Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2012/005 SE/Saab from Sweden)
Date: 2012-10-19
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, Sweden, collective dismissal, commitment of expenditure, economic recession, employment aid, general budget (EU), motor vehicle industry, payment appropriation, reintegration into working life

EUROPEAN 
COMMISSION 

Brussels, 19.10.2012  
COM(2012) 622 final 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund in accordance with 
point 28 of the Interinstitutional Agreement of 17 May 2006 between the European 
Parliament, the Council and the Commission on budgetary discipline and sound 
financial management (application EGF/2012/005 SE/Saab from Sweden) 

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EXPLANATORY MEMORANDUM 

Point  28  of  the  Interinstitutional  Agreement  of  17  May  2006  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 
management1  allows  for  the  mobilisation  of  the  European  Globalisation  Adjustment  Fund 
(EGF)  through  a  flexibility  mechanism,  within  the  annual  ceiling  of  EUR 500 million over 
and above the relevant headings of the financial framework. 

The rules applicable to the contributions from the EGF are laid down in Regulation (EC) No 
1927/2006  of  the  European  Parliament  and  of  the  Council  of  20  December  2006  on 
establishing the European Globalisation Adjustment Fund2. 

On  25  May  2012,  Sweden  submitted  application  EGF/2012/005  SE/Saab  for  a  financial 
contribution  from  the  EGF,  following  redundancies  in  Saab  Automobile  SA,  one  of  its 
subsidiaries and 16 of its suppliers in Sweden. 

After  a  thorough  examination  of  this  application,  the  Commission  has  concluded  in 
accordance  with  Article  10  of  Regulation  (EC)  No  1927/2006  that  the  conditions  for  a 
financial contribution under this Regulation are met. 

SUMMARY OF THE APPLICATION AND ANALYSIS 

Key data: 
EGF Reference no. 
Member State 
Article 2 
Primary enterprise 
Suppliers and downstream producers 
Reference period 
Starting date for the personalised services 
Application date 
Redundancies during the reference period 
Redundancies before and after the reference period 
Total eligible redundancies 
Redundant workers expected to participate in the 
measures 
Expenditure for personalised services (EUR) 
Expenditure for implementing EGF3 (EUR) 
Expenditure for implementing EGF (%) 
Total budget (EUR) 
EGF contribution (50 %) (EUR) 

EGF/2012/005 
Sweden 
(a) 
Saab Automobile SA 
16 
19.12.2011 – 19.4.2012 
20.12.2011 
25.5.2012 
3 239 
509 
3 748 

1 350 

10 509 120 
400 000 
3,67 
10 909 120 
5 454 560 

1. 

2. 

1 
2 
3 

The  application  was  presented  to  the  Commission  on  25  May  2012  and 
supplemented by additional information up to 20 August 2012. 

The application meets the conditions for deploying the EGF as set out in Article 2(a) 
of  Regulation  (EC)  No  1927/2006,  and  was  submitted  within  the  deadline  of  10 
weeks referred to in Article 5 of that Regulation. 

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

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Link  between  the  redundancies  and  major  structural  changes  in  world  trade  patterns 
due to globalisation 

3. 

4. 

5. 

6. 

7. 

In order to establish the link between the redundancies and major structural changes 
in world trade patterns due to globalisation, Sweden refers to the 2011 Automobile 
Industry Pocket Guide4 which shows that the EU-27 in 2010 with 15,1 million units 
had 26 % of worldwide passenger car production, a major reduction from 34,1 % in 
2005  and  35,9 %  in  2000.  During  the  same  decade,  the  market  share  of  the  BRIC 
countries had risen from 8,4 % (2000) to 15,8 % (2005) and 33,5 % (2010). 

The declining share of the European market as a proportion of the world market for 
passenger  cars  is  also  borne  out  by  the  Cars  21  final  report,  published  on  6  June 
20125. 

The  latest  semiannual  report  from  the  European  Automobile  Manufacturers' 
Association (ACEA)6 shows that new passenger car registrations in the EU continue 
to decline. Thus, the June 2012 figure is 2,8 % below that of June 2011, itself 7,3 % 
below that of June 2010. The trend has been almost constantly downwards during the 
past five years (2008 to 2012, with a small increase only in 2009). 

Saab's  situation  had  been  uncertain  over  the  past  few  years,  with  General  Motors 
announcing  in  August  2008  that  it  wished  to  sell  the  company.  Following  several 
rounds of fruitless negotiations, the Dutch company Spyker Cars bought Saab on 23 
February 2010. It soon ran into liquidity problems halting production. An attempt to 
sell the business to a Chinese company failed when General Motors refused to assign 
the  licences  for  the  cars  it  wanted  to  construct.  On  19  December  2011,  Saab 
Automobile filed for bankruptcy. 

To  date,  the  automotive  sector  has  been  the  subject  of  the  most  numerous  EGF 
applications, with 16 cases, of which seven are based on trade related globalisation, 
while the other nine are crisis related7. 

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

8. 

9. 

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5 
6 
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Sweden  submitted  this  application  under  the  intervention  criteria  of  Article  2(a)  of 
Regulation  (EC)  No  1927/2006,  which  requires  at  least  500  redundancies  over  a 
four-month  period  in  an  enterprise  in  a  Member  State,  including  workers  made 
redundant in its suppliers and downstream producers. 

The application cites 3 239 redundancies in Saab Automobile AB and its subsidiary 
SAAB Automobile Powertrain AB during the four-month reference period from 19 
December  2011  to  19  April  2012  and  a  further  509  redundancies  with  16 
subcontractors  before  the  reference  period,  but  related  to  the  same  collective 
redundancy procedure. All of these redundancies were calculated in accordance with 
the  third  indent  of  the  second  paragraph  of  Article  2  of  Regulation  (EC)  No 

http://www.acea.be/images/uploads/files/20110921_Pocket_Guide_3rd_edition.pdf 
http://ec.europa.eu/enterprise/sectors/automotive/files/cars-21-final-report-2012_en.pdf 
http://www.acea.be/images/uploads/files/20120717_PRPC-FINAL-1206.pdf 
Regular updates here : http://ec.europa.eu/social/BlobServlet?docId=4558&langId=en 

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1927/2006.  The  Swedish  authorities  have  confirmed  in  accordance  with  the  same 
third indent that all these redundancies have meanwhile been effected. 

Explanation of the unforeseen nature of those redundancies 

10. 

The Swedish authorities argue that despite the problems experienced by Saab during 
the  past  several  years,  the  bankruptcy  and  closure  were  unforeseen.  Several  buyers 
were  interested  in  taking  over  the  company  and  its  workforce,  and  several  car 
designs and models were attractive to potential buyers. It was only when GM as the 
former owner refused to assign the necessary licences to a potential Chinese buyer, 
that the company ran out of options and decided to file for bankruptcy. 

Identification of the dismissing enterprises and workers targeted for assistance 

11. 

The  application  relates  to  3 748  redundancies  of  which  3 239  occurred  in  Saab 
Automobile  AB  and  its  subsidiary  Saab  Automobile  Powertrain  AB  and  the 
remaining 509 within 16 subcontractors. As the list of subcontractors is confidential 
though available for audit, the companies are listed as A, B, C etc. hereunder. 

Company 
Saab Automobile Aktiebolag 
Saab Automobile Powertrain AB 
A 
B 
C 
D 
E 
F 
G 
H 
I 
J 
K 
L 
M 
N 
O 
P 
Total 

Number of redundancies
2 960
279
71
45
7
88
123
20
8
14
11
20
8
31
10
16
5
32
3 748

12. 

Of  this  total,  1 350  workers  are  targeted.  Most  of  the  remaining  workers  (in 
particular, the technicians and other well qualified workers) have already found new 
jobs. The break-down of the targeted workers is as follows: 

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

Number
1 000
350
1 320
30
15
1 200
135

Percent 
74,07 
25,93 
97,78 
2,22 
1,11 
88,89 
10,00 

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> 64 years old 

0

0,00 

13. 

Among these workers, there are 20 with longstanding health problems or disabilities. 

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14. 

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

Category 
Legislators, senior officials and managers 
Professionals 
Technicians and associate professionals 
Clerks 
Service workers and shop and market 
sales workers 
Craft and related trade workers 
Plant and machine operators and 
assemblers 
Elementary occupations 
Others 

Number
27
215
180
193
16

88
523

5
103

Percent 
2,00 
15,93 
13,33 
14,30 
1,19 

6,52 
38,74 

0,37 
7,63 

15. 

16. 

The  103  persons  listed  as  "others"  comprise  a  mix  of  workers  from  various  small 
categories, such as directors, medical staff, and artists. 

In  accordance  with  Article  7  of  Regulation  (EC)  No  1927/2006,  Sweden  has 
confirmed  that  a  policy  of  equality  between  women  and  men  as  well  as  non-
discrimination has been applied, and will continue to apply, during the various stages 
of the implementation of and, in particular, in access to the EGF. 

Description of the territory concerned and its authorities and stakeholders 

17. 

The  vast  majority  of  the  redundant  workers  reside  in  the  municipalities  of 
Trollhättan,  Vänersborg  and  Uddevalla,  which  are  located  between  70  and  90 km 
north  of  Gothenburg,  the  principal  city  of  the  industrialised  county  of  Västra 
Götaland.  This  is  an  area  of  already  high  unemployment,  due  to  previous  factory 
closures. Manufacturing is the largest business sector in Trollhättan with its 55 500 
inhabitants. 

The  Swedish  Public  Employment  Service  will  be  the  main  stakeholder  in  all  the 
affected  municipalities,  together  with  the  City  of  Trollhättan,  University  West,  the 
trade unions and the outplacement organisations Trygghetsrådet TRR and Startkraft. 

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

18. 

After Saab's bankruptcy, unemployment in Trollhättan in January 2012 rose to over 
20 %, the highest unemployment figure among the 290 municipalities in the country. 
Neighbouring municipalities also experienced a sharp rise in unemployment for the 
same reason, even though many of these already had very high levels.  

Saab Automobile also contributed to indirect effects on employment and value added 
through purchases of inputs and consultancy as well as other services from suppliers. 
The  National  Institute  of  Economic  Research  (NIER)  produced  an  estimate  of  the 
impact  of  the  closure  of  Saab  on  the  Swedish  economy,  which  shows  that  in  2010 
Saab  generated  about  3 200  jobs  among  its  subcontractors,  which  at  the  time  was 
equivalent to 0,9 external jobs per job at Saab. 

About 2 000 of the 3 600 Saab workers live in Trollhättan, which is 8,4 % of those 
employed in the municipality. 

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Co-ordinated  package  of  personalised  services  to  be  funded  and  a  breakdown  of  its 
estimated  costs,  including  its  complementarity  with  actions  funded  by  the  Structural 
Funds 

19. 

20. 

Sweden proposes EGF measures and actions which go beyond what the Employment 
Service  would  normally  offer,  so  that  it  works  with  an  "extended  toolkit"  to  find 
tailor-made  solutions.  In  practice  this  will  strengthen  efforts  in  areas  such  as  job-
search support, vocational guidance, tailor-made training and further training (e.g. in 
new  IT  skills),  validation  of  work  experience,  outplacement,  entrepreneurship 
promotion  measures  or  support  for  self-employment,  and  special  time-limited 
measures  (support  for  jobseekers,  relocation  allowances,  training  allowances, 
measures to assist disadvantaged or older employees to keep their jobs or to re-enter 
the labour market, etc.). 

EGF  supported  workers  will  be  offered  a  wider  programme  of  measures  to  choose 
from, including measures not normally offered by the PES. They could benefit from 
longer-duration  measures  than  usually  available,  and  an  enhanced  service  at  an 
earlier  stage  than  can  normally  be  offered.  One  focus  of  all  the  measures  listed 
hereunder  is  the  move  towards  green  jobs,  where  Sweden  is  one  of  the  leading 
players  at  international  level.  Forecasts  predict  future  labour  shortages  in  this  area, 
which  the  EGF  measures  could  help  to  avert.  The  largest  wave  power  park  in  the 
world  will  be  completed  in  2014-15  in  Sotenäs  Municipality,  within  commuting 
distance of the Trollhättan region. 

21. 

The EGF measures will include the following : 

–  Job-search  support  :  The  targeted  workers  will  receive  earlier  and  more 
personalised  support  than  could  normally  be  given,  and  those  with  a  long 
employment  record will  receive special assistance. Group work will be included 
among the measures on offer. Job coaching efforts will be made available to the 
workers. 

–  Vocational guidance : Targeted workers will receive enhanced support at an early 
stage, individually or in groups. The objective is that the participants will arrive at 
a realistic vocational orientation within a field where there is a demand for labour 
and where, upon completion of a supplementary training course, the participant is 
judged as having good chances of finding a job. Special attention will be given to 
job opportunities in the green sectors. 

–  Validation of experience and labour market training : Validation of experience is 
currently  available  under  the  general  schemes  for  the  areas  of  electricity, 
construction,  healthcare,  industry,  transportation  and  catering  /  restaurants.  The 
EGF support will open new possibilities to the redundant workers in other areas 
where  they  have  gained  experience  and  where  they  might  obtain  the  necessary 
qualifications either directly or with the help of limited further training, including 
in  green  job  sectors.  Apprenticeship  training  will  also  be  offered  to  those  who 
wish to pursue this option. 

The  Employment  Service  can  offer  shorter  vocational  courses  aimed  at  filling 
occupations  with  a  skills  shortage  that  cannot  be  remedied  with  the  usual  training 
system.  The  EGF  contribution  will  enable  it  to  broaden  the  numbers  of  courses 

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available, to provide for graduate level entry, to extend the duration from the usual 
six  months  to  twelve  months  and  to  include  the  qualification  as  Project  Manager 
within the individual's existing or potential area of expertise. 

–  Work placement and job-search support : The duration of work placements with 
potential employers can be extended with the EGF support beyond the usual six 
months,  if  this  is  expected  to  help  the  worker  in  question  to  be  hired  by  the 
relevant employer. 

–  Support for business start-ups : In addition to the normal provisions for business 
start-ups,  the  support  of  the  EGF  will  enable  the  workers  to  receive  enhanced 
start-up  allowances  and  longer  mentoring,  as  well  as  additional  training, 
counselling and marketing advice. 

–  Mobility allowances : These are granted in support of households relocating to a 

new city, travel costs to interviews, and travel costs for commuting. 

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

The  personalised  services  presented  by  the  Swedish  authorities  are  active  labour 
market measures within the eligible actions defined by Article 3 of Regulation (EC) 
No 1927/2006. The Swedish authorities estimate the total costs at EUR 10 909 120, 
of  which  the  expenditure  for  personalised  services  at  EUR 10 509 120  and  the 
expenditure for implementing the EGF at EUR 400 000 (3,67 % of the total amount). 
The total contribution requested from the EGF is EUR 5 454 560 (50 % of the total 
costs). 

22. 

23. 

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Actions 

Estimated 
number of 
workers 
targeted 

Estimated 
cost per 
worker 
targeted 
(EUR) 

Total costs 
(EGF and 
national 
cofinancing) 
(EUR) 

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

Job-search support 

Vocational guidance 

Validation of experience and labour market 
training 

Work placement and job-search support 

Support for business start-ups 

Mobility allowances 

Sub total personalised services 

1 350

1 350

800

800

90

400

373 

93 

503 550

125 550

6 000 

4 800 000

5 000 

4 000 000

9 778 

880 020

500 

200 000

10 509 120

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

Preparatory activities 

Management 

Information and publicity 

Control activities 

Sub total expenditure for implementing EGF 

Total estimated costs 

EGF contribution (50 % of total costs) 

80 000

190 000

60 000

70 000

400 000

10 909 120

5 454 560

24. 

Sweden confirms that the measures described above are complementary with actions 
funded by the Structural Funds. The Swedish Public Employment Service will adapt 
review  lists  to  ensure  that  recipients  of  EGF  support  do  not  also  receive  assistance 
from  other  Union  financial  instruments,  so  that  all  double  financing  can  be 
prevented. 

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

25. 

Sweden started the personalised services to the affected workers included in the co-
ordinated package proposed for co-financing to the EGF on 20 December 2011. This 

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date therefore represents the beginning of the period of eligibility for any assistance 
that might be awarded from the EGF. 

Procedures for consulting the social partners 

26. 

Since  production  at  the  Saab  plant  was  halted,  the  Employment  Service  has  been 
ready to undertake measures on behalf of the personnel involved. This has resulted in 
positive relations with the municipality, the employers, the trade union organisations 
and  the  outplacement  organisations  Startkraft  and  Trygghetsrådet  (both  themselves 
set up by collective agreements). 

27. 

The  Swedish  authorities  confirmed  that  the  requirements  laid  down  in  national  and 
EU legislation concerning collective redundancies have been complied with. 

Information  on  actions  that  are  mandatory  by  virtue  of  national  law  or  pursuant  to 
collective agreements 

28. 

As regards the criteria contained in Article 6 of Regulation (EC) No 1927/2006, the 
Swedish authorities in their application: 

•  confirmed that the financial contribution from the EGF does not replace measures 
which are the responsibility of companies by virtue of national law or collective 
agreements; 

•  demonstrated that the actions provide support for individual workers and are not 

to be used for restructuring companies or sectors; 

•  confirmed  that  the  eligible  actions  referred  to  above  do  not  receive  assistance 

from other EU financial instruments. 

Management and control systems  

29. 

Sweden has notified the Commission that the financial contribution will be managed 
by the Swedish Public Employment Service (PES) which will be formally appointed 
as the managing and paying authority. The project accounts will be examined by the 
Internal Audit Unit, which is a separate body attached to the board of PES. Its task is 
to  examine  the  internal  control  and  verification  process  at  PES  and  suggest 
improvements,  as  well  as  providing  advice  and  support  for  the  Board  and  the 
Director General. Project auditing will take place on a regular basis. 

Financing 

30. 

31. 

On  the  basis  of  the  application  from  Sweden,  the  proposed  contribution  from  the 
EGF  to  the  coordinated  package  of  personalised  services  (including  expenditure  to 
implement  EGF)  is  EUR 5 454 560,  representing  50 %  of  the  total  cost.  The 
Commission's proposed allocation under the Fund is based on the information made 
available by Sweden. 

Considering the maximum possible amount of a financial contribution from the EGF 
under  Article  10(1)  of  Regulation  (EC)  No  1927/2006,  as  well  as  the  scope  for 
reallocating  appropriations,  the  Commission  proposes  to  mobilise  the  EGF  for  the 

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32. 

33. 

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

The  proposed  amount  of  financial  contribution  will  leave  more  than  25 %  of  the 
maximum annual amount earmarked for the EGF available for allocations during the 
last  four  months  of  the  year,  as  required  by  Article  12(6)  of  Regulation  (EC)  No 
1927/2006. 

By  presenting  this  proposal  to  mobilise  the  EGF,  the  Commission  initiates  the 
simplified  trialogue  procedure,  as  required  by  Point  28  of  the  Interinstitutional 
Agreement of 17 May 2006, with a view to securing the agreement of the two arms 
of the budgetary authority on the need to use the EGF and the amount required. The 
Commission invites the first of the two arms of the budgetary authority that reaches 
agreement on the draft mobilisation proposal, at appropriate political level, to inform 
the other arm and the Commission of its intentions. In case of disagreement by either 
of  the  two  arms  of  the  budgetary  authority,  a  formal  trialogue  meeting  will  be 
convened. 

34. 

The Commission presents separately a transfer request in order to enter in the 2012 
budget  specific  commitment  appropriations,  as  required  in  Point  28  of  the 
Interinstitutional Agreement of 17 May 2006. 

Source of payment appropriations  

35. 

36. 

After  the  adoption  of  the  two  arms  of  the  Budgetary  Authority  of  the  EGF  cases 
currently  in  the  pipeline,  the  available  payment  appropriations  on  the  EGF  budget 
line  would  amount  to  EUR 6 618.  A  transfer  of  EUR 5 447 942  from  the  European 
Progress Microfinance Facility would be used to cover the additional amount needed 
for the present application. 

The payment needs of the European Progress Microfinance Facility by the end of the 
year  based  on  the  latest  estimations  provided  by  the  European  Investment  Fund 
which is its managing authority allow for the transfer of EUR 5 447 942 to the EGF 
budget line. 

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Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the European Globalisation Adjustment Fund in accordance with 
point 28 of the Interinstitutional Agreement of 17 May 2006 between the European 
Parliament, the Council and the Commission on budgetary discipline and sound 
financial management (application EGF/2012/005 SE/Saab from Sweden) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having  regard  to  the  Interinstitutional  Agreement  of  17  May  2006  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 
management8, and in particular point 28 thereof, 

Having  regard  to  Regulation  (EC)  No  1927/2006  of  the  European  Parliament  and  of  the 
Council  of  20  December  2006  establishing  the  European  Globalisation  Adjustment  Fund9, 
and in particular Article 12(3) thereof, 

Having regard to the proposal from the European Commission10, 

Whereas: 

(1) 

(2) 

(3) 

The  European  Globalisation  Adjustment  Fund  (EGF)  was  established  to  provide 
additional support for workers made redundant as a result of major structural changes 
in world trade patterns due to globalisation and to assist them with their reintegration 
into the labour market. 

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

Sweden  submitted  an  application  to  mobilise  the  EGF,  in  respect  of  redundancies  in 
the enterprise Saab Automobile SA, one of its subsidiaries and 16 of its suppliers, on 
25  May  2012  and  supplemented  it  by  additional  information  up  to  20  August  2012. 
This  application  complies  with  the  requirements  for  determining  the  financial 
contributions  as  laid  down  in  Article  10  of  Regulation (EC) No 1927/2006.  The 
Commission, therefore, proposes to mobilise an amount of EUR 5 454 560. 

(4) 

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

8 
9 
10 

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

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HAVE ADOPTED THIS DECISION: 

Article 1 

For  the  general  budget  of  the  European  Union  for  the  financial  year  2012,  the  European 
Globalisation  Adjustment  Fund  (EGF)  shall  be  mobilised  to  provide  the  sum  of 
EUR 5 454 560 in commitment and payment appropriations. 

Article 2 

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

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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