EUROPEAN COMMISSION

Brussels, 5.11.2024

COM(2024) 370 final

2024/0286(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 Belgium – EGF/2024/002 BE/Limburg machinery and paper

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 .

2.On 19 July 2024, Belgium submitted an application EGF/2024/002 BE/Limburg machinery and paper for a financial contribution from the EGF, following displacements in the economic sectors classified under the NACE Revision 2 division 17 (Manufacture of paper and paper products) and division 28 (Manufacture of machinery and equipment) in the NUTS 2 region of Provincie Limburg (BE22) in Belgium.

3.Following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of Regulation (EU) 2021/691, 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/2024/002 BE/Limburg machinery and paper within 12 weeks of the date on which the intervention criteria set out in Article 4 (2), point (c) of Regulation (EU) 2021/691 were met, on 19 July 2024. The Commission acknowledged receipt of the application the same date. The Commission was in possession of the translation of the application on 27 August 2024 and requested additional information from Belgium on 4 September 2024. 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 5 December 2024.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 681 displaced workers whose activity has ceased in the economic sectors classified under the NACE Revision 2 division 17 (Manufacture of paper and paper products) and 28 (Manufacture of machinery and equipment). The redundancies are located in the NUTS 2 region of Provincie Limburg (BE22) .

Intervention criteria

6.Belgium submitted the application under the intervention criteria of Article 4(2), point (c) of Regulation (EU) 2021/691, which requires the cessation of activity of at least 200 displaced workers over a reference period of four months in enterprises operating in the same or different economic sectors defined at NACE Revision 2 level and located in the same region defined at NUTS 2 level in a Member State.  

7.The reference period of four months for the application runs from 31 December 2023 to 30 April 2024.

8.There were 681 displaced workers in the NUTS 2 region of Provincie Limburg (BE22), in the economic sectors classified under the NACE Revision 2 division 17 (Manufacture of paper and paper products) and 28 (Manufacture of machinery and equipment).

Calculation of displacements and of cessation of activity

9.Pursuant to Article 6, first paragraph, point (a), in conjunction with Article 5, first paragraph, point (c), of Regulation (EU) 2021/691, the cessation of activities of the 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

10.The total number of eligible beneficiaries is 681.

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

11.The events giving rise to the displacements in the paper sector are the declining demand for graphics products resulting from increased digitalisation and the resulting growing overcapacity of the European woodfree coated paper (WCP) industry 5 .

12.In 2009, the European paper industry indicated having a capacity of 9,3 million tons of WCP. In 15 years, the capacity of the European WCP Industry has declined by 50 %, to 4,6 million tons in 2023. In 2023, the industry did not make use of the maximum capacity, but only produced 2,7 million tons 6 . WCP production in Sappi group has been following the same declining trend as the European WCP industry.

13.Sappi’s Lanaken site is at a disadvantage compared with other Sappi’s sites. Lanaken is specialised in the production of WCP, thus the shift to the production of other paper products more in demand requires heavy investments. In addition, other Sappi plants can take over Lanaken production, but not the other way around. Taking these considerations into account, the Sappi Group decided to stop production in Lanaken and close the plant 7 , as no suitable buyer could be identified, because of structural overcapacity in the industry.

14.The events giving rise to the displacements in the machinery sector is Purmo's decision to stop production of 50 mm panel radiators in its Zonhoven plant and close the relevant production line. This is resulting in 114 dismissals.

15.The reason to discontinue production is the sharp decline in demand for panel radiators in the EU. The demand for alternative heating systems, such as heat pumps and low-temperature systems, is experiencing rapid growth 8 mainly due to the European Union's commitment to emissions targets and the clear intention to decarbonise buildings and industry in the EU.

16.The unexpected situation regarding gas availability and prices, resulting from the Russian war of aggression against Ukraine began to modify consumer purchasing habits in favour of alternative heating solutions, partly due to the efforts to reduce dependence on Russian gas supplies, and EU legislation benefiting low-temperature heating systems to the detriment of panel radiators. In such scenario, demand recovery is unlikely as the panel radiator market will increasingly be limited to replacing units in use 9 .

17.Purmo Group's production volume has been steadily declining over the period 2018-2023, from 820 000 units in 2018 to 320 000 in 2023 (-60 %). When comparing the production costs of the various Purmo Group’s plants in Europe, the site in Zonhoven is at a disadvantage, as its costs are 17 % to 35 % higher 10 .

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

18.Redundant workers concentrate in Lanaken (83 %) and Zonhoven (27 %), so the province of Limburg in Flanders is the territory affected by the redundancies.

19.Lanaken’s and Zonhoven’s labour markets are at disadvantage when compared to Limburg as a whole or to Flanders. The ratio of the working population to available jobs is 49 % in Lanaken and 55 % in Zonhoven, that is between 19 and 13 pp lower than in Limburg (68 %) and between 24 and 18 pp lower than in Flanders (73 %) 11 . Furthermore, the ratio of job seekers to vacancies in Lanaken and its surrounding area (Maasland) is 4,5 (about twice the ratio in Flanders) 12 . The territories concerned by the redundancies are less prosperous than the region in which they are located .

20.In addition, a restructuring event in the Netherlands is also having an impact in the labour market of Maasland. The Dutch car manufacturer VDL reported a loss of about 2 000 jobs as from 1 March 2024 in its production plant in Born 13 , of which 700 were cross-border workers living in Maasland.

21.As regards employment opportunities, the number of industrial jobs available in Limburg decreased by 15 % in 2023, compared to the previous year 14 . In addition, the majority of the vacancies were not in Maasland or Zonhoven, but Hasselt-Genk.

22.In 2023, the unemployment rate in Flanders was 3,3 %. However, the unemployment rate was 5,7 % for workers with a low level of education and 7,1 % for workers with a migrant background 15 . Older workers also face more barriers to employment. In 2023, the regional average employment rate was 76,8 % 16 , whereas it was 60,8 % for people aged 55 and above.

23.Considering the profile of the redundant workers, one third of which are aged 55 years or more and 30 % are with low education, along with the downward trend in vacancies and its geographical distribution, the workers will need additional tailored support to help them succeed the transition to employment.

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

24.Belgium has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring have been taken into account.

25.The dismissing enterprises complied with Belgian law on collective redundancies, which establishes a mandatory procedure for informing and consulting workers' representatives. The procedure makes it possible to explore any possibility of avoiding or reducing the number of redundancies. It also seeks to mitigate the consequences of job loss through complementary social measures, such as support for redeployment or retraining of redundant workers.

26.Belgium has reported that national labour law 17 on the active management of restructuring requires enterprises undergoing restructuring to set up an employment unit, whose purpose is to provide workers laid off in the context of collective redundancies with 30 hours of outplacement services in a period of three months (60 hours over six months for workers aged 45+).

27.Regarding the activities undertaken to assist the displaced workers, Belgium has reported that the first information sessions to the workers started on 26 December 2023 and the employment units followed immediately after the redundancies. On 13 March 2024, the Public Employment Services in Flanders (VDAB 18 ) organised a job fair in Lanaken for former Sappi and Purmo workers, with around 20 enterprises taking part. Along with the invitation, VDAB offered advice on how to prepare for the visit to make the most of it and how to successfully approach companies at the fair.

Complementarity with actions funded by national or Union funds

28.Belgium has confirmed that the measures described below receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.

29.The coordinated package of personalised services complements actions funded by other national or EU funds.

Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities

30.Belgium has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners, in compliance with Article 7(4) of Regulation (EU) 2021/691. Trade unions and employer organisations are involved in VDAB's activities at all levels. In addition of being part of VDAB's Board of Directors, social partners along with other actors at regional (Flanders), provincial and local levels work in close cooperation with VDAB at operational level.

Targeted beneficiaries and proposed measures

Targeted beneficiaries

31.The estimated number of displaced workers expected to participate in the measures is 632. Pursuant to Article 8(7), point (f), of Regulation (EU) 2021/691, the provided breakdown of these workers by gender, age group and educational level is as follows:

Proposed measures

32.Pursuant to Article 8(7), point (h) of Regulation (EU) 2021/691, the personalised coordinated package to be provided to displaced workers consists of the following measures:

–Social Intervention Advisor (SIA): A social intervention advisor is the first service provided to laid-off workers. The service begins by providing information about the support available to facilitate the workers' transition to employment. The SIA are a point of reference for workers throughout the process.

–Guidance, counselling, and vocational orientation: Based on the initial profiling interviews, counsellors will provide workers with motivational and inspirational help and support and inform about developments on the job market and possible career paths. Workers shall be encouraged to upgrade their skills or to learn new skills and participate in training measures aimed at finding new employment. Counsellors also support the workers in their job-search activities, assisting them with the job application process, preparing for job interviews, etc.

Reinforced career guidance is planned for workers with greater distance to the profiles requested in the available job vacancies or with poor command of Dutch.

–Active job-search support: Among other support activities, this includes job scouting to locate potential job vacancies that are not yet published and which might suit eligible workers. Furthermore, a variety of job search events, like job fairs, will be organised.

–Training, retraining and vocational training: Workers will have access to the standard training offer of VDAB. In addition, upon agreement of individual projects with the vocational counsellor, specific training will be offered to cater for the identified needs.

–Training at the workplace: Workers receive on-the-job training at the enterprise that will employ them after training. Depending on the needs of the worker, the training can last between 4 and 26 weeks. Training is followed by an employment contract, either permanent or fixed term of at least the same duration as the training.

33.VDAB's standard support to redundant workers includes digital tools and training in digital skills. Workers also learn how to make the most of various VDAB digital platforms, such as the job vacancies database, or how to sucessfully apply for jobs online through specific coaching. VDAB’s training offer also provides for the skills required in a resource efficient economy. This caters for the dissemination of the skills required in the digital industrial age and in a resource-efficient economy, as required by Article 7(2) of Regulation (EU) 2021/691.

34.The proposed actions, here described, constitute active labour market policy measures within the eligible actions set out in Article 7 of Regulation (EU) 2021/691. These actions do not substitute passive social protection measures.

35.Regarding the activities undertaken to assist the displaced workers, Belgium has reported that the redeployment unit was set up shortly after the redundancies.

36.Belgium has provided the required information on measures that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. In accordance with Article 9(1) of Regulation (EU) 2021/691, Belgium has confirmed that a financial contribution from the EGF will not replace such measures.

Estimated budget

37.The estimated total costs are EUR 1 173 559, comprising expenditure for personalised services of EUR 1 126 559 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 47 000.

38.The total financial contribution requested from the EGF is EUR 704 135 (60 % of total costs).

39.Pursuant to Article 8(7), point (m), of Regulation (EU) 2021/691, Belgium has specified that the national pre-financing and co-funding is provided by VDAB 23 .

Period of eligibility of expenditure

40.Belgium started providing the personalised services to the targeted beneficiaries on 26 December 2023. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 26 December 2023 until 24 months after the date of the entry into force of the Financing Decision.

41.Belgium started incurring the administrative expenditure to implement the EGF on 20 November 2023. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 20 November 2023 until 31 months after the date of the entry into force of the Financing Decision. 

Management and control systems

42.The application contains a description of the management and control system required under Article 23 of Regulation (EU) 2021/691, which specifies the responsibilities of the bodies involved. Belgium has notified the Commission that the financial contribution will be managed by VDAB. The payments will be made by VDAB’s financial service. The Department of Finance and Budget - Audit Unit of the Flemish Audit Authority for the European Structural Funds is the audit authority for the EGF.

Commitments provided by the Member State concerned

43.Belgium 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 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 26 amended by Council Regulation (EU, Euratom) 2024/765 of 29 February 2024 27 .

45.Having examined the application in respect of the conditions set out in Article 13(1) and (2) of Regulation (EU) 2021/691, 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 704 135, representing 60 % 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 pursuant to Article 15(1), first subparagraph, second sentence, of Regulation (EU) 2021/691 and 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 28 .

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 to transfer to the relevant budgetary line the amount of EUR 704 135.

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 Regulation (EU, Euratom) 2024/2509 29 . 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 pursuant to Article 15(2), first subparagraph, of Regulation (EU) 2021/691.

2024/0286 (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 Belgium – EGF/2024/002 BE/Limburg machinery and paper

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 30 , and in particular Article 15(1), first subparagraph, 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 31 , 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 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 32  amended by Council Regulation (EU, Euratom) 2024/765 33  and Article 16 of Regulation (EU) 2021/691.

(3)On 19 July 2024, Belgium submitted an application to mobilise the EGF in accordance with Article 8(1) of Regulation (EU) 2021/691, in respect of worker’s displacements in the economic sectors classified under the NACE Revision 2 division 17 (Manufacture of paper and paper products) and division 28 (Manufacture of machinery and equipment) in the NUTS 2 region of Provincie Limburg (BE22) in Belgium. It was supplemented by additional information provided in accordance with Article 8(5) of Regulation (EU) 2021/691. That application is considered to comply with the conditions for providing a financial contribution from the EGF as laid down in Article 13 of Regulation (EU) 2021/691, on the basis of the assessment made by the Commission in the Proposal for a mobilisation decision of the European Parliament and of the Council 34 .

(4)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 704 135 in respect of the application submitted by Belgium.

(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 2024, the European Globalisation Adjustment Fund for Displaced Workers shall be mobilised to provide the amount of EUR 704 135 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] 35*

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 Article 7(5) of Regulation (EU) 2021/691.

(5)     https://www.euwid-paper.com/news/markets/fine-paper-demand-in-europe-is-currently-far-below-existing-capacities-090823/

(6)    Sappi’s presentation to the Works Council (10 October 2023). 

(7)    Sappi’s presentation to the Works Council (10 October 2023).

(8)     According to the EHPA , the European Heat Pump Association, in 2017 more than one million pumps were sold in EU. Three years later, in 2020, sales reached 1,5 million units, while in 2022 and 2023 sales were 2,76 and 2,64 million units respectively.

(9)    Purmo’s notification to the Work Council (11 May 2023).

(10)    Purmo’s notification to the Work Council (11 May 2023).

(11)    Provinciale Ontwikkelingsmaatschappij Limburg (POM Limburg)’s key figures presentation on Sappi/Lanaken/Maasland (12 October/2023); https://www.limburgradar.be/kerncijfers/

(12)     https://arvastat.vdab.be/arvastat_arbeidsmarkt.html

(13)     https://www.vdlcropteqrobotics.com/en/news/archief/vdl-nedcar-to-reduce-number-of-employees-by-2-000-by-1-march-2024

(14)     www.vdab.be/trendsdoc/beroepen/index.html

(15)     Statistiek Vlaanderen .

(16)     Statistiek Vlaanderen .

(17)    The Royal Decree of 10 November 2006 amending the Royal Decree of 9 March 2006.

(18)    Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding (VDAB).

(19)    ISCED 0-2

(20)    ISCED 3

(21)    ISCED 4

(22)    ISCED 5-8

(23)        Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding.

(24)    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 Belgium.

(25)    Totals do not tally due to rounding.

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

(27)    OJ L 2024/765, 29.2.2024, p 4

(28)    OJ L 433 I, 22.12.2020, p. 28.

(29)    Regulation (EU, Euratom) Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (recast), OJ L, 2024/2509, 26.9.2024. 

(30)    OJ L 153, 3.5.2021, p. 48.

(31)    OJ L 433 I, 22.12.2020, p. 28

(32)    Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (OJ L 433 I, 22.12.2020, p. 11).

(33)    OJ L 2024/765, 29.2.2024, p 4.

(34)    COM(2024) 370

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