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 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (application EGF/2012/007 IT/VDC Technologies from Italy)
Date: 2014-03-05
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, Italy, collective dismissal, commitment of expenditure, economic recession, electronics industry, employment aid, general budget (EU), payment appropriation, reintegration into working life













EUR-Lex - 52014PC0119 - EN











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52014PC0119

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 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (application EGF/2012/007 IT/VDC Technologies from Italy) /* COM/2014/0119 final */









EXPLANATORY MEMORANDUM
Article 12 of Council Regulation (EU,
Euratom) No 1311/2013 laying down the multiannual financial framework for
the years 2014-2020[1]
allows for the mobilisation of the European Globalisation Adjustment Fund (EGF)
within the annual ceiling of EUR 150 million (2011 prices) over
and above the relevant headings of the financial framework.
The rules applicable to the contributions
from the EGF for applications submitted until 31 December 2013 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 Fund[2].
On 31 August 2012, Italy submitted application EGF/2012/007 IT/VDC
Technologies for a financial contribution from the EGF,
following redundancies in VDC Technologies SpA and one supplier in Italy.
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. || EGF/2012/007 
 Member State || Italy 
 Article 2 || (a) 
 Primary enterprise || VDC Technologies SpA 
 Suppliers and downstream producers || 1 
 Reference period || 26.2.2012 – 25.6.2012 
 Starting date for the personalised services || 30.11.2012 
 Application date || 31.8.2012 
 Redundancies during the reference period || 1 164 
 Redundancies before and after the reference period || 54 
 Total eligible redundancies || 1 218 
 Redundant workers expected to participate in the measures || 1 146 
 Expenditure for personalised services (EUR) || 5 698 620 
 Expenditure for implementing EGF[3] (EUR) || 323 350 
 Expenditure for implementing EGF (%) || 5,4 % 
 Total budget (EUR) || 6 021 970 
 EGF contribution (50 %) (EUR) || 3 010 985 
1.           The application was
presented to the Commission on 31 August 2012 and supplemented by
additional information up to 6 September 2013.
2.           The
application meets the conditions for deploying the EGF as set out in Article
2(a) of Regulation (EC) No 1927/2006, and was submitted within the deadline of
10 weeks referred to in Article 5 of that Regulation.
Link between the redundancies and major structural changes in world trade patterns due to globalisation 
3.           The enterprises concerned
are VDC Technologies SpA and a supplier, Cervino Technologies Srl, which is a
100 % subsidiary of VDC Technologies SpA. VDC Technologies SpA
manufactured television sets and television monitors and displays as well as
air-conditioning units. Cervino Technologies Srl manufactured plastic mouldings
used in television sets and television monitors and displays. The sectors of
economic activity concerned are classified under NACE[4] division 26
‘Manufacture of computer, electronic and optical products’ and division 27
‘Manufacture of electrical equipment’. 
4.           In order to establish the
link between the redundancies and major structural changes in world trade
patterns due to globalisation, Italy argues that the sectors concerned in the
EU have undergone serious economic disruption due to intensified competition
from third countries, particularly China. 
5.           Between 2008 and 2011,
imports from China into the EU-27 of products classified under SITC[5] division 76
‘Telecommunications and sound-recording and reproducing apparatus and equipment’
increased by 18.7 %. During the same period, China’s share of imports into
the EU-27 of such products increased from 44.0 % to 52.2 %[6]. This change in world
trade patterns can be considered to have had a significant impact on employment
levels, as around 121 000 jobs have been lost in the sector of the
manufacture of computer, electronic and optical products in the EU during the
period 2008-2011, which represents a reduction by 7 %[7].
Demonstration of the number of
redundancies and compliance with the criteria of Article 2(a)
6.           Italy 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.
7.           The application cites 1 164
redundancies in VDC Technologies during the four-month
reference period from 26 February 2012 to 25 June 2012
and a further 54 redundancies outside the reference period, but related to the
same collective redundancy procedure. All of these redundancies were calculated
in accordance with the second indent of the second paragraph of Article 2 of
Regulation (EC) No 1927/2006. 
Explanation of the unforeseen nature
of those redundancies
8.           The Italian authorities
argue that whereas, between 2007 and the end of 2009, VDC Technologies had been
one of the largest producers of television sets in volume terms in the EU, at
the end of 2009 VDC Technologies SpA permanently ceased all productive
activities at its plant in Anagni (Frosinone) and the workers were admitted to
benefit from the cassa integrazione guadagni (CIG) scheme[8]. According to the
Italian authorities, this situation was caused by various factors such as a reduction
in demand for plasma screen television sets in favour of LCD screen sets, the
adverse euro/dollar exchange rate from 2008 onwards and a reduction in market
prices for television sets partly because of decreasing manufacturing costs. 
9.           Actions were taken to revive
the company and negotiations for the takeover of VDC Technologies SpA were
initiated in 2010 and 2011 with a potential buyer. However, as no agreement was
reached with its creditors, VDC Technologies SpA was declared in bankruptcy on
25 June 2012. Cervino Technologies Srl was declared in bankruptcy on
5 September 2012.
Identification of the dismissing
enterprises and workers targeted for assistance
10.         The application relates to 1 218
redundancies (1 164 in VDC Technologies SpA and 54 in Cervino Technologies
Srl). 
11.         The Italian authorities
have estimated that 1 146 of the redundant workers will participate in the
coordinated package of personalised services.
12.         The break-down of the
targeted workers is as follows:
 Category || Number || Percent 
 Men || 1 057 || 92,2 
 Women || 89 || 7,8 
 EU citizens || 1 145 || 99,9 
 Non EU citizens || 1 || 0,1 
 15-24 years old || 0 || 0,0 
 25-54 years old || 713 || 62,2 
 55-64 years old || 432 || 37,7 
 > 64 years old || 1 || 0,1 
13.         From the workers targeted
for assistance, 69 have a longstanding health problem or disability.
14.         In terms of occupational
categories, the break-down is as follows:
 Category || Number || Percent 
 Technicians and associate professionals || 1 097 || 95,7 
 Clerical support workers || 27 || 2,4 
 Service and sales workers || 22 || 1,9 
15.         In accordance with Article
7 of Regulation (EC) No 1927/2006, Italy 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
16.         The establishments of VDC
Technologies SpA and Cervino Technologies Srl in which the redundancies have
occured are located in the NUTS 3 level region ITI45 Frosinone in the NUTS 2
level region ITI4 Lazio. 
17.         The authorities in charge
of implementing the measures are the Italian Ministry of Labour and Social
Policies and the Lazio Region (Directorate-General for Policies for Labour and
Systems for Guidance and Training). 
18.         The Italian authorities
have established a local support network composed of representatives of local
and regional authorities (municipalities, province, region), trade unions (CGIL
USB, CISAL, CISL, UIL, UGL), and employers organisations.
Expected impact of the redundancies
as regards local, regional or national employment
19.         According to the Italian
authorities, economic activity and employment in the Lazio region have been strongly
affected by globalisation. In 2011, regional GDP decreased by −0.3 %[9] and data for the first
half of 2012 show a reduction in exports in the region’s main industrial
sectors (−28.3 % for petroleum products, −19 % for transport means,
−6.3 % for chemical products, −0.7 % for electronics[10]). Total employment in
Lazio fell by −0.2 % in 2011 and by −0.7 % in the first quarter of
2012. The unemployment rate in Lazio has increased from 8.5 % in 2009 to 10.8 %
in 2012[11].

20.         To limit the impact of this
economic situation, the Italian authorities have made extensive use of instruments
such as the CIG. According to the Italian authorities, in the first seven
months of 2012, total CIG support increased by 31 % in Lazio, which was
more than for Italy as a whole. In the province of Frosinone, there was a
substantial increase in the number of hours for industry (from 1.9 million to
3.9 million). 
21.         The redundancies are
therefore set against a regional and local context in which the number of
employees in industry is contracting. The Italian authorities expect the
redundancies to have a strong negative impact on the labour market in the area
and to worsen the economic situation in the area, particularly among the
company’s suppliers.
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
22.         All the following measures
combine to form a co-ordinated package of personalised services which aims at
re-integrating the redundant workers into employment:
–     
Occupational guidance/ skills assessment
(Orientamento professionale/bilancio di competenza):
All targeted workers will receive personalised information, advice and tutoring
services provided through the local employment centres which will serve as an
interface between workers and occupational guidance service providers.
–     
Training (Formazione): All targeted workers will participate in training courses in areas
and sectors with good developments prospects and that correspond to recognised
needs in the labour market. 
–     
Service to individuals (Servizi alla
persona/Voucher di conciliazione): Workers living
with persons who need care (such as dependent children, elderly persons or
disabled persons) will receive a lump-sum payment of up to EUR 1 000 per
worker to cover the cost of care services. 
–     
Bonus for territorial mobility (Bonus per la
mobilità territoriale): Workers recruited by
enterprises located more than 100 km from their place of residence will receive
a mobility allowance of up to EUR 5 000 per worker to cover removal and
travel costs. The allowance will be paid only on presentation of evidence of
the costs incurred. Regular checks will be carried out to monitor the
allocation of these funds.
–     
Support to entrepreneurship (Supporto all’imprendiorialità): Workers will be able to participate in a call for proposals to
present a business project. The Lazio Business Innovation Centre (BIC Lazio)
will select the projects to be supported, which will receive legal,
administrative, marketing, and financial advice from BIC Lazio and a contribution
of a maximum amount of EUR 2 000 per worker to cover start-up costs and
the cost of the services offered by BIC Lazio. 
–     
Recruitment bonus (Bonus assunzione): Enterprises that take on redundant workers with permanent
contracts or fixed-term contracts of at least 24 months will receive a
recruitment incentive of EUR 6 000 per worker.
–     
Participation allowance (Indennità di
partecipazione): Workers who participate in the job
search and training measures will receive a participation allowance of an average
amount of EUR 500 per month for a maximum duration of four months. The
amount of each allowance will be calculated according to the actual
participation of each worker in those measures.
23.         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.
24.         The personalised services
presented by the Italian authorities are active labour market measures within
the eligible actions defined by Article 3 of Regulation (EC) No 1927/2006. The Italian
authorities estimate the total costs at EUR 6 021 970, of which
the expenditure for personalised services at EUR 5 698 620 and
the expenditure for implementing the EGF at EUR 323 350 (5,4 %
of the total amount). The total contribution requested from the EGF is
EUR 3 010 985 (50 % of the total costs).
 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) 
 Occupational guidance/ skills assessment (Orientamento professionale/bilancio di competenza) || 1 146 || 470 || 538 620 
 Training (Formazione) || 1 146 || 2 000 || 2 292 000 
 Service to individuals (Servizi alla persona/Voucher di conciliazione) || 150 || 1 000 || 150 000 
 Bonus for territorial mobility (Bonus per la mobilità territoriale) || 42 || 5 000 || 210 000 
 Support to entrepreneurship (Supporto all'imprendiorialità) || 300 || 2 000 || 600 000 
 Recruitment bonus (Bonus assunzione) || 300 || 6 000 || 1 800 000 
 Participation allowance (Indennità di partecipazione) || 54 || 2 000 || 108 000 
 Sub total personalised services ||   || 5 698 620 
 Expenditure for implementing EGF (third paragraph of Article 3 of Regulation (EC) No 1927/2006) 
 Preparatory activities ||   || 40 350 
 Management ||   || 100 000 
 Information and publicity ||   || 35 000 
 Control activities ||   || 148 000 
 Sub total expenditure for implementing EGF ||   || 323 350 
 Total estimated costs ||   || 6 021 970 
 EGF contribution (50 % of total costs) ||   || 3 010 985 
25.         Italy confirms that the
measures described above are complementary with actions funded by the
Structural Funds and that any double financing will be prevented.
Date(s) on which the personalised
services to the affected workers were started or are planned to start
26.         Italy started the
personalised services to the affected workers included in the co-ordinated
package proposed for co-financing to the EGF on 30 November 2012. This
date therefore represents the beginning of the period of eligibility for any
assistance that might be awarded from the EGF.
Procedures for consulting the social
partners
27.         According to the Italian
authorities, all social partners involved participated in a meeting held by the
national and regional authorities in January 2013, during which actions to
reintegrate the redundant workers in the labour market were discussed. Meetings
of the social partners took place up to June 2013, and a local support network
was activated with the involvement of various local partners.
28.         The Italian 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
29.         As regards the criteria
contained in Article 6 of Regulation (EC) No 1927/2006, the Italian 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 
30.         Italy has notified the
Commission that the financial contribution will be managed at national level by
the Italian Ministry of Labour and Social Policies (Directorate-General for
Active and Passive Policies), within which one unit (ufficio) is acting
as managing authority, a second unit is acting as certifying authority and a
third unit is acting as audit authority. The Lazio Region will act as the
intermediate body for the managing authority at regional level. The application
contains a detailed description of the management and control system which
specifies the responsibilities of the organisations involved at national and regional
level.
Financing
31.         On the basis of the
application from Italy, the proposed contribution from the EGF to the
coordinated package of personalised services (including expenditure to
implement EGF) is EUR 3 010 985, representing 50 % of the
total cost. The Commission's proposed allocation under the Fund is based on the
information made available by Italy.
32.         Considering the maximum
possible amount of a financial contribution from the EGF under Article 12 of
Council Regulation (EU, Euratom) No 1311/2013, as well as the scope for
reallocating appropriations, the Commission proposes to mobilise the EGF for
the total amount referred to above.
33.         The proposed decision to
mobilise the EGF will be taken jointly by the European Parliament and the
Council, as laid down in point 13 of the Interinstitutional Agreement of 2
December 2013 between the European Parliament, the Council and the Commission
on budgetary discipline, on cooperation in budgetary matters and on sound
financial management[12].
34.         The Commission presents
separately a transfer request in order to enter in the 2014 budget specific
commitment appropriations, as required under point 13 of the Interinstitutional
Agreement of 2 December 2013.
Source of payment appropriations 
35.         Appropriations allocated to
the EGF budget line in the 2014 budget will be used to cover the amount of
EUR 3 010 985 needed for the present application.
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 13 of the
Interinstitutional Agreement of 2 December 2013 between the European
Parliament, the Council and the Commission on budgetary discipline, on
cooperation in budgetary matters and on sound financial management
(application EGF/2012/007 IT/VDC Technologies from Italy)
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 Regulation (EC) No
1927/2006 of the European Parliament and of the Council of 20 December 2006
establishing the European Globalisation Adjustment Fund[13], and in particular
Article 12(3) thereof,
Having regard to the Interinstitutional
Agreement between the European Parliament, the Council and the Commission of
2 December 2013 on budgetary discipline, on cooperation in budgetary
matters and on sound financial management[14],
and in particular point 13 thereof,
Having regard to the proposal from the
European Commission[15],

Whereas:
(1)       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.
(2)       The EGF shall not exceed a
maximum annual amount of EUR 150 million (2011 prices), as laid down in
Article 12 of Council Regulation (EU, Euratom) No 1311/2013 laying
down the multiannual financial framework for the years 2014-2020[16].
(3)       Italy submitted an
application to mobilise the EGF, in respect of redundancies in the enterprise VDC Technologies SpA
and one supplier, on  31 August 2012 and supplemented it by additional information up to 6 September 2013. This application complies with the
requirements for determining the financial contributions as laid down in
Article 10 of Regulation (EC) No 1927/2006. The Commission,
therefore, proposes to mobilise an amount of EUR 3 010 985.
(4)       The EGF should, therefore,
be mobilised in order to provide a financial contribution for the application
submitted by Italy,
HAVE ADOPTED THIS DECISION:
Article 1
For the general budget of the European
Union for the financial year 2014, the European Globalisation Adjustment Fund
(EGF) shall be mobilised to provide the sum of EUR 3 010 985 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                        For
the Council
The President                                                 The
President
[1]               OJ L 347, 20.12.2013, p. 884.
[2]               OJ L 406, 30.12.2006, p. 1.
[3]               In accordance with the third paragraph of Article 3
of Regulation (EC) No 1927/2006.
[4]               Statistical Classification of Economic Activities
revision 2.        
http://ec.europa.eu/eurostat/ramon/nomenclatures/index.cfm?TargetUrl=LST_NOM_DTL&StrNom=NACE_REV2&StrLanguageCode=EN&IntPcKey=&StrLayoutCode=HIERARCHIC

[5]               Standard International Trade Classification revision
4.               
http://unstats.un.org/unsd/publication/SeriesM/SeriesM_34rev4E.pdf

[6]               Source: Eurostat (online data code: DS_018995).
[7]               Source: Eurostat (online data code: lfsq_egan22d).
[8]               The CIG scheme consists in a financial benefit paid
by the Istituto Nazionale della Previdenza Sociale – INPS (National Social
Security Institute) to workers suspended from work performance or working
reduced hours.
[9]               Source:
ISTAT.
[10]             Source:
Banca d’Italia.
[11]             Source:
Eurostat.
[12]             OJ
C 373, 20.12.2013, p. 1.
[13]             OJ L 406, 30.12.2006, p. 1.
[14]             OJ C 373, 20.12.2013, p. 1.
[15]             OJ C […], […], p. […].
[16]             OJ L 347, 20.12.2013, p. 884.