The decarbonisation of transport will be led in the short to medium term (up to 2020) by 
the search for energy efficiency in all vehicles and modes, and by setting a level-playing 
field  between  the  different  modes.  Energy  efficiency  increases  will  largely  result  from 
information 
improving  current  conventional  technologies,  making  wider  use  of 
technologies  and  setting  stringent  vehicle  energy  efficiency  standards.  The  level  playing 
field  between  different  modes  will  notably  require  the  removal  of  unjustified  subsidies 
and  moving  towards  the  wide  application  of  the  user-pays  and  polluter-pays  principles. 
The  latter  move  is  expected  to  provoke  a  shift  towards  more  energy-efficient  forms  of 
transport. 

In the shorter term, two ways of job creation or job loss can be distinguished: 

●  autonomous growth within the different transport modes; and 

●  employment changes from the modal shift between them. 

The extent of the modal shift will also depend on the ability of the providers of energy-
efficient transport (railways in particular) to improve their attractiveness. 

 
 
 
 
 
 
 
 
Restructuring in Europe  254 

Rather than being due to the early effects of the decarbonisation process, in the shorter 
term, restructuring will most likely be mainly caused by the establishment of a European 
Transport Area, global competition and the enhanced use of information technologies.181 

The  market  penetration  of  alternative  fuels  will  be  gradual,  giving  rise  to  the  need  to 
synchronise investments in infrastructure and vehicles. Its effects on the labour force are 
not expected to be significant before 2020, although critical bottlenecks could appear and 
should be identified and eliminated (see box 6.3 on green jobs). 

In  the  meantime,  the  main  focus  of  this  low-carbon  technology  strand  should  be  on 
ensuring the availability of appropriate human and economic resources for R&D, not least 
through coordination of the actions of the private sector and of the Member States and 
the  Union.  At  the  same  time,  an  effort  should  be  made  to  ensure  that  the  education 
system,  which  will  educate  the  generations  that  will  carry  out  the  greater  part  of 
transition  in  the  transport  sector,  allows  students  to  improve  their  STEM  (Science, 
Technology,  Engineering  and  Mathematics)  skills,  which  will  be  much  in  need  in  the 
future. 

It is likely that the system will become knowledge-intensive before becoming low-carbon, 
just because the IT revolution is already taking place and many transport sub-sectors have 
embraced the adoption of IT. While the European satellite navigation system Galileo is in 
the process of becoming operational, GPS use is already pervasive and its use, combined 
with that of mobile phones, has greatly improved the efficiency of road and other modes 
of  transport.  While  mode  specific  smart  mobility  systems  have  been  or  are  being 
developed  (SESAR  for  air,  ITS  for  road,  ERTMS  for  rail,  SafeSeaNet  and  eMaritime  for 
maritime, RIS for inland navigation), their deployment is often delayed or fragmented. 

Box 6.3: The green and smart transport jobs of the future: purely green 
jobs and the greening of conventional jobs 

Purely green jobs could be those that are needed to deploy electric, fuel cell or 
other non conventional vehicles and to adapt infrastructures to the needs of a 
vehicle fleet that uses a wide variety of fuels. Petrol stations would offer a variety 
of refuelling possibilities, including electricity, biofuels, hydrogen, methane and 
conventional diesel and petrol fuels. Other types of green jobs include those in the 
information and communications technology sector providing services to transport 
and those jobs in the manufacturing sectors that will build green transport means. 
Critical bottlenecks could appear in the supply of these green jobs. 

181  Such  as  the  introduction  of  the  European Railway  Traffic  Management System  (ERTMS)  in  railways  or 
the  Single  European  Sky  Air  Traffic  Management  Research  (SESAR)  programme  in  aviation,  which 
replace more labour intensive means of traffic control and management. Modern communication tools 
may reduce the need or the desire for travelling as well. 

 
 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  255 

Previous experience of large-scale demonstration of electric vehicles has highlighted 
a  major  problem  of  skills  shortages,  throughout  the  value  chain  of  design, 
production,  distribution,  sales,  maintenance,  disposal,  and  emergency  first 
response. In addition, there are a number of concerns, including the following: 

●  the demonstration of innovative vehicles has proved very costly, either due to the 
need  to  have  representatives  from  original  equipment  manufacturers  (OEMs) 
available on site or available to travel to sites at short notice, the need to send 
vehicles  back  to  regional  centres  for  repair,  or  to  send  staff  to  OEMs  for 
specialised  training.  At  least  one  dealership  in  every  large  city  would  need  to 
have specially trained staff; 

●  there  are  serious  shortages  of  staff  skilled  in  the  research,  design,  and 
development of electric drive-trains, power electronics, batteries, fuel cells and 
hydrogen storage and system integration; 

●  dealerships  are  not  trained  to  sell  and  maintain  vehicles  with  non-conventional 

drive-trains using non-conventional fuels; 

●  insurance companies do not have staff who are qualified to assess risks; 

●  emergency  first  response  staff  are  not  trained  to  handle  the  different  issues 

raised by high voltage systems, risks of fire and explosion; and 

●  planning  authorities  and  certification  bodies  are  not  all  equipped  to  provide 

permission and approvals for new fuelling/re-charging infrastructures. 

Beyond — and even before — the initial pilot scale demonstrations, mature networks 
of qualified and certified staff will need to be in place for all the above functions. A 
serious  effort  of  resource  planning  is  therefore  required.  Considerable  work  was 
carried  out  by  the  ‘International  Partnership  of  the  Hydrogen  Economy’  to  identify 
training  needs  and  draft  training  curricula.  Similarly,  the  ‘Californian  Air  Resource 
Board’ has studied training requirements. 

During  the  first  phase  of  commercialisation  of  electric  vehicles  and  hydrogen  fuel 
cell  vehicles  (EVs/HFCVs),  skills  for  the  current  internal  combustion  engine  (ICE) 
technology  and  additional  new  skills  for  the  electric  power  train,  batteries  and 
control systems will be required. This phase will also coincide with an internalisation 
of electric drive-train technology development within the automotive manufacturers 
which will therefore also need these new skills. 

In  terms  of  anticipating  and  managing  restructuring,  the  skills  and  qualification 
levels needed for electric vehicles and hydrogen fuel cell vehicles will be essential. 
As  announced  in  the  European  Commission’s  Communication  ‘European  strategy  on 

 
 
 
 
 
Restructuring in Europe  256 

clean and energy efficient vehicles’,182 the Commission will support the creation of a 
European  Sectoral  Skills  Council,  aiming  at  creating  a  network  of  Member  States’ 
national  observatories.  The  Commission  will  also  target  the  use  of  the  European 
Social Fund, starting in 2011 to encourage retraining and upskilling. 

Other  modes  of  transport  present  similar  problems.  For  instance,  the  use  of 
alternative energy in maritime transport where emerging new propulsion technology 
such  as  the  use  of  gas-fuelled  ships  or  wind  energy  propulsion  will  require  safety 
standards  and  new  skills  which  could  be  of  benefit  to  the  revalorisation  of  the 
European workforce. As regards gas-fuelled ships, interim guidelines on safety have 
been developed in the framework of the International Maritime Organisation (IMO), 
which  will  be  complemented  by  the  development  and  finalisation  of  the 
International Code of Safety for Gas-fuelled Ships by 2014. The use of wind energy in 
maritime transport is still at the research stage and will require new skills also, but 
in a longer timeframe. 

Alongside  ‘green  jobs’  there  are  what  could  be  called  ‘conventional  transport 
greening  jobs’.  The  greening  of  the  transport  sector  can  be  seen  as  making  more 
commercially  attractive  and  increasing  the  use  of  the  greener  modes  of  transport 
while  ‘greening’  their  more  competitive  rivals  and  making  a  more  efficient  and 
‘greener’ use of all modes of transport. To compete with road and aviation, the low-
carbon  modes  of  transport  have  to  provide  better  services,  which  often  require 
specific skills: 

●  there  is  an  increasing  technological  complexity  in  railways  (e.g.  in  the  case  of 
high-speed  trains),  shipping  and  civil  engineering  as  well  as  in  aviation.  Workers 
employed  here,  as  well  as  those  working  in  possibly  less  technically  demanding 
sectors  such  as  road  transport,  inland  waterways  and  logistics,  need  also  to  be 
well  acquainted  with  information  technology,  and  in  particular  with  Intelligent 
Transport Systems; 

●  civil  engineering  is  becoming  more  capital-intensive,  but  also  more  human 
capital-intensive,  as  public  works  take  on  larger  and  more  complex  challenges. 
Pieces  of  infrastructure  such  as  bridges  and  tunnels  (including  those  in  urban 
locations) aim to make distances shorter and less costly in CO2 terms; 

●  public  passenger  transport  requires  personal  attention  to  the  user  to  ensure  a 
high level of quality, in particular concerning its security, and to ensure a highly 
reliable  service.  This  may  require  more  customer  attention  qualifications  from 
the  staff,  for  example  to  ensure  accessibility  for  disabled  passengers,  or  to 
uphold passenger rights or guarantee security; 

●  the  development  of  a  knowledge-intensive  transport  sector,  highly  efficient  and 
adapted  to  the  needs  of  customers,  involves  demanding  central  service 

182  European 

strategy 

on 

clean 

and 

energy 

efficient 

vehicles 

(COM(2010) 186): 

 
 
 
 
                                                       
 
Restructuring in Europe  257 

requirements.  Central  tasks  such  as  regulation,  monitoring,  modelling,  statistic 
collection,  or,  at  a  more  microeconomic  level,  network  management,  managing 
tolls and internalisation systems, as well as Intelligent Transport Systems, require 
highly skilled jobs to ensure rationality, feedback and resilience of the transport 
system; 

●  logistic  activities  will  grow  over  the  coming  years.  Logistics  professions  are  to 
some extent common to different transport modes. By increasing the efficiency of 
trans-shipment  and  supply  chain  management,  they  increase  the  energy 
efficiency  of  the  supply  chain.  With  automation,  containerisation  and  electronic 
tracking of goods, logistic professions are becoming more demanding in terms of 
skills. 

the  development  of 

Finally,  there  is  the  more  controversial  ‘greening  of  brown  jobs’,  which  could 
include 
the 
implementation of special training for the drivers, notably on energy efficiency and 
safety aspects. In the air transport sector, training linked to the use of the Airbus A-
380  is  a  case  in  point,  where  the  use  of  larger  aircraft  produces  environmental 
benefits. 

freight  vehicles 

involving 

longer 

road 

4.3: DEMOGRAPHY: HEADING FOR SKILL AND LABOUR SHORTAGES 

labour  force  which  creates  a  scarcity  problem  which  the 

In spite of current relatively high levels of unemployment, there is a consensus that the 
main problem facing the transport sector will be labour and skill shortages, even in the 
absence  of  decarbonisation  of  the  sector.  This  is  due  to  the  accelerated  ageing  of  the 
transport 
low  female 
participation  rate  in  the  sector  will  not  help  to  resolve.  Strong  demand  growth  will 
exacerbate  this  problem.The  sector  has  already  suffered  in  normal  conditions  from  skill 
shortages  and  a  tight  labour  supply.  For  the  moment,  skill  shortages  focus  on 
conventional  rather  than  green  jobs.  It  is  therefore  imperative  that  redeployment  and 
renewal of the labour force is facilitated. 

Green jobs within the transport sector appear to require a blend of existing skills rather 
than  adoption  of  totally  new  skills.  Moreover,  in  the  first  stages  of  decarbonisation, 
efforts  will  be  focused  on  research  and  development,  followed  by  demonstration 
projects,  the  strategic  impact  of  which  will  be  large  but  which  are  likely  to  go  mostly 
statistically unnoticed in the larger labour transport labour markets. 

In  the  short  term,  from  a  restructuring  point  of  view,  of  greater  importance  than  the 
emergence of new green jobs will be the upgrading of traditional green jobs in railways or 
public transport and the greening of conventional jobs in carbon intensive modes such as 
road freight transport and aviation. These transformations are due to take place against a 
background  dominated  by  the  ageing  of  the  population.  In  a  society  where  the  labour 
force will soon start shrinking, the transport sector workforce is ageing more rapidly than 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0186:FIN:EN:PDF. 

 
 
 
 
 
 
                                                                                                                                                                    
 
Restructuring in Europe  258 

the economy as a whole (26 % of employees aged over 50 compared with 22 % on average 
in the economy). In most sectors, female participation is expected to fill the gap left by 
ageing male workers, but in transport the labour market share of female workers is much 
lower  than  the  average  (21 %  compared  with  35 %,  while  in  land  transport  the  share  is 
only 13 %). For details of the age and gender profile of the sector, see box 6.4 below. 

Before the crisis, it was said that there were shortages of skilled workers in the following 
transport  professions:  locomotive  drivers;  road  drivers;  merchant  navy  officers;  and 
skilled  sailors  or  entrepreneurial  staff  in  inland  waterways.  Moreover,  in  some  sectors, 
such as railways or logistics, there was an ageing workforce, possibly due in part to the 
civil  servant  status  of  many  employees,  which  meant  that  employee  turnover  was  very 
low. The crisis has aggravated this situation. 

Shortages in some precise skills can sit aside the relative overstaffing of some modes of 
transport, as it has been the case in the rail sector in some countries. Other modes can 
become  overstaffed  in  the  future  as  a  result  of  restructuring  (for  example  air  traffic 
management  support  staff  as  a  consequence  of  the  creation  of  functional  blocks, 
although traffic growth should counteract this tendency) or consolidation between firms 
(for example between aviation companies). Finally, increases in productivity or changes in 
technology could make some jobs redundant (for example, train ticket collectors). Dealing 
with these shortages and easing the restructuring of the transport sector will require that 
labour  mobility  is  able  to  overcome  the  implicit  barriers  to  gender,  age,  mode  and 
nationality, and migration outside Europe. 

Box 6.4: The age and gender handicaps of the transport sector 

The proportion of the EU27 transport services workforce aged 15 to 29 was 17.7 % in 
2007, some  6.7 percentage points  below the average for the non-financial business 
economy. This was reflected in an above-average share of older workers (aged 50 or 
more), representing more than one quarter (25.7 %) of the workforce, compared with 
just  over  one  fifth  (21 %)  for  the  non-financial  business  economy  as  a  whole.  All  of 
the transport services NACE divisions recorded a relatively low proportion of younger 
workers,  but  this  was  most  notable  for  land  transport  and  transport  via  pipelines, 
where  the  proportion  was  as  low  as  14.1 %,  one  of  the  lowest  among  the  non-
financial  business  economy  NACE  divisions,  higher  only  than  in  some  mining  and 
quarrying  (NACE  Section  C)  divisions.  Air  transport  was  the  only  transport  services 
NACE  division  where  the  proportion  of  older  workers  (20.0 %)  was  below  the  non-
financial  business  economy  average,  while  the  highest  proportion  of  older  workers 
was recorded for land transport and transport via pipelines and for water transport 
services (both 27.8 %). 

Only  20.9 %  of  those  persons  employed  in  this  sector  in  2007  in  the  EU27  were 
women, around three fifths of the average for the non-financial business economy, 
where  women  accounted  for  35.1 %  of  those  employed.  In  land  transport  and 
transport via pipelines (NACE Division 60) the share of women in the workforce was 
just  13.5 %,  among  the  lowest  shares  across  the  non-financial  business  economy 

 
 
 
 
 
 
 
Restructuring in Europe  259 

NACE divisions, higher only than in construction and two mining and quarrying (NACE 
Section C) divisions. The share of women in the workforce was also particularly low 
in  water  transport,  19.9 %,  and  just  below  the  non-  financial  business  economy 
average  in  warehousing,  transport  support  activities  and  the  activities  of  travel 
agencies (32.4 %). The only one of the four transport services NACE divisions where 
the share of women in the workforce was above the non-financial business economy 
was air transport where 40.7 % of the workforce was female. 

Source: European business — Facts and figures, 2009 edition 

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-BW-09-001/EN/KS-BW-09-
00 l-EN.PDF 

4.4: INTEGRATION IN THE TRANSPORT SECTOR 

Restructuring is the result of decisions taken by enterprises, even if they are sometimes 
triggered by changes in the regulatory environment, such as the opening of markets or by 
external  facts  such  as  the  emergence  of  the  new  Asian  trading  powers.  The  high  and 
accelerating degree of integration of the European transport services sector at enterprise 
level and over different modes should be highlighted, as the success of decarbonisation 
and of the overall integration in a Single Transport Area depends on what is taking place 
at the level of the firm. 

The  freight  transport  sector  is  relatively  integrated  at  enterprise  level,  with  companies 
such as Deutsche Post-DHL, DB Schenker, TNT, Kuhne and Nagel and SNCF-Geodis taking 
many  of  the  strategic  decisions  that  will  shape  the  sector.  In  spite  of  repeated 
pronouncements in favour of rail freight, some of these companies have developed road 
freight  transport  branches  which  now  constitute  the  main  focus  of  their  activity:  this  is 
the case with SNCF and Geodis or the takeover of Schenker by DB.183 

ln  medium-distance  passenger  transport  sub-sector,  DB  and/or  SNCF/Keolis  are  leading 
the  market,  while  in  public  transport  there  are  firms  that  are  highly  diversified,  such  as 
Veolia or First Group UK, which are both active in railways and buses.184 The increased use 
of  tendering 
in  urban  and  regional  transport  gives  these  companies  significant 
opportunities for expansion. 

The  internal  market  has  led  so  far  to  some  degree  of  consolidation  in  aviation,  where 
after the takeover of Swiss, Brussels Airlines, and more recently of Austrian Airlines and 

183  ‘The 2006 turnover for DB Schenker totalled 17 billion euro, 3.8 of which stemmed from rail freight and 
combined transport. The 2006 turnover from the freight and logistics branch of SNCF group totalled 6.6 
billion  euro,  roughly  2  billion  of  which  stemmed  from  rail  freight  and  combined  transport.’  Freight 
Business Restructuring and its Impact on Employment. Joint European Group CER-ETF with the support 
of DG EMPL. 

184  Public transport firms may also participate in the deployment of electric vehicle pick and drive cars such 
as those of the Paris ‘Autolib’ system expected to be available from 2011. Le Monde 12.6.2010, page 2. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  260 

British  Midlands  by  Lufthansa185,  other  groups  have  emerged  such  as  Air  France-KLM  or 
British Airways-Iberia. Integration is hindered by the existing agreements with the USA186 
which  constitute  a  barrier  to  fully-fledged  mergers  within  Europe  and  to  capital 
movements across the Atlantic. 

The  actors  driving  integration  can,  however,  come  from  other  fields  as  is  the  case  with 
the seven BAA airports in the UK, which were taken over by the Spanish construction firm 
Ferrovial. Construction firms have had access to new activities thanks to the adoption of 
public-private  partnership  schemes.  Airports  themselves,  such  as  Frankfurt  airport 
(operated  by  Fraport)  may  have  a  wide-ranging  portfolio  of  shares  and  management 
contracts in different airports worldwide. 

Global  interests  have  also  established  beachheads  in  Europe,  most  notably  in  seaports. 
The case of an international tender to build and operate a container terminal at the port 
of  Piraeus,  near  Athens,  which  was  won  by  Cosco-Pacific,  made  the  headlines  due  to 
trade union industrial action against it. However, other Chinese or Asian companies run 
terminals in many other ports in the EU.187 

4.5: FROM NATIONAL PUBLIC MONOPOLIES TO EUROPEAN PRIVATE MONOPOLIES? 

Globalisation and decarbonisation may favour concentration, as only large firms may be 
able to carry out large research and investment programmes. It is often feared that the 
opening of markets and subsequent restructuring may result in old national monopolies 
being  replaced  by  the  predominance  of  a  short  number  of  European  firms.188 This 
perception could slow progress towards the creation of a European system that is able to 
carry  out  decarbonisation.  EU  and  national  policies  should  ensure  that  well  regulated 
competition prevails in EU transport markets. 

Over time, economies of scale and scope as well as historical advantages could lead to an 
excessive  market  concentration  in  a  few  large  firms.  In  railways  and  aviation,  the  ex-
incumbents  derive  their  strength  from  the  size  of  their  former  exclusive  markets,  from 
which they can make inroads into other markets. Moreover, public firms benefit from the 
financial  strength  of  the  Member  States  to  which  they  belong.  However,  cross-border 
penetration is not easy as other ex-incumbents use, as a means of resistance regulatory 

185  A recent agreement between Lufthansa and British-Airways/Iberia foresees the transfer of British 

Midland to the latter. 

186 Or  more  exactly  by  the  impossibility  so  far  of  reaching  an  agreement  over  the  restrictive  US  national 

ownership clauses. 

187  See ‘The corporate geography of global container terminal operators’. Theo Notteboom and Jean-Paul 

Rodrigue. 

188  For example ‘The ETF wants as a first step a moratorium on the liberalisation of transport modes since it 
only  replaces  public  monopolies  by  private  monopolies  or  leads  to  fragmentation  and  destructive 
competition to the detriment of workers’. Selected resolutions adopted at the ETF (European Transport 
Workers Federation) 2009 Congress — Ponta Delgada, 27-29 May 2009. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  261 

or de facto barriers (e.g. provision of rail safety certifications to new entrants), which are 
only  slowly  being  dismantled.  Within  passenger  transport,  public  service  obligations 
provide  a  channel  for  the  subsidising  of  firms  and  advantageous  attribution  of  rail 
contracts to incumbents, but this is seldom the case for freight transport. However, it is 
clear that regulatory barriers cannot protect inefficient firms for ever and that the need 
for public budget consolidation will drastically reduce the subsidies available for both the 
passenger and freight markets. 

lt is one of the roles of the EU and the national competition authorities to avoid abuses of 
dominant positions.189 Market forces have also their own resilience. ln this respect, it is to 
be  hoped  that  challenges  to  the  dominant  firms  could  come  from  outsiders  from  other 
transport  markets,  and  also  from  coalitions  of  consumers  favouring  small  suppliers  that 
are responsive to their needs.190 Newcomers to the sector may be able to start from niche 
positions or by better responding to customers’ needs. 

4.6: THE EFFECTS OF THE ECONOMIC CRISIS 

Europe  is  recovering  from  the  crisis  in  an  uneven  way  with  some  Member  States  still 
being  immersed  in  it.  The  economic  crisis  is,  in  the  short  term,  a  force  for  the 
consolidation  of  the  transport  sector,  as  the  weakest  actors  merge,  disappear  or  are 
taken over. Swift job transitions will help minimising the high social costs of this process. 
In  the  longer  term,  decarbonisation  threatens  the  less  energy-efficient  firms,  many  of 
which may not be able to finance large investments in low-carbon equipment. 

The  crisis  and  its  budgetary  consolidation  aftermath  have  resulted  in  high  numbers  of 
bankruptcies  and  restructurings.  Comprehensive  information  on  this  topic  is  limited, 
although  according  to  the  International  Road  Transport  Union  (IRU),  the  number  of 
bankruptcies  in  the  road  transport  sector  doubled  during  the  crisis.191 Further,  the 
International Air Transport Association (IATA) recorded losses in 2009 and after escaping 
from  them  in  2010  and  2011  expected  to  fall  in  the  red  again  in  2012 .192 The  European 
Restructuring Monitor, published by the European Monitoring Centre on Change (EMCC), 
illustrates well the severity of the crisis by listing a large number of cases of restructuring 
which were announced between 2009 and 2011. It is impossible to mention them all, not 
least because as attention concentrates on large firms SME sectors like road or IWW are 
seldom  mentioned.  Restructuring  cases  include  those  of:  Olympic  Airways,  Aer  Lingus, 
Alitalia,  Meridiana  Eurofly,  Air  France,  Czech  Airlines  CSA,  Lufthansa  Technik  Airmotive 
Ireland, Finnair Tekniikka, PKP Intercity and cargo, Cargo Slovakia, the ZSSK passenger rail 

189  In aviation, loss of competition will be fought typically through the compulsory transfer of slots free of 

charge, to be distributed among new entrants or existing competitors. 

190  The  opportunities  that  the  internet  provides  to  identify  and  consolidate  demand  for  public  transport 
and to provide tailored solutions, such as taxis, microbuses and coaches, are just starting to be explored. 

191  IRU press release: http://www.iru.org/index/en_media_press_pr/code.973/lang.en. 

192   IATA financial forecast December 2011 www.iata.orga/economics 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  262 

services of Slovakia, and ZSR the rail infrastructure company of the same country, SZDC 
the  Czech  railways,  the  Medcenter  Container  Terminal  in  the  Gioia  Tauro  port,  LOT 
ground  services,  Tirrenia,  Sea  France  Channel,  Schiphol  airport,  the  Mory  logistics  and 
courier  express  group  in  France,  the  London  Underground,  and  the  Campania  region 
public transport sector.  

Some  of  these  restructuring  events  have  been  solved  through  agreements,  involving 
natural  departures,  voluntary  redundancies,  restructuring  fund  subsidies  or  a  gradual 
implementation, while others gave rise to strikes.193  

The  severe  budgetary  and  financial  crisis  in  some  Member  States  has  greatly  increased 
the  need  for  restructuring  within  their  transport  sectors  as  the  room  for  national 
budgetary support to the sector has been drastically reduced. The Union is assisting these 
implement  their  National  Reform  Programmes  or  the  EU/IMF/ECB 
countries  to 
programmes  which  generally  include  transport  reforms.  Examples  of  the  latter  are  the 
intended  restructurings  of  the  Hellenic  railways  organisation,  the  Romanian  railways 
reform  (infrastructure,  passenger  and  freight  services)  and  of  the  Portuguese  rail 
passenger  services  (Comboios  de  Portugal) or  those  of  the  Lisbon underground and the 
Lisbon public transport company. 

In  recent  times  some  good  news  concerning  job-creating  expansion  restructurings  are 
becoming more common, notably for the aviation sector: Lufthansa, TNT Airways, Virgin 
Atlantic,  Southend  airport  Essex  or  the  Frankfurt-airport  operator  Fraport.  Geodis  and 
Keolis, two subsidiaries of SNCF are also planning important recruitment operations. 

Due  to  the  preceding  economic  euphoria,  many  transport  firms  entered  the  crisis  with 
plenty  of  cash  resources,  even  taking  into  account  record  oil  prices  in  2008,  and  many 
aviation low-cost carriers and ports and airports even benefited during the crisis. On the 
other  hand,  many  SMEs  in  the  road  transport  and  inland  waterways  sectors  have  felt 
squeezed by the 2008 credit crunch and its repercussions. 

In the aftermath of the crisis, the credit crunch and the weak market demand are in many 
cases followed by a public subsidy scarcity affecting transport companies which relied on 
them for their daily operations. Public infrastructure expenditure will also be cut down as 
a  result  of  deficit  avoiding  recovery  plans  while  some  pieces  of  infrastructure  such  as 
some  regional  airports  are  partially  or  totally  shut  down  as  their  subsidised  operation 
cannot be afforded.  

ln  general,  the  crisis  has  had  a  larger  impact  on  freight  transport  than  on  passenger 
transport,  which  always  remains  more  constant  within  the  business  cycle.  Within  the 
transport sector, the cheaper alternatives, such as the low-cost airlines and coaches, have 
experienced an increase in demand, to the detriment of more expensive suppliers. Within 
freight transport, the transport of fuels has also resisted the crisis well. 

193  ERM Quarterly, issue 1, Spring 2010. 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  263 

Conversely,  however,  the  crisis  has  aggravated  the  situation  in  long-distance  ocean 
transport,  where  even  before  the  crisis  there  were  indications  of  serious  future 
overcapacity.  This  structural  overcapacity  (estimated  to  be  as  much  as  20 %)  is  likely  to 
materialise as the recovery starts and could ensure years of fierce competition and low 
maritime transport prices, which would further push the process of globalisation. 

4.7: EXISTING PRACTICES IN RESTRUCTURING 

lt is often difficult to identify good practices in restructuring from a social point of view 
and even more within the transport sector. This is in part due to the fact that the initial 
effects of a restructuring event are often detrimental to those involved.  

In both the rail and aviation sectors, new entrants to the sectors are a source of jobs. In 
aviation, the strong growth in activity, which is resuming after the 2008-2009 downturn 
has  allowed  firms  to  redeploy  workers  into  other  jobs  or  companies,  although  working 
conditions may have deteriorated for some. In road transport and in seaports, firms keep 
a core of workers, which preserves corporate knowledge. However, a general trend in the 
entire  transport  sector,  except  aviation,  is  that  this  knowledge  is  ageing  with  the 
workforce. 

Substantial restructuring has already taken place in aviation, with the emergence of the 
low-cost carriers, which now control 30 % of scheduled flights. As air transport has grown, 
redundancies from the companies that have gone bankrupt have, to some extent, been 
absorbed by other companies. 

Within  railways,  restructuring  has  often  taken  place  through  early  retirement,  by  not 
replacing staff taking retirement or by redeployment to different jobs in the group. There 
have also been voluntary departures, sometimes to other railway companies. Compulsory 
redundancy has been used only rarely normally with fairly large severance payments.194 In 
many  instances,  the  civil-servant  status  of  railway  workers  has  meant  that  forced 
redundancies  have  been  avoided.  This  has  increased  the  average  age  of  the  staff  and 
threatens the transfer of knowledge within the firm. 

Further, road and maritime transport firms have recourse to contracting forms that are 
relatively flexible. Road transport companies use subcontractors while maritime transport 
companies  employ  workers  from  non-EU  countries,195 which  can  be  dismissed  relatively 
easily,  compared  with  workers  from  EU  Member  States.  In  seaports  there  is  a  wide 
variety of solutions, often based around a public or private ‘pool’ of permanent dockers 
supported  by  temporary  or  casual  workers  or  by  transport  company  employees.  The 

194   See the report of the Joint European Group CER—ETF ‘Freight business restructuring and its impact on 

employment’ of February 2009, funded with the support of DG EMPL/F/1, Page 65. 

195  About 50 % of foreign seafarers on EU-flagged ships come from the Philippines; other important labour 

supplier countries are the Ukraine and Russia (EMSA). 

 
 
 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  264 

adjustment resulting from the crisis has been borne by temporary workers, particularly as 
most ‘pool’ workers cannot be dismissed. 

Within  freight  transport,  road  is  also  a  ‘dual’  sector,  consisting  of  some  large  and 
medium-sized enterprises on the one side and a thinly atomised sector on the other, from 
which fluidity derives the whole road sector its strength. Logistics operators subcontract 
large numbers of individual drivers, with which they can dispense if the business climate 
worsens, while they retain their core fleet. The enlargement of the EU has allowed drivers 
from  new  Member  States,  often  working  for  delocalised  old  Member  State  firms,  to 
provide services to large shares of the international road transport market. 

4.8: EU ACTIONS TO SOFTEN THE SOCIAL EFFECTS OF RESTRUCTURING 

Restructuring results in labour mobility and job transitions. Even though restructuring is 
dealt  with  by  individual  Member  States  and  the  social  partners,  the  EU  should 
nevertheless  ensure  that  restructuring  does  not  involve  a  drop  in  the  quality  of  the 
service  and  in  working  conditions.  The  EU  can  facilitate  restructuring  and  reduce  its 
negative consequences in different ways: 

●  by increasing the employability of workers; 

●  by making sure there is no race to the bottom in working and safety conditions; 

●  by making sure that an acceptable level of competition is upheld; and 

●  by  providing  a  gradual  phase-in  of  measures  that  may  have  a  social  impact,  so  that 

firms can prepare themselves for these changes. 

One important element that ensures the employability of workers is providing them with 
certificates that acknowledge their qualifications and facilitate their labour mobility. The 
EU  has  legislation  covering  the  issuing  of  licences  and/or  certificates  for  the  different 
modes  of  transport.  In  the  case  of  maritime  transport,  EU  inspectors  assess  whether 
training  and  certification  by  EU  and  non-EU  countries  is  carried  out  at  the  appropriate 
levels. An effort to provide training has to be made to compensate for the ageing of the 
population  and  the  need  to  keep  up  with  rapid  technological  change.  However,  in  a 
number  of  cases,  training  is  controlled  by  ex-incumbents  which  creates  difficulties 
relating to the entry of new firms into the transport markets. Moreover, existing training 
centres  have  a  national  orientation:  greater  weight  should  be  given  to  the  ability  to 
operate in international environments.196 

196  A 2007 study, ‘Rail training 2020. Training needs and offers in the European railway area. The next 10 - 
15 years’,  on  the  evolution  of  skills  and training  in  the  railway  field provides  insights that can  also be 
relevant 
transport. 
http://ec.europa.eu/transport/rail/studies/doc/2007_rail_training_2020.pdf. 

training 

modes 

other 

for 

of 

in 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  265 

Measures  that  contribute  to  creating  a  level  playing  field  in  the  social  area  within  and 
between the different modes of transport include the following: 

●  in road transport, which has a large turnover of firms due to low entry barriers, the EU 
has  raised  the  requirements  for  the  access  to  the  profession.  It  has  also  harmonised 
training requirements, working times, rest periods and driving hours. Market opening 
towards  the  new  Member  States  has  been  gradual  and  the  freedom  to  provide 
cabotage services has been subject to some restrictions; 

●  for rail transport, there is also legislation on driving and rest periods for engine drivers; 

●  in maritime transport, the 2006 ILO Maritime Labour Convention laying down rules on 
recruitment  and  the  working  conditions  of  seafarers  has  been  transposed  into  EU 
legislation following an EU social partners’ agreement;197 and 

●  in  aviation,  safety  rules  define  working  and  rest  periods  as  well  as  the  health  and 

professional conditions of pilots and crew members. 

EU social policy measures are generally introduced gradually with phasing-in periods and 
derogations  for  special  cases.  Moreover,  studies  and  reports  are  requested  after  the 
introduction of the measures, to ensure that they are functioning in a socially acceptable 
way. Ex-post evaluation of past measures is now being added to existing ex-ante impact 
assessments, which in their turn will pay much more attention to the social dimension. 

The need of restructuring a firm or of closing it is not always derived from the effects of 
competition  in  the  market  and  is  not  always  unexpected.  In  the  context  of  public 
procurement  of  services,  or  similarly  regulated  situations  between  private  firms,  the 
restructuring or even the closure of contractor firms takes place on a regular basis when 
the  contract  expires  and  a  new  service  supplier  is  sought  through  competition  ‘for  the 
market’. The situation for the workers involved does not differ much from that of workers 
subject to other kinds of restructuring. In some cases EU legislation opens clearly the way 
for a transfer of staff between the old and the new supplier, this is the case of Regulation 
1370/07 on public passenger transport services. In other cases this may remain subject to 
the more general provisions of Directive 2001/23/EC on the transfer of undertakings to 
the  extent  that  they  apply.  Public  authorities  –  often  at  local  and  regional  level  –  are 
directly or indirectly responsible through public enterprises or the granting of concessions 
for  a  sizeable  share  of  employment  in  the  service  sectors.  Further  to  their  general 
responsibility  for  the  economy,  they  should  ensure  the  conditions  for  the  smooth 
transmission  of  knowledge  and  the  best  use  of  the  existing  workforce  of  the  sectors  of 
which they are in charge. This is particularly important at the moment of the renewal of 
concessions or when any divestment is foreseen. 

197  Council Directive 2009/13/EC as shown in: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009L0013:EN:NOT 
following the agreement between ETF and ECSA. 

 
 
 
 
 
 
 
                                                       
 
 
 
Restructuring in Europe  266 

4.9: OBJECTIVES FOR THE FUTURE 

The objective for restructuring within the transport sector could be to develop a large and 
competitive  and  socially  inclusive  European  market,  in  which  a  substantial  number  of 
firms  are  robust  enough  to  finance  the  IT,  energy  and  logistic  improvements  needed  to 
become competitive low-carbon firms and in which a significant number are large enough 
to invest in research. 

From a social point of view, transport employees should enjoy the degree of job stability 
needed  to  achieve  an  acceptable  reconciliation  of  work  and  private  life  and  to  ensure 
their  commitment  to  the  job,  which  is  crucial,  to  increase  their  productivity  and 
innovative capacities. Their skills and competences will need to be regularly upgraded to 
keep  up  with  innovation  and  facilitate  their  mobility.  Given  the  intensive  competition 
expected between firms in the years to come, job stability in the transport sector should 
include  a  ‘flexicurity’  approach,  where  changes  in  job  content  could  be  introduced, 
including  in  conjunction  with  other  firms,  preferably  within  the  same  profession  and 
within the wider transport, logistics and travel sector. 

If  the  completion  of  the  internal  market  in  transport  is  to  be  achieved,  further  cases  of 
restructuring look likely in the future. As announced in the White Paper ‘Transport 2050’ 
these include restructurings resulting from the expected opening of domestic passenger 
railways  and  road  cabotage,  the  current  gradual  obligation  to  tender  out  public  service 
contracts for rail, and the possible development of improved access to port services. In all 
of these cases, the essential element is to deliver good-quality services, in particular for 
those measures that improve the commercial attractiveness of rail and navigation as low-
carbon transport modes. The right consideration of the human dimension (e.g. quality of 
jobs  and  work)  will  be  crucial  to  deliver  those  high  quality  services,  even  more  so  in  a 
context of increasing skill shortages. 

From  a  horizontal  point  of  view,  the  issue  of  training  should  be  a  priority  in  terms  of 
meeting  the  challenges  of  climate  change,  ageing  and  globalisation.  Frequent 
restructurings  and  high  labour  mobility  makes  on-the-job  training  both  more  necessary 
and  less  likely.  It  makes  it  more  necessary  because  adaptability  of  workers  has  to  be 
enhanced to cope with new technologies and organisational changes. However, it makes 
it less likely because firms have little incentive to finance the training of workers who may 
soon leave them. Therefore, significant efforts have to be made in the field of training, in 
collaboration  with  the  social  partners  and  the  Member  States,  with  the  objectives  of 
increasing the supply of skilled labour (by means of lifelong learning and gender balance-
oriented  training)  and  by  adapting  skills  to  emerging  needs,  such  as  green  energies,  IT, 
logistics, ability to deal with elderly or reduced mobility passengers, and languages. 

With a view to the decarbonisation of transport while enhancing the competitiveness of 
the  sector,  the  transport  sector  seems  to  have  significant  opportunities  to  increase  its 
productivity, not least to make up for a shrinking labour force. These will stem from an 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  267 

accelerated  dissemination  of  information  and  communication  technologies  and  from  a 
combination  of  policies  allowing  better  access  to  markets,  better  provision  of 
infrastructure  and  a  more  efficient  use  of  it.  A  sector  that  is  able  to  generate  healthy 
growth will also be able to finance the technological improvement needed for a change 
towards  a  low-carbon  economy.  For  these  developments  to  take  place  smoothly  and 
effectively,  the  cooperation  of  the  social  partners  is  essential,  notably  in  respect  of  the 
provision of human capital and its swift reallocation where it is most needed at the lowest 
social cost. 

All  sectors  operate  within  the  framework  of  European  industrial  policy  and  this  is 
therefore  an  important  area  of  consideration,  and  one  that  is  inextricably  linked  to 
employment  policy.  The  next  section  of  this  chapter  therefore  looks  at  the  future  of 
industrial  policy  and  what  this  might  mean  for  EU  labour  markets,  based  on  a  recent 
European Commission Communication. 

5: THE FUTURE OF INDUSTRIAL POLICY 

5.1: AN INTEGRATED INDUSTRIAL POLICY FOR THE GLOBALISATION ERA 

Ensuring that the EU economy is capable of facing the challenges that the future is likely 
to bring is a key concern, particularly in the light of the economic crisis that is still ongoing 
in  many  EU  countries.  Strengthening  the  competitiveness  of  the  EU  economy  and 
enabling it to provide growth and jobs therefore needs to be at the centre of EU industrial 
policy, along with the goal of enabling a transition to a low-carbon and resource-efficient 
economy. 

To this end, the European Commission issued in October 2010 its Communication entitled 
An  integrated  industrial  policy  for  the  globalisation  era.  Putting  competitiveness  and 
sustainability at centre stage.198 

In this document, the Commission outlines its approach to industrial policy, stating that it 
will put the competitiveness and sustainability of European industry at centre stage. The 
overall approach is characterised by the following strands: 

●  bringing together a horizontal basis and sectoral application. All sectors are important 
and it will continue to apply a tailor-made approach to all sectors. However, there will 
also be coordinated European policy responses; 

●  the whole value and supply chain will be considered, from access to energy and raw 

materials to after-sale services and the recycling of materials, some parts of which will 
be outside Europe; and 

198  An  integrated  industrial  policy  for  the  globalisation  era.  Putting  competitiveness  and  sustainability  at 

centre stage. COM(2010) 614: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0614:FIN:EN:PDF. 

 
 
 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  268 

●  regular reporting by the Commission on the EU’s and Member States’ competitiveness 

and industrial policies and performance. 

5.2: IMPROVING THE FRAMEWORK CONDITIONS FOR INDUSTRY 

There is still significant scope for better regulation at the EU and national level, despite 
the existence of a well-developed body of EU legislation and regulation. In particular, it is 
essential to move towards smart regulation, which comprises the following elements: 

●  competiveness  proofing  of  policy  proposals  as  part  of  the  Commission's  integrated 

Impact Assessment process; and 

●  ex-post evaluation of the effects of legislation on competitiveness. 

Further, Member States need to make increased and more systematic efforts to reduce 
the  administrative  burden,  pursue  better  regulation  and  e-government  policies  and  to 
simplify  support  schemes  in  order  to  help  smaller  businesses.  Although  much  progress 
towards  creating  a  better  business  environment  for  SMEs  has  been  made  through 
initiatives  such  as  the  Small  Business  Act  and  certain  components  of  the  EU’s  Lisbon 
Strategy, it is necessary to continue to improve the business environment for SMEs. 

Access to finance has been identified by the majority of EU Member States as a significant 
barrier  to  growth,  particularly  in  the  case  of  SMEs.  Credit  availability  is  still  not  back  to 
normal following the crisis, and financial markets remain risk averse. The Commission has 
established an SME Finance Forum in order to try to find new solutions to ensure access 
to finance for businesses, and in particular SMEs. 

5.3: INDUSTRIAL INNOVATION 

Innovation is a key driver for productivity, increased energy and material efficiency, the 
improved  performance  of  goods  and  services  and  the  generation  of  new  markets. 
However,  Europe  needs  to  be  better  at  turning  its  excellence  in  ideas  into  marketable 
goods  and  services  and  therefore  industrial  innovation  policy  should  encourage  faster 
development and commercialisation of goods and services and ensure that EU firms are 
first  into  the  market.  In  particular,  there  is  an  urgent  need  for  better  coordination  of 
education, research and development and innovation efforts, more coherence in science, 
technology and innovation cooperation with the rest of the world, a global approach to 
societal  challenges,  the  establishment  of  a 
level  playing  field  for  research  and 
development  and  innovation,  an  enhanced  access  to  finance  and  risk  capital,  and  an 
appropriate focus on both competitiveness and societal challenges. 

There  is  also  a  need  to  improve  skills  and  strengthen  the  share  of  technology  and  skill-
intensive  activities.  Further,  an  improved  use  of  ICT  will  be  essential  for  future 
competitiveness. 

In order to encourage industrial innovation, the Commission intends to put into place a 
range  of  activities  to  promote  the  use  of  technology,  to  encourage  industrial  research, 
development and innovation, to bring together higher education and businesses in order 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  269 

to  improve  the  skills  of  Europe’s  workforce,  to  promote  new  business  concepts,  and  to 
develop greater cross-fertilisation between sectors. 

5.4: IMPROVING THE EU’S SKILLS BASE 

Modernising  the  skills  base  of  Europe’s  workforce  —  including  making  sure  that 
employees  have  the  skills  and  knowledge  to  cope  with  technological  and  information 
technology  change  —  is  one  of  the  Commission’s  key  policy  objectives.  This  can  be 
achieved  in  a  number  of  ways:  upskilling  of  the  workforce,  improving  the  employment 
rates  of  certain  groups  such  as  young  people,  older  workers,  refugees,  women  and 
migrants already legally present in the Member State, increasing retirement age, as well 
as improving free movement of EU citizens. 

Although  there  is  high  unemployment,  European  industry  is  still  struggling  to  find 
employees  who  have  the  necessary  skills  to  fill  their  vacancies,  and  the  EU  therefore 
needs  to  address  this  skills  mismatch.  This  is  even  more  urgent,  given  the  fact  that 
modernising industrial structures will mean that in the future, new skills will be needed 
and  career  shifts  will  be  more  frequent.  Workers  therefore  need  support  in  managing 
these  processes  successfully,  and  there  needs  to  be  closer  coordination  between 
national,  regional  and  local  governments,  with  a  strong  involvement  of  the  social 
partners.  There  also  needs  to  be  close  coordination  between  the  public  sector  and 
industrial partners in the area of education and training policies, with a focus in particular 
on  increasing  the  number  and  quality  of  science,  technology,  engineering  and  maths 
(STEM) graduates. 

In order to promote the skills development of the EU workforce, the Commission intends 
to  encourage  the  networking  of  Member  States’  industry,  education  and  employment 
authorities, with a view to the sharing of information and best practice on labour markets 
and skills strategies. It will also propose guidance principles on framework conditions for 
job creation, looking in particular at the development of graduates in science, technology, 
engineering and maths. 

For a comprehensive discussion of skills and competences, see chapter 2. 

5.5: TACKLING STRUCTURAL EXCESS CAPACITIES 

An  important  priority  of  the  EU’s  new  industrial  policy  must  be  to  help  EU  industry  to 
recover  swiftly  and  to  make  the  necessary  adjustments  after  the  economic  crisis.  In 
particular, the Commission believes that the emergence of what it terms structural excess 
capacities  in  some  industries  requires  tailor-made  responses  at  company  level,  ranging 
from engaging in new business models and products to definite market exit. 

Companies and social partners have the primary responsibility for restructuring to ensure 
their future competitiveness and viability, since experience has shown that competitive-
driven structural adaptation is quickest and most efficient. Member States also need to 
support reallocation of labour, within the framework of a flexicurity system. In particular, 
better anticipating and managing restructuring would help employees and companies to 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  270 

adapt  to  transitions  imposed  by  excess  capacities  as  well  as  by  modernisation  and 
structural adjustment. Existing State aid rules offer Member States ample possibilities to 
use  state  aid  to  accompany  change,  eg  through  training.  In  addition  to  this,  at  the 
European  level,  the  Regional  and  Cohesion  Funds  can  stimulate  investment  and 
innovation to strengthen the resilience of local economies. 

Further, an expanded European Globalisation Adjustment Fund will also help to improve 
the ability of Member States and regions to manage the consequences of the crisis and 
help  to  provide  retraining  and  other  active  labour  market  measures  aimed  at  helping 
redundant workers to find alternative employment. See also chapter 3. 

5.6: THE ROLE OF MANAGEMENT AND WORKER REPRESENTATIVES 

The  role  of  management  and  worker  representatives  when  anticipating  and  managing 
restructuring  is  particularly  important,  as  is  their  interaction  with  each  other.  Most 
specifically,  management  and  workers’  representatives  are  the  key  players  to  agree  on 
restructuring  strategies  at  the  company  level.  Policy  interventions  should  accompany 
such restructuring to avoid social hardship and promote new skills and jobs, thus avoiding 
mass lay-offs and the decline of entire regions or the delocalisation of entire industries, 
and facilitating economic reconversion and professional transitions. 

The ETUC, Business Europe, CEEP and UEAPME have worked on a draft joint text, entitled 
Orientations  for  reference  in  managing  change  and  its  social  consequences  in  2003 
without  having  reached  a  formal  agreement  on  it  (see  chapter  7  for  more  details). 
However,  the  Commission  believes  that  these  orientations  need  to  be  revisited  to 
integrate  knowledge  subsequently  accumulated  on  the  best  ways  to  anticipate  and 
manage  restructuring  and  to  take  into  account  the  experience  of  the  economic  and 
financial crisis. Updated orientations on restructuring could be very useful in reinforcing 
the  capacity  of  businesses  and  the  workforce  to  adapt  to  a  fast-changing  economic 
environment. 

Box 6.5: Commission commitments on the anticipation and management of 
restructuring 

The Commission makes a number of commitments in the framework of a strategy to 
develop the anticipation and management of restructuring. These are to: 

●  review  Community  support  for  re-integrating  redundant  workers  into  new  jobs 
including  through  the  review  of  the  European  Globalisation  Adjustment  Fund 
(EGAF) regulation (2011); 

●  launch a consultation on restructuring; 

●  review the Rescue and Restructuring Guidelines for State Aid (2012); 

 
 
 
 
 
 
 
 
Restructuring in Europe  271 

●  support Member States and regions through Cohesion Policy in the diversification 
of  existing  industries,  upgrading  industrial  capacity,  stimulating  investment  and 
innovation to re-develop and strengthen the resilience of local economies; 

●  present  proposals  to  accelerate  the  implementation  and  improve  the  focus  of 
European  Structural  Funds  through  the  Fifth  Cohesion  Report  (2010)  and  in  the 
new Cohesion policy regulatory framework (2011). 

5.7: TOWARDS A NEW EU GOVERNANCE FOR INDUSTRIAL POLICY 

Although  the  crisis  has  shifted  the  focus  of  industrial  competitiveness  policies  towards 
short-term  rescue  and  recovery  actions,  it  is  clear  that  the  future  attention  of  policy 
makers  must  focus  on  long-term  structural  challenges,  largely  on  maintaining  global 
competitiveness,  climate  change,  energy,  the  ageing  of  the  population,  skills  and 
knowledge. Delivering this strategy calls for more effective European governance and in 
particular for coordinated European policy responses, focused in particular on: 

●  a holistic and better-coordinated vision of policy-making at EU level, including 

competitiveness proofing of new policy proposals; and 

●  closer cooperation with Member States and more monitoring of the success and 

competitiveness performance of policies at EU and Member State level. 

The exchange of best practice will be an important part of this process. The types of areas 
that are particularly suitable for this are the reduction of the administrative burden and 
assessment  of  impacts  of  competitiveness,  ‘fitness  checks’  and  ‘think  small  first’  in 
national  legislation,  policies  to  facilitate  access  to  finance,  key  strategies  in  connection 
with industrial needs and in the design of national industrial policies, particularly in the 
case of individual sectors and the involvement of stakeholders. 

It is hoped that this new approach to industrial policy will help businesses and investors 
to engage in profitable, sustainable and job-creating industrial production in the EU and 
improve international competitiveness. This would help Europe’s industry to benefit from 
the  fast-growing  world  market  provided  by  globalisation.  It  is  also  important  that 
industrial policy is sustainable and the next section of this chapter therefore examines the 
principle of a sustainable industrial policy. 

5.8: SUSTAINABLE INDUSTRIAL POLICY 

The  Commission’s  Directorate  General  for  Enterprise  and  Industry  (DG  ENTR)  is  actively 
engaged in helping to develop and deliver policies and instruments to facilitate economic 
and  social  adaptation,  through  its  Sustainable  Industrial  Policy.199 DG  ENTR  is  concerned 
with restructuring and adaptation to change from two perspectives. 

Commission Communication on Sustainable Consumption and Production and Sustainable Industrial 

199 
Policy Action Plan, COM(2008) 397/3: http://ec.europa.eu/environment/eussd/pdf/com_2008_397.pdf. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  272 

First,  DG  ENTR  is  working  to  ensure  fair  treatment  for  Europe’s  energy-intensive 
industries in the context of the Emissions Trading system (ETS). One of the main priorities 
is  to  find  an  equitable  solution  that  helps  the  EU  meet  both  its  climate  and 
competitiveness imperatives. This is compatible with DG EMPL’s ambition to secure smart 
restructuring for the future, within the framework of smart growth, which is one of the 
focuses of the EU’s 2020 strategy. Second, DG ENTR is also charged with ensuring optimal 
framework  conditions  for  Europe’s  environmental  goods  and  services  industries.  These 
industries  are  expanding  rapidly  and  will  provide  much  of  the  future  employment  and 
economic  growth  that  EU  economies  and  citizens  need.  However,  these  industries  face 
stiff competition from abroad. 

The Commission and Member States therefore need to ensure that the right policies are 
developed  and  implemented  to  help  them  thrive.  Europe  needs  to  ensure  that  it 
responds positively to change in this context by ensuring that EU workers have new skills 
for new jobs and encouraging greater movement of more of the EU’s economic resources 
(notably workers and capital) to these fast-growing sectors. 

The  Commission  recognises  that  the  two  most  pressing  challenges  facing  industry  and 
policy makers today are how to grow Europe’s economies and create jobs while making 
the  transition  to  a  more  resource-efficient  economy,  as  noted  in  the  Commission’s 
October  2010  Communication  on  industrial  policy  (see  above).  European  industry  is 
already responding to this challenge and shifting to more sustainable ways of production 
in many sectors. The challenge for policy makers is to facilitate the necessary transition 
with consistent policies. These policies must not overburden industry while creating the 
legal certainty required to help companies deliver innovative products and technological 
solutions to environmental challenges. 

Main principles guiding Commission policy in restructuring and industrial change 

The guiding principles of the Commission’s work in relation to restructuring and industrial 
change should be: Confidence, Certainty and Coherence: 

●  first,  in  view  of  the  fragility  of  the  economic  recovery,  it  is  important  that  Europe 
develops and articulates a more ‘can do’ attitude. Businesses and consumers thrive on 
confidence and suffer from doubt and uncertainty. It is therefore imperative that the 
EU  sets  out  a  positive,  proactive  change  agenda  to  secure  the  recovery,  build  on  its 
strengths and successfully marry competitiveness and climate imperatives; 

●  second, industry needs to plan ahead and requires as much legal certainty and clarity 
as possible. It needs to have clear, consistent and well-signalled policies and is entitled 
to expect fair treatment from policy makers in this respect and to be given reasonable 
timeframes to adjust to new targets or objectives. This is particularly important in the 
context of the green economy, where much capital-intensive investment is required to 
seize  emerging  opportunities.  In  view  of  the  difficulties  companies  currently  face  in 
accessing  appropriate  finance  and  the  speed  with  which  competitors  in  the  US  and 
Asia are moving in markets such as solar energy, it is crucial that the EU commits to 

 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  273 

long-term visions (such as the 20 % renewable energy target by 2020200) and delivers 
realistic roadmaps outlining the steps to be taken to achieve them. That is why a clear 
and  reasoned  restructuring  agenda  supported  by  realistic  targets  and  accompanying 
actions is important; and 

●  third, the EU needs joined-up, holistic, coherent policies that facilitate the transition to 
a  more  sustainable  economy  and  avoids  setting  contradictory  objectives  in  different 
policy  spheres.  This  is  of  course  easier  said  than  done,  as  has  been  seen  with,  for 
example,  the  phasing-out  of  environmentally  harmful  subsidies  for  the  coal  industry 
and the difficulty of explaining to fishermen why they have to sacrifice their livelihoods 
to  protect  a  resource.  But  to  be  credible  and  successful,  the  EU  does  need  to  avoid 
silo/compartmentalised thinking in different policy spheres and ensure that its policies 
complement  rather  than  contradict  each  other  in  the  restructuring  context  as 
elsewhere. 

In  terms  of  specific  policy  domains  that  offer  the  greatest  potential  to  improve 
competitiveness, facilitate a more sustainable economy and proactively anticipate change 
and  restructuring,  the  EU  needs  to  focus  particularly  on  developing  talent  in  order  to 
foster innovation. For example, environmental skills need to be developed and promoted. 
Europe  needs  to  equip  its  labour  force  with  new  skills  for  new  green  jobs  and  deliver 
structural reforms and a better-integrated internal labour market in the green economy. 
Initiatives  also  need  to  be  taken  at  national  level,  particularly  in  the  field  of  education. 
Further,  as  the  adverse  effects  of  restructuring  and  globalisation  make  some  skills 
obsolete, workers must be retrained to exploit opportunities in the environmental sector. 
Specific actions aimed at promoting green jobs and providing society with the necessary 
green skills could be progressively integrated into EU employment policies. These could 
include  mapping  current  training  needs  and  identifying  gaps  and  possible  solutions  for 
dealing  with  them.  Eco-innovation  is  a  process  which  encompasses  change  to  business 
practices, technologies, products and processes201 which move towards cleaner and more 
energy  and  resource-efficient  products  and  processes.  And  it  is  a  key  instrument  to 
improve competitiveness in a way that does not jeopardise living standards in a resource-
constrained environment. 

However, eco-innovation faces specific barriers, such as a constantly evolving regulatory 
framework,  inconsistent  incentives  and  subsidies  and  a  lack  of  adequate  structures, 
networks,  and  sources  of  funding.  This  calls  for  the  development  of  an  integrated  and 
important  complement  to  the 
comprehensive  EU  eco-innovation  strategy  as  an 

200  The EU climate and energy package: http://ec.europa.eu/environment/climat/climate_action.htm. 

201  One  official  definition  is  available  in  the  Community  Guidelines  on  State  Aid  for  Environmental 

Protection, (2008/C 82/01). . 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  274 

Innovation  Union  flagship 
programmes available in the EU that aim to promote environmental skills. 

initiative. 202  Box  6.6  below  gives  an  overview  of  the 

Box 6.6: Programmes to promote environmental skills 

A study issued in 2010203 looked at environmental skills programmes in six European 
countries:  the  UK,  the  Netherlands,  Italy,  Germany,  Bulgaria  and  Poland.  It  found 
considerable  variety  among  Member  States 
in  terms  of  the  existence  of 
environmental  skills  programmes.  Usually,  however,  firms  are  at  the  frontline  of 
developing green skills — often through in-house training to their staff in response to 
a business need. 

There is an even mix of courses that cater for the high-, medium- or low-skilled. The 
most common method of financing environmental skills programmes is usually a mix 
of  public  and  private  finance  as  there  is  considerable  public  funding  of  skills 
programmes conducted in partnership with companies. 

This report offered the following conclusions: 

There is a mix of skills being targeted by environmental skills programmes 

Environmental  programmes  target  the  full  range  from  low-skilled  through  medium- 
to  high-skilled  audiences.  These  programmes  tend  to  be  driven  by  employment 
demand  and  by  the  implementation  of  environmental  legislation  that  requires 
sectors  to  train  staff  to  meet  new  or  stricter  regulation.  The  actual  content  of 
trainings  and  programmes  varies  across  industries  and  is  often  tailored  to  specific 
companies.  A  common  thread  is  the  ‘soft’  skills  programmes,  aiming  to  raise 
environmental awareness, and provide training which improves environmental skills 
for every day use. 

Green skills provision is relatively less mature than other skills provision areas 

In countries across Europe, skills provisions programmes have been mainly targeted 
at traditional jobs and traditional skills over the past years. Indeed, even green skills 
programmes often target such traditional jobs, but placing an emphasis on the extra 
green  elements  of  a  job  that  must  be  learned  to  be  able  to  contribute  to  a  low-
carbon economy. Given that the emphasis on green skills as a specialisation has been 
recently  coming  to  the  fore,  and  is  especially  focused  on  the  ecological  industries 
such as waste management, renewable energies etc., the maturity of the specialist 

202  Part of the Europe 2020 strategy, the Innovation Union will attempt to improve framework conditions 
and access to finance for research and innovation so as to strengthen the innovation chain and boost 
levels of investment throughout the Union. 

203  Programmes  to  promote  environmental  skills.  Final  report.  Ecorys  Research  and  Consulting.  For  the 

European Commission, DG Environment. June 2010. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  275 

green  skills  programmes  is  increasing  but  remains  behind  those  programmes 
targeting traditional skills. 

Recognised need for green skills training across Member States 

Based  on  the  case  studies  presented  in  this  report,  it  is  clear  that  the  majority  of 
people recognise the need for green skills training and its importance in facilitating 
green growth. The importance that stakeholders attach to green skills development 
differs  between  Member  States;  however  the  conclusion  that  can  be  drawn  is  that 
environmental skills programmes are found in every country studied in this research 
with  both  public  and  private  sector  involvement.  Nevertheless,  financing  of 
environmental skills programmes varies between countries. 

Firms  are  large  investors  in  green  skills,  supported  by  national  and  European 
funding 

Firms  are  at  the  frontline  of  developing  green  skills  —  as  they  provide  in-house 
training  to  staff  throughout  different  sectors  of  the  economy.  Large  companies  in 
ecological industries in particular have ongoing learning opportunities for their staff 
that are linked to sustainability in a number of different formats. 

Some countries are further advanced than others 

The UK is a country where the needs of a green economy have been analysed more 
than elsewhere: for example, there has been much research on what skills gaps exist 
and how they can be filled. In the short term it is recognised that some of the gaps 
will  have  to  be  filled  in  with  migrant  workers  who  have  such  skills  and  more 
investment  is  needed  to  develop  technical  and  other  green  skills  in  the  long  term. 
Other  countries  have  less  well-established  green  politics,  and  therefore  also  lag  in 
terms of the supply of environmental skills programmes. 

Qualifications from programmes are usually not universally recognised 

Many  environmental  programmes  do  not  have  universal  recognition  for  the 
qualifications  participants  receive.  Accreditation  and  other  similar  initiatives  may 
help increase the mobility of green-skilled workers. Especially at the sectoral level, 
accreditation is something that could be approached more consistently, which would 
take  away  a  barrier  to  allowing  the  labour  market  to  flow  to  where  demand  for 
certain skills exist. 

5.9: ENERGY-INTENSIVE INDUSTRIES AND INTERNATIONAL ASPECTS 

The  EU  must  also  be  ever  mindful  of  the  external  competitiveness  implications  of  its 
actions, as European industries have to thrive or strive in the global arena. That is why the 
EU needs an ambitious, fair and balanced international agreement on climate change and 
progress towards a truly global carbon market. Indeed, without global carbon pricing in 
some  form  there  will  be  imbalances  in  cost-sharing  that  will  distort  competitiveness, 

 
 
 
 
Restructuring in Europe  276 

leading  to  political  difficulties  and  a  slowdown  of  progress  towards  an  eco-efficient 
economy204. 

The EU has to strike a fine balance between leading from the front in terms of its climate, 
energy and industrial policies and not putting its industries at a competitive disadvantage. 
There  are  benefits  to  be  gained  from  continuing  to  move  first  and  quickly,  in  order  to 
industries.  Competitive  advantage  will  belong  to  those 
grow  EU  environmental 
economies that adapt earliest to the challenges of the changing fundamentals. And it is 
the  relative  pace  of  green  growth  that  will  determine  competitiveness,  not  only  the 
setting of green growth as an objective. 

However,  Europe  also  needs  an 
industrial  and  climate  policy  that  promotes 
environmentally friendly innovation without leading to industrial outsourcing and the loss 
of jobs and prosperity. And just as there is no place in the 21st century for an industrial 
policy which is pursued at the expense of the environment, there is also no place in the 
competitive  global  economy  for  an  environmental  policy  that  unnecessarily  drives 
industry  and  jobs  out  of  Europe  to  pollute  the  environment  elsewhere.  That  does  not 
make any sense from an economic or environmental perspective. 

That  is  why  the  revised  Emissions  Trading  System  (ETS)  Directive  includes  a  number  of 
implementing provisions that will reduce the risk of carbon leakage. The EU ETS Directive 
(2003/87/EC)  was  amended  in  2009  by  Directive  2009/29/EC.  The  design  changes  will 
apply  as  of  the  third  trading  period,  which  will  begin  in  2013  and  run  until  2020.  The 
amended Directive contains a range of measures to be adopted by the Commission after 
agreement  by  the  Member  States.  The  EU  ETS  intends  to  drive  investment  into  low-
carbon technologies by putting a price on each tonne of greenhouse gases emitted and 
introducing the principle of auctioning of emission allowances. 

In a broader context, European industry is a major user of energy and raw materials and 
thus an important part of their cost structure is related to these inputs. If industry is to be 
competitive, it should attain a sustainable use of these resources as they will remain part 
of their core business factors. Sustainable growth205 is not the exclusive domain of certain 
sectors. It rather represents a re-orientation of the entire economic landscape. However, 
for some industries, sustainable growth will need to be focused on how the use of energy 
and  raw  materials  is  managed.  Scarcity  and  climate-change  objectives  will  increase  the 
cost  of  these  inputs  for  industry  in  the  long  run,  thus  an  industrial  policy  that  wants  to 
address competitiveness cannot forget the efficient use of these resources. This will lead 
to a ‘double dividend’ as other policy developments also require a more efficient industry 
with  regards  to  input  use.  For  example,  minimising  the  risk  of  climate  change  requires 
that  the  European  economy  be  fully  decarbonised  by  2050.  However,  sustainability 
requires considering the wider picture of efficiency in the use of all materials. European 

204 COM(2011) 21 A resource-efficient Europe –  Flagship initiative under the Europe 2020 Strategy 

205  See Europe 2020: A European strategy for smart, sustainable and inclusive growth, Communication for 

the Commission COM(2010) 2020. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  277 

industry  is  facing  a  dramatic  challenge  under  which  its  current  business  model  will  be 
turned inside out in the coming decades, and this new environment calls for an industrial 
policy  that  promotes  this  change  if  European  industry  is  to  remain  competitive.  The 
greening of the economy should not mean that European industry disappears; rather, it 
should mean that European industry develops competitive products and processes for a 
sustainable future. 

To that effect, EU policies should: 

●  support  industrial  transition:  the  EU  should  provide  a  regulatory  framework  that 
facilitates a sustainable future by exploiting the benefits of existing technologies and 
promoting the development of new technologies; 

●  deepen  product  policy:  industrial  policy  must  incorporate  a  life  cycle  analysis 
perspective of products. This is carried out in the Community context mainly via eco-
design, energy efficiency labelling and eco-label Directives; and 

●  develop  market  and  financial  incentives:  the  EU  should  also  play  a  leading  role  in 
providing incentives for sustainable industries. Appropriate pricing systems should be 
introduced and perverse incentives removed. 

5.10: DEVELOPING A SUSTAINABLE INDUSTRIAL POLICY 

In  line  with  the  ever-changing  industrial  landscape,  both  in  the  European  Union  and 
further afield, and more specifically the growth of environmental concerns and a focus on 
the green economy, the EU is trying to develop an industrial policy that is sustainable. The 
objective  of  this  sustainable  industrial  policy  is  to  set  the  appropriate  framework 
conditions  for 
its 
competitiveness and seizing the resulting opportunities. 

industry  to  achieve  the  20-20-20  targets 206  while  reinforcing 

Green  growth  is  economic  growth  in  the  high-growth  sectors207 that  meet  increasing 
global  demand  for  improved  resource,  energy  and  carbon  efficiency  and  growth  that 
improves  the  EU’s  production  efficiency.  It  provides  for  new  employment  opportunities 
since it increases economic activity in sectors that are relatively job intensive within the 
EU (such as waste management). Green growth would reduce the EU’s bill for imports of 
energy and other raw materials. The EU currently sends € 350 billion (or € 700 per person) 
a year out of the EU economy to pay for energy imports.208 Europe already produces some 

206  A  reduction  in  EU  greenhouse  gas  emissions  of  at  least  20 %  below  1990  levels;  20 %  of  EU  energy 
consumption to come from renewable resources; and a 20 % reduction in primary energy use compared 
with projected levels, to be achieved by improving energy efficiency. 

207  Such as clean-tech, recycling, renewable energy, building energy systems, energy efficiency. 
208 
final: 

Second  strategic  energy  review.  An  EU  energy  security  and  solidarity  action  plan.  COM(2008)  781 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0781:FIN:EN:PDF. 

 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  278 

world-leading green technologies and has world-leading environmental industries209 with 
a combined turnover of more than € 300 billion, providing nearly 3.5 million jobs. These 
eco-industries are growing fast and have large global market shares of more than 30-40 % 
for recycling, waste management and renewable energy. Meanwhile, the global markets 
for  eco-technologies  and  services  are  estimated  to  more  than  double  to  € 3  trillion  by 
2020.210 But this first-mover advantage is being challenged and the Commission is working 
to  ensure  optimal  framework  conditions  for  these  industries  in  the  context  of  its 
Sustainable Industrial Policy Action Plan.211  

The  core  of  this  action  is  a  new  Sustainable  Product  Policy  that  aims  to  improve  the 
environmental  performance  of  products,  reward  eco-friendly  behaviour,  and  foster  the 
demand  for  better  products,  through  energy  labelling,  green  public  procurement  and 
incentives.  The  Eco-design  framework  Directive212 is  the  cornerstone  of  this  initiative. 
Implementing  measures  that  have  already  been  adopted  are  set  to  deliver  total  energy 
savings by 2020 equivalent to more than 12 % of the EU’s electricity consumption in 2007. 
And  with  many  more  implementing  measures  currently  in  the  pipeline,  this  initiative  is 
making a major contribution to helping Europe reduce its energy consumption. 

5.11: THE FUTURE 

To  stimulate  investments  and  prepare  the  ground  for  future  economic  success,  the  EU, 
and its national governments must set out a clear and reasoned roadmap for the future 
direction of their economies. This will allow business and entrepreneurs to better target 
their investments and ensure that they are made in Europe rather than elsewhere. This 
vision  is  set  out  in  the  Commission’s  Europe  2020  strategy  (ADD  and  in  follow-up 
roadmaps  such  as  the  Low-Carbon  Economy  Roadmap  (COM(2011)112)  and  the  Energy 
Roadmap  2050  (COM(2011)885)).  Future  Communications  and  actions  from  the 
Commission need to translate this vision into practical actions that free business to adapt 
to change and deliver our future prosperity.  

209  DG  ENTR  study  on  eco-industries:  http://ec.europa.eu/enterprise/policies/sustainable-business/eco-

industries/index_en.htm. 

210  Roland Berger Strategy Consultants, 2009; The same source states that more people could be employed 
in this sector in Germany by 2020 than in the automobile and mechanical engineering sectors. Global 
investment in renewable energies rose by 85 % in 2007, year on year (IEA). 

211  Sustainable Industrial Policy Action Plan: 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008DC0397:EN:NOT. 

212  Eco-design 

framework 

Directive 

2005/32/EC: 

http://www.energy.eu/directives/l_19120050722en00290058.pdf. 

 
 
 
 
 
 
 
                                                       
 
 
Restructuring in Europe  279 

Box 6.7: Towards sustainable industrial competitiveness policy 

Ideas  setting  out  a  general  framework  for  a  sustainable  industrial  competitiveness 
policy  are  contained  in  a  paper  to  EU  industry  ministers  in  2010. 213  This  paper 
concludes  that,  until  recently,  by  implementing  extensive  restructuring,  the  EU’s 
resource-intensive  industries  have  been  largely  able  to  respond  to  the  various 
pressures  they  faced.They  have  implemented  extensive  restructuring  measures  and 
positioned  themselves  as  reliable  suppliers  of  high-quality  and  specialised  products 
to  the  most  demanding  client  sectors.  However,  the  crisis  has  resulted  in  a  fall  in 
demand  and  industry  faces  increased  competition  from  non-EU  countries,  higher 
energy  costs  and  challenges  relating  to  access  to  energy  and  resources.  It  sets  out 
three possible transformation strategies: 

●  transformation  strategy  1:  Process  innovation  and  reducing  resource-intensity. 
Investing  in  technologies  and  production  methods  that  reduce  resources  and 
energy-intensity are a  key transformation  strategy. In the energy-intensive basic 
material  industries  such  as  chemicals  and  steel,  the  potential  for  increasing 
energy productivity typically relates closely to core process technologies; 

●  transformation  strategy  2:  Moving  to  ‘up-market’  segments.  EU  industries  have 
responded  to  globalisation  pressures  by  specialising  and  differentiating  their 
products, by moving into niche markets and by moving to ‘up-market’ segments. 
Increased  differentiation  and  moving  to  higher  value-added  segments  can 
however  be  difficult  for  parts  of  the  resource-intensive  industries,  if  they  are 
unable  to  differentiate  their  products  or  compete  on  technological  intensity. 
However,  investment  and  development  in  ‘up-market’  segments  will  reduce  the 
industry’s exposure to consequences of supply-side sensitivity; and 

●  transformation strategy 3: Increase presence in growth markets and relocate to 
low-cost  countries.  This  strategy  presumes  both  the  capacity  of  EU  firms  to 
undertake such investments and the absence of foreign investments restrictions. 
It would also allow these EU companies to take advantage of the lower cost base 
in these markets. Despite clear advantages for industry, this strategy can hardly 
be called favourable from a European or global perspective. 

Trying  to  ensure  that  the  EU  labour  markets  are  fully  equipped  to  face  up  to  the 
challenges outlined in this chapter has significant implications for skills and competence 
development. It is vital to ensure that the EU labour force has the right kinds of skills and 
competences that will enable it to work in the types of jobs that will be available in the 
future.  Chapter  2  looks  in  detail  at  the  main  issues  related  to  skills  and  competence 
development. 

213  Towards Sustainable Industrial Competitiveness Policy. Issues paper to EU Ministers of Industry. Part II B. 
Transformation and Resource-intensive Industries. ECORYS Brussels NV in partnership with IDEA Consult 
NV. June 2010. 

 
 
 
 
                                                       
 
Restructuring in Europe  280 

CHAPTER 7: MAIN ECONOMIC AND SOCIAL CHALLENGES: THE RESPONSE OF 
THE EU 

The past two years have seen the most severe economic and financial downturn probably 
in living memory. This has had a substantial effect on the economy of the European Union 
and has been the cause of a high level of restructuring activity, as organisations attempt 
to adapt to the new climate and keep pace with change in a globalised economy. 

Within  this  context,  the  EU  is  facing  a  wide  range  of  challenges,  both  in  economic  and 
social terms. The successful management of transition will therefore be key to ensuring 
the social and economic future of the EU. The European Commission has set out its broad 
vision for the next 10 years in its 2020 Strategy, which follows on from the Lisbon Strategy 
that ran from 2000 to 2010. Alongside this, the Commission has also been focusing, over 
the  past  few  decades,  on  how  to  manage  change  within  the  context  of  enterprise 
restructuring.  The  involvement  of  the  social  partners  in  this  process  is  key,  and  in 
accordance  with  this,  the  Commission  issued  a  first  consultation  to  the  EU-level  cross-
sector  social  partners  in  2002,  asking  for  views  on  the  establishment  of  principles  at 
Community  level  that  aim  to  help  support  businesses  undergoing  restructuring.  This 
consultation triggered joint work from the social partners in 2003 on a draft text entitled 
Orientations  for  reference  in  managing  change  and  its  social  consequences,  which 
addresses  the  anticipation  and  management  of  restructuring  and  the  roles  of  the  main 
stakeholders.  However,  the  text  has  never  been  formally  agreed  by  the  social  partners. 
This  first  consultation  was  followed,  in  2005,  by  a  second  consultation  that  focused  on 
mitigating  the  negative  consequences  of  restructuring.  Although  the  social  partners 
responded  by  organising  a  series  of  seminars  to  debate  the  issues  surrounding 
restructuring,  the  2003  text  remains  the  main  EU-level  social  partner  text  dedicated  to 
the anticipation and management of change. 

Over the past two years, due to the economic crisis, the issue of how to anticipate and 
manage  restructuring  has  gained  centre  stage  in  EU  social  policy.  The  EU  has  funded  a 
wide range of projects aimed at finding, highlighting and disseminating good practice in 
this field, and stimulating debate on the issues to be taken into account when anticipating 
and  managing  restructuring.  In  its  most  recent  Communication  on  industrial  policy  and 
globalisation,  the  Commission  states  that  ‘updated  orientations  on  restructuring  can  be 
very  useful  in  reinforcing  the  capacity  of  businesses  and  workforce  to  adapt  to  a  fast-
changing  economic  environment’  .214 Drawing  on  the  wide  range  of  experience  gained 
from initiatives already undertaken, the Commission will issue in 2011 a Green Paper on ‘ 
Restructuring and anticipation of change: what lessons from the economic crisis?’. 

214 The  same  view  is  expressed  by  the  Commission  in  the  Single  Market  Act  of  November  2010  —  see 
Proposal  No  32  under  point  2.2  (http://ec.europa.eu/internal_market/smact/index_en.htm)  and  the 
Commission  Communication  on  An  Agenda 
Jobs  —  see  point  1.2. 
(http://ec.europa.eu/social/main.jsp?langId=en&catId=958). 

for  New  Skills  and 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  281 

The Commission’s main objective with this planned Green Paper is to help reinforce and 
disseminate  a  practical  culture  of  anticipation  in  the  implementation  of  restructuring 
programmes,  with  the  emphasis  on  moving  from  a  purely  corrective  strategy,  based  on 
passive  anticipation,  towards  preventive  action  that  will  stave  off  conflict  and  in  some 
cases  prevent  the  emergence  of  a  crisis  situation  through  the  proactive  and  negotiated 
management of restructuring. 

1:  PRINCIPLES  EXPRESSED 
CONSULTATIONS OF EUROPEAN SOCIAL PARTNERS 

IN  AND  RESULTING  FROM  THE  COMMISSION’S 

1.1: THE 2002 CONSULTATION OF THE EUROPEAN SOCIAL PARTNERS ON ANTICIPATING 
AND MANAGING CHANGE 

The  European  Commission  issued  a  first  phase  of  consultation  of  the  Community  cross-
industry and sectoral social partners on anticipating and managing change on 16 January 
2002.215 In  the  economic  and  social  environment  of  that  time,  it  was  considered  to  be 
important to debate the need to develop throughout the EU good practices that should 
be followed by companies undergoing restructuring. The consultation paper suggested a 
number of areas relevant in this context and asked the views of the social partners on: 

●  the  usefulness  of  establishing  at  Community  level  a  number  of  principles  for  action 

which would support business good practice in restructuring situations; 

●  the method of drawing up and developing these main principles and, in this context, 
whether they consider that agreements between the social partners at cross-industry 
or sectoral level represent the appropriate way of proceeding; and 

●  any other appropriate initiative that should be further considered. 

The  European  Commission’s  view  when  launching  this  consultation  was  that  enterprise 
restructuring, which has a growing transnational dimension, was an important element of 
change and that the European Union should focus positively on this issue. This requires 
the  right  balance  to  be  struck  between  flexibility  for  businesses  —  which  is  more 
important than ever in times of ongoing restructuring — and security for workers, which 
is necessary to maintain human capital and employability (for a exploration of flexicurity 
in the crisis, see chapter 5). Forward-planning of human resources and enhancement of 
skills  were  seen  as  core  issues  in  this  context  and  the  development  of  mechanisms 
favouring  them  requires  an  active  partnership  between  the  social  partners,  including  at 
EU level. The initiative aimed to stimulate dialogue between the social partners in order 
to identify and develop best practices on anticipating and managing restructuring. 

The  Commission  stated  at  that  time  that  one  of  the  key  factors  for  the  success  of 
restructuring,  in  terms  of  strengthening  the  competitiveness  of  business  and  from  the 

215  ‘Anticipating  and  managing  change:  a  dynamic  approach  to  the  social  aspects  of  corporate 

restructuring’: http://ec.europa.eu/social/BlobServlet?docId=101&langId=en. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  282 

workers’ point of view, is good practice in terms of involving worker representatives. This 
entails involvement on an ongoing basis in the general running of the business, but also 
effective and therefore anticipatory involvement in relation to the possible emergence of 
changes likely to have an impact on employment. 

In addition to this important worker involvement dimension, the Commission stressed the 
fact that most Member States have developed their own responses to the economic and 
social  challenges  associated  with  restructuring.  This  has  been  achieved  through  sets  of 
rules,  either  statutory  or  agreement-based,  with  which  businesses  engaged 
in 
restructuring should comply, as well as good practices that they can follow. These rules 
and practices usually address, amongst others, the following issues: 

●  anticipating  and  assessing  the  social  consequences  of  restructuring,  including  taking 
into consideration the fact that delaying limited restructuring may lead to more wide-
ranging restructuring in the future; 

●  the  principle  whereby  job  losses  and  redundancies  should  be  a  last  resort  (ultima 

ratio), to be used in the absence of other, less drastic solutions; 

●  an  effective  search  (by  providing  the  necessary  resources  or  by  achieving  certain  set 
targets)  for  alternative  solutions,  such  as  redeployment,  training  or  retraining  of  the 
workers  concerned.  Planned  measures  should  be  phased  in  over  time,  and  efforts 
should be made to reorganise work, including working time, as a precondition for the 
use  of  more  radical  measures.  Help  should  be  provided  in  relation  to  jobseeking, 
occupational  guidance,  supporting  the  development  of  self-employment  or  the 
creation  of  SMEs  by  the  workers  affected,  and  support  should  be  given  to  workers 
taking over certain activities of the business; 

●  examination of the feasibility of finding individuals to take over the business activities 

that have been affected by the restructuring; and 

●  the  rehabilitation  and  reallocation  of  abandoned 

industrial  sites,  both  as  an 
environmental measure and the absorption of a proportion of the jobs lost as a result 
of restructuring. 

Within  this  context,  the  Commission  believed  that  a  debate  on  the  principles  that  can 
help to support business good practice in restructuring situations could relate, amongst 
others, to the following areas: 

Employability and adaptability 

●  Managing  careers.  Good  management  of  human  capital  makes  for  a  successful 
changeover to the knowledge-based economy and strengthens the competitiveness of 
businesses. For this reason, without prejudice to the powers of the public authorities 
in this field, companies have an interest in helping to maintain their workers’ capacity 
to  adapt  to  developments  in  the  techniques  and  knowledge  required  for  work.  This 
could be achieved, for example, through ongoing training and regular and independent 
skills assessments or other such measures applied in certain countries. More generally, 

 
 
 
 
 
 
 
Restructuring in Europe  283 

it is important that businesses try to anticipate the competences and skills that will be 
needed,  taking  into  account  as  far  as  possible  the  rapid  obsolescence  of  knowledge 
and  skills.  This  responsibility  also  concerns  workers  who  must  avail  of  the  training 
opportunities offered to them and thus contribute actively to the ongoing adaptation 
of  skills.  In  this  context,  the  acquisition  of  entrepreneurial  competences  plays  an 
important role in improving employability. 

●  Support  for  employability  and  adaptability.  When  designing  and  implementing 
restructuring,  faced  with  the  need  for  workforce  adjustment,  it  is  good  practice  to 
ensure  that  employees  can  continue  to  work  in  their  chosen  occupations.  Achieving 
this  involves  an  active  partnership  between  companies,  the  public  employment 
service,  training  bodies  and  other  players  concerned.  Several  types  of  measures 
applied 
in  this  context:  for  example, 
redeployment,  help  in  finding  a  new  job,  vocational  guidance,  support  for  the 
development of self-employment or the creation of SMEs by the workers affected by 
restructuring,  and  support  for  workers  who  take  over  some  of  the  activities  of  the 
business. 

in  many  Member  States  are  relevant 

●  Considering  all  options.  The  fact  that  there  must  be  immediate,  real  and  serious 
economic  grounds  to  justify  job  losses,  which  are  only  considered  after  other,  less 
damaging, options have been examined, is widely acknowledged and observed in the 
EU  Member  States.  This  concern  for  the  lowest  social  cost,  which  encompasses  the 
idea that any decision leading to job losses should be proportionate to the objective of 
ensuring  the  survival  or  maintaining  the  competitiveness  of  the  company,  needs  to 
guide  the  practical  implementation  of  restructuring  plans.  This  may  result,  for 
example, in the phasing of the planned measures over time or prior reorganisation of 
work, including working time, before any recourse to job cuts. A clear explanation of 
the  serious  nature  of  the  economic  grounds  underlying  the  need  for  job  losses  is 
essential. 

External responsibility 

●  Territorial responsibility. Aspects to take into consideration at territorial level include 
measuring  local  effects,  cooperation  with  local  players,  local  training,  and  the 
rehabilitation of industrial sites. 

●  Downstream responsibility. Aspects to take into consideration here include the impact 
of  the  proposed  restructuring  on  subcontractors  by,  for  instance,  concern  for  the 
security  of  orders,  participation  of  the  subcontractor’s  workforce  in  training  and 
adopting a global perspective, including subcontractors, when agreeing, adopting and 
implementing measures relating to the points set out above. 

Implementation of restructuring 

●  Involvement  of  workers.  Social  dialogue  is  essential  for  the  successful  management 
and  acceptance  of  change.  It  can  reinforce  the  effectiveness  of  the  process  and 
minimise  its  cost.  Therefore,  all  restructuring  processes  need  to  involve  effective 
cooperation  with  workers’  representatives  in  order  to  anticipate  and  successfully 

 
 
 
 
 
 
Restructuring in Europe  284 

manage  its  social  and  economic  consequences.  Both  parties  need  to  engage  in 
dialogue on the basis of full and wide-ranging information, while ensuring compliance 
with the principle of confidentiality. 

●  Fair compensation. In accordance with well-established practice in all Member States, 
the  provision  of  fair  compensation  in  the  form  of,  for  example,  payments  or  notice 
periods  is  an  essential  element  that  can  smooth  the  adjustment  process  where  job 
losses cannot be avoided. 

●  Prevention and resolution of disputes. There are no measures at Community level for 
preventing  or  for  helping  to  resolve  collective  industrial  disputes  that  have  a 
transnational  dimension.  Such  measures  exist  at  national  level  only,  for  disputes 
restricted to a single country. However, given the usefulness of such national systems 
industrial  disputes,  their  potential  for 
for  preventing  and  resolving  collective 
application at Community level needs to be explored. 

●  SMEs. Particular attention should be paid to the way in which restructuring practices 
are developed by SMEs, taking into account their specific situation and needs and their 
more limited capacity to act, on one hand, and the need to preserve social cohesion 
and equity amongst the European workforce, on the other. 

The  result  of  this  consultation  was  that  the  EU-level  social  partners  held  a  series  of 
meetings  and  seminars,  which  finally  resulted  in  agreement  on  a  joint  text  on  the 
management of change, which is discussed below. 

1.2: THE 2003 EUROPEAN SOCIAL PARTNERS’ WORK ON MANAGING CHANGE 

In response to the above first consultation of the social partners, and following a series of 
seminars  and  case  studies,  European  social  partners’  representatives  worked  on  a  joint 
text  entitled  Orientations 
its  social 
consequences.216 However, the text has never been formally agreed by the social partners. 

in  managing  change  and 

reference 

for 

This text comprises six sections which broadly follow the list of themes proposed by the 
Commission in its consultation. For a broad outline of the content of this text, see box 7.1 
below. 

216  Orientations 

change 
http://ec.europa.eu/social/BlobServlet?docId=2750&langId=en. 

in  managing 

reference 

for 

and 

its 

social 

consequences 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  285 

Box  7.1:  Overview  of  the  main  provisions  of  the  (never  formally  agreed) 
draft  EU-level  cross-sector  social  partners’  text,  Orientations  for 
reference in managing change and its social consequences of 16 October 
2003 

●  Introduction.  The  main  challenges  of  the  current  economic  and  social  situation 
are  listed,  among  others,  as  globalisation,  new  technologies,  competition,  and 
modernisation  of  work  organisation.  The  text  stresses  the  importance  of  a 
positive  attitude  to  change,  and  the  existence  of  good-quality  social  dialogue, 
and  explains  the  background  to  this  joint  text.  It  also  mentions  the  European 
Monitoring  Centre  on  Change  (EMCC,  based  at  the  European  Foundation  for  the 
Improvement  of  Living  and  Working  Conditions,  Dublin)  as  an  important 
instrument of support. 

justifying 

the  need 

●  Explaining  and  justifying  change.  This  section  stresses  the  importance  of 
their 
explaining  and 
representatives  and  managers,  in  good  time,  and  respecting  the  obligations  of 
information and consultation throughout the change process, in order to create a 
climate  of  confidence  and  trust.  In  this  regard,  several  possible  instruments  for 
ensuring  that  this  is  done  effectively  are  suggested,  such  as  specific  annual 
reports on developments, or documentation prepared for shareholders. 

to  employees, 

for  changes 

●  Developing  employability.  This  section  makes  an  explicit  link  with  the  social 
partners’  Framework  of  actions  for  the  lifelong  development  of  competencies 
and  qualifications  of  March  2002, 217  which  emphasises  the  importance  of  the 
ongoing competence development of employees. 

●  Territorial  dimension.  This  section  emphasises  the  need  for  partnership  at  local 
and  regional  level  between  employers,  trade  unions  and  public  authorities  in 
order  to  promote  the  development  of  new  employment-generating  activities.  It 
stresses  the  important  role  of  the  European  Structural  Funds  in  this  regard  (for 
more information on European financial support for restructuring, see chapter 3). 

●  The specific situation of SMEs. In this section, the important role of  SMEs in the 
local  economic  and  social  fabric  and  their  vulnerability  in  the  face  of 
restructuring  in  regions  dominated  by  one  activity  are  brought  to  the  fore, 
highlighting  the  need  for  a  supportive  business  environment  for  SMEs,  and  the 
importance  of  involving  their  employees  and/or  their  representatives  in  the 
management of change. 

●  Managing restructuring. This is the most sensitive section of the text, in which the 
social  partners  agree  that  the  management  of  restructuring  must  take  account 
both of the needs of enterprises, and of the needs and choices of employees. The 

217  http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=10421. 

 
 
 
 
 
                                                       
 
Restructuring in Europe  286 

text  stresses  the  need  to  explore  all  possible  alternatives  to  dismissals  (the 
‘ultima ratio’ principle, ie that dismissals should be a last resort), including a list 
of possible options which could be considered as an alternative to redundancy in 
the case of restructuring. Emphasis is placed on the importance of the time factor 
in the good management of restructuring. 

The  main  shortcoming  of  the  text,  however,  lies  in  the  lack  of  any  appropriate 
dissemination  and  of  any  mechanism  for  its  concrete  application.  The  Commission 
therefore  felt  that  it  wanted  to  revisit  this  issue  and  subsequently  issued  a  second 
consultation of the EU-level social partners, set out below. 

1.3:  THE  2005  CONSULTATION  OF  THE  EUROPEAN  SOCIAL  PARTNERS  ON 
RESTRUCTURING AND EMPLOYMENT 

Following  this  first  stage  of  consultation  and  the  conclusion  of  the  social  partners’  joint 
text as set out above, a second phase of consultation of the European social partners was 
launched on 31 March 2005 as part of the Commission’s Communication on Restructuring 
and  Employment.218 In  addition  to  the  issue  of  restructuring,  this  Communication  also 
focused  on  European  Works  Councils  (EWCs),  following  a  first  consultation  of  the  social 
partners on revising the EWCs Directive in April 2004. This consultation process ultimately 
led to a Commission proposal for a revised EWCs Directive in July 2008 and the adoption of 
the revised EWCs Directive in 2009 (Directive 2009/38/EC). 

In  setting  the  scene  for  this  second  consultation,  the  Commission  stated,  in  the 
consultation  document,  that,  in  the  context  of  anticipating  and  managing  restructuring, 
‘the preservation of social cohesion, which is a distinctive characteristic of the European 
social model, requires the introduction of accompanying policies designed to reduce the 
social costs to a minimum and to promote the search for alternative sources of jobs and 
income.’  It  noted  further  that  although  restructuring  is  generally  seen  as  a  negative 
phenomenon, it is essential to the survival and development of enterprises. The negative 
impact of restructuring should therefore be managed as carefully as possible. 

The  Commission  stated  further  that  a  range  of  factors  contribute  to  restructuring,  as 
follows: 

●  the development of the European single market and the opening-up of economies to 

international competition; 

●  technological innovation; 

●  the development of the regulatory framework (the introduction of new regulations or 

deregulation); and 

218  Commission  Communication  on  Restructuring  and  Employment 

(COM(2005) 120):  http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0120:FIN:EN:PDF. 

 
 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  287 

●  major  changes  in  consumer  demand,  which  are  taking  place  as  a  result  of,  among 
other  things,  the  new  needs  of  an  ageing  population,  greater  sensitivity  to 
environmental issues or changes in the geography of world demand. 

The Commission noted that the EU social partners have a ‘decisive’ role to play in helping 
to mitigate the negative effects of restructuring, in two key areas: 

●  within the European sectoral social dialogue committees, it is up to the social partners 
to  develop  ways  of  anticipating  structural  change,  having  regard  particularly  to 
negotiations  at  cross-sector  level,  and  to  their  sectoral  and  regional  monitoring 
initiatives; and 

●  given their special knowledge of the sectors, they have a role to play in informing and 
alerting  the  authorities  at  all  levels.  If  the  social  partners  then  decide  to  alert  the 
Commission to a particularly worrying development, the Commission can decide to set 
in motion an enhanced process of sectoral monitoring. 

The  Commission  then  called  on  the  social  partners  to  become  more  involved  in 
anticipating and managing change, noting in the consultation document that they are ‘key 
players in terms of effective action on the restructuring front’. It noted that this second-
stage consultation should primarily consist of inviting the social partners to continue their 
ongoing  work  by  encouraging  the  adoption  of  their  best-practice  guidelines  on 
restructuring  and  European  Works  Councils.  Acknowledging  the  work  that  the  social 
partners have already undertaken in this area, notably the 2003 draft text, Orientations 
for  Reference  in  Managing  Change  and  its  Social  Consequences,  the  Commission  felt, 
however, that there was a need for more European social dialogue input, and therefore 
encouraged  the  European  social  partners  to  intensify  ongoing  work  and  to  start 
negotiations with a view to reaching an agreement on the requisite ways and means for: 

●  implementing  mechanisms  for  applying  and  monitoring  existing  guidelines  on 
restructuring (agreed by the EU social partners in 2003), and a discussion on the way 
forward; 

●  encouraging  adoption  of  the  best  practices  set  out  in  the  existing  guidelines  on 

restructuring; and 

●  devising a common approach to the other points in the Communication which are of 
concern  to  them,  more  especially  training,  mobility,  the  sectoral  dimension  and  the 
anticipatory aspect. 

In  the  consultation  document,  the  Commission  stated  its  firm  belief  that  ‘restructuring 
must  not  be  synonymous  with  social  decline  and  a  loss  of  economic  substance.  On  the 
contrary,  restructuring  can  underpin  economic  and  social  progress  —  but  only  if  such 
measures are correctly anticipated, and provided firms can manage the necessary change 
quickly and effectively, and provided public action helps ensure that the change is carried 
out in sound conditions’. It highlighted the following four dimensions as a focus for the 
response at Community level: 

 
 
 
 
 
 
 
Restructuring in Europe  288 

●  A  need  for  consistency  between  the  various  policies,  if  growth  and  the  ensuing 

restructuring are to avoid destroying human capital. 

●  A  need  for  a  long-term  perspective  encompassing  the  various  Community  policies.  If 
the economic and social players are to act effectively, they need to be able to see the 
way ahead. 

●  A  need  for  participation  on  the  part  of  all  the  stakeholders,  first  and  foremost  the 

social partners. 

●  A  need  to  pay  heed  to  the  local  dimension  —  it  is,  after  all,  at  local  level  that 
anticipating change is most effective. Looked at from this angle, the European Union’s 
regional and cohesion policy must act as a catalyst. 

The  EU-level  social  partners  have  not  concluded  a  second  joint  text  as  a  result  of  this 
consultation  exercise.  They  have,  however,  held  a  series  of  seminars  throughout  EU 
Member  States,  to  discuss  ways  in  which  to  anticipate  and  manage  restructuring  (for 
more details on this, see chapter 5). 

2: PRINCIPLES RESULTING FROM ANALYTICAL WORK AND STAKEHOLDERS’ VIEWS 

2.1: SOURCES: STUDIES, REPORTS, RESTRUCTURING FORA 

Aside  from  the  above-mentioned  consultations  of  the  EU-level  cross-sector  social 
partners, in recent years, a range of organisations and groups have analysed in depth the 
issue of restructuring and the best way to deal with this phenomenon in an anticipatory 
and proactive manner, sometimes with Commission funding. These include: 

●  The Gyllenhammar Report.219 In 1997, the European Council invited a high-level expert 
group to analyse the implications and economic and social effects of industrial change, 
and  to  consider  ways  of  anticipating  and  managing  them.  The  Group’s  report, 
Managing change, issued in 1998, presented a set of recommendations addressed to 
political decision-makers, company managers and social partners. 

●  A  2002  report  entitled  Anticipating  and  Managing  Change.  This  suggests  a  dynamic 

approach to the social aspects of corporate restructuring.220 

●  The Final Report and other materials of the TRACE Project221 in 2006, which examines 
industrial and economic restructuring and how trade unions can defend the interests 
of working men and women facing this challenge. 

219  High-level  group  on  economic  and  social 

implications  of 

industrial  change  —  Final  Report: 

http://ec.europa.eu/employment_social/soc-dial/csr/gyllen_en.pdf. 

220  Anticipating  and  Managing  Change.  A  dynamic  approach  to  the  social  aspects  of  corporate 

restructuring. Alpha Consulting: http://www.social-law.net/article.php3?id_article=417. 

 
 
 
 
 
 
                                                       
 
Restructuring in Europe  289 

●  The  Final  Report  of  the  MIRE  Project  (2007). 222 This  project  aimed  to  examine 
innovative  restructuring  processes  and  looked  at  how  they  could  be  translated  into 
other contexts. More specifically, the aim was to benefit from exchanges between five 
EU Member States: Belgium; France; Germany; Sweden; and the UK. 

●  The Final Report of the AgirE Project (2007),223 entitled Anticipation of restructuring in 
the  European  Union.  This  project  aimed  to  examine  new  approaches  integrating  the 
knowledge  acquired  over  10  years  on  restructuring.  It  involved  practitioners  and 
researchers,  who  brought  their  experience  and  cross-analyses  together  to  help 
institutional and social players to deal with the challenges of restructuring. 

●  The  2008  Impact  assessment  preceding  the  launch  of  the  revision  of  the  European 
Works  Councils  Directive,224 as  well  as  its  2007  preparatory  study,225 both  of  which 
analysed the way in which EWCs intervened in restructuring processes and the impact 
of EU rules in this field. 

●  A  number  of  Restructuring  Forums226 organised  by  the  European  Commission  from 
2005 to the present day, which have dealt with the issue of anticipation, preparation 
and good management of restructuring in a comprehensive way and covering different 
dimensions, such as sectoral issues, regional issues, SMEs, the automotive sector, and 
the defence sector). For details, see box 7.2. 

●  The 2009 Checklist on Restructuring Processes,227 which is based on numerous practical 
examples  of  good  practices  in  the  context  of  anticipating  and  managing  change  and 
restructuring  within  different  national  frameworks,  industrial  relations  systems  and 
economic and social contexts. It is a synthesis of the main actions identified during a 
workshop organised by DG EMP in Brussels in February 2009 involving over 40 experts 
on restructuring from around Europe. More than 600 actions to anticipate and manage 
restructuring were identified at this workshop. 

221  Project 

financed 
the 
http://www.traceproject.org/. 

by 

Commission 

under  Article 

6 

of 

the 

FSE 

Regulation: 

222  Project  financed  by  the  Commission  under  Article  6  of  the  FSE  Regulation:  http://www.mire-

restructuration.eu/. 

223  Project financed by the Commission under Article 6 of the ESF Regulation: http://www.fse-agire.com/. 

224  European 

Works 

Councils 

Directive 

(94/45/EC): 

http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=211. 

225  For details, see: http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=211. 

226  See 

background 

documents, 

minutes 

and 

Final 

reports 

on: 

http://ec.europa.eu/social/main.jsp?catId=783&langId=en. 

227  For details, see: http://:ec.europa.eu/social/BlobServlet?docId=28002741&langId=en. 

 
 
 
 
                                                                                                                                                                    
 
Restructuring in Europe  290 

●  The ARENAS project (Anticipating Restructuring in Enterprises: National Seminars),228 a 
European  Commission-funded  project  which  organised  seminars  in  all  of  the  EU 
Member States, in order to debate issues relating to restructuring. More information 
on this project, which ran from 2009 to 2010, can be found in chapter 5. 

228  The project website is at: http://arenas.itcilo.org/. 

 
 
 
 
                                                       
 
Restructuring in Europe  291 

Box 7.2: Restructuring Forums organised by the European Commission 

Date 

Focus of the Forum 

June 2005 

Inaugural Forum 

July 2006 

Sectoral actions in industry 

The main conclusions of this Forum included recognition of the need to anticipate and 
accompany  change,  with  a  view  to  giving  workers  affected  by  restructuring  the 
opportunity to swiftly find new jobs, and the importance of planning coherent policies 
in order to exploit all possible synergies between the actors.  

This  Forum  had  three  main  objectives:  to  showcase  the  experience  and  potential  of 
sectoral  social  dialogue  and  of  sectoral  social  partners’  organisations  in  anticipating 
change  and  restructuring;  to  familiarise  them  and  the  other  Forum  participants  with 
the  Commission’s  Communication  of  5  October  2005  on  a  new  integrated  industrial 
policy,  which  aims  at  developing  tools  to  predict  and  anticipate  change  and  at 
implementing  coordinated  actions  to  reinforce  certain  sectors;  and  to  discuss  the 
European Union’s financial mechanisms which support anticipation and management of 
change and restructuring. 

December 
2006 

regions 

How  dynamic 
face 
restructuring,  the  role  of  the 
European  Social  Fund  and  the 
other Structural funds 

This Forum was dedicated to the regional dimension of restructuring and the role of the 
ESF.  Although  much  of  the  Forum’s  focus  was  on  what  has  been  done  in  the  recent 
past,  it  was  also  strongly  focused  on  the  future,  and  in  particular  on  the  2007–13 
programming period of the Structural Funds. 

June 2007 

Anticipation of change 

October 2007  The 

of 

challenges 

the 
automotive industry. Towards a 
European  partnership  for  the 
anticipation of change. 

This Forum was devoted to anticipation of restructuring at various levels. It also served 
as an event at which the actors involved in the anticipation of restructuring could share 
experience and best practice and learn from each other. 

This  Forum  was  dedicated  to  the  restructuring  challenges  faced  by  the  automotive 
industry,  in  a  year  when  change  in  the  automotive  industry  was  at  the  top  of  the 
industry  agenda,  following  a  number  of  high-profile  restructuring  cases.  One  of  the 
main objectives of the event, which was entirely fulfilled, was to promote a ‘European 
Partnership  for  the  anticipation  of  change  in  the  automotive  industry’  describing  the 
roles  and  responsibilities  of  each  actor  (European  Union,  governments,  companies, 
trade unions and regions). 

 
 
 
 
 
Restructuring in Europe  292 

November 
2007 

Adaptation of SMEs to change 

November 
2008 

Anticipating 
restructuring 
agreements 

change 

and 
in  transnational 

November 
2008 

Innovative  actions  of  Article  6 
of the European Social Fund 

December 
2008 

Anticipating  change 
defence industry 

in 

the 

June 2009 

The  impact  of  climate  change 
on employment 

This Forum highlighted the specific challenges that restructuring can pose for SMEs and 
created a platform for the exchange and discussion of best practices on how to adapt 
to change. The Forum also addressed questions that are rarely raised from the point of 
view of entrepreneurs as well as that of the employees.  

The  aim  of  this  Forum  was  to  analyse  the  emerging  mechanisms  for  partnership  and 
anticipation of change that are contained in transnational agreements, the approaches 
adopted  by  the  groups  using  these  instruments,  the  views  of  the  actors  on  the  added 
value  and  the  results  achieved,  the  difficulties  encountered  in  the  implementation 
process,  and  the  role  that  these  mechanisms  have  among  all  the  measures  taken  at 
different levels when restructuring processes are planned and assistance is provided to 
employees. 

The objectives of this Forum were to show the innovative dimension of a range of ESF-
funded projects and their transferability potential, but also of diffusing the experiences 
of successes of these projects and of helping the actors involved in the management of 
the restructuring within the framework of the new programming of the ESF 2007-2013. 

This  Forum  brought  together  the  European  institutions,  governments,  social  partners, 
academic  experts,  regional  and  local  authorities,  as  well  as  market  development 
experts,  in  order  to  discuss  the  anticipation  of  change  in  the  defence  industry.  The 
Forum  was  also  an  opportunity  for  the  launch  of  a  ‘European  Partnership  for  the 
Anticipation of Change in the Defence Industry’ aimed at maintaining and strengthening 
the  competitive  position  of  EU  defence  industries,  creating  high  levels  of  high-quality 
jobs and reinforcing the employability of the workers of the sector, a pre-condition for 
sustainable growth and social cohesion. 

The  purpose  of  this  Forum  was  to  spread  awareness  of  the  changes  that  can  be 
expected as a result of climate change, and the new skills that will be required in the 
medium term to meet the needs of adjusting to a low-carbon economy. It also provided 
a platform for employers and trade unions to learn from other organisations that have 
internalised  this  challenge  and  taken  positive  measures  to  anticipate  change,  in 
addition  to  disseminating  information  on  practices  that  have  been  used  to  embrace 
change and come up with innovative solutions, notably using new technology. 

 
 
 
 
November 
2009 

Partnerships 

Restructuring  and  the  crisis  — 
Building 
for 
and  managing 
anticipating 
socially 
in  a 
restructuring 
responsible way 

December 
2009 

Sectors’  New  Skills  for  New 
Jobs 

July 2010 

Impact 

The 
Investors on Enterprises 

of 

Financial 

October 2010  Anticipating 
restructuring 
responsible  way  — 
partnerships 
employment 

and  managing 
socially 
in  a 
New 
preserve 

to 

November 
2010 

Investing  in  well-being  at  work 
—  Addressing  psychosocial  risks 
in times of change 

Restructuring in Europe  293 

The main objectives of this Forum were to promote mutual learning on how to manage 
restructuring in the context of the crisis, on the basis of the experiences developed so 
far, and to debate what the EU can further do in order to help the actors to cope with 
the effects of restructuring in a socially responsible way. 

The  objective  of  this  Forum  was  to  present,  promote  and  discuss  the  18  sector-based 
studies  published  by  the  European  Commission  that  look  at  emerging  and  future  skill 
needs  up  to  2020.  The  Forum  also  launched  a  discussion  on  how  to  reinforce  and 
promote  stronger  collaboration  at  European  level  in  the  field  of  skills  anticipation, 
focusing  on  the  sectoral  approach.  The  Forum  served  as  a  platform  for  the  exchange 
and discussion of good practice and instruments for dealing with skills identification at 
sector level. 

The  purpose  of  this  Forum  was  to  spread  awareness  of  the  challenges  that  the 
increasing importance of these unconventional financial actors poses, and to engage a 
wide  audience  throughout  the  European  Union  (social  partners,  representatives  of 
public  authorities  at  different  levels  and  experts)  to  take  stock  of  their  prevalent 
expectations and concerns about unconventional financial actors. 

The main objective of this Forum was to debate with the social partners, the Member 
States and the EU institutions the way in which the EU, Member States, social partners, 
companies  and  workers  should  face  the  challenge  of  corporate  restructuring  in  the 
context of an economy in deep and quick transformation and with a view to ensure that 
restructuring takes place in a socially responsible way and benefits to employment. It 
also presented the main findings of each of the 27 national seminars organised by the 
Commission  in  2009-2010,  which  analysed  and  debated  the  measures  and  instruments 
used  for  anticipating  and  managing  restructuring  in  the  27  EU  Member  States  (for 
further details, see chapter 5). 

The purpose of the Forum was to hear and discuss the latest research findings on the 
health impact of restructuring, on stress at work, and on the reality of risk assessments 
information  on  the 
at  Europe’s  workplaces.  The  Forum  also  presented  new 
implementation of the European social partners’ framework agreement on work-related 
stress, and heard high-level presentations on the political framework in Member States. 

 
 
 
 
Restructuring in Europe  294 

Based on these studies and analyses, policy makers have a great deal of evidence on which 
to base any future actions in the area of anticipating and managing restructuring. The main 
issues to emerge from these studies are discussed below. 

3: MAIN ISSUES RELATING TO THE ANTICIPATION AND MANAGEMENT OF CHANGE 

Since  the  late  1990s,  in  the  context  of  the  changing  pace  and  forms  of  corporate 
restructuring, anticipation has become a crucial issue. New practices from different actors 
both  inside  and  outside  companies  have  emerged,  showing  that  restructuring  can  be 
managed more easily and with more success when the social and regional actors are able to 
anticipate potential negative effects in the short term (operational anticipation) and, above 
all, when they manage to prepare change in the long term (strategic anticipation). 

Operational  and  strategic  anticipation  of  change  and  restructuring  is  not  only  a  necessary 
requirement for managing those processes in a socially responsible way and for cushioning 
their  social  impact:  it  is  also  an  indispensable  pre-condition  of  economic  success  and 
company  competitiveness.  A  focus  on  the  strategic  goals  of  the  company  and  placing 
change  within  long-term  management  frameworks  (as  opposed  to  decision-making  based 
on  short-term  profits)  can  usefully  contribute  to  the  sustainability  and  competitiveness  of 
companies. This is also the case for economic sectors, regions and economies as a whole. 

In  recent  years,  and  as  has  been  seen  above,  the  European  Commission  has  launched 
several  initiatives  in  the  field  of  anticipating  and  managing  change  and  restructuring.  The 
European Commission has also financed numerous studies on this topic and supported the 
Joint  European  Social  Partners’  Work  Programme  which  includes  an  integrated  project  on 
restructuring in the EU27 Member States.229  

3.1: THE IMPORTANCE OF TIMELY ACTION 

The more time the actors have to act before the announcement of a restructuring event (or 
after  the  announcement  but  before  the  implementation  of  the  restructuring),  the  more 
space  for  discussion  they  will  have  to  anticipate  and  manage  the  restructuring  in  a 
responsible way. They will also be more likely to have time to be able to find solutions to the 
resulting  economic  and  occupational  problems.  The  period  of  time  given  for  restructuring 
(especially  in  a  context  of  acceleration  of  change)  has  recently  become  a  major  factor 
conditioning  the  ability  of  the  actors  to  monitor  the  situation,  to  identify  particular  risks 
(dependent, for example, on the particular level of qualifications, age, health, and gender of 

229  Since  2004  the  European  Social  Partners  have  been  carrying  out  comprehensive  national  studies  on 
restructuring in the EU Member States. In addition to a series of national dossiers and national seminars 
with  social  partners,  two  comparative  reports  on  restructuring  in  the  new  Member  States  and  ten  ‘old’ 
Member States were carried out. A final evaluation report and a major conference completed the project 
in  January  2010:  Improving  the  anticipation  and  management  of  restructuring …  adding  value  through 
January  2010.  http://www.spcr.cz/files/cz/eu/esd/IP2_-
social  partner  engagement.  Aritake-Wild. 
_Joint_Study_on_Restructuring_in_the_EU_-_Final_EN.pdf. 

 
 
 
 
 
 
 
                                                       
 
Restructuring in Europe  295 

the workers involved) and to act in a proactive way. This means that the type of anticipatory 
action  of  each  actor  strongly  depends  on  the  period  of  time  they  have  at  their  disposal 
before, during or after the announcement. 

There  are  degrees  of  predictability  in  the  management  of  change:  it  depends  where  the 
time cursor is situated. A high degree of predictability is possible when anticipation is used 
as a permanent monitoring process for developing workers’ employability and sustainable 
activities of the company. Such an ex ante approach aims at conceiving and implementing in 
advance  strategies,  practices  and  measures  that  contribute  to  enabling  companies  and 
workers to adapt to all internal and external shocks and transformations. National, regional 
and sectoral observatories dealing in a prospective way with the evolution of employment, 
skills and careers belong to this category. Early warning mechanisms, such as observatories 
that  track  economic  and  labour  market  developments  in  specific  sectors  or  regions,  and 
which  are  then  able  to  highlight  actual  threats  or  dangers  to  employment  in  particular 
regions, sectors or companies, intervene generally a little later but are still within this early 
stage  of  anticipation  that  gives  time  to  the  actors  to  build  a  common  representation  of 
future economic and social developments. Finland has a relatively well-developed system of 
early warning mechanisms, including the Government Foresight Network, which is an inter-
ministerial  forum  for  cooperation  and  exchange  of  information  in  issues  relating  to  the 
anticipation  of  future  events.  This  comprises  a  systematic  and  inclusive  process  involving 
the  collection,  assessment  and  analysis  of  information.  It  also  includes  the  drawing  up  of 
projections for the future in the medium and long term. 

Anticipation  can  also  be  designed  to  manage  a  restructuring  process  in  the  best  possible 
way, to find alternatives and to limit negative social impact, according to a ‘curative’ or an 
ex post approach. In this context, tools and procedures are conceived and used at an early 
stage to prepare workers, organisations, work processes and the local labour market for the 
consequences of a restructuring event that is already underway. The aim here is to mitigate 
the  impact  of  restructuring  on  the  employment  paths  of  workers  and  on  the  economic 
situation of the region concerned. 

In the final stage of restructuring, there are strategies aimed at managing a temporary crisis 
situation, by implementing a range of different tools (for example during the present crisis, 
short-time work or reinforcing temporary unemployment schemes or part-time work). The 
main idea behind this approach is to find ways to maintain the workforce during the crisis 
and then to be ready to restart pre-crisis activities. However, it is also important to take on 
board the fact that a crisis can stimulate the need to accelerate structural adaptations. 

It  is  clear  that  the  current  economic  crisis  significantly  reduces  the  time  available  for 
anticipatory  intervention  and  the  capacity  of  the  social  and  regional  actors  to  implement 
anticipatory  solutions.  However,  even  in  this  period  of  crisis,  time  remains  an  essential 
factor for overcoming a crisis situation. 

 
 
 
 
 
 
 
 
Restructuring in Europe  296 

3.2: A MULTI-LEVEL, MULTI-ACTOR ISSUE 

Anticipation  can  be  used  by  the  actors  concerned  at  different  levels  (European,  national, 
regional sectoral and company). However, issues surround questions such as: in what way 
can  the  actors  be  involved  in  preparing  for  change  in  a  permanent  way  (especially  before 
the announcement of restructuring); the capacities of the actors to build a shared diagnosis 
of  a  restructuring  situation  and  to  manage  the  situation;  and  whether  there  are  shared 
diagnoses and a common perception of the crisis and its causes. 

All  actors  can  play  an  active  role  in  anticipating  and  managing  change,  as  new  and 
innovative practices show. In a context of multi-actor anticipation, the actors concerned are 
to  be  found  both  inside  and  outside  the  company.  A  multi-actor  approach  also  requires 
strong  interconnections  between  actions  at  different  levels  (such  as  mobilising  corporate 
strategies, 
trade  unions,  public  authorities,  regional  bodies, 
observatories,  universities,  and  the  European  level).  The  multiplicity  of  these  interactions, 
which conditions the role of the different actors, is a factor of complexity. It also means that 
some actions and some policies are more difficult to apply to SMEs. 

local  management, 

A  key  element  of  any  successful  strategy  of  anticipation  and  prevention  of  the  negative 
social  impact  of  restructuring  consists  of  building  a  culture  and  practice  of  permanent 
adaptation to change. This can be achieved by creating and pursuing on a permanent basis 
the instruments that will facilitate smoother adaptation and will help organisations to cope 
better  with  crisis  situations  once  they  occur.  This  includes  the  development  of  specific 
knowledge  and  expertise  on  change  management,  the  development  of  strategies  of  crisis 
management  and  the  creation  of  early  warning  systems.  This  implies  that  the  strategic 
dimension  should  be  integrated  into  corporate  management  as  opposed  to  short-term 
profit or asset value objectives. For this purpose, the creation within companies of change 
managers who could liaise with similar entities at other levels (notably at regional, national 
and sectoral level) may be particularly useful. 

With  regard  to  companies,  social  responsibility  for  anticipating  and  managing  change 
concerns the internal as well as the external responsibility of the companies concerned (at 
local, national, or European/international level). For example, it concerns the involvement 
of the company in the economic revitalisation of the area hit by the restructuring, which in 
turn  aims  to  secure  the  professional  transition  of  those  workers  who  have  been  made 
redundant. 

Companies are at the centre of the restructuring process. Any efficient action of anticipation 
and socially responsible restructuring must start and be conducted mainly within individual 
companies. Internal action is, however, frequently insufficient, taken on its own, to prevent 
or alleviate the social impact of restructuring. It must therefore be combined with parallel 
measures  and  instruments  deployed  by  other  actors  (such  as  social  partner  organisations, 
public authorities and individual employees) at other levels of governance (local, regional, 
national, sectoral and European). 

 
 
 
 
 
 
 
 
Restructuring in Europe  297 

It  seems  also  important  to  stress  the  role  that  the  companies  can  play  concerning  the 
employability,  or  capacity  to  adapt,  of  their  workforce.  The  development  of  workers’ 
competences is crucial for the success of the company and for the capacity of the workers 
to manage their working life. 

SMEs  are  frequently  excluded  from  most  training  and  support  provision  and  therefore 
experience particular difficulties in dealing with organisational, as well as wider economic, 
changes (see chapter 2 on training in SMEs). This is clearly an unfavourable scenario, given 
the importance of SMEs for jobs and growth in the EU. One way of addressing this problem 
would  be  for  the  sectoral  organisations  and  the  regional  authorities  to  offer  tools  and 
methodologies  (eg  pooling  resources)  to  take  account  of  the  time,  cultural  and  financial 
specificities of SMEs (ie the fact that they do not have the resources, access to credit, formal 
internal systems or the staffing levels of larger firms). These interventions not only help to 
train and support SME employees, but also give strategic direction to the business, which is 
a critical step in the positive management of change. 

From  the  employee  representatives’  perspective,  anticipation  is  very  much  linked  to  their 
capacity to exercise in good time their social and economic prerogatives at different levels 
(such as the level of the site, company, group of companies, national and European level). 
This  presupposes  an  effective  and  constructive  mode  of  implementing  information, 
consultation and negotiation practice at the enterprise and group levels. 

Employee  representatives  at  company  and  group  levels  are  the  main  management 
counterparts  during  restructuring  processes.  They  should  therefore  be  involved  and 
participate actively in all anticipatory measures and permanent mechanisms established by 
the company, internally and externally (ie those that are part of internal company processes 
and  procedures,  and  those  that  have  been  developed  by  or  with  the  help  of  external 
parties). Representing the entire workforce, they are in a unique position to work with the 
change  manager,  if  one  is  present,  promote  smooth  change  and  restructuring  and  ensure 
that  employees’  interests  are  safeguarded.  If  there  is  no  change  manager,  the  company 
needs to ensure that this role is covered by managers internally. 

From  the  employers’  and  employer  representatives’  point  of  view,  anticipation  of 
restructuring  can  be  part  of  good  business  planning  and  a  need  to  anticipate  demand  for 
goods and services. Regular meetings with employee representatives can form part of this 
process, giving the parties an opportunity to discuss likely future trends. 

Employers  are  the  actors  that  usually  initiate  and  consequently  manage  the  process  of 
restructuring. They are bound by national legislation concerning the process, particularly in 
the  area  of  informing  and  consulting  employee  representatives.  In  particular, consultation 
should be carried out in good time to allow discussion of the options available to mitigate 
the  impact  of  any  planned  redundancies.  Where  a  relationship  of  trust  has  been  built  up 
with employee representatives, meaningful consultation will be able to take place. 

 
 
 
 
 
 
 
 
 
Restructuring in Europe  298 

From the individual worker’s viewpoint, anticipation relies on their capacity as an individual 
to choose and to use a training programme in order to improve their employability and to 
facilitate a transition in their career and working life. The intensity of the difficulties met by 
workers who have been made redundant varies according to their level of qualification, with 
the risk being higher, the lower the level of qualification. With regard to employability, it is 
evident that the individual employee cannot be regarded as an isolated entity: other actors, 
such  as  the  employer,  employee  representatives,  the  social  partners  and  the  public 
authorities have a crucial role to play in supporting, motivating and encouraging individual 
employees. 

Employees are, together with companies, the main actor of the restructuring process — and 
at  the  same  time,  very  often,  the  main  victims  of  restructuring.  Without  prejudice  to  the 
specific responsibilities of the other actors in creating the whole set of conditions that will 
give employees a real opportunity to find their way through those processes, the success of 
any  effort  to  minimise  the  social  cost  of  restructuring  depends,  as  far  as  employees  are 
concerned, on: 

●  Their  own  initiative,  dynamism  and  positive  attitude  at  all  times  and  not  only  when 

restructuring or the loss of the job is a concrete possibility. 

●  Their capacity to collect the information that will help them to understand the situation 
(if  possible  in  advance  of  particular  restructuring  events)  and  to  use  adaptation  tools 
such as reskilling and upskilling and redeployment where possible. 

●  Their proximity to their representatives at all levels. 

●  Their  capacity  to  be  employable  and  mobile  and  to  make  transitions  to  alternative 

employment, possibly in different sectors. 

●  The  frameworks  and  actions  that  are  in  place  in  order  to  support  employees  in 
strengthening  their  employability,  involving  actions  such  as  career  advice,  training, 
recognition of competences and acquisition of transferable skills. 

The  opportunities  offered  to  employees  in  term  of  training  and  support  may  differ 
significantly  according  to  how  an  employee  is  categorised  —  ie  whether  they  are  a 
temporary agency worker, or a temporary worker within the company — and also the size 
of the company. 

For the social partners, collective bargaining and other forms of bi- and tripartite bargaining 
and dialogue are among the most important tools for anticipating and managing change at 
enterprise, sectoral, national and European/international levels. Social partners also play a 
crucial role with regard to the social perception of a given restructuring situation. 

Social partners represent employers and workers at cross-sector and sector level. They play 
a  key  role  in  anticipating  and  managing  change.  Their  capacity  to  intervene  at  all  levels 
through  social  dialogue  and  collective  bargaining  mechanisms  places  them  in  a  privileged 
position  to  coordinate  actions  aimed  at  stimulating  and  developing  social  tools  for 

 
 
 
 
 
 
 
Restructuring in Europe  299 

anticipating and managing restructuring. They are important actors in the creation of social 
innovation,  economic  and  social  progress,  solidarity,  social  inclusion  and  good-quality 
employment  practices  at  all  levels.  The  creation  of  guarantee,  training  and  job  security 
funds by collective agreement is a particularly innovative practice that has been developed 
in recent years. 

National  and  regional  authorities  can  also  develop  specific  actions  supporting  employees 
and companies in the field of anticipation of change and restructuring. Regional authorities 
have  a  specific  role  in  coordinating  all  actors  and  offering  rapid  solutions  to  the 
consequences  of  a  restructuring  event.  For  examples  of  regional  anticipation  and 
management of change, see box 7.3. 

Although  the  main  actors  involved  in  restructuring  processes  are  companies,  their 
employees, and social partners; public authorities also have an important role to play. They 
shape  the  relevant  legal  framework,  define  and  pursue  employment  policy  goals,  manage 
important  forecasting  tools,  possess  the  institutional  capacity  to  help  employees  (through 
means such as education and training institutions and job centres) and manage substantial 
financial resources that can be allocated to meeting the needs of restructuring companies 
and their employees. 

Other  government-led  tools  are  mediation,  forecasting  tools  and  incentive  schemes.  A 
major contribution from governments consists in establishing or supporting the creation of 
risk mutualisation mechanisms (guarantee, training and job security funds). This should be 
seen  in  the  context  of  flexicurity  policies  —  for  more  information  on  flexicurity  and 
restructuring, see chapter 5. 

Alongside  national  governments,  regional  authorities  have  a  major  role  to  play  in  the 
in  each  region  through 
coordination  of  the  work  of  stakeholders  who 
restructuring operations or are engaged in the processes of anticipation. 

intervene 

Another  task  that  falls  under  the  responsibility  of  regional  authorities  relates  to  the 
promotion of regional development and economic and social reconversion of regions likely 
to  be,  or  already  affected  by,  severe  restructuring.  It  seems  important  in  that  regard  that 
regions  create  a  regional  task  force  (a  body  involving  all  stakeholders  interested  in 
employment in the region) and train change managers who will coordinate the economic, 
social and institutional actors around those two objectives. 

The efficiency of anticipation processes developed by all of these actors differs according to 
the time they have for acting in a strategic and effective way. An early diagnosis contributes 
to effective anticipation, while a late (or mistaken) diagnosis hinders the possibilities of both 
strategic and operational anticipation. Time is indeed an essential factor. 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  300 

Box 7.3: The regional experience of anticipation and management of change 

At a preparatory workshop for the Restructuring Forum that was held on 23 September 
2009,  participants  presented  and  discussed  a  range  of  experiences  of  both  the 
anticipation  and  the  management  of  restructuring  and  change  at  regional  (or  more 
properly territorial, as  the geographical scope  is not always that of an administrative 
region) level. The experiences were those of: 

●  Finland’s public Regional Employment and Economic Development (TE) Centres and 
regional  foresight  services,  which  engage  in  ongoing  action  such  as  mapping  and 
planning  of  employment  and  skills  needs,  and  are  involved  in  the  ‘Finnish  action 
model’  for  responding  to  abrupt  structural  change.  When  a  region  is  classified  as 
undergoing  such  change,  the  appropriate  ministries  and  TE  Centres,  in  partnership 
with  the  regional  council  and  local  municipalities,  draw  up  a  plan  to  tackle  the 
crisis. 

●  The  Asturias  region  of  northern  Spain,  an  area  traditionally  dominated  by  heavy 
industry and mining, which has undergone a major process of industrial reconversion 
since  the  1980s.  Since  2000,  this  process  of  moving  from  industrial  to  services 
employment  has  increasingly  been  managed  by  regional  authorities  and  other 
actors, with an important role for higher education institutions and public funding. 

●  The northern region of  Portugal (Norte), where a multi-actor ‘bottom-up’ regional 
competitiveness  pact  was  launched  in  2007,  covering  areas  such  as  innovation, 
internationalisation,  employment,  mobility,  social  inclusion  and  support  for 
enterprises. The region is highly reliant on industry, especially textiles, and the pact 
focuses on innovating the industrial base and making it more hi-tech. This includes 
linking sectors through ‘competitiveness poles’, retraining and upskilling (eg in ICT 
skills), and attracting young people into industry. 

●  Göteborg in Sweden, where a public-private collaborative platform, Business Region 
Göteborg, has since 2000 sought to support growth in the region by providing a good 
investment climate and developing networks of growing companies. It has aimed to 
redirect  the  economy  from  traditional  industries  to  hi-tech  sectors,  stimulate 
company  networks  and  clusters,  promote  foreign 
investment  and  enhance 
collaboration between universities, business and local authorities. The region is now 
considered one of the most knowledge-intensive in Europe. 

●  Genk in Flanders, Belgium, which has faced successive waves of industrial change. 
In  the  1980s  and  1990s,  innovative  local  development  programmes  tackled  high 
youth unemployment, and then the closure of local coal mines was addressed, with 
EU support, through an integrated multi-actor programme of industrial renewal and 
training/retraining. 

●  The  Arve  valley,  in  the  Haute-Savoie  département  of  eastern  France,  where  a 
‘competitiveness  pole’  has  been  established 
to  promote  excellence, 
competitiveness  and  innovation  among  the  area’s  large  number  of  small-scale 

 
 
 
Restructuring in Europe  301 

mechanical  engineering  companies,  and  anticipate  future  changes  affecting  them. 
The  pole  (unusually  for  such  schemes  in  France)  includes  a  human  resources 
programme,  aimed  at  promoting  modern  HR  management,  based  on  the  forward-
looking management of employment and skills, especially among SMEs. 

●  Grenoble in south-east France, where the MATRI project (funded by the EU) seeks 
to  bring  together  stakeholders  —  including  large  companies,  business  groups,  local 
authorities, universities and research bodies, and trade unions — to develop ways of 
anticipating  future  needs  for  individual  and  collective  competences  in  order  to 
strengthen local actors’ ability to develop new products and services. This includes 
foresight studies, a job observatory, action plans overseen by standing groups, rapid 
design  of  tailored  training/tutoring  and  ‘job  roadmaps’,  local  mobility  poles 
involving large and small companies, and local change/competence managers. 

●  Veneto in eastern Italy, where the regional authorities (as in the case across Italy) 
are  responsible  for  employment  and  training.  For  example,  they  draw  up  annual 
regional  employment  plans,  operate  a  regional  labour  market  observatory  and 
information system, and engage in tripartite dialogue with the social partners. Key 
themes  for  the  region  include  demography  and  globalisation,  and  the  authorities 
conduct  projects  in  areas  such  as  human  capital  development  in  SMEs,  lifelong 
learning to anticipate change, the creation of cluster districts and the operation of 
a  skills  stock  exchange.  In  the  current  crisis,  the  region  has  adapted  these  various 
instruments and reached a framework agreement with the social partners, involving 
increased  resources  and  support  for  companies  and  workers.  A  regional  taskforce 
has been established, along with a public-private technical assistance structure. 

 
 
 
 
 
 
 
 
 
 
 
Restructuring in Europe  302 

CHAPTER 8: CONCLUSIONS 

This report has examined a wide range of issues related to restructuring, the impact that it 
has  on  sectors,  organisations  and  workers,  and  the 
impacts  of  continuing 
restructuring. Crucial factors include how to best anticipate restructuring, and the best way 
to manage restructuring once a restructuring course has been decided, including the use of 
EU funds. 

likely 

One  of  the  main  points  of  focus  of  the  report  this  year  has,  inevitably,  been  the 
restructuring that has taken place as a result of the economic crisis of the past two years. 
There is a significant amount of information concerning the impact that the crisis has had on 
the  EU  labour  market  and  the  extent  to  which  it  has  contributed  to  higher  levels  of 
restructuring  across  the  EU.  The  EU  institutions  have  a  range  of  measures  and  tools 
designed to help organisations undergoing restructuring, largely in the form of funds, and 
these funds have been made use of by organisations that have implemented restructuring 
programmes over the past two years in the context of the crisis. 

Although the recent crisis has thrown the issue of how to manage restructuring into sharp 
relief, it should not be forgotten that restructuring is a part of everyday business life with 
which  organisations  need  to  engage  if  they  are  to  remain  competitive  in  an  increasingly 
globalised  market.  Anticipating  and  managing  restructuring  will  therefore  continue  to  be 
issues  that  need  to  be  addressed  at  EU  level,  at  the  level  of  EU  Member  States,  at  sub-
national level and at the level of the individual organisations undergoing restructuring. Once 
the recession is over and the European economy begins to grow once more, however, the 
shape and focus of the economy is likely to continue to evolve, due to the future challenges 
facing the EU in areas such as continuing industrial restructuring and industry rebalancing, 
the  emerging  green  economy  and  what  this  will  mean  for  all  sectors,  but  particularly 
transport and energy, and demographic challenges such as the ageing population. 

More than ever, there is a need to ensure that skills and competences are kept up to date 
with  all  of  these  trends,  not  just  in  an  environment  of  restructuring,  but  throughout  the 
length of individuals’ careers. There is therefore a significant focus on skills and competence 
development in this report, focusing on the issues of lifelong learning and the types of skills 
development  that  will  be  needed  to  meet  the  future  challenges  faced  by  the  European 
economy.  Going  forward  into  the  next  decade,  the  European  Commission  has  highlighted 
skills and competence development as a key feature for its Europe 2020 strategy. 

The European Commission has initiated a range of actions over the past 15 years that have 
had the aim of trying to help organisations and stakeholders to manage restructuring in a 
way  that  has  the  least  possible  negative  impact  on  workers,  their  families  and  the 
surrounding community. These include two consultations to the EU-level social partners on 
the issue of managing change. There is now a will at EU level to further and to try to devise 
some kind of over-arching framework for restructuring at EU level: in its Communication on 
industrial policy, issued in October 2010, the Commission stated that ‘updated orientations 

 
 
 
 
 
 
 
 
Restructuring in Europe  303 

on restructuring can be very useful in reinforcing the capacity of businesses and workforce 
to adapt to a fast-changing economic environment’.230  

The  European  Commission  has  also,  over  the  past  two  decades,  funded  a  wide  range  of 
research, in the form of studies or analyses concerning the identification of good practices, 
measures  or  actions  to  better  anticipate  the  restructuring  and  manage  it  in  a  responsible 
way. There is a significant degree of convergence between the good practices and actions 
highlighted in these studies, enabling the following key messages to be identified, as set out 
below. 

1:  TEN  TENTATIVE  LESSONS  ON  THE  ANTICIPATION  AND  MANAGEMENT  OF 
RESTRUCTURING 

An  analysis  of  the  above  reports  and  studies  on  the  subject  of  restructuring  and  labour 
market transitions gives rise to a number of key messages relating to the anticipation and 
management  of  restructuring.  These  tentative  conclusions  are  contained  in  the  table  8.1 
below, which shows each lesson learned and the documentary sources for this lesson, based 
on the numbers given to the studies set out below the table. 

 
 
 
 
 
                                                       
 
 
Table 8.1: Ten key tentative lessons on the anticipation and management of restructuring 

Lesson 

Documentary sources 

Restructuring in Europe  304 

Measures to anticipate and manage restructuring are 
influenced by factors such as national culture, national 
industrial relations and employment systems, national welfare 
and social security systems and national skills and training 
strategies. Nevertheless, there are distinct and clear 
possibilities for the translation of initiatives or elements of 
initiatives across borders, adapting them to different national 
contexts. 

There is a significant variety of country-specific backgrounds and experiences, 
depending very much on the respective traditions and frameworks of welfare state 
rationales and industrial relations (1). 

Many tools and measures have been put into place by Member States in the context 
of the crisis (2). 

Career choice and career development are extremely diverse around the EU (4). 

There are persisting national differences that make translation of good practices 
from one country to another difficult. Although it is probably not possible to transfer 
whole tools, there is a case for looking at the functional equivalents of tools in 
different countries. For example, many mechanisms are composed of basic tools or 
measures which are often similar across Europe, such as individual profiling, skills 
assessment, personal action plans, job clubs, training for job search, individual or 
group coaching during the search process, support for business creation and training 
offers. It is important to focus on what is done instead of who is doing it and how 
(7). 

Member States differ greatly in terms of the types of measures that they adopt to 
anticipate and manage restructuring. However, there is the potential for the transfer 
of experiences from Member States with more developed toolboxes for 
restructuring (8). 

The exporting of entire systems of system-dependent processes should be 
discouraged. However, there are micro examples of practice that can be considered 
for adoption in the context of differing national environments and systems of 
employee relations (10). 

The quality and maturity of enterprises’ arrangements to support workers 
are affected by the variable starting points for different countries (12). 

 
 
 
Lesson 

Documentary sources 

Active social partner involvement is crucial in many of the 
schemes available to anticipate and manage restructuring. 

Many of the schemes in existence would not be able to function without the 
involvement of the social partners at all levels (1). 

Restructuring in Europe  305 

Collective bargaining and other forms of bi- and tripartite bargaining, negotiation 
and dialogue are one of the most important tools of anticipating and managing 
changes at all levels (6). 

Social dialogue is a key tool in the anticipation and management of restructuring (8). 

The active engagement of the social partners in the anticipation and management of 
change at all levels improved performance in the design of change management 
architecture and in restructuring practice (10). 

The involvement of social partners in the design and implementation of flexicurity 
policies through social dialogue and collective bargaining is of crucial importance 
(12). 

A multi-actor approach is invaluable, in terms of career guidance and competence 
development support (4). 

A range of knowledgeable partners are needed in order to promote healthier 
restructuring (5). 

The multi-actor approach with strong interconnections between actions at different 
levels is extremely important (6). 

Multi-actor collaboration is of importance through all the stages of restructuring, 
and partnerships at regional, national and sectoral level are essential ingredients for 
dealing with the issues and concerns that are related to restructuring (9). 

A wide range of actors participating in measures is a 
strengthening factor. Partnerships can provide a wide range of 
expertise and human resources to support organisations that 
are trying to manage restructuring. This can also limit the 
effects of restructuring on the wider region, community and 
employees’ families. 

SMEs have specific challenges when engaging with the 
anticipation and management of restructuring in a socially 
responsible way. They often lack the resources, both financial 
and in terms of personnel, to go much beyond statutory 

Although SMEs cannot develop socially responsible practices on their own, they can 
be supported in this task by publicly funded strategic arrangements and regional 
partnerships. There may therefore be a case for targeted public support for SMEs in 
terms of career progression and skills development (4). 

 
 
 
 
 
 
Lesson 

compliance. 

Anticipation of restructuring is a powerful tool that can limit 
the negative effects of restructuring. However, there needs to 
be a greater emphasis on anticipation and preparation of 
restructuring. 

Restructuring in Europe  306 

Documentary sources 

SMEs do not have the same internal HR resources as larger companies and often 
lack the necessary knowledge about external support offers that might facilitate and 
ease the process of organisational restructuring. External collaborations are very 
useful for organisations, and particularly SMEs (5). 

There are a range of tools that can be used by SMEs to help them to anticipate and 
manage restructuring. These include outplacement, a range of training offers, local 
and regional employment pacts that cover SMEs, and schemes that validate skills 
and competences (7). 

There is a gap between large companies and SMEs regarding anticipation, social 
dialogue practices and the support given to workers when made redundant. Many 
restructuring models are not appropriate for smaller companies and there is 
therefore a lack of support for SMEs (8). 

It is often said that small and micro enterprises are the engines of economic growth 
and act as shock absorbers at times of change, but it is clear that the role of small 
and micro enterprises in the economy and the issues they face in restructuring are 
more complex (10). 

There should be fair allocation of resources regarding short-time and temporary lay-
off schemes, with specific attention paid to the needs of SMEs (10). 

Anticipation of likely future needs for career guidance is a key issue in supporting 
socially responsible practice (4). 

There needs to be more health monitoring and prevention in a coordinated way (5). 

True anticipation initiatives were only to be found in a limited number of EU 
Member States, and their effectiveness depends on timeliness and good-quality 
data (8). 

Actions that focused on the ‘before’ stage of restructuring have entailed a more 
proactive approach and have been able to minimise the negative social impacts of 
restructuring (9). 

 
 
 
 
 
Lesson 

Documentary sources 

Restructuring in Europe  307 

European funds play an important role in some of the newer 
EU Member States and in southern Europe. 

Anticipation of change is crucial if sudden and unexpected workforce shocks are to 
be avoided and restructuring take place against timescales that facilitate both 
organisational change objectives and the delivery of acceptable solutions for 
affected workers (10). 

These funds play a vital role in funding transition schemes and are therefore of vital 
and continuing importance to these countries, some of which are still in the process 
of shifting the focus of their economies away from over-reliance on traditional 
heavy industry (1). 

EU funding is relied on by some of the newer EU Member States in the development 
of measures to anticipate and manage restructuring (8). 

While redundancy should always be a last resort, active 
measures should take place over passive measures. 

One of the key long-term strategies should be ensuring the sustainability of labour 
supply. This implies, for example, that early retirement not be readily facilitated (3). 

Training is a crucial and core issue when considering the 
anticipation and management of restructuring. 

Severance payments, while attractive to individual workers, are not a long-term 
measure. When designing a severance package, elements such as retraining and 
competence development should be included. Similarly, there should not be any 
over-reliance on early retirement (8).  

A more general access to support for training is desirable, with a focus on skills and 
competences that will be needed in the future. Such a future skills orientation might 
require occupational change and substantial retraining (3). 

Career guidance and continuing training are vital components of socially responsible 
restructuring (4). 

Training, skilling and reskilling are seen as key to anticipating or accompanying 
restructuring in order to avoid unemployment or to facilitate a rapid return to the 
labour market (8). 

 
 
 
 
 
 
 
 
Lesson 

Documentary sources 

Restructuring in Europe  308 

Training and other human capital measures, such as mentoring, are key tools in the 
management of restructuring, allowing individuals to develop their skills, and deal 
with their own personal employment situation (9). 

The social partners in every participating country highlighted current skills 
mismatches and/or the future skills needs to support the changing economy as key 
issues for the social partners and for government. In the longer term, these issues 
have to be addressed through more, and more effective, investment in education 
and training at all levels. In the shorter term the issues of lifelong learning and 
migrant workers need to be tackled (10). 

The impact of restructuring on the health of the individuals 
concerned should be monitored closely, and negative effects, 
such as psychosocial impacts but also physical impacts, should 
be mitigated as much as possible. This concerns those who are 
made redundant, those overseeing the redundancies (line 
managers) and the ‘survivors’ of restructuring. 

Healthier restructuring needs conscious stakeholders and leaders and a proactive 
health policy, with collaboration from both within and outside the organisation. It is 
clear that organisational change is always a potential stress factor. If employee 
stress levels can be monitored, specific preventative health measures can be put 
into place to try to avoid or mitigate the negative impact of restructuring on 
employees’ health (5). 

Good coordination from all the actors is needed in implementing career guidance 
and skills development policies (4). 

The availability of measures to support the transfer of redundant workers to new 
jobs is limited and uneven across Member States (8). 

Although a range of innovative policies and practices have 
been highlighted by all these studies, at national, regional, 
sectoral and organisational level, there is a general lack of 
coordination and coherence in terms of the implementation 
of socially responsible restructuring. For example, in terms of 
anticipation, it is vital that the information collected by early 
warning or forecasting systems is passed on in a timely fashion 
to the relevant stakeholders in order to ensure that it is put to 
full use. In the management of restructuring, all stakeholders, 
such as employees, employers, employee representatives, 
local authorities and training providers need to work together 
to ensure that employees facing job loss are provided with 
career guidance, appropriate training and competence 

 
 
 
 
Lesson 

development and outplacement support. More emphasis 
therefore needs to be placed on coordination of measures. 

Restructuring in Europe  309 

Documentary sources 

 
 
 
Restructuring in Europe  310 

SOURCES AND FURTHER READING 

●  (1) Organising transitions in response to restructuring. Study on instruments and schemes 
of job and professional transition and re-conversion at national, sectoral or regional level 
in the EU. Eckhard Voss. Wilke, Maack and Partner. In collaboration with Alan Wild, 
Valeria Pulignano, Ann Kwiatkiewicz and Nicolas Farvaque. 

This study is a review of mechanisms, programmes, schemes and funds of support for 
workers  affected  by  restructuring,  which  have  been  set  up  in  parallel  or  to 
complement  mechanisms  provided  by  public  employment  services.  The  focus  of  the 
study  is  on  transitions  and  professional  transfers  from  one  job  or  profession  to 
another,  rather  than  on  maintaining  employment  by  means  such  as  short-time 
working.  This  study  found  that  there  exists  a  wide  range  of  mechanisms  to  support 
professional transition and that these systems are constantly changing — only a very 
few mechanisms remain constant over time. 

●  (2) Recovering from the crisis. 27 ways of tackling the employment challenge. European 

Commission. 2009. 

This  is  a  review  of  ways  in  which  each  of  the  27  EU  Member  States  have  tried  to 
increase  or  maintain  employment  levels,  giving  one  example  from  each  Member 
State. 

●  (3) Restructuring in recession — ERM Report 2009. European Foundation for the 

Improvement of Living and Working Conditions. 

This report examines the ways in which companies around the EU have taken initiative 
to  main  employment,  largely  by  means  of  reducing  working  hours  but  also  by  other 
means, including wage cuts. 

●  (4) Socially responsible restructuring. Effective strategies for supporting redundant 

workers. Cedefop working paper No 7. 2010. 

This  report  provides  evidence  of  the  contribution  of  career  guidance  and  continuing 
training in helping to support redundant workers. 

●  (5) Health in Restructuring. Innovative Approaches and Policy Recommendations (HIRES). 
European Expert Group on Health in Restructuring. Thomas Kieselbach. Rainer Hampp 
Verlag, 2009. 

This report focuses on the health dimension of restructuring, examining the available 
data  for  monitoring  the  forms  and  effects  of  restructuring,  looking  at  the  effects  of 
restructuring  on  individual  health  and  organisational  performance,  examining  which 
EU  policies  might  best  guide  restructuring  to  reduce  its  negative  health  effects,  and 
looking  at  how  the  different  groups  of  actors  can  best  cooperate  to  maintain 
organisational, employee and community well-being. 

●  (6) Checklist on Restructuring Processes. European Commission, February 2009. 

 
 
 
Restructuring in Europe  311 

This checklist examines the issues that are relevant for each of the actors involved in 
restructuring:  companies;  employee  representatives; 
individual  workers;  social 
partners, 
including  sectoral  organisations;  national  authorities;  and  regional 
authorities. It states that all actors can play an active role in anticipating and managing 
change and sets out the key areas of focus and the challenges for each of these actors. 

●  (7) European Restructuring Toolbox. European Commission. Progress project 

VS/2009/0319. January 2010. 

This  toolbox  consists  of  a  users’  manual,  which  contains  a  methods  of  how  to  learn 
from each other in terms of anticipating and managing restructuring. It also contains 
more  than  60  tools  that  have  already  been  implemented  in  countries,  regions,  local 
labour markets and companies. The users’ manual describes how to use these tools. 

●  (8) 27 national Seminars Anticipating and Managing Restructuring. EU Synthesis Report. 

September 2010. 

This is the final report of a large EU-wide project based on the organisation of national 
seminars in each of the 27 EU Member States, focusing on best practices in terms of 
anticipating and managing restructuring. 

●  (9) Toolkits for restructuring based on the innovative actions of European Social Fund 
Article 6 projects. DG Employment, Social Affairs and Inclusion. GHK. December 2009. 

This is a practical toolkit intended to help actors to deal with restructuring. It presents 
a range of actions and success factors for six types of actor in the three main stages of 
restructuring. 

●  (10) Improving the anticipation and management of restructuring … adding value through 

social partner engagement. Aritake-Wild. January 2010. 

This report was commissioned by the European social partner organisations and looks 
specifically and exclusively at the role of the social partners at the national, sectoral, 
regional and enterprise levels in economic restructuring. 

●  (11) Preparatory study for an impact assessment of a European Code of Conduct on 

Restructuring. Interim report, GHK, September 2010. 

The  purpose  of  this  report  is  to  examine  current  company  practices  in  restructuring 
situations,  to  ascertain  the  costs  and  benefits  of 
level 
regulations in this area (either through a Directive or a Commission Recommendation 
addressed  at  Member  States),  and  to  establish  the  potential  impact  on  non-binding 
policy options, ie would companies follow the principles if they are not obliged to do 
so? 

introducing  European 

●  (12) ERM report 2010. Short-time working and temporary lay-off as flexicurity 
instruments. European Foundation for the Improvement of Living and Working 
Conditions. 

 
 
 
Restructuring in Europe  312 

This  study  looks  at  the  incidence  of  short-time  working  across  the  EU  during  the 
current crisis, in addition to temporary lay-offs, within the framework of flexicurity. 

●  (13) Restructuring work and employment in Europe. Managing change in an era of 

globalisation. Bernard Gazier and Frédéric Bruggeman (eds). Edward Elgar publishing, 
2008. 

●  (14) Building anticipation of restructuring in Europe. Marie-Ange Moreau (ed) in 

collaboration with Serafino Negrelli and Philippe Pochet. Peter Lang 2009. 

 
 
 
 
Restructuring in Europe  313 

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European Commission Communication amending the Temporary Community Framework for 
State aid measures to support access to finance in the current financial and economic crisis:. 
(http://ec.europa.eu/competition/state_aid/legislation/atf_en.pdf) 

European Commission Communication applying Articles 92 and 93 of the Treaty to short-
term export- credit insurance. (http://eur--
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31997Y0917(01):EN:HTMLNOT) 

European Commission Communication, A European Economic Recovery Plan, 
COM(2008) 800. 

European Commission Communication, Europe 2020 — A strategy for smart, sustainable 
and inclusive growth, COM(2010) 2020. 

European Commission staff working paper, Regions 2020: Regional vulnerability — 
Globalisation (Update of the Commission Staff Working Paper, Regions 2020 An Assessment 
of Future Challenges for EU Regions, which was published in November 2008). 

 
 
 
 
 
Restructuring in Europe  316 

Chapter 4 

Aritake-Wild (2010), Joint European Level Social Partners’ Study on Restructuring in the EU 
— Improving the anticipation and management of restructuring … adding value through 
social partner engagement. 

Council of European Municipalities and Regions (CEMR) and the European Federation of 
Public Service Unions (EPSU), Reform of public services: what role for social dialogue? 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8711) 

Ernst & Young (2010), Study on the operation and the impacts of the Statute for a European 
Company (SE) — 2008/S 144-192482. 
(http://ec.europa.eu/internal_market/consultations/docs/2010/se/study_SE_9122009_en.p
df) 

European Commission Communication on the review of the application of Directive 
2002/14/EC in the EU, COM(2008) 146 (http://eur-lex.europa.eu/LexUriServ/ 
LexUriServ.do?uri=CELEX:52008DC0146:EN:HTML) and accompanying Commission staff 
working document, SEC(2008) 334 ( http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC0334:EN:HTML) 

European Commission (2009)), Restructuring in Europe 2008. A review of EU action to 
anticipate and manage employment change. 
(http://ec.europa.eu/social/main.jsp?langId=en&catId=103&newsId=434&furtherNews=yes) 

European Commission Communication, Report on the application of the SE Statute (, 
COM(2010) 676 final. (http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52010DC0676:EN:NOT) 

European Commission staff working document, The role of transnational company 
agreements in the context of increasing international integration, COM(2008) 419 final. 
(http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=214) 

European Social Partners in the Ground Handling Sector, Joint declaration on training and 
qualification in the ground handling sector. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8773) 

European Social Partners in the Rail Sector, The concept of employability in the railway 
sector. Recommendations. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8555) 

European Social Partners in the Electricity Sector, Restructuring in the Electricity Industry: A 
Toolkit for Socially Responsible Restructuring with a Best Practice Guide. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8751) 

 
 
 
 
 
 
Restructuring in Europe  317 

Chapter 5 

European Commission Communication, Towards Common Principles of Flexicurity: More and 
better jobs through flexibility and security (, COM(2007) 359 final)( . (http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0359:FIN:EN:PDF) 

European Commission (2009)), The role of Public Employment Services related to ‘Flexicurity’ 
in the European Labour Markets, DG Employment, Social Affairs and Inclusion. 

ERM (2010), Extending flexicurity: the importance of short-time working schemes. European 
Foundation. (http://www.eurofound.europa.eu/publications/htmlfiles/ef1071.htm) 

Expert Group on Flexicurity (2007), Flexicurity Pathways. Turning hurdles into stepping 
stones. (http://ec.europa.eu/social/BlobServlet?docId=1519&langId=en) 

Voss, E., Organising transitions in response to restructuring. Study on instruments and 
schemes of job and professional transition and re-conversion at national, sectoral or regional 
level in the EU. Wilke, Maack and Partner. 

Chapter 6 

Ecorys Research and Consulting, Programmes to promote environmental skills. Final report. 
European Commission, DG Environment. June 2010. 

European Commission, Promoting the Mental Health of the Population. Towards a strategy 
for mental health for the EU. Green Paper issued in 2005. 
(http://ec.europa.eu/health/ph_determinants/life_style/mental/green_paper/mental_gp_e
n.pdf) 

European Commission Guidance on work-related stress, Spice of life or kiss of death?, Office 
for Official Publications of the European Communities, Luxembourg, 2002. 
(http://www.isma.org.uk/pdf/publications/ke4502361_en.pdf) 

European Commission, Employment in Europe 2009. 
(http://ec.europa.eu/social/BlobServlet?docId=4196&langId=en) 

European Commission Communication, Adapting to climate change: Towards a European 
framework for action, COM(2009) 147 final. (http://eur--
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0147:FIN:EN:PDF) 

EU social partners’ Framework agreement on work-related stress. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=10402) 

EU social partners’ Framework agreement on harassment and violence at work. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=8446) 

 
 
 
 
 
Restructuring in Europe  318 

European Parliament Resolution on mental health. 
(http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2009-
0063+0+DOC+XML+V0//EN) 

European Commission (2005), Commission Staff Working Document on the links between 
employment policies and environment policies. 
(http://ec.europa.eu/environment/integration/pdf/sec_2005_1530_en.pdf) 

European Commission Communication, An energy policy for Europe., COM/2007/0001 final 
(http://eur-lex.europa.eu/LexUriServ/site/en/com/2007/com2007_0001en01. 
(http://www.ipex.eu/ipex/webdav/site/myjahiasite/groups/CentralSupport/public/2007/CO
M_2007_0001/COM_COM(2007) 0001_EN.pdf) 

European Commission Communication, Renewable Energy Road Map Renewable energies in 
the 21st century: building a more sustainable future, COM(2006) 848 final. (http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0848:FIN:EN:PDF) 

European Commission Communication, Towards a comprehensive climate change 
agreement in Copenhagen, COM(2009) 39 . (http://eur--
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0039:FIN:EN:PDF) 

European Commission (2009), The impact of renewable energy policy on economic growth 
and employment in the European Union. 
(http://ec.europa.eu/energy/renewables/studies/doc/renewables/2009_employ_res_repor
t.pdf) 

European Commission, Rail training 2020. Training needs and offers in the European railway 
area. The next 10 - 15 years. 
(http://ec.europa.eu/transport/rail/studies/doc/2007_rail_training_2020.pdf) 

European Commission Communication, An integrated industrial policy for the globalisation 
era. Putting competitiveness and sustainability at centre stage., COM(2010) 614. 

(http://eur--lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0614:FIN:EN:PDF) 

European Commission Communication, Sustainable Consumption and Production and 
Sustainable Industrial Policy Action Plan, COM(2008)). 
(http://ec.europa.eu/environment/eussd/pdf/com_2008_397.pdf) 

European Commission Communication, Europe 2020: A European strategy for smart, 
sustainable and inclusive growth, COM(2010) 2020. 

European Commission Communication, European strategy on clean and energy efficient 
vehicles (, COM(2010) 186). (http://eur--
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0186:FIN:EN:PD)F) 

Eurofound, ERM Quarterly, issue 1, Spring 2010. 

Eurostat: European business — Facts and figures, 2009 edition. 

 
 
 
 
Restructuring in Europe  319 

(http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/portal/page/portal/product_details/
publication?p_product_code=KS-BW-09-001/EN/KS-BW-09-00 l-EN.PDF) 

GHK (2009), The Impacts of Climate Change on European Employment and Skills in the Short 
to Medium-Term: A Review of the Literature. Company Case Studies (Volume 1)). 
(http://ec.europa.eu/social/main.jsp?catId=103&langId=en&eventsId=172&furtherEvents=y
es) 

KPMG (2008)), Risk Preparedness Framework: Climate Changes Your Business. 
(http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Clim
ate-changes-your-business.pdf) 

Notteboom, T. and Rodrigue J.-P., The corporate geography of global container terminal 
operators. 
(http://people.hofstra.edu/jean-paul_rodrigue/downloads/2010 %20IAME%20-
%20Notteboom-Rodrigue-final.pdf) 

UNEP/ILO (2009)), Green Jobs: Towards decent work in a sustainable, low-carbon world. 
(http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---
webdev/documents/publication/wcms_098487.pdf) 

Waddell and Burton (2006), Is work good for your health and well-being? 
(http://www.dwp.gov.uk/docs/hwwb-is-work-good-for-you.pdf) 

Chapter 7 

Alpha Consulting, Anticipating and Managing Change. A dynamic approach to the social 
aspects of corporate restructuring. (http://www.social-law.net/article.php3?id_article=417) 

Aritake-Wild, Improving the anticipation and management of restructuring … adding value 
through social partner engagement. January 2010. 

European Commission Communication, An Agendaagenda for New Skillsnew skills and 
Jobsjobs. (http://ec.europa.eu/social/main.jsp?langId=en&catId=958) 

European Commission Communication on Restructuring and Employment (, 
COM(2005) 120). (http://eur--
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0120:FIN:EN:PDF) 

European Commission first consultation of the Community cross-industry and sectoral social 
partners on anticipating and managing change, Anticipating and managing change: a 
dynamic approach to the social aspects of corporate restructuring. 
(http://ec.europa.eu/social/BlobServlet?docId=101&langId=en) 

EU social partners’ draft text, Orientations for reference in managing change and its social 
consequences. (http://ec.europa.eu/social/BlobServlet?docId=2750&langId=en) 

 
 
 
 
 
 
Restructuring in Europe  320 

EU social partners, Framework of actions for the lifelong development of competencies and 
qualifications. 
(http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=10421) 

High -level group on economic and social implications of industrial change –, Final Report. 
(http://ec.europa.eu/employment_social/soc-dial/csr/gyllen_en.pdf)