Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund following an application from Estonia– EGF/2016/003 EE/petroleum and chemicals
Date: 2016-09-28
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: Estonia, European Globalisation Adjustment Fund, North-eastern Estonia, chemical industry, coal by-products industry, collective dismissal, commitment of expenditure, employment aid, oil industry, reintegration into working life

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   EUROPEAN COMMISSION  Brussels, 28.9.2016  COM(2016) 622 final   Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund following an application from Estonia– EGF/2016/003 EE/petroleum and chemicals  
 
EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

1. 

2. 

3. 

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 1927/20061 (the ‘EGF Regulation’). 

On 11 May 2016, Estonia submitted an application EGF/2016/003 EE/petroleum and 
chemicals for a financial contribution from the EGF, following redundancies2 in the 
economic sectors classified under the NACE Revision 2 Division 19 (Manufacture of 
coke  and  refined  petroleum  products)  and  Division  20  (Manufacture  of  chemicals 
and chemical products) in Estonia. 

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/2016/003 EE/petroleum and 
chemicals 

Member State 
Region(s) concerned (NUTS3 level 2) 

Date of submission of the application 

Date of acknowledgement of receipt of the 
application 

Estonia 
EE00- Eesti4 

11 May 2016 

11 May 2016 

Date of request for additional information 

25 May 2016 

Deadline for provision of the additional 
information 

6 July 2016 

Deadline for the completion of the assessment 

28 September 2016 

Intervention criterion 

Article 4(2) of the EGF Regulation 

Number of enterprises concerned 

3 

Sector(s) of economic activity 
(NACE Revision 2 Division)5 

Division 19 (Manufacture of coke and 
refined petroleum products) 
Division 20 (Manufacture of 

1 
2 
3 

4 
5 

OJ L 347, 20.12.2013, p. 855. 
Within the meaning of Article 3 of the EGF Regulation. 
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). 
The Republic of Estonia is not divided into NUTS-level 2 regions. 
OJ L 393, 30.12.2006, p. 1. 

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Reference period (nine months): 

1 August 2015 – 1 May 2016 

chemicals and chemical products) 

Total number of redundancies  

Total number of eligible beneficiaries 

Total number of targeted beneficiaries 

Number of targeted young persons not in 
employment, education or training (NEETs) 
Budget for personalised services (EUR) 
Budget for implementing EGF6 (EUR) 
Total budget (EUR) 
EGF contribution (60 %) (EUR) 

ASSESSMENT OF THE APPLICATION 

Procedure 

1 550 

1 550 

800 

0 

1 740 070 
145 527 
1 885 597 
1 131 358 

4. 

Estonia submitted application EGF/2016/003 EE/petroleum and chemicals within 12 
weeks of the date on which the intervention criteria set out in Article 4 of the EGF 
Regulation  were  met,  on  11 May  2016.  The  Commission  acknowledged  receipt  on 
11 May 2016,  and  requested  additional  information  from  Estonia  on  25 May 2016. 
Such  additional  information  was  provided  within  six  weeks  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 28 September 2016.  

Eligibility of the application 

Enterprises and beneficiaries concerned 

5. 

The  application  relates  to  1 550  workers  made  redundant  in  the  economic  sectors 
classified under the NACE Revision 2 Division 19 (Manufacture of coke and refined 
petroleum  products)  and  Division  20  (Manufacture  of  chemicals  and  chemical 
products). 

Enterprises and number of dismissals within the reference period 

Eesti Energia AS 

Nitrofert AS 

Viru Keemia Grupp AS (VKG) 

532 

421 

597 

Total no. of enterprises: 3 

Total no. of dismissals:  

1 550 

Total no. of self-employed persons whose activity has ceased:  

0 

Total no. of eligible workers and self-employed persons:  

1 550 

6 

In accordance with the fourth paragraph of Article 7 of Regulation (EU) No 1309/2013. 

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Intervention criteria 

6. 

7. 

Estonia  submitted  the  application  under  the  intervention  criteria  of  Article 4(2) 
derogating from the criteria of Article 4(1)(b) of the EGF Regulation, which requires 
at least 500 workers being made redundant over a reference period of nine months in 
enterprises  operating  in  the  same  economic  sector  defined  at  NACE  Revision  2 
Division  and  located  in  one  region  or  two  contiguous  regions  defined  at  NUTS  2 
level in a Member State.  

The reference period of nine months for the application runs from 1 August 2015 to 
1 May 2016. 

Calculation of redundancies and of cessation of activity 

8. 

The redundancies during the reference period have been calculated as follows: 

– 

– 

– 

689  from  the  date  on  which  the  employer,  in  accordance  with  Article 3(1)  of 
Council Directive 98/59/EC7, notified the competent public authority in writing 
of the projected collective redundancies. Estonia confirmed prior to the date of 
the  completion  of  the  assessment  by  the  Commission  that  these  689 
redundancies have actually been effected, 

471 from the date of the employer's individual notice to lay off or to terminate 
the contract of employment of the worker, 

390 from the date of the de facto termination of the contract of employment or 
its expiry. 

Eligible beneficiaries 

9. 

The total number of eligible beneficiaries is 1550. 

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

globalisation 

10. 

11. 

In order to establish the link between the redundancies and major structural changes 
in world trade patterns due to globalisation, Estonia argues that the country is a small 
open economy with high reliance on exports of goods and services (nearly 80 % of 
national GDP in 2015 compared to 43,5 % in EU28). The Estonian economy highly 
suffered  from  the  recent  global  oil  market  turbulences  and  a  general  decrease  in 
Europe's international trade position. The county of Ida-Virumaa, in the north-east of 
Estonia,  has  been  hit  particularly  hard,  not  only  due  to  its  geopolitically  remote 
position  at  the  Russian  border,  but  especially  because  of  a  high  concentration  of 
industries  dependent  on  oil  and  gas  prices  in  this  area.  The  two  sectors  that  are 
subject to this application have been affected in different ways. 

As  concerns  the  manufacturing  of  chemicals  and  chemical  products  sector,  the 
production  of  mineral  fertilizers  is  highly  energy  intensive  (gas  prices  make  up  to 
80 % of total production costs). Due to the high increase of natural gas prices, low-
cost gas regions outside Europe have a competitive advantage and allow producing 
fertilizers at far lower costs than in Europe. Higher environmental standards have had 
further adverse effects on the competitiveness of the sector in Europe. The EU share 
of world chemicals production dropped from 30,9 per cent in 2004 to 17  % in 2014. 
The  EU  gradually  lost  its  top  position  in  world  chemicals  sales  to  China,  which 

7 

Council  Directive  98/59/EC  of  20 July  1998  on  the  approximation  of  the  laws  of  the  Member  States 
relating to collective redundancies (OJ L 225, 12.8.1998, p. 16). 

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12. 

13. 

increased its share from 9 % to almost 35 % in the same timeframe. The rest of Asia 
also  gained  market  shares,  and  the  USA,  where  the  availability  of  cheap  shale  gas 
made production relatively inexpensive as well8. 

As  concerns  the  manufacture  of  coke  and  refined  petroleum  products  sector, 
especially  the  shale  oil  industry,  the  production  of  shale  oil  depends  on  global  oil 
prices. As the production of shale oil is comparatively cost-intensive, the production 
is  only  economically  feasible  when  oil  prices  are  high9.  According  to  Statistics 
Estonia,  due  to  falling  oil  prices,  Estonian  export  of  mineral  fuels  decreased  25 % 
during the first two months of 2016 compared to the same period a year earlier. 

To date, the manufacture of coke and refined petroleum products sector has not yet 
been the subject of any EGF application. The manufacture of chemicals and chemical 
products sector has been subject of one EGF application10, which was based on trade 
related globalisation. 

Events giving rise to the redundancies and cessation of activity 

14. 

In  July  2015,  Nitrofert,  a  company  producing  synthetic  ammonia  and  urea,  shut 
down  its  production  plant.  This  decision  was  made  due  to  a  significant  increase  in 
natural  gas  prices,  and  a  drop  in  the  prices  of  mineral  fertilizers  caused  mostly  by 
intensified global competition, primarily from Asian competitors. Nitrofert has been 
struggling  since  2009  when  the  first  decision  to  interrupt  production  was  made. 
Afterwards, production resumed, but was stopped again after only one year. As there 
were  no signs of a  possible improvement of the situation, the  decision to  terminate 
employment contracts with all 421 redundant employees was taken. 

In October 2015, Eesti Energia, the leading energy company in the Baltic States and 
the largest company in the world working with oil shale, decided to reduce shale oil 
production due to dramatically fallen profits caused by lower oil prices. The decision 
resulted  in  the  collective  termination  of  work  contracts  of  114  employees.  In  the 
following months, another 418 workers were made redundant. 

The third enterprise subject to the application is Viru Keemia Grupp (VKG), another 
shale oil producer in Ida-Virumaa, facing similar problems caused by the drop in oil 
prices.  VKG  closed  down  a  plant  in  January  2016  which  resulted  in  597  workers 
being made redundant. 

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

employment 

15. 

16. 

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9

10 

The impact of the redundancies on the local and regional economy and employment 
is  expected  to  be  significant.  The  sharp  decline  in  shale  oil  production  has  further 
spill-over effects into other sectors such as the energy sector, manufacturing, mining 
and quarrying. In mining, production fell 40 % because of a drop in oil shale mining 
due to low demand caused by the low price of oil and oil shale products.  

Ida-Virumaa  county  is  facing  considerable  challenges  due  to  its  location  and  its 
demography. It is located in a rather remote area in north-eastern Estonia, right at the 
Baltic Sea, about 200 kilometres east of the thriving capital region  – a distance too 

http://fr.zone-secure.net/13451/186036/publication/contents/pdfweb.pdf 

http://www.energiatalgud.ee/img_auth.php/6/64/EY._Estonian_oil_shale_mining_and_oil_production_macroeconomi

c_impacts_study.pdf 
EGF/2013/009 PL/Zachem 

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17. 

18. 

19. 

20. 

far to commute. The region borders the Russian Federation to the East. Due to lower 
wages  in  Russia,  the  current  economic  situation  in  Russia,  and  to  work  permit 
restrictions,  cross-border  commuting  is  not  an  alternative  either.  The  counties 
bordering  directly  to  the  West  and  to  the  South  are  sparsely  populated,  agrarian 
areas.  Ida-Virumaa,  however,  is  the  most  urbanised  region  in  Estonia.  More  than 
80% of the population live in cities, which commonly are mono-cultural settlements 
formed around one or two large production plants. 

About 80 % of the inhabitants of Ida-Virumaa county are ethnic Russians who settled 
there  during  Soviet  times,  working  in  the  then  newly  established  Soviet  industrial 
plants. Many of these people do not hold Estonian citizenship and still speak Russian 
as their first and often only language.  

time  of  Soviet  occupation.  This  has  resulted 

After  independence,  the  region  has  encountered  specific  labour  market  challenges 
due  to  the  collapse  or  restructuring  of  the  large  industrial  plants  established  during 
the 
in  significantly  higher 
unemployment rates in the region (in 2015 11,7 % in the region compared to 6,2 % 
national average). As Russian is not an official language in Estonia, only those with a 
good  command  of  Estonian  have  a  chance  of  finding  a  job  in  other  regions  of 
Estonia,  or  in  new  enterprises  investing  in  Ida-Virumaa.  The  lack  of  knowledge  of 
the national language, alongside with cultural barriers, is one of the major obstacles 
for  workers  made  redundant  finding  a  job  elsewhere  in  the  country,  but  also  for 
companies wishing to invest in or people moving to the region.  

The region’s population of 150 000 in 2015 accounts for only 9,5 % of the national 
labour  force,  but  for  17,3 %  of  unemployed  persons  in  Estonia.  Considering  the 
overall difficult employment situation in the region, including the limited number of 
job  vacancies  available  (rate  of  job  vacancies,  as  the  share  of  job  vacancies  in  the 
total  number  of  jobs,  in  Ida-Virumaa  was  0,8 %  compared  to  1,2 %  on  average  in 
Estonia in the fourth quarter of 2015)11, collective lay-offs of workers with relatively 
similar  technical  profiles  looking  for  similar  jobs  complicate  the  labour  market 
recovery.  

A  regional  development  strategy  has  been  designed,  which  is  outlined  in  the  Ida-
Virumaa Action Plan for 2015-202012. Logistics and tourism have been identified as 
potential  growth  sectors,  and  infrastructure  projects  launched  in  order  to  boost 
growth and to form a base for diversifying the economic structure. Other sectors with 
a potential to create new jobs are the production of timber, metals and construction 
materials. The proposed package of personalised measures to be co-financed by the 
EGF fully supports the action plan by offering training measures aimed at making the 
redundant workers ready for these growth sectors. 

Explanation of the exceptional circumstances underlying the admissibility of the application 

21. 

As set out above, due to the remote location and the unique demographic situation, 
Ida-Virumaa can be considered a small labour market. Estonia further argues that an 
application  under  Article  4(2)  of  the  EGF  Regulation  had  to  be  filed  anyhow 
regarding the Manufacture of chemicals and chemical products-sector. In this sector, 
only one company was concerned, but the number of redundancies did not reach the 
threshold  for  an  application  under  Article  4(1)(a).  Even  though  the  redundancies 

11 
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http://pub.stat.ee/px-web.2001/Dialog/varval.asp?ma=WSV014&lang=1 
https://www.siseministeerium.ee/sites/default/files/dokumendid/Arengukavad/ida-virumaa_tegevuskava_2015-2020_26.02.15.pdf 

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occurred  in  two  different  economic  sectors  defined  at  NACE  Revision  2  Division-
level,  instead  of  filing  two  separate  applications,  Estonia  decided  to  combine  the 
redundancies in one regional application, as the redundancies happened at the same 
place, during the same timeframe and involved redundant workers with very similar 
backgrounds. Therefore, an application exceptionally combining redundancies in two 
different sectors, without a direct link between the redundancies, but all occurring in 
the  same  small  labour  market,  at  the  same  point  of  time,  not  only  reduces 
administrative burden, but offers synergy effects, allowing to organise joint measures 
for workers made redundant in both sectors. 

Targeted beneficiaries and proposed actions 

Targeted beneficiaries 

22. 

The estimated number of redundant workers expected to participate in the measures 
is 800. Main reason for the relatively low number of targeted beneficiaries is that the 
measures  shall  target  those  workers  made  redundant  that  had  been  identified  as 
particularly  vulnerable  on  the  job  market.  Some  of  the  workers  had  declared  they 
were  not  available  for  participation  in  the  measures.  Considering  the  time-lapse 
between  the  first  redundancies  and  the  start  of  the  measures,  Estonia  expects  that 
some of the less vulnerable people would be able to find a job before the start of the 
measures. The breakdown of the workers expected to participate in the measures by 
sex, citizenship and age group is as follows: 

Category 

Number of  
targeted beneficiaries 
(percentages rounded 
to first decimal) 

Sex: 

Men: 

Women: 

Citizenship:  EU citizens: 

non-EU citizens: 

Age group: 

15-24 years: 

25-29 years: 

30-54 years: 

55-64 years: 

over 64 years: 

565 

235 

294 

506 

31 

47 

380 

334 

8 

(70,6 %) 

(29,4 %) 

(36,8 %) 

(63,3 %) 

(3,9 %) 

(5,9 %) 

(47,5 %) 

(41,8 %) 

(1 %) 

Eligibility of the proposed actions 

23. 

The  personalised  services  to  be  provided  to  redundant  workers  consist  of  the 
following actions:  

– 

Support for Formal Studies- Payment of the Cost of Training: This measure is 
targeting  unemployed  persons  who  start  or  continue  their  formal  studies  for 
completing  education,  up-skilling  and  training.  The  envisaged  maximum 
duration is 2.5 years. 

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– 

– 

– 

Training  Cost  Reimbursement  for  Employers:  Applies  if  an  employer  has 
recruited one of the targeted beneficiaries. The Unemployment Insurance Fund 
(PES) may (in accordance to a prior agreement with the employer) reimburse 
50 %  of  the  cost  of  the  training,  but  no  more  than  EUR 1 250.  The  training 
courses  must  take  place during  the  implementation  period.  This  measure  also 
includes the cost of obtaining a proof of qualification. 

Labour Market Training: This measure will last up to 1 year but courses must 
be completed by the end of the implementation period. These courses will not 
only provide vocational training focused on gaining specific skills, but also on 
general  or  soft  skills  as  well  (i.e.  computer  literacy  skills,  entrepreneurship 
training).  It  won't  be  possible  for  the  same  person  to  participate  in  both  the 
labour  market  training  courses  and  in  formal  studies.  The  labour  market 
training  measure  includes  the  cost  of  obtaining  a  proof  of  qualification, 
including  certificates  of  vocational  competency  or  driver’s  licence  and  it  will 
also cover expenses related to state fees for obtaining these. 

Estonian  Language  Training:  all  targeted  beneficiaries  will  be  eligible  to 
participate in the training, including those who have found a new job already 
but  have  to  improve  Estonian  language  skills  in  order  to  find  a  sustainable 
employment.  

–  Work  Practice:  aims  at  the  provision  of  practical  experience  to  targeted 
beneficiaries.  It  is  provided  by  employers  with  the  aim  of  improving 
knowledge and skills needed to re-enter the labour market as soon as possible.  

– 

– 

– 

– 

Debt  Counselling:  main  aim  is  to  learn  how  to  cope  with  the  situation  of 
reduced income and substantial financial obligations. It is important for the re-
integration  into  the  labour  market  and  for  accepting  a  new  job  with  possibly 
lower salary. 

Psychological  Counselling:  this  measure  offers  psychological  counselling 
services  to  help  to  remove  personal  challenges  and  employment  barriers  that 
redundant workers might face. 

Study  Allowance  relating  to  the  participation  in  formal  studies:  During  the 
studies each participant will receive a study allowance of EUR 260 per month. 
To  motivate  persons  to  start  and/or  continue  formal  studies,  the  study 
allowance  will  be  paid  during  the  whole  period  of  studies,  but  only  until  the 
end  of  the  implementation  period.  This  rate  will  be  reduced  to  EUR 130  per 
month  in  case  a  participant  finds  employment,  but  wishes  to  complete  the 
studies besides the job.  

Scholarship,  Transport  and  Accommodation  Benefit  for  Estonian  Language 
Training: in case the language training is provided to an unemployed person, a 
scholarship as well as a transport and accommodation benefit will be paid. 

–  Mobility  Allowance:  is  paid  to  unemployed  persons  who  haven't  found  a 
suitable job close to home and/or those who work at least 20 kilometres away 
from their place of residence. The allowance is paid during the first 6 months 
after starting a new job, but no longer than the duration of the project. In case 
of a fixed-term contract, the allowance  is also  paid during the first  6 months, 
but cannot be paid for longer than half the duration of the contract. The rate of 
the  allowance  is  EUR 0,1  per  kilometre,  but  not  more  than  EUR 300  per 

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24. 

25. 

26. 

calendar  month.  Payments  are calculated  on  the basis  of the shortest  distance 
between the place of residence and the workplace. 

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. 

Estonia has provided the required information on actions that are mandatory for the 
enterprise 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. 

The  package  of  measures  proposed  is  in  line  with  the  needs  identified  in  Estonia’s 
regional development strategy 2014-202013 as well as the Ida-Virumaa Action Plan 
2015-202014.  Estonia  further  declares  that  the  coordinated  package  of  measures  is 
compatible with the shift towards a resource-efficient and sustainable economy and 
shows great potential to facilitate it. 

Estimated budget 

27. 

total  costs  are  EUR 1 885 597,  comprising  expenditure  for 
The  estimated 
for  preparatory, 
personalised  services  of  EUR 1 740 070  and  expenditure 
information  and  publicity,  control  and  reporting  activities  of 
management, 
EUR 145 527.  Estonia  declares  that  it  will  bear  almost  all  the  expenditure  for 
preparatory measures and for information and publicity itself.  

28. 

The total financial contribution requested from the EGF is EUR 1 131 358 (60 % of 
total costs). 

Actions 

Estimated 
number of 
participants 

Estimated cost 
per participant 
(rounded) 
(EUR) 

Estimated total 
costs 
(EUR)  

Personalised services (Actions under Article 7(1)(a) and (c) of the EGF Regulation) 

Support for Formal Studies- Payment of the 
Cost of Formal Studies 

47 

5 750 

270 250 

Training Cost Reimbursement for Employers 

129 

338 

43 661 

Labour Market Training 

Estonian Language Training 

Work Practice 

379 

451 

273 

851 

322 704 

944 

425 523 

649 

177 117 

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https://www.siseministeerium.ee/sites/default/files/dokumendid/eesti_regionaalarengu_strateegia_2014-2020.pdf 
https://www.siseministeerium.ee/sites/default/files/dokumendid/Arengukavad/ida-virumaa_tegevuskava_2015-2020_26.02.15.pdf 

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Debt Counselling 

Psychological Counselling 

51 

50 

116 

5 901 

416 

20 791 

Sub-total (a): 
Percentage of the package of personalised 
services  

– 

1 265 947 

(72,75 %) 

Allowances and incentives (Actions under Article 7(1)(b) of the EGF Regulation) 

Study Allowance relating to the Participation 
in Formal Studies  

47 

4 181 

196 521 

Scholarship and Transport and 
Accommodation Benefit for Estonian 
Language Training 

Mobility Allowance 

Sub-total (b): 
Percentage of the package of personalised 
services: 

 Actions under Article 7(4) of the EGF Regulation 

1. Preparatory activities 

2. Management 

3. Information and publicity 

4. Control and reporting 

Sub-total (c): 
Percentage of the total costs : 

Total costs (a + b + c): 

EGF contribution (60 % of total costs) 

301 

175 

393 

118 177 

911 

159 425 

– 

– 

– 

– 

– 

– 

– 

– 

474 123 

(27,25 %) 

100 

109 635 

400 

35 392 

145 527 

(7,7 %) 

1 885 597 

1 131 358 

29. 

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.  Estonia  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 

30. 

Estonia  started  providing  the  personalised  services  to  the  targeted  beneficiaries  on 
1 July 2016. The expenditure on the actions will therefore be eligible for a financial 
contribution  from  the  EGF  from  1 July 2016  to  1 July 2018,  with  the  exception  of 

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formal  studies  of  a  duration  of  more  than  two  years,  which  will  be  eligible  until 
1 January 2019. 

31. 

Estonia  started  incurring  the  administrative  expenditure  to  implement  the  EGF  on 
11 May 2016.  The  expenditure  for  preparatory,  management,  information  and 
publicity,  control  and  reporting  activities  shall  therefore  be  eligible  for  a  financial 
contribution from the EGF from 11 May 2016 to 1 January 2019.  

Complementarity with actions funded by national or Union funds 

32. 

33. 

The  source  of  national  co-funding  is  the  Foundation  of  labour  market  services  and 
benefits, from which the Estonian Unemployment Insurance Fund (PES) is providing 
active labour market measures in Estonia. As a source of pre-financing, further funds 
are made available from the state budget. 

Estonia  has  confirmed  that  the  measures  described  above  receiving  a  financial 
contribution  from  the  EGF  will  not  also  receive  financial  contributions  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 

34. 

Estonia has indicated that the co-ordinated package of personalised services has been 
drawn up in consultation with all stakeholders  including social partners, enterprises 
and  public  employment  services.  On  15 February 2016,  the  trade  unions  and  the 
employers’  association  of  Ida-Virumaa  organised  a  roundtable  to  discuss  potential 
solutions  for  the  ongoing  crisis.  Afterwards,  in  the  beginning  of  April  2016,  a 
meeting at the Ministry of Social Affairs took place, discussing a possible application 
for  EGF  co-funding.  Participants  of  the  high-level  meeting  were  representatives  of 
the  Estonian  Trade  Union  Confederation,  the  Estonian  Employers’  Confederation, 
the  Ministry  of  Economic  Affairs  and  Communication  as  well  as  of  the  Estonian 
Unemployment  Insurance  Fund  (PES).  A  further  meeting  was  then  organised  at 
regional level in Ida-Virumaa region, involving all relevant regional players. 

Management and control systems 

35. 

The application contains a description of the management and control system which 
specifies  the  responsibilities  of  the  bodies  involved.  Estonia  has  notified  the 
Commission  that  the  financial  contribution  will  be  managed  by  the  Ministry  of 
Social  Affairs  in  the  Strategy  and  Budget  Management  Department  as  EGF 
Managing  Authority  (MA),  by  the  Ministry  of  Finance  in  the  Financial  Control 
Department  as  EGF  Audit  Authority  (AA)  and  by  the  Ministry  of  Finance  in  the 
European  Union  Payments  Department  as  EGF  Certifying  Authority  (CA).  Some 
functions  of  the  Managing  Authority  will  be  delegated  to  Foundation  Innove  as  a 
second level Intermediate Body (IB). 

Commitments provided by the Member State concerned 

36. 

Estonia has 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, 

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– 

– 

– 

– 

the dismissing enterprises,  which  have  continued their activities after  the lay-
offs,  have  complied  with  their  legal  obligations  governing  the  redundancies 
and 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 

37. 

38. 

39. 

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 2014-202015. 

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 1 131 358, representing 60 % of the total 
costs  of  the  proposed  actions,  in  order  to  provide  a  financial  contribution  for  the 
application. 

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 management16. 

Related acts 

40. 

41. 

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 1 131 358. 

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. 

15 
16 

OJ L 347, 20.12.2013, p. 884. 
OJ C 373, 20.12.2013, p. 1. 

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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 following an 
application from Estonia– EGF/2016/003 EE/petroleum and chemicals 

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 1927/200617, 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 management18, and in particular point 13 thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

17 
18 
19 

20 

The  European  Globalisation  Adjustment  Fund  ('EGF')  aims  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, or as a result of a 
new  global  financial  and  economic  crisis,  and  to  assist  them  with  their  reintegration 
into the labour market. 

The  EGF  is  not  to  exceed  a  maximum  annual  amount  of  EUR 150  million  (2011 
in  Article 12  of  Council  Regulation  (EU,  Euratom) 
prices),  as 
No 1311/201319. 

laid  down 

On 11 May 2016, Estonia submitted an application to mobilise the EGF, in respect of 
redundancies  in  the  economic  sectors  classified  under  the  Statistical  classification  of 
economic  activities  in  the  European  Community  ('NACE')  Revision  2  Division  19 
(Manufacture of coke and refined petroleum products) and Division 20 (Manufacture 
of chemicals and chemical products) in Estonia (the Republic of Estonia is not divided 
into Nomenclature of Territorial Units for Statistics ('NUTS')20 level 2 regions). It was 
supplemented  by  additional  information  provided  in  accordance  with  Article 8(3)  of 
Regulation  (EU)  No 1309/2013.  That  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. 

OJ L 347, 20.12.2013, p. 855. 
OJ C 373, 20.12.2013, p. 1. 
Council  Regulation  (EU,  Euratom)  No 1311/2013  of  2  December  2013  laying  down  the  multiannual 
financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884). 
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). 

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(4) 

(5) 

(6) 

In  accordance  with  Article 4(2)  of  Regulation  (EU)  No 1309/2013,  the  application 
from Estonia is considered admissible since the redundancies have a serious impact on 
employment and the local, regional and national economy. 

The EGF should, therefore, be mobilised in order to provide a financial contribution of 
EUR 1 131 358 in respect of the application submitted by Estonia. 

In  order  to  minimise  the  time  taken  to  mobilise  the  EGF,  this  decision  should  apply 
from the date of its adoption, 

HAVE ADOPTED THIS DECISION:  

For the general budget of the Union for the financial year 2016, the European Globalisation 
Adjustment Fund shall be mobilised to provide the amount of EUR 1 131 358 in commitment 
and payment appropriations. 

Article 1 

Article 2 

This Decision shall enter into force on the day of its publication in the Official Journal of the 
European Union. It shall apply from [the date of its adoption]. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

  

Date to be inserted by the Parliament before the publication in OJ. 

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