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Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the 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 Spain  -EGF/2020/001 ES/Galicia shipbuilding ancillary sectors

(

COM(2020)0485 – C9‑0294/2020 – 2020/1996(BUD))

The European Parliament,

 having regard to the Commission proposal to the European Parliament and the Council (COM(2020)0485 – C9‑0294/2020),

 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[1] (EGF Regulation),

 having regard to Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020[2], and in particular Article 12 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[3] (IIA of 2 December 2013), and in particular point 13 thereof,

 having regard to the trilogue procedure provided for in point 13 of the IIA of 2 December 2013,

 having regard to the letters from the Committee on Employment and Social Affairs and from the Committee on Regional Development,

 having regard to the report of the Committee on Budgets (A9-0192/2020),

A. whereas the Union has set up legislative and budgetary instruments to provide additional support to workers who are suffering from the consequences of major structural changes in world trade patterns or of the global financial and economic crisis, and to assist their reintegration into the labour market; whereas this assistance is made through a financial support given to workers and the companies for which they worked;

B. whereas Spain submitted application EGF/2020/001 ES/Galicia shipbuilding ancillary sectors for a financial contribution from the EGF, following 960 redundancies[4] in the economic sectors classified under the NACE Revision 2 Division 24 (Manufacture of basic metals), 25 (Manufacture of fabricated metal products, except machinery and equipment), 30 (Manufacture of other transport equipment), 32 (Other manufacturing), 33 (Repair and installation of machinery and equipment) and 43 (Specialised construction activities) in the NUTS level 2 region of Galicia (ES11) in Spain;

C. whereas the application is based on the intervention criteria of point (a) of Article 4(2) of the EGF Regulation, which allows that a collective application involving SMEs located in one region may cover SMEs operating in different economic sectors as defined at NACE Revision 2 division level, provided that it is SMEs that are the main or the only type of business in that region;

D. whereas SMEs are the backbone of the region’s economy which has more than 95 % of its enterprises with less than 250 workers and whereas the 38 enterprises concerned by this application are SMEs; whereas Galicia is part of the Atlantic Axis association and its economy considerably relies on cross-border companies and workers;

E. whereas the Galician shipbuilding follows the subcontracting pattern of the European shipbuilding sector which is mostly made up of small and medium shipyards, with a very high percentage of subcontracting in value and employment;

F. whereas Spain argues that Europe has lost since 2004 its merchant shipbuilding[5] to East-Asia and that the economic and financial crisis started in 2008 resulted in significant decline in orders, expansion of shipbuilding in Asia and intensive global competition[6];

G. whereas subsidy policies, preferential fiscal treatment such as state aids and lower labour costs in East-Asian countries have resulted in market losses for Union shipbuilders;

H. whereas shipyards in Galicia build technologically advanced military ships, oil and chemical tankers, offshore vessels, oceanographic and seismic research vessels, tugboats, and passenger ships, fishing vessels;

I. whereas the closure of Factorias Vulcano shipyard in July 2019, and the request for creditors pre-bankruptcy by HJ Barreras shipyard in October 2019 have led to the redundancies, since half of the dismissals subject to this application happened in companies that are creditors of HJ Barreras;

J. whereas the subcontractors have a high level of specialisation and therefore a high degree of dependence on the main shipyard with interdependencies and consequences on employment in the ancillary shipbuilding industry the same as if the companies were within a single NACE economic sector.

1. Agrees with the Commission that the conditions set out in Article 4(2) of the EGF Regulation are met and that Spain is entitled to a financial contribution of EUR 2 054 400 under that Regulation, which represents 60 % of the total cost of EUR 3 424 000, comprising expenditure for personalised services of EUR 3 274 000 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 150 000;

2. Notes that the Spanish authorities submitted the application on 13 May 2020, and that, following the provision of additional information by Spain, the Commission finalised its assessment on 11 September 2020 and notified it to Parliament on the same day;

3. Notes that Spain started providing personalised services to the targeted beneficiaries on 13 August 2020 and that the period of eligibility for a financial contribution from the EGF will therefore be from 13 August 2020 to 13 August 2022;

4. Notes that Spain started incurring administrative expenditure to implement the EGF on 8 June 2020 and that expenditure on preparatory, management, information and publicity, control and reporting activities from 8 June 2020 to 13 February 2023 will therefore be eligible for a financial contribution from the EGF;

5. Welcomes that the coordinated package of personalised services was drawn up by Spain in consultation with the social partners and that through a collaboration agreement, the social partners will also be involved in the implementation of the services;

6. Welcomes the involvement of ASIME and the trade unions CCOO[7] and UGT[8], the social partners that participate in the Social Dialogue in Galicia, in the drawing of the co-ordinated package of personalised services and in the implementation of the services; stresses that the social partners should also be involved in the monitoring of the measures;

7. Takes into consideration that the sector of shipyards and ancillary industries in Galicia had in 2018 an annual turnover of around EUR 2 000 million, 10 000 direct jobs and 25,000 indirect jobs depended on shipbuilding, whereas last year the sector’s turnover dropped by 11%  and the number of jobs by 20,8 % (about 2000);

8. Underlines that those redundancies took place in a context of high level of unemployment (11,7 % in 2019) in the region of Galicia; welcomes, therefore, the re-skilling and up-skilling measures provided by this EGF support to make the regional shipbuilding sector, the cross-border economy and the overall labour market, more resilient and competitive in the future;

9. Emphasizes that effective research, specialisation and technological innovation are key to strengthen the European shipbuilding industry and make it able to compete on a global scale with countries relying on lower labour costs, subsidy policies and preferential fiscal treatment;

10. Stresses that the personalised services to be provided to workers made redundant have to be tailor-made for each profile;

11. Notes that 94 % of targeted beneficiaries are men and 78,2 % of them are between 30 and 54 years old; notes that the personalised services to be provided to redundant workers include: information sessions and preparatory workshops, occupational guidance towards employment or self-employment, training (including training towards entrepreneurship will be provided for those aiming at self-employment), tutoring after reintegration into work, intensive job-search assistance and a variety of incentives;

12. Welcomes the inclusion of participation incentives (up to EUR 400), contribution to commuting expenses (EUR 0,19/kilometre plus additional costs such as tolls and parking costs), contribution to expenses for carers of dependent persons (to EUR 20 per day of participation), outplacement incentives (dependent workers or self-employed will receive EUR 200 per month, for a maximum period of six months, in order to support the targeted beneficiaries in job search or training activities, conditional on active participation in the measures);

13. Recalls that the proposed actions constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation and do not substitute passive social protection measures;

14. Notes that the financial contribution will be managed and controlled by the same bodies that manage and control the European Social Fund and that the Xunta de Galicia[9] will be the intermediate body for the managing authority;

15. Stresses that the Spanish authorities have confirmed that the eligible actions do not receive assistance from other Union funds or financial instruments;

16. Reiterates that assistance from the EGF must not replace actions which are the responsibility of companies, by virtue of national law or collective agreements;

17. Recalls that according to the current rules, the EGF could be mobilised to support permanently dismissed workers and the self-employed in the context of the global crisis caused by COVID-19 without amending the EGF Regulation, as Spain is one of the Member States with a severe negative impact following the pandemic;

18. Approves the decision annexed to this resolution;

19. Instructs its President to sign the decision with the President of the Council and arrange for its publication in the Official Journal of the European Union;

20. Instructs its President to forward this resolution, including its annex, to the Council and the Commission.

ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund following an
application from Spain – EGF/2020/001 ES/Galicia shipbuilding ancillary sectors

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) 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.

(2) The EGF is not to 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[12].

(3) On 13 May 2020, Spain 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 Divisions 24 (Manufacture of basic metals), 25 (Manufacture of fabricated metal products, except machinery and equipment), 30 (Manufacture of other transport equipment), 32 (Other manufacturing), 33 (Repair and installation of machinery and equipment) and 43 (Specialised construction activities) in the NUTS level 2 region of Galicia (ES11) in Spain. 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.

(4) In accordance with Article 4(2) of Regulation (EU) No 1309/2013, the application from Spain is considered admissible, since it is a collective application involving only SMEs located in the Galicia region where the SMEs are the main type of business and the redundancies have a serious impact on employment and on the local, regional or national economy.

(5) The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 2 054 400 in respect of the application submitted by Spain.

(6) 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:

Article 1

For the general budget of the Union for the financial year 2020, the European Globalisation Adjustment Fund shall be mobilised to provide the amount of EUR 2 054 400 in commitment and payment appropriations.

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 …,

For the European Parliament For the Council

The President The President

 

 

 

EXPLANATORY STATEMENT

I. Background

The European Globalisation Adjustment Fund has been created in order to provide additional assistance to workers suffering from the consequences of major structural changes in world trade patterns.

According to the provisions of Article 12 of Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020[13] and of Article 15 of Regulation (EU) No 1309/2013[14], the Fund may not exceed a maximum annual amount of EUR 150 million (2011 prices). The appropriate amounts are entered into the general budget of the Union as a provision.

As concerns the procedure, according to 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[15], in order to activate the Fund the Commission, in case of a positive assessment of an application, presents to the budgetary authority a proposal for mobilisation of the Fund and, at the same time, a corresponding request for transfer. In the event of disagreement, a trilogue shall be initiated.

II. Spain’s application and the Commission’s proposal

On 13 May 2020, Spain submitted an application EGF/2020/001 ES/Galicia shipbuilding ancillary sectors for a financial contribution from the EGF, following 960 redundancies[16] in the shipbuilding ancillary sectors, in enterprises located in the NUTS level 2 region of Galicia (ES11).

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.

On 11 September 2020, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of Spain to support the reintegration in the labour market of 960 workers made redundant in 38 small and medium sized companies in in the shipbuilding ancillary sectors in Galicia.

This is the first application to be examined under the 2020 budget and the 7th in the shipbuilding sector in the broader sense, with two based on trade related globalisation and the other five on the global financial and economic crisis. Four of these cases relate to machinery and equipment for ships, while the other three relate to shipyards.

It concerns 960 workers made redundant and refers to the mobilisation of a total amount of EUR 2 054 400 from the EGF for Spain representing 60 % of the total costs of the proposed actions.

In order to establish the link between the redundancies and major structural changes in world trade patterns due to globalisation, Spain argues that the global maritime industry changed dramatically over the last 20 years. From a period (2002 – 2008) of massive growth where most of the new shipyards were built in Asia to a declining trend ever since. As a result of the reduced orders and the significant expansion of shipbuilding in Asia, the sector has been suffering from global overcapacity leading to tough global competition. In the light of fierce competition from East-Asian countries, European shipyards refocused their shipbuilding activities to new markets and entered into the niche markets of complex shipbuilding such as passenger ships and other non-cargo carrying vessels (ONCCV). In 2019, passenger ships, ONCCV and offshore accounted all together for 95% of the European orders.

The six types of actions to be provided to redundant workers and for which EGF co-funding is requested consist of:

a. Information sessions and preparatory workshops

b. Occupational guidance

c. Training

d. Intensive job-search assistance

e. Tutoring after reintegration into work

f. Incentives

According to the Commission, the described measures constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation and do not substitute passive social protection measures.

Spain provided the required information on actions that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. They confirmed that a financial contribution from the EGF will not replace such actions.

III. Procedure

In order to mobilise the Fund, the Commission has submitted to the Budgetary Authority a request to transfer a global amount of EUR 2 054 400 from the EGF reserve (40 02 43) to the EGF budget line (04 04 01). The trilogue procedure shall be initiated in the event of disagreement, as provided for in Article 15(4) of the EGF Regulation.

 

 

LETTER OF THE COMMITTEE ON EMPLOYMENT AND SOCIAL AFFAIRS

Mr Johan Van Overtveldt

Chair

Committee on Budgets

Wiertz 05U012

BRUSSELS

Subject: Opinion on Mobilisation of the European Globalisation Adjustment Fund – EGF/2020/001 ES/Galicia shipbuilding ancillary sectors – Spain (COM(2020)0485 – C9‑0294/2020 – 2020/1996(BUD))

 

Dear Chair,

The Committee on Employment and Social Affairs (EMPL) and its Working Group on the EGF, chaired by EMPL Vice-Chair Tomáš Zdechovský, examined the mobilisation of the EGF for the case EGF/2020/001 ES/Galicia and adopted the following opinion.

The EMPL committee and its Working Group are in favour of the mobilisation of the Fund concerning this request. In this respect, the EMPL committee presents some remarks without, however, putting into question the transfer of the payments.

The deliberations of the EMPL committee are based on the below considerations. Therefore, the Committee on Employment and Social Affairs calls on the Committee on Budgets, as the committee responsible, to integrate the following suggestions in its motion for a resolution concerning the Spanish application:

 

Yours sincerely,

 

 

Lucia Ďuriš Nicholsonová

Chair of the Committee on Employment and Social Affairs

SUGGESTIONS

A) Whereas this application is based on Article 4(1)(b) of Regulation (EU) No 1309/2013 (EGF Regulation) and relates to 960 workers made redundant in the shipbuilding ancillary sectors, in enterprises located in the NUTS level 2 region of Galicia (ES11);

 

B) Whereas Spain argues that Europe has lost since 2004 its merchant shipbuilding[17] to East-Asia and that the economic and financial crisis started in 2008 resulted in significant decline in orders, expansion of shipbuilding in Asia and intensive global competition[18];

 

C) Whereas China, South Korea and Japan entry in European market of high-tech/complex ship types are boosted by sectoral strategies, subsidy policies, preferential fiscal treatment such as state aid and other financial incentives for stimulating domestic demand, lower labour costs and supportive measures for local maritime equipment companies[19];

 

D) Whereas shipyards in Galicia build technologically advanced military ships, oil and chemical tankers, offshore vessels, oceanographic and seismic research vessels, tugboats, and passenger ships, fishing vessels;

 

E) Whereas the closure of Factorias Vulcano shipyard in July 2019, and the request for creditors pre-bankruptcy by HJ Barreras shipyard in October 2019 have led to the redundancies, since half of the dismissals subject to this application happened in companies that are creditors of HJ Barreras;

 

F) Whereas Article 4(2) of the EGF Regulation allows that a collective application involving SMEs located in one region may cover SMEs operating in different economic sectors as defined at NACE Revision 2 division level, provided that it is SMEs that are the main or the only type of business in that region;

 

G) Whereas the subcontractors are highly specialized and dependent on the main shipyard, which result in the same consequences on employment in the ancillary shipbuilding industry as if the companies were within a single NACE economic sector;

 

1. Agrees with the Commission that the intervention criteria set out in Article 4(1)(b) of the Regulation (EU) No 1309/2013 are met and that, therefore, Spain is entitled to a financial contribution of EUR 2 054 400 under this Regulation, which represents 60% of the total cost of EUR 3 424 000;

 

2. Notes that the Commission respected the deadline of 12 weeks from the reception of the completed application from the Spanish authorities until finalising its assessment of its compliance with the conditions for providing a financial contribution on 11 September, and notified it to Parliament on the same day;

 

3. Takes into consideration that the sector of shipyards and ancillary industries in Galicia had in 2018  an annual turnover of around EUR 2 000 million, 10 000 direct jobs and 25,000 indirect jobs depended on shipbuilding, whereas last year the sector’s turnover dropped by 11%  and the number of jobs by 20,8% (about 2000);

 

4. Notes that 94 % of targeted beneficiaries are men and 78,2 % of them are between 30 and 54 years old.  Notes that the personalised services to be provided to redundant workers include: information sessions and preparatory workshops, occupational guidance towards employment or self-employment, training (including training towards entrepreneurship will be provided for those aiming at self-employment), tutoring after reintegration into work, intensive job-search assistance and a variety of incentives;

 

5. Welcomes the inclusion of participation incentives (up to EUR 400),  contribution to commuting expenses (EUR 0,19/kilometre plus additional costs such as tolls and parking costs), contribution to expenses for carers of dependent persons (to EUR 20 per day of participation), outplacement incentives dependent workers or as self-employed will receive EUR 200 per month, for a maximum period of six months, in order to support the targeted beneficiaries in job search or training activities, conditional on active participation in the measures;

 

6. Recalls that the proposed actions constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation and do not substitute passive social protection measures;

 

7. Takes note of Spain’s confirmation that the above-listed measures subject to EGF funding will not receive financial contributions from another Union financial instruments. Further, a financial contribution from the EGF will not replace actions the enterprise concerned is required to take by virtue of national law or pursuant to collective agreements;

 

8. Welcomes the involvement of ASIME and the trade unions CCOO[20] and UGT[21], the social partners that participate in the Social Dialogue in Galicia, in the drawing of the co-ordinated package of personalised services and in the implementation of the services; stresses that the social partners should also be involved in the monitoring of the measures;

 

9. Notes that the financial contribution will be managed and controlled by the same bodies that manage and control the ESF. The Xunta de Galicia[22] will be the intermediate body for the managing authority.

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