EUROPEAN COMMISSION

Brussels, 30.5.2022

COM(2022) 248 final

2022/0170(BUD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Greece – EGF/2021/008 EL/Attica electrical equipment manufacturing

EXPLANATORY MEMORANDUM

CONTEXT OF THE PROPOSAL

1.The rules applicable to financial contributions from the European Globalisation Adjustment Fund for Displaced Workers (EGF) are laid down in Regulation (EU) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/2013 1 (hereinafter called EGF Regulation).

2.On 21 December 2021, Greece submitted an application EGF/2021/008 EL/Attica electrical equipment manufacturing for a financial contribution from the EGF, following displacements in the economic sector classified under the NACE Revision 2 division 27 (Manufacture of electrical equipment) in the NUTS 2 region of Attica (EL30) in Greece.

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

ASSESSMENT OF THE APPLICATION

Procedure

4.Greece submitted application EGF/2021/008 EL/Attica electrical equipment manufacturing within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 21 December 2021. The Commission acknowledged receipt of the application on the same date, and requested additional information from Greece on 24 February 2022. Such additional information was provided within 15 working days of the request. The deadline of 50 working days 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 7 June 2022.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 206 displaced workers whose activity has ceased in the economic sector classified under the NACE Revision 2 division 27 (Manufacture of electrical equipment). The redundancies are located in the NUTS 2 region of Attica (EL30). The collective redundancies concern 6 enterprises in total.

Intervention criteria

6.Greece submitted the application under the intervention criteria of Article 4(2)(b) of the EGF Regulation, which requires the cessation of activity of at least 200 displaced workers over a reference period of six 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. There were 206 displaced workers in the NUTS 2 region of Attica (EL30).

7.The reference period of six months for the application runs from 1 April 2021 to 1 October 2021.

Calculation of displacements and of cessation of activity

8.The cessation of activities of the displaced workers during the reference period has been calculated as follows:

-    186 from the date of the employer’s individual notice to make the worker redundant or to terminate the employment contract or relationship of the worker, and

-    20 from the date of the de facto termination or the expiry of the employment contract or relationship.

Eligible beneficiaries

9.The total number of eligible beneficiaries is 206.

Description of the events that led to the displacements and cessation of activity

10.The primary event giving rise to these redundancies is the closure of Pitsos' 5  production plant in Attica, while retaining the brand, sales and service department in Greece.

11.A combination of factors, including the lack of automation and advanced manufacturing, high production costs of electrical household appliances and domestic supply shortages of electrical components resulted in a loss of competitiveness of Pitsos' factory. To reduce manufacturing costs and to optimise production facility the plant required substantial capital investments. However, such investments were not supported by BSH-Pitsos 6 management, and eventually it was decided to move production to Turkey, where the production costs are lower 7 .  

12.Moreover, a long-lasting socioeconomic crisis (2008-2016) in Greece had a significant impact in consumers’ expenditure, which in turn decreased domestic demand for new household appliances. Between 2008 and 2016 spending on household appliances in Greece has decreased by 35 %, from approximately EUR 824 million in 2008 to around EUR 536 million in 2016 8 . Even if expenditure on household appliances recovered by 9,5 % from 2017 to 2019, it was hit again by the Covid-19 pandemic and was down by 50% in 2020 compared to 2019 9 .

13.The announcement to stop Pitsos factory operations was made in September 2017 10 . However, a temporary agreement was reached to extend production until the beginning of 2021, in order to mitigate the adverse consequences of the plant’s closure. The process of closing operations and dismissal of workers was scheduled to be completed by 31 March 2021 11 . Nevertheless, the actions took longer than planned, consequently the majority of displacements occurred between April and September 2021.

14.With regard to the redundancies in the other five enterprises 12 , Greece argues that electrical equipment manufacturing industry faces challenges, in particular the need of digital transformation and automation, as well as the insufficient skills of the workforce to adapt to the rapidly transforming digital economy. 

15.The basic digital skills of the Greek population remain underdeveloped and fall behind EU average, which implies a high risk of technological lag and digital illiteracy 13 . According to the European Commission’s 2021 Digital Economy and Society Index (DESI), Greece ranks 22nd of 27 EU Member States with regard to the integration of digital technologies into business activities and only 23 % of individuals possess above basic digital skills, versus an EU average of 31 % 14 . 

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

16.Although the unemployment rate in Greece has been gradually declining since 2013, when it reached its highest peak of 27,5 % 15 , it remained one of the highest in the EU at 15,3 % 16  in 2021.

17.Attica region is the largest in Greece in terms of population, with about 3,7 million inhabitants, which generates  almost half (47 %) of the total national GDP. Attica region has also the highest number of unemployed with 342 744 people in December 2021, representing 31 % of registered unemployed people in the country 17 . The number of registered unemployed workers in Attica increased by 3,8 % from 334 658 in December 2019 18  to 347 427 in December 2021 19 . Moreover, almost a quarter (24,1 %) of Attica population are at risk of poverty and social exclusion 20 . The redundancies in the manufacturing of electrical equipment sector in Attica region will further aggravate the unemployment situation, as well as the expansion of poverty in the region.

18.The Greek authorities argue that the displaced workers will face difficulties of re-employment as most of them (81 %) possessed lower secondary education or less 21 . The measures offered will increase their chances of finding a job on the open labour market, or support those who want to start their own business. 

Application of the EU Quality Framework for anticipation of change and restructuring (QFR)

19.Greece has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring have been taken into account. The Greek authorities confirmed that actions to better anticipate and manage restructuring processes were followed and measures had been taken.

20.Upon the announcement to terminate Pitsos production department in September 2017 22 , the company's management and workers’ representatives held extensive consultations to explore all possible options before contemplating redundancies. To mitigate the effects of the plant closure, in particular on employees, it was agreed to extend production operations until 31 December 2020. At the same time, the process of cessation of operations and dismissal of staff was planned until 31 March 2021 23 .    

21.The negotiating parties have also agreed to set up a voluntary redundancy scheme, which included a compensation package, pension contributions and additional financial benefits such as gift vouchers for household appliances from the company. It also included a limited training program, with counseling sessions, vocational guidance and assistance in writing curriculum vitae (CV).

Complementarity with actions funded by national or Union funds

22.Greece has confirmed that the measures described below 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

23.Greece has indicated that the co-ordinated package of personalised services has been drawn up in consultation with workers’ representatives and the Ministry of Labour and Social Affairs. On 24 November 2021, the managing authority for the EGF held a meeting with workers’ representatives and a number of former employees to discuss the proposed application and the content of the integrated package of measures.

Targeted beneficiaries and proposed measures

Targeted beneficiaries

24.The estimated number of displaced workers expected to participate in the measures is 206. The breakdown of these workers by gender, age group and educational level is as follows:

Proposed measures

25.The personalised services to be provided to displaced workers consist of the following measures:

–Professional counselling. This measure will be offered to all participants and consists of individual sessions and guidance covering the following stages:

(1)General information and welcome sessions. During this phase the participants will receive guidance about the support process, information on proposed actions and available trainings. This also includes activities such as collecting personal and professional data, assessing jobseeker’s professional competences and their needs for the services. 

(2)Development process, personal and professional stocktaking. This measure aims to help beneficiaries to identify their own strengths and weaknesses that may hinder effective job seeking and/or their professional choices. Particular emphasis will be placed on skills development and information about the labour market needs.

(3)Developing and preparation of the individual action plan. This involves preparation of detailed individual professional action plan. The participants interested in setting up a business will receive support, including entrepreneurial training.

–Training in digital skills. All participants will be trained in digital skills according to their level of knowledge and their needs. Training will lead to certification where possible.

–Vocational training /education. This measure aims in providing specialised vocational training/retraining (e.g. vocational education and training leading to certification, licence to practise a profession, foreign language courses, professional driving licence, etc.). Higher education programmes (e.g. postgraduate programmes) with a duration of less than two years are also included.

–Higher education. This will focus on obtaining educational qualifications from higher education institutions (higher education degree or post-graduate degree in a specialisation).

–Contribution to business start-up. Beneficiaries who set up their own businesses will receive up to EUR 22 000 as a contribution to cover setting-up costs. They can also benefit from personalised tutoring throughout the start-up process. The contribution will be paid in several instalments based on reaching pre-defined milestones. The condition for the first instalment is that the beneficiaries must draw up a business plan in cooperation with Entrepreneurship Counsellor and the business must be registered with the competent public finance authority.

–Further incentives will be offered:

Occupational counselling allowance. Beneficiaries completing all professional counselling sessions will receive a lump sum of EUR 700.

Training in digital skills allowance. The lump sum of EUR 600 will be offered to the participants who will complete training in digital skills.

Vocational training / education allowance. Beneficiaries completing vocational training /education programme will receive an allowance of EUR 800.

Higher education allowance. Beneficiaries who will complete higher education (two-year programmes) will receive an allowance of EUR 800.

26.Training in digital skills was included as horizontal element in designing the proposed actions. The package will contribute to the dissemination of horizontal skills required in the digital industrial age as well as in a resource-efficient economy, in line with Article 7.2 of the EGF Regulation.

27.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.

28.Greece has provided the required information on measures that are mandatory for the enterprises concerned by virtue of national law or pursuant to collective agreements. Greece has confirmed that a financial contribution from the EGF will not replace such measures.

Estimated budget

29.The estimated total costs are EUR 1 759 800, comprising expenditure for personalised services of EUR 1 689 800 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 70 000.

30.The total financial contribution requested from the EGF is EUR 1 495 830 (85 % of total costs).

31.The national pre-financing or co-funding is provided by the Public Investment Programme of the Greek Ministry of Economy and Development.

32.The costs of the measures identified in the table above as measures under Article 7(2)(b) of the EGF Regulation do not exceed 35 % of the total costs for the coordinated package of personalised services. Greece confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.

33.Greece confirmed that the costs of investments for self-employment, business creation and employee take-overs will not exceed EUR 22 000 per beneficiary.

Period of eligibility of expenditure

34.Greece will start providing the personalised services to the targeted beneficiaries as soon as the mobilisation of the EGF is adopted by the budgetary authority. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from  the date on which Greece starts to provide personalised services until 24 months after the date of the entry into force of the Financing Decision. With the exception of formal studies of a duration of more than two years, which will be eligible until the deadline for submission of the final report.

35.Greece started incurring the administrative expenditure to implement the EGF on 1 March 2022. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 1 March 2022 until 31 months after the date of the entry into force of the Financing Decision. 

Management and control systems

36.The application contains a description of the management and control system, which specifies the responsibilities of the bodies involved. Greece has notified the Commission that the financial contribution will be managed and controlled as follows:

–the NSRF 30 Executive Directorate of the Ministry of Labour, Social Security and Solidarity will act as managing authority,

–the EDEL (Financial Audit Committee) within the Finance Ministry will act as audit authority, and

–the department for Certification and Verification of Co-financed Programmes of Ministry of Development and Investment as certifying authority.

Commitments provided by the Member State concerned

37.Greece has provided all necessary assurances regarding the following:

–the principles of equality of treatment and non-discrimination will be respected in access to the proposed measures and their implementation,

–the requirements laid down in national and EU legislation concerning collective redundancies have been complied with,

–the dismissing enterprises, which have continued their activities after the lay-offs, have complied with their legal obligations and provided for their workers accordingly,

–any double financing will be prevented,

–the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.

BUDGETARY IMPLICATION

Budgetary proposal

38.The EGF shall not exceed a maximum annual amount of EUR 186 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) No 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 31 .

39.Having examined the application in respect of the conditions set out in Article 13(1) and (2) of the EGF Regulation, and having taken into account the number of targeted beneficiaries, the proposed measures and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 1 495 830, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.

40.The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council, as laid down in point 9 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources 32 .

Related acts

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 the amount of EUR 1 495 830.

42.At the same time as it adopted this proposal for a decision to mobilise the EGF, the Commission adopted a decision on a financial contribution that constitutes a financing decision within the meaning of Article 110 of the Financial Regulation 33 . That financing decision will enter into force on the date on which the Commission is notified of the approval of the budgetary transfer by the European Parliament and the Council.

2022/0170 (BUD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Greece – EGF/2021/008 EL/Attica electrical equipment manufacturing

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) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/2013 34 , and in particular Article 15(1) thereof,

Having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources 35 , and in particular point 9 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The European Globalisation Adjustment Fund for Displaced Workers (EGF) aims to demonstrate solidarity and promote decent and sustainable employment in the Union by providing support for displaced workers and self-employed persons whose activity has ceased in the case of major restructuring events and assisting them in returning to decent and sustainable employment as soon as possible.

(2)The EGF is not to exceed a maximum annual amount of EUR 186 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 36 .

(3)On 21 December 2021, Greece submitted an application to mobilise the EGF, in respect of worker’s displacements in the economic sector classified under the Statistical classification of economic activities in the European Community ('NACE') 37 Revision 2 division 27 (Manufacture of electrical equipment) in the Nomenclature of Territorial Units for Statistics ('NUTS') 38 level 2 region of Attica (EL30) in Greece. It was supplemented by additional information provided in accordance with Article 8(5) of Regulation (EU) 2021/691. That application complies with the conditions for a financial contribution from the EGF as laid down in Article 13 of Regulation (EU) 2021/691.

(4)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 1 495 830 in respect of the application submitted by Greece.

(5)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 2022, the European Globalisation Adjustment Fund for Displaced Workers shall be mobilised to provide the amount of EUR 1 495 830 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] 39*.

Done at Brussels,

(1)    OJ L 153, 3.5.2021, p. 48.

(2)    Commission Delegated Regulation 2019/1755 of 8 August 2019 amending the Annexes to 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). OJ L 270, 24.10.2019, p. 1–56.

(3)    OJ L 393, 30.12.2006, p. 1.

(4)    In accordance with the fifth paragraph of Article 7 of Regulation (EU) 2021/691.

(5)    Pitsos is a Greek manufacturer of household appliances https://www.pitsos.gr  

(6)    Pitsos is a company owned by BSH Hausgeräte GmbH (Bosch-Siemens Hausgeräte), a German manufacturer of household appliances https://www.bsh-group.com  

(7)     https://www.liberal.gr/economy/pitsos-parateinetai-eos-to-2021-i-leitourgia-tis-monadas-stou-renti/214847  

(8)     https://www.statista.com/statistics/581413/house-hold-appliance-expenditure-greece/  

(9)     https://imegsevee.gr/wp-content/uploads/2021/01/etisia-ereuna-eisodimatos-2020.pdf  

(10)     https://greekreporter.com/2017/10/19/one-of-greeces-oldest-plants-is-shutting-down/  

(11)     https://www.capital.gr/epixeiriseis/3528092/bsh-kleinei-to-ergastasio-tis-pitsos-31-3-oi-diapragmateuseis-me-mpakatselo-kai-ergazomenous  

(12)    Enterprises listed in paragraph 5, all operating in the electrical equipment manufacturing sector.

(13)     https://www.cedefop.europa.eu/files/greece_-_european_inventory_on_nqf_2020.pdf  

(14)    Digital Economy and Society Index (DESI) 2021 https://digital-strategy.ec.europa.eu/en/policies/countries-digitisation-performance  

(15)    Eurostat https://ec.europa.eu/eurostat/databrowser/view/tps00203/default/table?lang=en  

(16)    European Economic Forecast. Autumn 2021 https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/autumn-2021-economic-forecast-recovery-expansion-amid-headwinds_en#documents  

(17)     https://www.oaed.gr/storage/statistika-stoikheia/synoptikh-ekthesh-dekembrios-2021.pdf  

(18)     https://www.oaed.gr/storage/statistika-stoikheia/eksamhniaia-ekthesh-b-eksamhno-2020.pdf  

(19)     https://www.oaed.gr/storage/statistika-stoikheia/synoptikh-ekthesh-dekembrios-2021.pdf  

(20)     https://ec.europa.eu/eurostat/databrowser/view/tgs00107/default/table?lang=en  

(21)    International Standard Classification of Education (ISCED 0-2) https://ec.europa.eu/eurostat/statistics-explained/index.php?title=International_Standard_Classification_of_Education_%28ISCED%29#ISCE  

(22)     https://greekreporter.com/2017/10/19/one-of-greeces-oldest-plants-is-shutting-down/  

(23)     https://www.capital.gr/epixeiriseis/3528092/bsh-kleinei-to-ergastasio-tis-pitsos-31-3-oi-diapragmateuseis-me-mpakatselo-kai-ergazomenous  

(24)    ISCED 0-2

(25)    ISCED 3

(26)    ISCED 4

(27)    ISCED 5-8

(28)    To avoid decimals, the estimated costs per worker have been rounded. However, the rounding has no impact on the total cost of each measure, which remains as in the application submitted by Greece.

(29)    Totals do not tally due to rounding.

(30)    National Strategic Reference Framework (NSRF)

(31)    OJ L 433 I, 22.12.2020, p. 11.

(32)    OJ L 433 I, 22.12.2020, p. 29.

(33)    Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) N1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 OJ L 193, 30.7.2018, p. 1

(34)    OJ L 153, 3.5.2021, p. 48.

(35)    OJ L 433 I, 22.12.2020, p. 29

(36)    Council Regulation (EU, Euratom) No 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (OJ L 433 I, 22.12.2020, p. 11).

(37)    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).

(38)    Commission Delegated Regulation 2019/1755 of 8 August 2019 amending the Annexes to 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). OJ L 270, 24.10.2019, p. 1–56.

(39) *    Date to be inserted by the Parliament before the publication in OJ.