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/2014/014 DE/Aleo Solar)
Date: 2014-12-16
Institutions: European Commission
Subjects: Belgium, European Globalisation Adjustment Fund, building industry, cessation of trading, commitment of expenditure, financial management, management audit, reintegration into working life, solar architecture, vocational training













EUR-Lex - 52014PC0726 - EN











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52014PC0726

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/2014/014 DE/Aleo Solar) /* COM/2014/0726 final - 2014/ () */









EXPLANATORY MEMORANDUM
CONTEXT OF THE PROPOSAL
1.           The rules applicable to
financial contributions from the European Globalisation Adjustment Fund (EGF)
are laid down in Regulation (EU) No 1309/2013 of the European Parliament
and of the Council of 17 December 2013 on the European Globalisation
Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006[1] (the 'EGF Regulation').

2.           The German authorities
submitted application EGF/2014/014 DE/Aleo Solar for a financial contribution
from the EGF, following redundancies in aleo solar AG
and two subsidiaries in Germany.
3.           Following its assessment of
this application, the Commission has concluded, in accordance with all applicable
provisions of the EGF Regulation, that the conditions for awarding a financial
contribution from the EGF are met.
SUMMARY OF THE APPLICATION
 EGF application || EGF/2014/014 DE/Aleo Solar 
 Member State || Germany 
 Region(s) concerned (NUTS level 2) || Brandenburg (DE 40) and Weser-Ems (DE 94) 
 Date of submission of the application || 29.7.2014 
 Date of acknowledgement of receipt of the application || 4.8.2014 
 Date of request for additional information || 11.8.2014 
 Deadline of provision of the additional information || 23.9.2014 
 Deadline for the completion of the assessment || 16.12.2014 
 Intervention criterion || Article 4(1)(a) of the EGF Regulation 
 Primary enterprise || aleo solar AG 
 Sector(s) of economic activity (NACE Rev. 2 division)[2] || Division 26 ('Manufacture of computer, electronic and optical products') 
 Number of subsidiaries, suppliers and downstream producers || 2 
 Reference period (four months) || 7 March 2014 - 7 July 2014 
 Number of redundancies and cessations of activity during the reference period (a) || 657 
 Number of redundancies and cessations of activity before or after the reference period (b) || 0 
 Total number of redundancies and cessations of activity (a + b) || 657 
 Total estimated number of targeted beneficiaries || 476 
 Number of targeted young persons not in employment, education or training (NEETs) || 0 
 Budget for personalised services (EUR) || 1 719 601 
 Budget for implementing EGF[3] (EUR) || 105 000 
 Total budget (EUR) || 1 824 601 
 EGF contribution (60 %) (EUR) || 1 094 760 
ASSESSMENT OF THE APPLICATION
Procedure
4.           The German authorities submitted
application EGF/2014/014 DE/Aleo Solar within 12 weeks of the date on which the
intervention criteria set out below were met, on 29 July 2014. The Commission acknowledged
receipt of the application within two weeks of the date of submission of the
application, on 4 August 2014 and requested additional information from the German
authorities on 11 August 2014. Such additional information was provided within six
weeks of the date of the request. The deadline of 12 weeks of the receipt of
the complete application within which the Commission should finalise its assessment
of the application's compliance with the conditions for providing a financial
contribution expires on 16 December 2014.
Eligibility of the application
Enterprises and beneficiaries
concerned
5.           The application relates to
657 workers made redundant in aleo solar AG and its two
subsidiaries aleo solar Dritte Produktion GmbH (Prenzlau) and aleo solar
Deutschland GmbH (Oldenburg). aleo solar operated in the economic sector
classified under NACE Rev. 2 division 26 ('Manufacture of computer, electronic and optical products'). The redundancies made by the enterprises concerned are located in the
NUTS[4] level 2 regions of Brandenburg (DE 40) and Weser-Ems (DE 94).
 Enterprises and number of dismissals within the reference period 
 aleo solar AG || 390 
 aleo solar Dritte Produktion GmbH || 163 
 aleo solar Deutschland GmbH || 104 
 Total no. of enterprises: 3 || Total no. of dismissals: || 657 
 Total no. of self-employed persons whose activity has ceased: || 0 
 Total no. of eligible workers and self-employed persons: || 657 
Intervention criteria
6.           The German authorities submitted
the application under the intervention criteria of Article 4(1)(a) of the
EGF Regulation, which requires at least 500 workers being made redundant or self-employed persons' activity ceasing,
over a reference period of four months in an enterprise in a Member State, including
workers made redundant and / or
self-employed persons' activity ceasing in its
suppliers and downstream producers.
7.           The
reference period of four months runs from 7 March 2014 to 7 July 2014.
8.           The
application relates to 390 workers made redundant[5]
in aleo solar AG during the reference period of four months, and 267 workers
made redundant in its two subsidiaries during the same reference period.
Calculation of redundancies and of cessation
of activity
9.           The redundancies have been
calculated as follows: 
–              
all 657 workers are counted as redundant from
the date of the employer's individual notice to lay off or to terminate the
contract of employment of the worker. 
Eligible beneficiaries
10.         The application includes no
further redundancies before or after the reference period.
11.         The total number of
eligible beneficiaries is therefore 657. 
Link between the redundancies and major
structural changes in world trade patterns due to globalisation
12.         In order to establish the
link between the redundancies and major structural changes in world trade
patterns due to globalisation, Germany states that aleo solar was a German
company within the Robert Bosch Group, which also had production sites in Spain, Italy, the USA, Australia and England, several of which have been sold off within the past
few years.
13.         It is only one of many
European solar enterprises that have become insolvent, quit the solar business,
shut down production wholly or partially, or sold out to Chinese investors over
the past few years (since 2010). The Photovoltaic (PV) Sustainable Growth Index
for 2011[6]
concludes that "the total revenue pool of all 33 PV companies in the study
[7] increased by 79% from
$21bn to $36bn (2005-2011) in a market where installations grew by 129 %.
Chinese and Taiwanese companies were able to grow revenue faster than German
and US companies. Market share of German companies continued to slide. US companies gave up market share after four years of gains." Thus, between 2005 and
2011, the revenue share of China increased from 11 % to 45 %, while that of Germany fell from 64 % to 21 %. The only other EU Member State with a production
significant enough to be listed, is Spain with 1 %.
14.         China has built up huge
overcapacities in solar modules, which neither its own consumers nor the world
market can absorb; this coupled with the worldwide decline in demand has led to
a collapse in prices. As a result of locally available financial support for
manufacturers in China, and the priority given to the sector by the current
Chinese 5-year plan (2011-2015), these companies are able to survive and grow
by selling their output cheaply on markets abroad. More than 90 % of Chinese production
is exported, of which 80 % into the EU. In 2011, EU prices dropped by 40 %
compared with 2010, to a level below the production costs of aleo solar. In
2013, the EU approved additional duties on solar modules originating in China, and a minimum price which, however, is still below the production costs of German
producers.
15.         Aleo solar in 2010 had a
turnover of EUR 550 million and a profit of EUR 43 million; this declined
rapidly from 2011 and by 2013 had reached losses of EUR 92 million. Employment
in the company meanwhile declined from 995 in 2011 to 740 in 2013. Despite
various efforts to restructure and improve efficiency, it did not manage to
return to profitability, and future prospects were no better. Aleo solar went
into liquidation and closed or sold off its facilities, while some other German
solar companies struggling with losses moved production to the Far East, e.g.
Malaysia. 
16.         To date, solar module manufacturing
has been the subject of two EGF applications (including this one), both of
which were based on trade related globalisation.
Events giving rise to the redundancies
and cessation of activity
17.         The events giving rise to
the redundancies are the closure of the two sites in Germany of aleo solar --
the production facility in Prenzlau (553 redundancies) and the administrative
centre in Oldenburg (104 redundancies). The production site in Prenzlau has
meanwhile been sold by the liquidator to an Asian consortium, which has taken
back 164 of the dismissed aleo solar workers. These workers, although for the
time being employed again, are nevertheless eligible to participate in EGF
measures (provided that these are compatible with their working hours), as the
security of their new employment is not certain.
Expected impact of the redundancies
as regards the local, regional or national economy and employment
18.         The redundancies have a
significant adverse impact on the regional economy in Prenzlau / Brandenburg. This area has a relatively low population density (41/ km vs the national
average of 84/km). The area has mostly small and medium-sized enterprises, and
only 10 enterprises (0.3 %) have more than 249 workers. Aleo solar was one of
these major employers, and there are no immediate prospects for the redundant
workers of finding any equivalent new jobs.
19.         The main sectors in the
region are agriculture (including organic production), tourism, mineral oil and
renewable energy production. Per capita income is well below the national
average. The areas of Uckermark and Prenzlau have the highest unemployment
rates of Germany, at 15.5 and 16.4 % respectively (May 2014). As the workers
who have joined the transfer company and started the measures which the EGF is
being asked to support, are not counted in the unemployment rate, this would be
higher by 0.9 % if they were included. The risk of long-term unemployment for
the redundant workers is high. The measures for the workers will therefore
encourage them to look beyond the immediate area and take up job offers where
they can be found.
20.         The employment situation is
much more promising in the Oldenburg area, where the aleo solar administration
was located, and the 104 workers made redundant there are not included in the
measures to be co-funded by the EGF. 
Targeted beneficiaries and proposed
actions
Targeted beneficiaries
21.         The estimated number of
targeted workers expected to participate in the measures is 476. The breakdown
of these workers by sex, citizenship and age group is as follows:
 Category || Number of targeted beneficiaries 
 Sex: || Men: || 262 || (55.0 %) 
   || Women: || 214 || (45.0 %) 
 Citizenship: || EU citizens: || 474 || (99.6 %) 
   || non-EU citizens: || 2 || (0.4 %) 
 Age group: || 15-24 years: || 3 || (0.6 %) 
   || 25-29 years: || 42 || (8.8 %) 
   || 30-54 years: || 332 || (69.7 %) 
   || 55-64 years: || 98 || (20.6 %) 
   || over 64 years: || 1 || (0.2 %) 
Eligibility of the proposed actions
22.         The social partners
involved in aleo solar AG and aleo solar Dritte Produktion GmbH agreed in early
2014 on a social plan which includes the services of a transfer company. The
organisation chosen by the stakeholders to provide transfer company services is
the BOB Transfer GmbH, which will be active in Prenzlau. Workers will receive
the transfer company services from 11 April 2014. Unlike earlier German
applications, there will be no possibility here of starting the measures with
the help of ESF co-funding, while awaiting the outcome of the EGF application.
23.         All the following measures
combine to form a package of personalised services co-ordinated by the transfer
company and aimed to re-integrate the redundant workers into employment:
–        Vocational training measures
(Qualifizierungen) : These are offered to the eligible workers following
profiling and career guidance interviews, and with the intention of helping
them to benefit from perceived opportunities in the labour market. Training
courses offered will focus on sectors with future prospects, such as
construction, health and nursing, retail, catering, transport and logistics.
Courses can be provided individually or in groups, and they range from basic
competences (such as languages, IT, driving licence) to upskilling courses and
courses preparing the workers for new sectors, including business creation.
Special courses will be prepared for 18 redundant workers with varyious
disabilities.
–        Careers advice and guidance
(Berufsorientierung) : This will include various innovative instruments, such
as skills mapping, video job applications, online job applications, and home
office. The skills mapping instrument was developed in the context of the New
Skills New Jobs initiative of the Commission and should help the workers to
avoid skills mismatches in their applications and potential new jobs. Video job
applications will help applicants to present themselves professionally and get
noticed. Home offices could give them job opportunities, as the cost of hiring
them would be reduced for potential employers.
–        Peer groups / workshops : These will
be group fora assisted by a facilitator, helping participants to exchange ideas
and reflections. Peer groups may be composed in various ways, e.g. by age
group, need, family composition or previous work experience. Account will be
taken of the fact that some 200 participants are over 50 years of age and
confronted with additional obstacles in their job search. Several couples and
lone parents are affected by the closure and may require psychological support.
–        Entrepreneurship advice (Existenzgründerberatung)
: This will comprise expert advisory services for those contemplating a
business start-up. New entrepreneurs and creative role models will be brought
in to stimulate the redundant workers and help them develop new ideas.
–        Inter-regional advice (Interregionale
Beratung) : This will attempt to encourage workers to look for jobs in other
regions and may comprise visits to job fairs.
–        Job search (Stellenresearch) : A
professional job searcher (Jobscout) will use his or her contacts and
experience in order to locate potential job vacancies not yet published, which
could suit the eligible workers. Events may be organised at which the eligible
wokers can present themselves to potential new employers.
–        Follow-up mentoring / advice (Nachbetreuung
/ Beratung) : Workers can benefit from further guidance and counselling after
they take up a new job, so that the risk of job loss can be minimised.
–        Follow-up mentoring / job safeguard
(Nachbetreuung / Beschaeftigungs-sicherung) : This is particularly important
for workers who take up new jobs at some distance from their previous home and
may need mentoring and advice as they settle.
–        Training allowance
(Transferkurzarbeitergeld) : This amounts to 60 % of the worker's previous net
income, or 67 % if one or more children are resident in the recipient's
household. It is payable for around nine months from the date when the worker
enters the transfer company.
24.         The
proposed actions, here described, constitute active labour market measures within
the eligible actions set out in Article 7 of the EGF Regulation. These
actions do not substitute passive social protection measures. 
25.         The German authorities have
provided the required information on actions that are mandatory for the
enterprises concerned by virtue of national law or pursuant to collective
agreements. They have confirmed that a financial
contribution from the EGF will not replace such actions.
Estimated budget
26.         The estimated total costs are
EUR 1 824 601, comprising expenditure for personalised services
of EUR 1 719 601 and expenditure for preparatory, management, information and
publicity, control and reporting activities of EUR 105 000.
27.         The
total financial contribution requested from the EGF is EUR 1 094 760
(60 % of total costs).
 Actions || Estimated number of participants || Estimated cost per participant (EUR)* || Estimated total costs (EUR) 
 Personalised services (Actions under Article 7(1)(a) and (c) of the EGF Regulation) 
 Vocational training measures (Qualifizierungsmassnahmen) || 230 || 2 512 || 577 793 
 Careers advice and guidance (Berufsorientierung) || 180 || 370 || 66 625 
 Peergroups / Workshops || 265 || 559 || 148 100 
 Entrepreneurship advice (Existenzgruenderberatung) || 25 || 1 225 || 30 634 
 Inter-regional advice (Interregionale Beratung) || 95 || 364 || 34 549 
 Job search (Stellenresearch) || 100 || 683 || 68 255 
 Follow-up mentoring / advice (Nachbetreuung / Beratung) || 165 || 900 || 148 477 
 Follow-up mentoring / job safeguard (Nachbetreuung / Beschaeftigungssicherung) || 35 || 1 237 || 43 308 
 Sub-total (a): || – || 1 117 741 
 (65 %) 
 Allowances and incentives (Actions under Article 7(1)(b) of the EGF Regulation) 
 Training allowance (Transferkurzarbeitergeld) || 403 || 1493 || 601 860 
 Sub-total(b): || – || 601 860 
 (35 %) 
 Actions under Article 7(4) of the EGF Regulation 
 1. Preparatory activities || – || 15 750 
 2. Management || – || 57 750 
 3. Information and publicity || – || 5 250 
 4. Control and reporting || – || 26 250 
 Sub-total (c): || – || 105 000 
 (5,75 %) 
 Total costs (a + b + c): || – || 1 824 601 
 EGF contribution (60 % of total costs) || – || 1 094 760 
 * Rounded figures ||   ||   
28.         The costs of the actions
identified in the table above as actions under Article 7(1)(b) of the EGF
Regulation do not exceed 35 % of the total costs for the coordinated
package of personalised services. The German authorities confirmed that these actions
are conditional on the active participation of the targeted beneficiaries in
job-search or training activities. 
Period of eligibility of expenditure
29.         The German authorities
started providing the personalised services to the targeted beneficiaries on 11
April 2014. The expenditure on the actions referred to under sub-totals (a) and
(b) in the table above shall therefore be eligible for a financial contribution
from the EGF from 11 April 2014 to 29 July 2016.
30.         The German authorities started
incurring the administrative expenditure to implement the EGF on 1 March 2014. The
expenditure for preparatory, management, information and publicity, control and
reporting activities, i.e. sub-total (c) in the table above, shall therefore be
eligible for a financial contribution from the EGF from 1 March 2014 to 29
January 2017.
Complementarity with actions funded
by national or Union funds
31.         The sources of national
pre-financing and co-funding are the Federal budget and the Bundesagentur für
Arbeit (Federal Labour Agency). These fund the 40 % national contribution, and
can begin pre-financing the measures once they are sufficiently confident that
the EGF funds are likely to be forthcoming.
32.         The German authorities have
confirmed that the measures described above receiving a financial contribution
from the EGF will not also receive financial contribution from other Union
financial instruments.
Procedures for consulting the targeted
beneficiaries or their representatives or the social partners as well as local
and regional authorities
33.         The German authorities have
indicated that the co-ordinated package of personalised services has been drawn
up in consultation with the representatives of the targeted beneficiaries. Following
such consultations, on 12 June 2014, the Federal Ministry for Employment and
Social Affairs, together with the Federal Labour Agency and the Transfer
Company, presented the planned package of personalised services to the
representatives of the targeted beneficiaries and received their agreement
regarding the content and details.
Management and control systems
34.         The application contains a
description of the management and control system which specifies the
responsibilities of the bodies involved. Germany has notified the Commission
that the financial contribution will be administered by the same bodies within
the Federal Ministry for Labour and Social Affairs (Bundesministerium für
Arbeit und Soziales) which administer the ESF. However, within the 'Gruppe
Europäische Fonds für Beschäftigung', it is the 'Referat EF 4' which acts as
the managing authority for the EGF, while the managing authority for the ESF is
'Referat EF 1'. The 'Organisationseinheit Prüfbehörde' is the control authority
for both EGF and ESF. These bodies also administered the previous EGF
contributions to Germany.
Commitments provided by the Member State concerned
35.         The German authorities have
provided all necessary assurances regarding the following: 
–              
the principles of equality of treatment and
non-discrimination will be respected in the access to the proposed actions and
their implementation;
–              
the requirements laid down in national and EU
legislation concerning collective redundancies have been complied with;
–              
where the dismissing enterprises have continued
their activities after the lay-offs, they have complied with their legal
obligations governing the redundancies and have provided for their workers
accordingly;
–              
the proposed actions will not receive financial
support from other Union funds or financial instruments and any double
financing will be prevented;
–              
the proposed actions will be complementary with
actions funded by the Structural Funds; 
–              
the financial contribution from the EGF will comply
with the procedural and material Union rules on State aid.
BUDGETARY IMPLICATION
Budgetary proposal
36.         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 of
2 December 2013 laying down the multiannual financial framework for the
years 2014-2020[8].
37.         Having examined the
application in respect of the conditions set out in Article 13(1) of the
EGF Regulation, and having taken into account the number of targeted beneficiaries,
the proposed actions and the estimated costs, the Commission proposes to
mobilise the EGF for the amount of EUR 1 094 760,
representing 60 % of the total costs of the proposed actions, in order to provide a financial
contribution for the application.
38.         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[9].
Related acts
39.         At the same time as it
presents this proposal for a decision to mobilise the EGF, the Commission will present
to the European Parliament and to the Council a proposal for a transfer to the
relevant budgetary line for the amount of EUR 1 094 760.
40.         At the same time as it
adopts this proposal for a decision to mobilise the EGF, the Commission will
adopt a decision on a financial contribution, by means of an implementing act,
which will enter into force on the date at which the European Parliament and
the Council adopt the proposed decision to mobilise the EGF.
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/2014/014 DE/Aleo Solar)
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 (EU) No 1309/2013
of the European Parliament and of the Council of 17 December 2013 on the
European Globalisation Adjustment Fund (2014-2020) and repealing Regulation
(EC) No 1927/2006[10],
and in particular Article 15(4) thereof,
Having regard to 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[11],
and in particular point 13 thereof,
Having regard to the proposal from the
European Commission,
Whereas:
(1)       The European Globalisation
Adjustment Fund (EGF) was established to provide support for workers made
redundant and self-employed persons whose activity has ceased as a result of
major structural changes in world trade patterns due to globalisation, as a
result of a continuation of the global financial and economic crisis addressed
in Regulation (EC) No 546/2009[12],
or as a result of a new global financial and economic crisis 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.
(3)       Germany submitted an
application to mobilise the EGF, in respect of redundancies[13] in aleo solar AG and two subsidiaries in Germany, on 29 July 2014 and supplemented it by additional information as provided by
Article 8.3 of Regulation (EU) No 1309/2013. This application complies with the
requirements for determining a financial contribution from the EGF as laid down
in Article 13 of Regulation (EU) No 1309/2013.
(4)       The EGF should, therefore,
be mobilised in order to provide a financial contribution of an amount of EUR 1
094 760 for the application
submitted by Germany,
HAVE ADOPTED THIS DECISION: 
Article 1
For the general budget of the European
Union for the financial year 2015, the EGF shall be mobilised to provide the
sum of EUR 1 094 760 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. 855.
[2]               Regulation (EC) No 1893/2006 of the European
Parliament and of the Council of 20 December 2006 establishing the statistical
classification of economic activities NACE Revision 2 and amending Council
Regulation (EEC) No 3037/90 as well as certain EC regulations on specific
statistical domains (OJ L 393, 30.12.2006, p. 1).
[3]               In accordance with the fourth paragraph of Article 7
of Regulation (EU) No 1309/2013.
[4]               Commission Regulation (EU) No 1046/2012 of 8 November
2012 implementing Regulation (EC) No 1059/2003 of the European Parliament
and of the Council on the establishment of a common classification of
territorial units for statistics (NUTS) as regards the transmission of the time
series for the new regional breakdown (OJ L 310, 9.11.2012, p. 34).
[5]               Within the meaning of Article 3(a) of the EGF
Regulation.
[6]               http://www.pwc.com/en_US/us/technology/assets/pwc-pv-sustainable-growth-index.pdf
[7]               The 33 largest publicly traded
solar companies around the world according to their growth performance and their
financial and operational efficiency
[8]               OJ L 347, 20.12.2013, p. 884.
[9]               OJ C 373, 20.12.2013, p. 1.
[10]             OJ L 347, 20.12.2013, p. 855.
[11]             OJ C 373, 20.12.2013, p. 1.
[12]             OJ L 167,  29.6.2009, p.26.
[13]             Within the meaning of Article 3(a) of the EGF
Regulation.