EUROPEAN COMMISSION

Brussels, 4.10.2019

COM(2019) 442 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 Belgium – EGF/2019/001 BE/Carrefour

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 20 June 2019, Belgium submitted an application EGF/2019/001 BE/Carrefour for a financial contribution from the EGF, following redundancies 2 in Carrefour Belgique SA in Belgium.

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.Belgium submitted application EGF/2019/001 BE/Carrefour within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 20 June 2019. The Commission acknowledged receipt of the application the same day and requested additional information from Belgium on 4 July 2019. 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 7 November 2019.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 751 workers made redundant in Carrefour Belgique SA. The enterprise operates in the economic sector classified under the NACE Revision 2 Division 47 (Retail trade, except motor vehicles and motorcycles). The redundancies made by Carrefour Belgique concern the whole of Belgium. 

Intervention criteria

6.Belgium submitted the application under the intervention criteria of Article 4(1)(a) of the EGF Regulation, which requires at least 500 workers being made redundant over a reference period of four months in an enterprise in a Member State, including workers made redundant by suppliers and downstream producers and/or self-employed persons whose activity has ceased.

7.The reference period of four months for the application runs from 30 November 2018 to 30 March 2019. The redundancies during the reference period concern 751 workers made redundant in Carrefour Belgique.

Calculation of redundancies and of cessation of activity

8.All 751 redundancies during the reference period were calculated as 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 268 workers made redundant before or after the reference period. These workers were made redundant after the general announcement of the projected redundancies on 25 January 2018 6 . A clear causal link can be established with the event that triggered the redundancies during the reference period.

10.The total number of eligible beneficiaries is therefore 1 019.

Link between the redundancies and major structural changes in world trade patterns due to globalisation

11.Belgium argues that retail trade is going through a period of major changes, due to globalisation (online shopping), this resulting in redundancies. Changing patterns of consumers' habits and digitalisation also have an impact on retail trade.

12.Worldwide online sales have been steadily growing for many years. In 2015, global retail e-commerce sales accounted for 7,4% of total retail spending. In 2017, it reached USD 2 382 trillion, marking a 28% increase over the previous year and making up 10,4% of total retail sales worldwide. In 2019, worldwide online sales are expected to grow by 20,7% and to make up 14,1% of total retail spending 7 .

Retail e-commerce sales worldwide 2017-2019
(USD trillions, % change and % of total retail sales)

13.According to forecasts, this upward trend will continue in the forthcoming years. In 2023 worldwide retail e-commerce sales are expected to triple the sales accounted in 2018, making up 22% of total retail spending 8 .

Retail e-commerce sales worldwide 2020-2023. Forecast.
(USD trillions, % change and % of total retail sales)

14.In the EU, the percentage of the population purchasing online increased from 47% to 69% over the period 2013-2018 9 . Along with the increase in the number of e-buyers, there have been shifts in the choice of the e-sellers. Shoppers making online purchases from sellers in their own country declined although only by one percentage point, from 89% in 2013 to 88% in 2018; whilst EU cross-border shopping increased significantly from 26% to 36% and online shopping from sellers outside the EU is becoming more and more popular. It grew from 14% to 26% over the same period 10 .

15.Marketplaces are an ever-present feature of the e-commerce world. The top three players are Amazon, Aliexpress, and eBay, which operate as global players.

Retailer choice
(last cross border online purchase) 11

16.For price-based considerations, consumers tend to turn to such international web-shops, based in non-EU countries. Non-EU online shopping is having a major impact on the sales of conventional retail stores in the EU.

17.The global trends also apply to Belgium. According to Comeos 12 , 67% of the Belgians bought online in 2018, compared to only 46% in 2012. This represents an increase of 21 p.p. in six years. Belgian e-buyers making monthly online purchases are 44% of the total, 9% do so weekly. More than 150 euros is a normal monthly budget for 42% of the Belgian e-buyers. 39% of Belgians e-buyers declare they will spend more or much more in 2019 than the previous year. For half of the respondents it is irrelevant whether the webshop is Belgian or not 13 .

18.To date, the retail sector has been the subject of 10 EGF applications, two of which based on trade related globalisation 14 and eight on the global financial and economic crisis 15 .

Events giving rise to the redundancies and cessation of activity

19.Carrefour Belgium operates through three brands: Carrefour Express (proximity shops) a brand that is profitable and expanding (opening of 20-25 stores a year); Carrefour Market (supermarkets), focused on fresh products, is also expanding with an ambition to open 10 stores a year; and Carrefour Hypermarkets. Out of 45 Carrefour hypermarkets, 19 are not profitable 16 .

20.The events giving rise to the redundancies are the closure of one Carrefour hypermarket and the renting out of parts of the stores’ surface to external retailers, in some of the hypermarkets still operating. As stated above, online shopping from non-EU sellers is having a major impact on the sales of conventional stores in the EU.

21.The products for which online sales are already high or are expected to grow in the near future are the same as the non-food offer in hypermarkets. Fashion is a mature product in e-commerce. 'Booming products' 17 are books and ebooks, computer and electronics, health and beauty, and entertaiment. By contrast, only few Belgian consumers buy food online, although e-buyers declare they intend to do so more often in the future 18 .

22.For Carrefour the growth of online sales has contributed to the decline in sales of non-food products in its hypermarkets (the turnover of non-food products declined by 6% in 2017, and by 19% since 2010), undermining profitability of this type of stores. Belgium indicated that the redundancies are mainly due to the difficulties in the non-food sector described above.

Carrefour hypermarkets turnover. Non-food 19 .
(all taxes included)
(year-over-year percentage change)

Carrefour hypermarkets profitability 20
(ROC 21 in million euro)

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

23.Although the redundancies concern the whole of the country, Belgium expects that they have a particularly significant adverse impact on the employment situation and thus on the regional economy of Wallonia. The expected impact is linked to the scarcity of jobs in the region, the relatively high unemployment rate and, as a consequence, the expected difficulties of redeployment for the redundant workers, in particular those aged 50+, since one out of four job-seekers in Wallonia are workers over 55 years.

24.Although the number of job seekers in the region declined by 1,5% in 2018 compared with the previous year, the unemployment rate in Wallonia (8,6% 22 ) is more than twice the unemployment rate in Flanders (3,5% 23 ) and above the EU average of 6,9%. Furthermore, in Wallonia other indicators show lower labour market performances: interim activity slowed down (- 2,3% of hours worked between December 2017 and December 2018), temporary unemployment increased (+ 5,8% on an annual basis) and, bankruptcies rose in the last quarter of 2018 (+ 5% compared to the same quarter of 2017). In addition, job creation is expected to slow down in 2019 (about 15 000 jobs less than in 2018) 24 .

25.In 2018, 57% of the job-seekers in Wallonia were long-term unemployed (> 12 months), while workers unemployed over more than two years represented 67% of the total long-term unemployed job-seekers 25 .

26.According to Comeos, although employment in the retail sector in Belgium is not yet declining, there are concerns that digitalisation and automation of warehouses will very soon have an impact on thousands of relatively unskilled jobs 26 .

Targeted beneficiaries and proposed actions

Targeted beneficiaries

27.Due to the particularly difficult employment situation in Wallonia, Belgium expects that only the 400 workers made redundant in this region will participate in the measures. The breakdown of these workers by sex, citizenship and age group is as follows:

28.Additionally, Belgium will provide personalised services co-financed by the EGF to up to 330 young people not in employment, education or training (NEETs) under the age of 25 on the date of submission of the application, given that 240 of the redundancies referred to in paragraph 5 occur in the NUTS level 2 regions of Province Hainaut (BE32) and Province Liège (BE33)], that had youth unemployment rates for young persons aged 15 to 24 of at least 20% 27 , based on the annual data available for 2018 28 .

29.The total estimated number of eligible beneficiaries expected to participate in the measures, including NEETs, is therefore 730. 

Eligibility of the proposed actions

30.The personalised services to be provided to redundant workers and NEETs consist of the following actions:

–Support/Guidance/Integration: This set of services expands the standard activities in support of Carrefour former workers carried out by the Walloon Public Employment Service (Forem) Redeployment Units on behalf of the dismissing enterprise. The standard offer will be extended beyond the mandatory period 29 and additional specific services will be proposed to the redundant workers, such as active job-search and job-matching services.

The support and mobilisation of NEETs is carried out by Forem and its trade union partners.

NEETs will have the opportunity to participate in "Coup de boost", an intensive socio-professional support scheme, of nine months duration. The participants will be proposed a variety of collective and individual activities on topics related to job search (preparation for the job interview, asking for an interview, etc.), developing self-confidence and communication; activities to discover the professional environment and training (visits, internships, work experience, ...); individual interviews with counsellors and/or social coaches to help each young person define his professional project; adapted information on labour law and social rights and support in administrative procedures; exchange activities where young people can support each other and share their professional experiences, job search and training; etc.

The goal, at the end of the support, is that the NEET gets a first job or integrates in a qualifying training program. An additional support is also foreseen after "Coup de Boost" to ensure that the NEET is well integrated into training or employment and to overcome difficulties that might arise.

–Training, retraining and vocational training. Workers and NEETs will have access to the standard training offer of Forem and its partners and specific job search modules will be deployed as well. In addition, after the profiling and validation of individual professional projects with the vocational counsellor, specific training will be offered to cater for the identified needs. Training in basic skills (proficiency in language, mathematics, use of information technology, etc.) will also be on offer for young people who need it.

–Support towards business creation. This measure addressed to workers will include a phase of diagnosis and orientation, awareness-raising actions on entrepreneurship, information sessions on the potential of starting a business through territorial economic diagnoses, and networking with relevant entrepreneurs and with certified start- up coaches.

–Contribution to business start-up. The workers who start a business or an activity as self-employed persons will receive a contribution up to EUR 15 000. The contribution will be paid in two instalments, after demonstrating the effective development of the activity with supporting documents.

–Allowances. (1) Job-search and training allowances. The workers and NEETs will receive EUR 1 per hour of effective participation in training or in Forem's Redeployment Units job-search activities 30 . (2) Contribution to commuting expenses. To encourage regional and interregional mobility, workers and NEETs who take a job located either at more than 60 km from home, or at a distance implying more than four hours of commuting time (return), will receive a lump sum of EUR 500 or EUR 750 31 . (3) Allowance towards business creation. To support the workers while setting up their business 32 , a monthly allowance of EUR 350 for a maximum of 12 months will be granted. (4) Return to school allowance. A monthly allowance of EUR 350 will be granted to workers and NEETs who undertake full-time studies (études de plein exercice) of at least one year.

31.The proposed actions, described above, 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.

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

Estimated budget

33.The estimated total costs are EUR 2 720 047, comprising expenditure for personalised services of EUR 2 665 047 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 55 000.

34.The total financial contribution requested from the EGF is EUR 1 632 028 (60 % of total costs).

35.The costs of the actions identified in the table above as actions under Article 7(1)(b) of the EGF Regulation do not exceed 35% of the total costs for the coordinated package of personalised services. Belgium confirmed that these actions are conditional on the active participation of the targeted beneficiaries in job-search or training activities.

36.Belgium 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

37.Belgium started providing the personalised services to the targeted beneficiaries on 1 December 2018. The expenditure on the actions will therefore be eligible for a financial contribution from the EGF from 1 December 2018 to 20 June 2021.

38.Belgium started incurring the administrative expenditure to implement the EGF on 25 January 2018. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 25 January 2018 to 20 December 2021.

Complementarity with actions funded by national or Union funds

39.The source of national pre-financing or co-funding are funds of the Région Wallonne.

40.Belgium 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

41.Belgium indicated that the co-ordinated package of personalised services was drawn up in consultation with the social partners.

42.Along with the mandatory information and consultation of workers' representatives, a crisis unit was set up to define the social plan and coordinate the interventions of the public services concerned. The Walloon public employment service consulted the trade unions on various redeployment solutions 35 , and trade unions, vocational counsellors and social workers in direct contact with the dismissed workers, were consulted on the reskilling/upskilling needs of the workers 36 .

Management and control systems

43.Belgium notified the Commission that the financial contribution will be managed and controlled by the same bodies that manage and control the ESF.

Commitments provided by the Member State concerned

44.Belgium 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,

–Carrefour, which has continued its activities after the lay-offs, has complied with its legal obligations governing the redundancies and provided for its workers accordingly,

–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 to 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

45.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 37 .

46.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 1 632 028, representing 60% of the total costs of the proposed actions, in order to provide a financial contribution for the application.

47.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 38 .

Related acts

48.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 1 632 028.

49.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 Belgium – EGF/2019/001 BE/Carrefour

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 39 , 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 40 , 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 41 .

(3)On 20 June 2019, Belgium submitted an application to mobilise the EGF, in respect of redundancies in Carrefour Belgique SA in Belgium. 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)In accordance with Article 6(2) of Regulation (EU) No 1309/2013, Belgium has decided to provide personalised services co-financed by the EGF also to 330 young persons not in employment, education or training (NEETs).

(5)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 1 632 028 in respect of the application submitted by Belgium.

(6)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 2019, the European Globalisation Adjustment Fund shall be mobilised to provide the amount of EUR 1 632 028 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 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)     http://www.gondola.be/fr/news/food-retail/plan-de-transformation-carrefour-belgique-signature-du-protocole-daccord

(7)    Worldwide retail ecommerce sales ( https://www.emarketer.com/content/global-ecommerce-2019 )

(8)    Ibid.

(9)    Eurostat. Internet purchases by individuals [isoc_ec_ibuy].

(10)    Eurostat. https://ec.europa.eu/eurostat/statistics-explained/pdfscache/46776.pdf

(11)    Cross-border ecommerce shopper survey, 2017
https://www.eurocommerce.eu/media/159952/2018.07.02%20-%20ecommerce%20report_annex.pdf

(12)    Belgian Federation for Commerce and Services

(13)    Comeos. E-commerce Belgium 2018. https://static.comeos.be/E-commerce_Belgium_2018.pdf

(14)    The current application and EGF/2017/005 FI/Retail, COM(2017) 618.

(15)    EGF/2010/010 CZ/Unilever, COM(2011) 61,
EGF/2010/016 ES/Aragón Retail, COM(2010) 615,
EGF/2011/004 EL/ALDI Hellas, COM(2011) 580,
EGF/2014/009 EL/Sprider Stores, COM(2014) 620,
EGF/2014/013 EL/Odyssefs Fokas, COM(2014) 702,
EGF/2015/011 GR/Supermarket Larissa, COM(2016) 210,
EGF/2016/005 NL/Drenthe Overijssel Retail,COM(2016) 742, and
EGF/2017/003 GR Attica Retail, COM(2017) 613.

(16)    Carrefour. ‘Plan de transformation Carrefour Belgique’ (January 2018)

(17)    Booming products are products that many consumers buy online already and plan to do so more often in the future.

(18)    Comeos. E-commerce Belgium 2018, op.cit.

(19)    Carrefour. ‘Plan de transformation Carrefour Belgique’ (January 2018).

(20)    Ibid.

(21)    Return on customers (ROC) is an indicator of shops profitability. It calculates the profitability offered by the customers in view of the investments made and continue to be made to serve, satisfy, and retain them. ROC equals a firm’s current-period cash flow from its customers plus any changes in the underlying customer equity, divided by the total customer equity at the beginning of the period.

(22)    Statbel
( https://statbel.fgov.be/fr/themes/emploi-formation/marche-du-travail/emploi-et-chomage#panel-11 )

(23)    Ibid.

(24)    Le Forem. Marché de l’emploi. Tendances et conjoncture en Wallonie. Janvier 2019

(25)    Iweps. Séries statistiques du marché du travail en Wallonie. Décembre 2018
( https://www.iweps.be/wp-content/uploads/2019/01/dmc1812.pdf )

(26)     https://www.lecho.be/entreprises/grande-distribution/Malgre-Carrefour-l-emploi-dans-la-grande-distribution-a-progresse/9976847

(27)    Province Hainaut (27,6%), Province Liège (21,1%).

(28)    Source: Eurostat, dataset: [lfst_r_lfu3rt].

(29)    For workers over 45 years, 6 months (60 hours). For workers up to 44 years, 3 months (30 hours).

(30)    In accordance with the Walloon decree of 29 January 2004 (Décret relatif au plan d’accompagnement des reconversions)

(31)    EUR500 if they commute by car or EUR750 if they commute by public transport.

(32)    The allowance ends the moment the business starts.

(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 that remains as in the application submitted by Belgium.

(34)    Totals do not tally due to rounding.

(35)    On 15 and 27 March 2019

(36)    On 15 March 2019

(37)    OJ L 347, 20.12.2013, p. 884.

(38)    OJ C 373, 20.12.2013, p. 1.

(39)    OJ L 347, 20.12.2013, p. 855.

(40)    OJ C 373, 20.12.2013, p. 1.

(41)    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).

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