EUROPEAN COMMISSION

Brussels, 8.11.2021

COM(2021) 683 final

2021/0356(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/2021/004 ES / Aragón automotive

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 26 July 2021, Spain submitted an application EGF/2021/004 ES/Aragón automotive for a financial contribution from the EGF, following displacements in the economic sector classified under the NACE Revision 2 division 29 (Manufacture of motor vehicles, trailers and semi-trailers) in the NUTS 2 region of Aragón (ES24) 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/2021/004 ES/Aragón automotive within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 26 July 2021 5 . The Commission acknowledged receipt of the application on 4 August 2021 and requested additional information from Spain on 9 August 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 10 November 2021.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 592 displaced workers whose activity has ceased in the economic sector classified under the NACE Revision 2 division 29 (Manufacture of motor vehicles, trailers and semi-trailers located in the NUTS 2 region of Aragón (ES24).

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 592 displaced workers in the NACE Revision 2 division 29 (Manufacture of motor vehicles, trailers and semi-trailers), in the NUTS 2 region of Aragón (ES24). 

7.The reference period of six months for the application runs from 1 November 2020 to 1 May 2021.

Calculation of displacements and of cessation of activity

8.The cessation of activities of all displaced workers during the reference period has been calculated from the date of the de facto termination of the contract of employment or its expiry.

Eligible beneficiaries

9.In addition to the workers already referred to, the eligible beneficiaries include 460 displaced workers whose activity ceased before or after the reference period of six months. All these workers ceased their activity within the six months before the start of the reference period on 1 November 2020 and/or between the end of the reference period and the day before the adoption of this proposal. A clear causal link can be established with the event that triggered the cessations of activity of the displaced workers during the reference period..

10.The total number of eligible beneficiaries is therefore 1 052.

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

11.The events giving rise to these displacements are the impact on the Spanish automotive sector of the COVID-19 pandemic and the shortage of semiconductors.

12.The strict lockdown measures implemented in Spain in Q2 2020 resulted in a curtail of non-essential economic activities and services, which caused the temporary closure of car dealers commercial activity and car production.

13.According to data from Confemetal 6 and Anfac 7 , the pandemic had a significant impact on the activity and turnover of the enterprises operating in the automotive sector in Spain, which resulted in a decline in sales (32,3%) 8 , production (18,9%), and turnover (11,3%) in 2020 compared to 2019, with negative consequences on employment and on the liquidity of enterprises (payment defaults, access to credit, etc.) 9 .

14.Production declined for all types of vehicles in 2020.

Source: Anfac 10

15.Over January-June 2021, the production of vehicle in Spain (1,2 million units) was still lower by 21,6% than the production in the same period of 2019. Production in June 2021 (172 696 units) was lower by 33,8% compared to June 2019 and by 18,1% compared to June 2020 11 .

16.According to Anfac, the worldwide shortage of semiconductors is putting additional stress in the car sector and causing a significant decline in car production. At the beginning of 2021, the chip-crisis was forecast to lead to losses of approximately EUR 60 billion in the automotive sector. The figure has been revised upwards to over EUR 90 billion 12 . The sector expects this issue to continue throughout the first half of 2022 13 .

17.The lockdown and the shortage of semiconductors forced to interrupt or slow down car production in Spain 14 , consequently car manufactures started to use short-time work schemes or temporarily shutting downs with the subsequent job losses 15 . 

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

18.In its application, Spain has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring were taken into account. The Spanish authorities confirmed that actions to better anticipate and manage restructuring processes were followed and measures had been taken.

19.Spain highlights that public bodies monitor restructuring processes and manage collective redundancies requests although without authorisation/refusal capacity. These bodies can however set programmes promoting job creation in partnership with local bodies or public-private bodies (redeployment agencies).

20.In the run-up to displacements, in accordance with national legislation, social partners, enterprises and workers’ representatives engage in negotiation processes aimed at agreeing on displacements and the outplacement plans that are a legal obligation for the enterprise that dismisses 50 or more workers at the same time. The outplacement plans provide the workers with job-search assistance, occupational guidance and training. The duration of the plans is six months. Aragon’s public employment service (INAEM) provides redeployment services to the displaced workers not entitled to the outplacement plans.

21.As part of the regional employment strategy, INAEM runs a variety of training programs, such as Detecta 16 (training combined with work), training for people in active employment 17 , training CTA 18 (CTA is a centre of advanced technologies within the INAEM that offers training related to TIC and audio-visual technologies).

22.Regarding the activities already undertaken for the assistance of the displaced workers Spain has informed that INAEM has provided the workers with access to its general services (job-search support, vocational counselling and training - mostly linked to obtaining certificates of vocational qualification). 

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

23.In Aragón, the automotive sectors represents 2,42% of the net employment and about 6% of the regional GDP 19 .

24.According to the Aragón Statistics Institute (IAEST), from February 2021 to June, the number of registered job seekers in Aragón declined by 11%, from 85 158 to 75 578 20 . However, registered unemployment is still 26% higher than pre-pandemic levels (60 000 job seekers in June 2019) 21 .

25.In June 2021, the regional unemployment rate was 10,7% 22  that is 3,6 pp higher than the EU average (7,1%) 23 .

26.Of all job seekers in Aragon, 60% are women (the percentage rises to 65% if only the group of long-term unemployed is considered). In addition, 52% of the registered job seekers are long-term unemployed (>12 months), of which 49% are over 50 years old 24 .

27.Given that 40% of the targeted beneficieries belong to the 54+ age group and that a third of the redundant workers are women, the dismissals will have a particular impact on these two categories of workers who are already at a disadvantage on the regional labout market. The regional authorities argue that the dismissed workers will need additional and targeted support to increase their possibility to find new jobs.

Targeted beneficiaries and proposed measures

Targeted beneficiaries

28.The estimated number of displaced workers expected to participate in the measures is 320. The breakdown of these workers by gender, age group and educational level is as follows:

Proposed measures

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

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

–Occupational guidance will be provided through collective and individual sessions. The workers interested in become self-employed will be provided with tutoring sessions, which might cover planning, carrying out feasibility studies, preparing business plans, help with identifying financing possibilities, etc.

–Intensive job-search assistance. Through biweekly sessions, workers will receive information on job search techniques and hiring processes. This measure also includes the active search for local and regional employment opportunities and job matching.

–Training. This will include (1) Horizontal training, such as soft skill and digital skills. (2) Re-skilling vocational training for those who choose to redirect their vocational career outside the automotive sector, such as logistics, welding, industry 4.0 tools in production environments (basic elements, problems and implementation process of automated guided vehicle (AGV), augmented reality and Virtual Reality (AR/VR) and COBOTS 29 in production), or Lean Six Sigma (project management). (3) Up-skilling vocational training to cater for the skills at request in the automotive sector, such as risks prevention when working with HEV batteries 30 ; cyber security automation and threat detection; automotive quality internal auditor; or the AIAG 31 Core Tools, which are necessary tools to implement a Quality Management System for the Automotive Industry, and include Advanced Product Quality Planning & Control Plan (APQP), Production Part Approval Process (PPAP), Failure Mode and Effects Analysis (FMEA), Statistical Process Control (SPC) and Measurement System Analysis (MSA); etc..

–Incentives. (1) Participation incentive. The workers completing all the measures included in their agreed back to employment plan will receive a lump sum of EUR 500 (EUR 700 for participants with care responsibilities); (2) Outplacement incentive. Beneficiaries who return to employment with a contract of at least three months will receive a lump sum of EUR 300. The incentive is designed to encourage quick reemployment and stimulate elderly workers to remain in the labour market; (3) Contribution to commuting expenses. The beneficiaries can get public transport costs reimbursement or EUR 0,19/kilometre when they commute by private car to participate in the measures.

30.The measures were planned to be in line with the Spanish Circular Economy Strategy 32 . The horizontal training on digital skills along with some of the planned up-skilling/re-skilling training caters the requirement of disseminating the skills required in the digital industrial age and in a resource-efficient economy, in line with Article 7.2 of the EGF Regulation.

31.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.

32.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

33.The estimated total costs are EUR 1 652 780, comprising expenditure for personalised services of EUR 1 600 280 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 52 500.

34.The total financial contribution requested from the EGF is EUR 1 404 863 (85 % of total costs).

35.The national pre-financing and co-funding is provided by funds of Aragon’s public employment service (INAEM). 

36.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.

Period of eligibility of expenditure

37.Spain will start providing the personalised services to the targeted beneficiaries on 15 October 2021. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 15 October 2021 until 24 months after the date of the entry into force of the Financing Decision.

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

Complementarity with actions funded by national or Union funds

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

40.The coordinated package of personalised services complements actions funded by other national or EU funds, such as the general outplacement services offered by the regional public employment service or the outplacement plans.

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

41.Spain has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners (UGT 36 , CCOO 37 , CEPYME 38 and CEOE 39 ). The application was discussed at political level on a social dialogue meeting on 3 December 2020 and 16 July 2021. A technical meeting was held on 26 June 2021. The social partners will also be involved in the implementation of the package of measures, as they did in previous EGF cases related to Aragón 40 . INAEM sought the views of the Aragon Automotive Cluster (CAAR) regarding skills in demand and the most suitable training to facilitate the return of the displaced workers to the automotive sector.

Management and control systems

42.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. INAEM will be the intermediate body for the managing authority.

Commitments provided by the Member State concerned

43.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 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

44.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 41 .

45.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 1 404 863, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.

46.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 42 .

Related acts

47.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 1 404 863.

48.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 43 . 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.

2021/0356 (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/2021/004 ES / Aragón automotive

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 44 , 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 45 , 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 46 .

(3)On 26 July 2021, Spain submitted an application to mobilise the EGF, in respect of workers’ displacements in the economic sector classified under the Statistical classification of economic activities in the European Community ('NACE') 47 Revision 2 division 29 (Manufacture of motor vehicles, trailers and semi-trailers) in the Nomenclature of Territorial Units for Statistics ('NUTS') 48 level 2 region of Aragón (ES24) 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 1 404 863 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 1 404 863 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] 49*.

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 30 April 2021 and 3 May 2021, in accordance with Article 8(2) of Regulation (EU) 2021/691.

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

(7)    Anfac is the association of Spanish car manufacturers.

(8)     https://anfac.com/wp-content/uploads/2021/07/Informe-Anual-ANFAC-2020.pdf

(9)    Confemetal. Newsletter ‘Metal en cifras’  nº 199 , July 2021

(10)     https://anfac.com/wp-content/uploads/2021/07/Informe-Anual-ANFAC-2020.pdf

(11)     https://cincodias.elpais.com/cincodias/2021/07/22/companias/1626961844_041144.html

(12)     https://www.consultancy.eu/news/6273/global-chip-shortage-costs-automotive-sector-90-billion  

(13)    Ibid

(14)    Ford, Mercedes-Benz, Renault, Seat, Stellantis Group and Volkswagen

(15)     https://www.silicon.es/la-falta-de-chips-paraliza-la-industria-automovilistica-espanola-2440494  

(16)     https://inaem.aragon.es/sites/default/files/recursos/detecta_ettes_21.pdf

(17)     https://inaem.aragon.es/cursos-formacion

(18)     https://inaem.aragon.es/buscador-de-cursos-cta

(19)     https://caaragon.com/

(20)     http://www.aragon.es/iaest (Registered unemployment, June 2021)

(21)     https://www.facebook.com/GobAragon/posts/6537004519658572  

(22)     https://datosmacro.expansion.com/paro-epa/espana-comunidades-autonomas/aragon

(23)     https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Unemployment_statistics  

(24)     http://www.aragon.es/iaest (Registered unemployment, June 2021)

(25)    ISCED 0-2

(26)    ISCED 3

(27)    ISCED 4

(28)    ISCED 5-8

(29)    COBOTS or collaborative robots are versatile automation platforms that can be used for a huge range of tasks from grinding and polishing to machine tending, blood testing or food packaging.

(30)    Hybrid electric vehicle batteries.

(31)    The Automotive Industry Action Group (AIAG) is a not-for-profit organization where companies in the mobility industries work collaboratively to drive down cost and complexity in the supply chain. AIAG membership includes global OEMs such as GM, Boeing, Toyota, Tesla, Honda, Polaris, Volkswagen, Caterpillar, Nissan, Stellantis, etc. and many of their part suppliers including Adient, ZF, Aptive, Bosch, Tenneco, Continental, Magna, Lear, Dana, Freudenberg, among others.

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

(33)    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.

(34)    Totals do not tally due to rounding.

(35)    The cost per participant for this measure is provided for presentation purposes only, as the actual cost per participant will depend on the individual situation of each worker and on his/her eligibility for the different types of incentives.

(36)     http://www.ugt.es  

(37)     https://www.ccoo.es  

(38)     https://www.cepyme.es  

(39)     https://www.ceoe.es  

(40)    EGF/2008/004 ES Castilla y León and Aragón automotive, COM(2009) 150; EGF/2010/016 ES Aragón retail, COM(2010) 615; EGF/2011/017 ES Aragón construction, COM(2012) 290 and EGF/2014/003 ES Aragón food and beverage services, COM(2014) 456.

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

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

(43)    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

(44)    OJ L 153, 3.5.2021, p. 48.

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

(46)    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).

(47)    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).

(48)    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.

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