EUROPEAN COMMISSION

Brussels, 29.11.2016

COM(2016) 742 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 the Netherlands – EGF/2016/005 NL/Drenthe Overijssel Retail

EXPLANATORY MEMORANDUM

CONTEXT OF THE PROPOSAL

1.The rules applicable to financial contributions from the European Globalisation Adjustment Fund (EGF) are laid down in Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006 1 (the ‘EGF Regulation’).

2.On 12 July 2016, the Netherlands submitted an application EGF/2016/005 NL/ Drenthe Overijssel Retail for a financial contribution from the EGF, following redundancies 2 in the economic sector classified under the NACE Revision 2 Division 47 (Retail trade, except of motor vehicles and motorcycles) in the NUTS level 2 regions of NL13 - Drenthe and NL21 - Overijssel in the Netherlands.

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.The Netherlands submitted application EGF/2016/005 NL/Drenthe Overijssel Retail within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 12 July 2016. The Commission acknowledged receipt of the application on the same day and requested additional information from the Netherlands on 15 July 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 29 November 2016.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 1 096 workers made redundant in the economic sector classified under the NACE Revision 2 Division 47 – Retail trade, except of motor vehicles and motorcycles. The redundancies made are located in the NUTS level 2 regions of NL13 - Drenthe and NL21 - Overijssel.

Intervention criteria

6.The Netherlands submitted the application under the intervention 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 two contiguous regions defined at NUTS 2 level in a Member State. There were 1 096 redundancies combined in the NUTS level 2 regions of NL13 – Drenthe and NL21 – Overijssel. 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

7.All the 1 096 redundancies during the reference period have been calculated as from the date of the collective redundancies notification on which the employer, in accordance with Article 3(1) of Council Directive 98/59/EC 6 , notified the competent public authority in writing of the projected collective redundancies. The Netherlands confirmed prior to the date of the completion of the assessment by the Commission that these 1 096 redundancies have actually been effected.

Eligible beneficiaries

8.The total number of eligible beneficiaries is 1 096.

Link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009

9.In order to establish the link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009, the Netherlands argues that retail is a sector in crisis. The sector had to face fundamental changes and still has major difficulties in dealing with these changes. The difficulties had a substantial and negative influence on employment in the sector.

10.In the past few years there were significant changes in the consumers` sentiment, such as the decline of sales in the middle price category and the growing popularity of internet shopping. The development of new shopping areas in many Dutch cities outside the city centres and the declining trust of consumers 7 in the economy also affected negatively the position of the conventional retail sector.

11.The Netherlands argues that the Dutch financial sector being a global player is bound by international rules including rules for financial reserves, in order to meet the new international standards. As a consequence the banks have lower resources for financing the economy, than before.

12.The Netherlands argues that banks became more critical about providing credit to companies 8 . In all bankruptcy cases in retail no further credit or restructuring of credit could be arranged. It was due to the stricter banking rules, which were implemented as a result of the financial economic crisis. A recent analysis shows the declining trend of credit provided by the main Dutch banks 9 .

13.The weak financial position of the bigger department stores made it impossible to invest in other shop models in order to achieve the necessary changes and to be competitive again.

14.To date, the NACE 47 sector has been the subject of 6 EGF applications; all based on the global financial and economic crisis 10 .

Events giving rise to the redundancies and cessation of activity

15.Although the Dutch labour market is recovering slowly from the crisis the effects are still visible in certain sectors. Some sectors like the retail have only more recently started to really suffer from the consequences of the financial economic crisis.

16.The main reasons for the above mentioned negative development in the retail sector are the negative income development of consumers, caused by the financial economic crisis, in combination with their indebtedness 11 . The consumers` confidence is also on the decrease, along with their purchasing power 12 . In the first period only the smaller, more recently the bigger department stores suffered from the financial economic crisis 13 .

17.In the Dutch retail sector many redundancies can be noted in the past few months. The main department stores of the sector suffer from bankruptcies, which triggered a total number of 27 052 14 redundancies in the period 2011-2015.

18.During the financial economic crisis the indicators for consumer confidence declined first in the period 2011-2013. In 2014 the confidence recovered somewhat but was still negative. In 2014 the selling of consumer goods in the retail recovered somewhat to +1%, following the trend of consumer confidence 15 .

19.In 2016 there is a decline again in the consumer confidence 16 . The volume of goods sold in retail sector followed this pattern from -2% (2011) to -4% (2013). In 2014 internet shopping contributed to a small recovery. However, purchases are still 2,7% under the level of 2008, the year when the financial economic crisis began 17 .

20.The consumption of retail goods -especially in the mid-priced product range- is still suffering from the crisis 18 . The main cause for this is the deteriorating income situation of consumers and their reduced potential to buy consumer goods 19 . As illustrated the dynamic purchase power development still has not recovered from the negative income development in the years 2008-2013.

21.This negative effect of declining purchase power is intensified by the high debt position of the average Dutch household. Most of these debts concern mortgages 20 . The indebtedness and declining creditability of the households had a strong negative effect on the retail sector.

22.Since the start of the crisis 5 200 21 retail shops went bankrupt, of which the biggest department stores were affected only recently.

23.Some of the biggest retail shops went bankrupt by the end of 2015. An analysis illustrates the 10 biggest bankruptcies in the retail sector over the years, the number of branches/shops that were closed and the number of jobs lost 22 . The trend of bankruptcies was already going on in the middle of the crisis (2011-2013), first striking the smaller retail chains and now (2015-2016) the bigger ones 23 .

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

24.In both provinces the retail sector is one of the biggest sectors in the regional economy 24 . From the figures it appears that the trade sector (which includes the retail sector) is the second biggest sector in Drenthe containing 7 800 branches and 37 410 jobs in 2015 and the biggest in Overijssel with 19 400 branches and 104 000 jobs. From 2013 onwards the trend in number of branches is negative in Drenthe.

25.Both Drenthe and Overijssel suffer considerably especially from the bankruptcies in the retail sector. The share of employment of this sector in both provinces is considerable and the loss of jobs therefore has a strong negative effect on the economy of both regions. Particularly the loss of shops in the inner cities 25 has a strong negative influence on the regional economy.

26.In the province of Overijssel trade shows a small improving trend in the number of branches as well as jobs. However this trend is mainly caused by the food branches, supermarkets and internet selling. The redundancies are caused by the other branches of the retail sector like non-food retail, cultural and recreation goods, stores for information and communication equipment, stores for household equipment 26 .

27.The total number of jobs in Drenthe is still decreasing, while in Overijssel a slight recovery of jobs in 2015 can be noted compared with 2013 when the biggest loss of jobs took place.

28.The number of bankruptcies in the retail sector has a considerable impact on the economy and labour market of both provinces. The share of the retail sector in the total employment of Drenthe and Overijssel is between 17-19% 27 . The development of jobs (2015-2016) in the consumer services sector, which includes retail, for the regions Drenthe and Overijssel stays behind the Dutch average by 1% 28 .

29.Both Drenthe and Overijssel show that the total number of jobs declined. The redundancies of the retail sector contributed to this development 29 .

30.In the retail sector for 2015 the total increase of unemployment benefits were for Drenthe 410 and for Overijssel 905. In 2016 until March this increase was 711 for Drenthe and 1 435 for Overijssel 30 . Several department stores went bankrupt by the end of 2015 - beginning of 2016. In the first three months of 2016 a steep increase of unemployment benefits can be noticed compared with the whole of 2015. In total 1 121 unemployed in Drenthe and 2 340 in Overijssel had to apply for unemployment benefits within a period of 15 months. If we take into account the trade sector -including retail- the figures are even more worrying.

31.The total number of persons who became unemployed in the last year rose more considerably in Overijssel than in Drenthe 31 . As regards the retail sector, the redundancies were unforeseen. Some of the larger department stores suffered from the negative consequences of the financial economic crisis earlier, but their bankruptcy was completely unforeseen, particularly with such a short notice and high number of redundancies.

Targeted beneficiaries and proposed actions

Targeted beneficiaries

32.The estimated number of redundant workers expected to participate in the measures is 800. The breakdown of these workers by sex, citizenship and age group is as follows:

*:% is rounded

Eligibility of the proposed actions

33.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.

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

–Intake: this measure will map the participants according to their capabilites, potentials and job perspectives. Every intake will conclude with an advice.

–Job search assistance and case management: this measure will start with an offer for a customised programme. Among others it will include preparation of transfer documents, intensive job application training, organising job markets and intensive contacting of employers.

– Mobility pool: this measure consists of a flexible pool for the job seekers and employers with temporary jobs. This service can be used for flexible deployment. This measure will provide work experience for the (retrained) workers and help them to present themselves to new employers.

–Outplacement assistance: this measure will offer job orientation, job counseling and competence training.

–Training and retraining: this measure will provide training, re-training and other educational facilities, for the retail sector and for new occupational profiles, such as transport, IT services, technical professions and others.

–Entrepreneurship promotion training and coaching: some of the participants can use their commercial skills and experience to start their own business. This measure will provide training and coaching to them, by developing their skills, drafting a sustainable business plan and by guiding them through the legislative procedures.

–Entrepreneurship promotion grant: this measure will give a grant for covering investment costs, if the participant will obtain the necessary skills and will have a sustainable business plan.

35.The above mentioned package of measures is additional to the regular services provided for dismissed persons. These measures are personalised and targeted at the dismissed worker.

Estimated budget

36.The estimated total costs are EUR 3 031 250 comprising expenditure for personalised services of EUR 2 910 000 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 121 250.

37.The total financial contribution requested from the EGF is EUR 1 818 750 (60 % of total costs).

*: figures are rounded

38.The Netherlands confirmed that they do not foresee allowances and pay-subsidies.

39.The Netherlands confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 15 000 per beneficiary.

Period of eligibility of expenditure

40.The Netherlands started providing the personalised services to the targeted beneficiaries on 22 August 2016. The expenditure on the actions will therefore be eligible for a financial contribution from the EGF from 22 August 2016 to 12 July 2018.

41.The Netherlands started incurring the administrative expenditure to implement the EGF on 22 August 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 22 August 2016 to 12 January 2019.

Complementarity with actions funded by national or Union funds

42.The sources of national co-funding are the local governments of the two provinces concerned and the sector representatives. They will co-finance 40% of the costs.

43.The Netherlands 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

44.The Netherlands has indicated that the application, particularly the co-ordinated package of personalised services, has been drawn up in consultation with stakeholders, social partners, representatives of the retail sector and of the regions 32 .

45.The Employee Insurance Agency (UWV), who is in charge of registration of the dismissed workers, consulted with the dismissed workers. An inventory of the nature and the magnitude of the problem were prepared along with UWV.

46.A number of meetings were held with the representatives of the sector and the regions (provinces). A plan was also prepared to increase the chances of reemployment for the dismissed workers.

Management and control systems

47.The application contains a description of the management and control system which specifies the responsibilities of the bodies involved. It is identical to the structure as for ESF. The costs related to these activities are included in the total project costs. The Netherlands has notified the Commission that the management will be done by the Agency of the Ministry of Social Affairs and Employment (Agentschap SZW).

48.The financial control will be done by the General Director of the Netherlands Enterprise Agency (RVO, Rijksdienst voor Ondernemend Nederland) as certifying authority. The independent audit authority will be the Director of the Audit Agency in the Ministry of Finance.

49.There is no separate budget allocated for the policy part of the project from the Ministry of Social Affairs and Employment. It is considered as part of their work. The department of Employees` Regulation is in charge of EGF in general.

Commitments provided by the Member State concerned

50.The Netherlands 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,

–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

51.The EGF shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 33 .

52.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 1 818 750, representing 60 % of the total costs of the proposed actions, in order to provide a financial contribution for the application.

53.The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council, as laid down in point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management 34 .

Related acts

54.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 1 818 750.

55.At the same time as it adopts this proposal for a decision to mobilise the EGF, the Commission will adopt a decision on a financial contribution, by means of an implementing act, which will enter into force on the date at which the European Parliament and the Council adopt the proposed decision to mobilise the EGF.

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund following an
application from the Netherlands – EGF/2016/005 NL/Drenthe Overijssel Retail

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 35 , 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 36 , 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 37 .

(3)On 12 July 2016, the Netherlands submitted an application to mobilise the EGF, in respect of redundancies in the economic sector classified under the Statistical classification of economic activities in the European Community ('NACE') Revision 2 Division 47 (Retail trade, except of motor vehicles and motorcycles) in the Nomenclature of Territorial Units for Statistics ('NUTS') 38 level 2 regions of NL13 - Drenthe and NL21 - Overijssel in the Netherlands. 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)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 1 818 750 in respect of the application submitted by the Netherlands.

(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 2017, the European Globalisation Adjustment Fund shall be mobilised to provide the amount of EUR 1 818 750 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 347, 20.12.2013, p. 855.

(2) Within the meaning of Article 3 of the EGF Regulation.

(3) 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).

(4) OJ L 393, 30.12.2006, p. 1.

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

(6) 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).

(7)

    https://www.cbs.nl/nl-nl/nieuws/2016/11/consumentenvertrouwen-daalt-opnieuw

(8) Dutch National Bank (DNB). http://www.dnb.nl/nieuws/nieuwsoverzicht-en-archief/statistisch-nieuws-2015/dnb333575.jsp#

(9) Figures from Dutch National Bank (DNB). http://www.dnb.nl/nieuws/nieuwsoverzicht-en-archief/statistisch-nieuws-2015/dnb333575.jsp#

(10) EGF/2010/010_CZ/Unilever, EGF/2010/016_ES/Aragón retail, EGF/2011/004_EL/ALDI Hellas, EGF/2014/009_EL/Sprider stores. EGF/2014/013_EL/Odyssefs Fokas, EGF/2015/011_GR/Supermarket Larissa

(11) CBS press statement 8 July 2015 on debt position of Duch households. http://www.cbs.nl/nl-NL/menu/themas/macro-economie/publicaties/artikelen/archief/2015/4505-schulden-huishoudens-nemen-weer-iets-toe.htm

(12) Retail sector prognoses, Economic Agency ABN-AMRO Sonny Duijn. 22 January 2016

(13) Retail sector prognoses Economic Agency ABN-AMRO Sonny Duijn. 22 January 2016.

(14) http://www.consultancy.nl/nieuws/11992/de-25-grootste-faillissementen-van-retailketens-en-winkels

(15) CBS figures on “koopkrachtontwikkeling” March 2016: http://statline.cbs.nl/Statweb/publication/?DM=SLNL&PA=71015NED&D1=0&D2=0,72,76-77&D3=a&HDR=T&STB=G1,G2&VW=G

(16)

    https://www.cbs.nl/nl-nl/nieuws/2016/11/consumentenvertrouwen-daalt-opnieuw

(17) Focus on consumption, Economic Agency ABN-AMRO Mathijs Deguelle and Nico Klene. Volume development retail sector. 24 January 2014. Retail sector prognoses, Economic Agency ABN-AMRO Sonny Duijn paragraph 1. 22 January 2016.

(18) CBS figures on “koopkrachtontwikkeling” March 2016. http://statline.cbs.nl/Statweb/publication/?DM=SLNL&PA=71015NED&D1=0&D2=0,72,76-77&D3=a&HDR=T&STB=G1,G2&VW=G

(19) CBS press statement 8 July 2015 on debt position of Dutch households: http://www.cbs.nl/nl-NL/menu/themas/macro-economie/publicaties/artikelen/archief/2015/4505-schulden-huishoudens-nemen-weer-iets-toe.htm

(20) https://www.cbs.nl/nl-nl/nieuws/2015/28/schulden-huishoudens-nemen-weer-iets-toe https://www.cbs.nl/en-gb/news/2015/28/overall-household-debt-marginally-up

(21) http://www.consultancy.nl/nieuws/11992/de-25-grootste-faillissementen-van-retailketens-en-winkels

(22) http://www.consultancy.nl/nieuws/11992/de-25-grootste-faillissementen-van-retailketens-en-winkels

(23) http://overijssel.databank.nl/jive/jivereportcontents.ashx?report=home Theme economy

(24) http://www.lisa.nl/data/gratis-data/overzicht-lisa-data-per-provincie

(25) Focus on consumption, Economic Agency ABN-AMRO Mathijs Deguelle and Nico Klene. Volume development retail sector. 24 January 2014.

(26) http://statline.cbs.nl/Statweb/publication/?DM=SLNL&PA=81804NED&D1=a&D2=0-2,5,29&D3=172-188&VW=T

(27) http://www.lisa.nl/include/nl/bibliotheek/4._LISA_Groot-_en_detailhandel_2014.pdf

(28) UWV Labour Market Prognoses 2015-2016 Page 52

(29) Figures by UWV April 2016

(30) Figures by UWV April 2016

(31) Figures by UWV April 2016

(32) Organisations consulted: Dutch Employers/Entrepreneurs Union, Employee Insurance Agency, branch organisation of the retail sector, Dutch Federation of Trade Unions/Division Drenthe, National Federation of Christian Trade Unions, regional authorities.

(33) OJ L 347, 20.12.2013, p. 884.

(34) OJ C 373, 20.12.2013, p. 1.

(35) OJ L 347, 20.12.2013, p. 855.

(36) OJ C 373, 20.12.2013, p. 1.

(37) 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).

(38) 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).

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