PURPOSE: to mobilise the European Globalisation Adjustment Fund (EGF) in respect of redundancies in specialised construction activities in Ireland.

LEGISLATIVE ACT: Decision 2011/773/EU of the European Parliament and of the Council on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2010/020 IE/Construction 43 from Ireland).

CONTENT: with this Decision, the European Parliament and the Council have decided to mobilise the European Globalisation Adjustment Fund to provide the sum of EUR 21 664 148 in commitment and payment appropriations in the framework of the general budget 2011.

This amount will assist Ireland in respect of redundancies in 1560 enterprises operating in the NACE Revision 2 Division 43 ("Specialised construction activities") in the NUTS II regions of Border, Midlands and Western (IE01) and Southern and Eastern (IE02) in Ireland.

Given that this application complies with the requirements for determining the financial contributions as laid down in Regulation (EC) No 1927/2006 ( EGF ), the abovementioned amount has been granted to Ireland meet its request.

To recall, the European Globalisation Adjustment Fund (EGF) aims to provide additional support to redundant workers who suffer from the consequences of major structural changes in world trade patterns and to assist them with their reintegration into the labour market. The Interinstitutional Agreement of 17 May 2006 on budgetary discipline allows for the mobilisation of the Fund through a flexibility mechanism, within the annual ceiling of EUR 500 million.

It should be noted that t he scope of the EGF was broadened for applications submitted from 1 May 2009 to include support for workers made redundant as a direct result of the global financial and economic crisis.

Decision 2011/773
OJ L 317 30.11.2011, p. 0031

Results of vote in Parliament

The European Parliament adopted by 529 votes to 73, with 19 abstentions, a resolution on the proposal for a decision of the European Parliament and of the Council on mobilisation of the European Globalisation Adjustment Fund for an amount of EUR 21 664 148 in commitment and payment appropriations in respect of redundancies in specialised constructions activities in Ireland.

Parliament recalls that the European Union has set up the appropriate legislative and budgetary instruments to provide additional support to workers who are suffering from the consequences of major structural changes in world trade patterns and to assist their reintegration into the labour market. Given that Ireland has requested assistance in respect of a case concerning 3 382 redundancies, of which 2 228 have been targeted for assistance, in 1 560 enterprises operating in the NACE Revision 2 Division 43 (‘Specialised construction activities’) in the NUTS II regions of Border, Midlands and Western (IE01) and Southern and Eastern (IE02) in Ireland, Parliament requests the institutions involved to make the necessary efforts to accelerate the mobilisation of the EGF for the requested amount. It appreciates in this sense the improved procedure put in place by the Commission, following the Parliament's request for accelerating the release of grants. It hopes that further improvements in the procedure will be reached in the framework of the upcoming reviews of the EGF.

Parliament recalls the institutions’ commitment to ensuring a smooth and rapid procedure for the adoption of the decisions on the mobilisation of the EGF, providing one-off, time-limited individual support geared to helping workers who have suffered redundancies as a result of globalisation and the financial and economic crisis.

It also recalls that:

assistance from the EGF must not replace actions which are the responsibility of companies by virtue of national law or collective agreements, nor measures restructuring companies or sectors; the information provided on the coordinated package of personalised services to be funded from the EGF includes information on the complementarity with actions funded by the Structural Funds.

At the same time, Parliament re calls that the EGF was created as a separate specific instrument with its own objectives and deadlines and that therefore deserves a dedicated allocation, superseding transfers from other budget lines, as done in the past, which could be detrimental to the achievement of the various policies objectives. It states that the amount of payment appropriations initially entered on the EGF budget line 04 0501 were fully consumed with the nineteenth application. However, in order to mobilise the EGF for this case, payments appropriations will be transferred from a budget line dedicated to the "Completion of the European Social Fund (ESF) – Objective 1 (2000 to 2006).

T7-0498/2011

A7-0376/2011

The Committee on Budgets adopted the report drafted by Barbara MATERA (EPP, IT) on the proposal for a decision of the European Parliament and of the Council on mobilisation of the European Globalisation Adjustment Fund for an amount of EUR 21 664 148 in commitment and payment appropriations in respect of redundancies in specialised constructions activities in Ireland.

Members recall that the European Union has set up the appropriate legislative and budgetary instruments to provide additional support to workers who are suffering from the consequences of major structural changes in world trade patterns and to assist their reintegration into the labour market. Given that Ireland has requested assistance in respect of a case concerning 3 382 redundancies, of which 2 228 have been targeted for assistance, in 1 560 enterprises operating in the NACE Revision 2 Division 43 (‘Specialised construction activities’) in the NUTS II regions of Border, Midlands and Western (IE01) and Southern and Eastern (IE02) in Ireland, Members request the institutions involved to make the necessary efforts to accelerate the mobilisation of the EGF for the requested amount. They appreciate in this sense the improved procedure put in place by the Commission, following the Parliament's request for accelerating the release of grants. They hope that further improvements in the procedure will be reached in the framework of the upcoming reviews of the EGF.

Members recall the institutions’ commitment to ensuring a smooth and rapid procedure for the adoption of the decisions on the mobilisation of the EGF, providing one-off, time-limited individual support geared to helping workers who have suffered redundancies as a result of globalisation and the financial and economic crisis.

They also recall that:

assistance from the EGF must not replace actions which are the responsibility of companies by virtue of national law or collective agreements, nor measures restructuring companies or sectors; the information provided on the coordinated package of personalised services to be funded from the EGF includes information on the complementarity with actions funded by the Structural Funds.

At the same time, Members re call that the EGF was created as a separate specific instrument with its own objectives and deadlines and that therefore deserves a dedicated allocation, superseding transfers from other budget lines, as done in the past, which could be detrimental to the achievement of the various policies objectives. The amount of payment appropriations initially entered on the EGF budget line 04 0501 were fully consumed with the nineteenth application. However, in order to mobilise the EGF for this case, payments appropriations will be transferred from a budget line dedicated to the "Completion of the European Social Fund (ESF) – Objective 1 (2000 to 2006).

A7-0376/2011

PE475.782

PE473.884

SEC(2011)1147
EUR-Lex

PURPOSE: to mobilise the European Globalisation Adjustment Fund (EGF) in respect of redundancies in specialised construction activities in Ireland.

PROPOSED ACT: Decision of the European Parliament and of the Council.

CONTENT: the European Globalisation Adjustment Fund (EGF) was established by Council Regulation No 1927/2006 to provide additional support to redundant workers who suffer from the consequences of major structural changes in world trade patterns and to assist them with their reintegration into the labour market.

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

The Commission services have carried out a thorough examination of the application submitted by Ireland to mobilise the EGF. The main elements of the assessment are as follows:

Ireland: on 9 June 2010, Ireland submitted application EGF/2010/020 IE/Construction 43.

for a financial contribution from the EGF, following redundancies in 1 560 enterprises operating in the NACE Revision 2 Division 43 ('Specialised construction activities') in the NUTS II regions of Border, Midlands and Western (IE01) and Southern and Eastern (IE02) in Ireland. These two contiguous regions comprise the entire State of Ireland. The application was supplemented by additional information up to 17 June 2011.

In order to establish the link between the redundancies and the global financial and economic crisis, Ireland argues that as a small export-oriented economy, it has suffered from the effects of the credit crunch on its major trading partners, at a time when the world economy was experiencing its worst contraction in the postwar period. The credit crunch severely affected the banks in Ireland, with further effects on mortgage loans and building activity in the country. Employment in the previously fast-growing building sector fell sharply. When the crisis hit, the share of those employed in construction in Ireland dropped from 12.25% in Q4 / 2007 to 9.2% in Q1 / 2009 and 6.25% by Q3 / 2010. Many of the redundancies in the sector were caused by the effective closure of the employing enterprise for reasons cited such as liquidation, receivership, closure, insolvency, end of contract and bankruptcy. In mid-2009, one in three construction workers were unemployed. This compares to the overall national unemployment rate at that time of 12.4 %. In terms of construction subsectors, in Q4 / 2009, the greatest absolute unemployment levels were observed in the construction of buildings (NACE Revision 2 Division 41) and specialised construction (NACE Revision 2 Division 43) subsectors. In Q2 / 2009, unemployment rates in these subsectors was almost 40%.

Ireland submitted this application under the intervention criteria of Article 2(b) of Regulation (EC) No 1927/2006, which requires at least 500 redundancies over a nine-month period in enterprises operating in the same NACE Revision 2 Division in one region or two contiguous regions at NUTS II level in a Member State. The application cites 3 382 redundancies in 1 560 enterprises operating in the NACE Revision 2 Division 43 ('Specialised construction activities') in the NUTS II regions of Border, Midlands and Western (IE01) and Southern and Eastern (IE02) during the nine-month reference period from 1 July 2009 to 31 March 2010.

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.

On the basis of the application from Ireland, the proposed contribution from the EGF to the coordinated package of personalised services is EUR 21 664 148 , representing 65% of the total cost.

It should be noted that this application is part of a series of three, all concerning the construction sector in Ireland. The other two applications are in support of workers made redundant in NACE Revision 2 Divisions 71 (‘ Architectural and engineering activities ’) and 41 (' Construction of buildings ').

IMPACT ASSESSMENT: no impact assessment was carried out.

FINANCIAL IMPACT: considering the maximum possible amount of a financial contribution from the EGF under Article 10(1) of Regulation (EC) No 1927/2006, as well as the scope for reallocating appropriations, the Commission proposes to mobilise the EGF for the total amount referred to above, to be allocated under heading 1a of the financial framework.

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

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

The amount of payment appropriations initially entered on the budget line 04.0501 will have been fully consumed after adoption by both arms of the budgetary authority of the proposals submitted to date for mobilising the EGF. As payment appropriations are available in 2011 under the budget line 04.0201 "Completion of the European Social Fund (ESF) – Objective 1 (2000 to 2006)", an amount of EUR 21 664 148 needed for the present application can therefore be made available for transfer.

COM(2011)0618
EUR-Lex