EUROPEAN COMMISSION

Brussels, 7.10.2021

COM(2021) 618 final

2021/0316(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 Spain – EGF/2021/001 ES/País Vasco metal

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 25 June 2021, Spain submitted an application EGF/2021/001 ES/País Vasco metal for a financial contribution from the EGF, following displacements in the economic sector classified under the NACE Revision 2 division 25 (Manufacture of fabricated metal products, except machinery and equipment) in the NUTS 2 region of País Vasco (ES21) in Spain.

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.Spain submitted application EGF/2021/001 ES/País Vasco metal within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 25 June 2021 5 . The Commission acknowledged receipt of the application on 28 June 2021 and requested additional information from Spain on 9 July 2021. 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 8 October 2021.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 491 displaced workers whose activity has ceased in the economic sector classified under the NACE Revision 2 division 25 (Manufacture of fabricated metal products, except machinery and equipment), out of which 192 in the course of collective redundancies notified to the authorities. The collective redundancies concern 6 enterprises in total 6 . All the displacement occurred in the NUTS 2 region of País Vasco (ES21).

Intervention criteria

6.Spain 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 491 displaced workers in the NUTS 2 region of País Vasco (ES21).

7.The reference period of six months for the application runs from 2 June 2020 to 2 December 2020.

Calculation of displacements and of cessation of activity

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

–192 from the date on which the employer, in accordance with Article 3(1) of Council Directive 98/59/EC 7 , notified the competent public authority in writing of the projected collective redundancies. Spain confirmed prior to the date of the completion of the assessment by the Commission that these 192 redundancies have actually been effected, and

–299 from the date of the employer's individual notice to lay off or to terminate the contract of employment of the worker.

Eligible beneficiaries

9.The total number of eligible beneficiaries is therefore 491.

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

10.The event giving rise to these displacements is the economic crisis caused by the COVID-19 pandemic.

11.The strict lockdown measures implemented in Spain in Q2 2020 resulted in a curtail of non-essential economic activities and services, which hit the metal sector hard. When the lockdown measures were softened other issues linked to the pandemic, such as shortages of supplies and raw materials, difficulties to adapt facilities to anti-COVID19 protocols, contagions and workers' confinement, or mobility issues, also hit the metal sector.

12.According to data from Confemetal 8 , the pandemic has had a significant impact on the activity and turnover of the enterprises operating in the metal sector, with negative consequences on employment and on the liquidity of enterprises (payment defaults, access to credit, etc.).

13.In 2020 (year on year variation), production fell by more than 50% in 18% of the metal enterprises. Turnover fell by more than 50% in 16% of the businesses. A third of metal enterprises experienced a decrease between 30% and 50% of both production and turnover 9 .

14.The production, turnover and prices indices for the fabricated metal products sector declined year on year in all quarters in 2020.

Source: Confemetal 10

15.The decline in activity and turnover resulted in displacements. Despite the extensive use of short-time work schemes 11 , displacements occurred in 14% of the enterprises in the metal sector, affecting 10,6% of their workforce 12 . The displacements concerned by this application started in 2020 Q2.

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

16.In the Basque region, the fabricated metal products sector represents 27,4% of the gross value added (GVA) of the industry. The relative weight of the industry over the regional GVA as a whole is around 24%. At the national level, the GVA of the industry represents 14,5% of the GVA 13 , while the EU-28 average is 18,8% 14 .

17.Due to its high weight in the regional economy, the difficulties in the fabricated metal products sector has had a significant impact on the regional economy and employment. At the beginning of 2020, unemployment (year on year) in the sector was decreasing. However, since March 2020, the trend changed drastically, because of the pandemic. In August 2020, there were 25% 15 more unemployed persons than six months before. Job destruction in industry has been greater than in all other sectors together.

Unemployment in Basque region in 2020
(year on year)
(%)

Source: Lanbide - Servicio Vasco de Empleo 16

18.Although from January to May 2021, registered unemployment has been declining (6,21%), it is still 4,6% higher than the pre-pandemic levels 17 . Moreover, recovery is not benefiting all groups equally. In May 2021, long-term unemployment represented 55,6% of total unemployment (3,6 p.p. higher than in January 2021) and unemployed persons with basic education or less represented 60,8% (1,1 p.p. higher than in January).

Application of the EU Quality Framework for anticipation of change and restructuring

19.In its application for EGF support, Spain has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring were taken into account. Spain highlights the key concepts of the Basque Vocational Training Plan, Basque Employment Strategy and the Green jobs program. The Observatory of Industrial Situation monitors the economic situation. HOBETUZ (Basque Foundation for Continuing Professional Training continuing education) offers training for people in active employment, while AukerabeRRi 18 is a new outplacement program launched in 2021 with the aim of reskilling and redeploying workers displaced from sectors in crisis. Both are integrated into the structure of Lanbide (País Vasco Public Employment Service). Social partner involvement is ensured by their representation in Lanbide's governance board, which is made up of representatives of the regional government, trade unions and employers organizations.

20.Regarding the activities already undertaken for the assistance of the displaced workers Spain has indicated that Lanbide (País Vasco Public Employment Service) has provided the workers with access to its general services. The workers were also informed of their eligibility to participate in the pilot programme AukerabeRRi. The 178 workers entitled to outplacement plans 19 have already completed them.

Complementarity with actions funded by national or Union funds

21.Spain has confirmed that the measures receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.

22.The coordinated package of personalised services complements actions funded by other national or EU funds such as AukerabeRRi or the outplacement plans, already mentioned.

Consultation of targeted beneficiaries or their representatives or the social partners as well as local and regional authorities

23.Spain has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners.. The application, previously discussed in various technical meetings, was aproved by Lanbide’s governance board in the meeting held on 2 July 2021.

24.Additional meetings were held on 19 January and 2 February 2021 with Federación Vizcaína de Empresas del Metal, (federation of metal enterprises of Biscay), Asociación de Empresas de Guipúzcoa - ADEGI (Business association of Gupúzcoa) and SEA-Empresas Alavesas (business associations of Alava). All these employers organisations along with relevant cluster associations 20 contributed to the proposal.

Targeted beneficiaries and proposed measures

Targeted beneficiaries

25.The estimated number of displaced workers expected to participate in the measures is 300. The breakdown of these workers by gender, age group and educational level is as follows:

Proposed measures

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

–General information, welcome and profiling sessions: The information session is the first measure to be offered to all targeted beneficiaries and includes general information on available vocational counselling, training programmes and incentives. The individual information sessions include the profiling of the participant and the allocation of the counsellor who will accompany the worker along the process towards reemployment.

–Occupational guidance will be provided through collective and individual sessions.

–Intensive job-search assistance, including workshops on job-search and recruiting processes, the active search for local and regional employment opportunities, and job-matching.

–Support for business creation: Workers interested in becoming self-employed will receive individual tutoring sessions and training, which might cover planning, carrying out feasibility studies, preparing business plans, help with identifying financing possibilities, etc.

–Contribution to business start-up: Workers who start a business or an activity as self-employed persons will receive a contribution up to EUR 8 000, to help them with setting-up costs.

–Training: This will include (1) training on key and horizontal competencies, such as digital skills, quality management, prevention of occupational risks, etc.; (2) re-skilling vocational training — for those who choose to redirect their career outside the metal sector —, such as logistics, warehouse management, construction and energy efficiency, food industry, urban and industrial waste management, recreational activities for the elderly, etc.; (3) up-skilling vocational training to cater for the skills in demand in the metal sector such as 3D CAD 25 assembly and part modelling; CNC 26 machine tool programming; CATIA 27 mechanical design; forklifts, overhead cranes and lifting platforms; fine sheet metal work and boilermaking; welding (oxy-fuel, semi-automatic, TIG 28 , etc.); machining by chip removal, abrasive machining, deformation machining etc.; and (4) On-the-job training designed for vacancies that lack suitable candidates. After successfully completing the training, the worker in question will be offered a contract.

–Participation, job-search and training allowances: A participation allowance up to EUR 300 is foreseen for those participating in all the individual counselling session set in their personalised itinerary of insertion. The workers participating actively in the measure 'Intensive job search assistance' or completing training will receive a lump sum of EUR 400.

27.The Measures were planned to be in line with the Spanish Circular Economy Strategy 29 . Training contributes to boost the process of digital transformation in the industry. The conclusions of the DESI 2020 report 30 have been taken into account to set the contents of the training in digital skills. 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.

28.The proposed coordinated package of personalised services, here described, constitutes of active labour market measures within the eligible measures set out in Article 7 of the EGF Regulation. The proposed services do not substitute passive social protection measures.

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

Estimated budget

30.The estimated total costs are EUR 1 428 950, comprising expenditure for personalised services of EUR 1 384 950 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 44 000.

31.The total financial contribution requested from the EGF is EUR 1 214 607 (85 % of total costs). 

32.The national pre-financing and co-funding is provided by Lanbide, the Basque public employment service.

33.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. Spain confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.

34.Spain confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 22 000 per beneficiary.

Period of eligibility of expenditure

35.Spain started providing the personalised services to the targeted beneficiaries on 11 June 2021. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 11 June 2021 until 24 months after the date of the entry into force of the Financing Decision.

36.Spain started incurring the administrative expenditure to implement the EGF on 1 February 2021. 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 February 2021 until 31 months after the date of the entry into force of the Financing Decision.

Management and control systems

37.The application contains a description of the management and control system, which specifies the responsibilities of the bodies involved. Spain has notified the Commission that the financial contribution will be managed and controlled by the same bodies that manage and control the European Social Fund Plus. Lanbide will be the intermediate body for the managing authority.

Commitments provided by the Member State concerned

38.Spain 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 actions 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

39.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 34 .

40.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 actions and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 1 214 607, representing 85 % of the total costs of the proposed actions, in order to provide a financial contribution for the application.

41.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 35 .

Related acts

42.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 1 214 607.

43.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 36 . 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.

2021/0316 (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 Spain – EGF/2021/001 ES/País Vasco metal

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 37 , 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 38 , 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 workers made redundant 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 39 .

(3)On 25 June 2021, Spain 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') 40 Revision 2 division 25 (Manufacture of fabricated metal products, except machinery and equipment in the Nomenclature of Territorial Units for Statistics ('NUTS') 41 level 2 region of País Vasco (ES21) in Spain. 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 1 214 607 in respect of the application submitted by Spain.

(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 2021, the European Globalisation Adjustment Fund for Displaced Workers shall be mobilised to provide the amount of EUR 1 214 607 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] 42*.

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)    The time limit of 12 weeks was suspended between 1 January 2021 and 3 May 2021, in accordance with Article 8(2) of Regulation (EU) 2021/691.

(6)    Auxiliar Troquelería SL, Calderería del Oria, Matricería Deusto, Mecanizados de la Industria Vasca SLU, Taller Mecanizado Pablo López Lacalle SL, Tratamientos Superficiales Iontech SA.

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

(8)    Confemetal is the Spanish Confederation of Metal Business Organizations, which represents about 220,000 enterprises and more than one and a half million workers.

(9)     Report on the economic impact of COVID-19 on the metal sector. October 2020 - https://atra.gal/files/noticias/Archivos_3680.pdf

(10)    Confemetal. Monthly newsletter nº 185 and nº 197

(11)    Short time work schemes were applied by 60% of the enterprises and half of the sector workforce (56,71%) were in short time work.

(12)     Report on the economic impact of COVID-19 on the Metal sector. October 2020 - https://atra.gal/files/noticias/Archivos_3680.pdf

(13)     https://es.statista.com/estadisticas/1220166/porcentaje-del-vab-total-en-espana-por-sector/

(14)     https://www.eustat.eus/elementos/El-32-del-VAB-industrial-esta-generado-por-sectores-de-nivel-tecnologico-alto-o-medio-alto-en-2019/not0018911_c.html

(15)     Avance de los datos del mercado laboral del año 2020 (labor market data for 2020).

(16)     Avance de los datos del mercado laboral del año 2020 (labor market data for 2020).

(17)    February 2020.

(18)     https://www.lanbide.euskadi.eus/general/-/aukeraberri/

(19)    The outplacement plans are a legal obligation for the enterprise that dismisses 50 or more workers. Their duration is 6 months and they must offer job-search assistance, occupational guidance and training to the workers. The 178 displaced workers in Matricería Deusto were entitled to an outplacement plan.

(20)     Eraikune (Basque Country construction cluster), meeting held on 26 January 2021,
    GAIA (Association of knowledge and applied technologies industries in the Basque Country) and     Aclima (Basque Country environmental cluster) meetings held on 27 January 2021,
    ACICAE (Basque Country automotive cluster), meeting held on 28 January 2021,
    Clúster Energía (Basque energy cluster), meeting held on 2 February 2021,
    AFM (cluster for advanced manufacturing), meeting held on 3 March 2021, and
    HEGAN (Basque aerospace cluster), meeting held on 4 March 2021.

(21)    ISCED 0-2

(22)    ISCED 3

(23)    ISCED 4

(24)    ISCED 5-8

(25)    Computer-aided design (CAD).

(26)    CNC programming (Computer Numerical Control Programming) is used by manufacturers to create program instructions for computers to control machine tools.

(27)    CATIA (acronym of computer-aided three-dimensional interactive application) is a multi-platform software suite for computer-aided design (CAD), computer-aided manufacturing (CAM), computer-aided engineering (CAE), product lifecycle management (PLM) and 3D.

(28)    Tungsten inert gas.

(29)     https://www.miteco.gob.es/es/calidad-y-evaluacion-ambiental/temas/economia-circular/estrategia/

(30)     https://digital-strategy.ec.europa.eu/en/policies/desi

(31)    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 Spain.

(32)    Totals do not tally due to rounding.

(33)    The cost per participant for this measure is provided for presentation purposes only. The cost per participant of the incentives will depend on the individual situation of each worker and on its eligibility for the different types of incentives.

(34)    OJ L 433, 22.12.2020, p. I/11.

(35)    OJ L 433, 22.12.2020, p. I/29.

(36)    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) No 1296/2013, (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

(37)    OJ L 153, 3.5.2021, p. 48.

(38)    OJ L 433, 22.12.2020, p. I/29

(39)    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, 22.12.2020, p. I/11).

(40)    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).

(41)    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

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