PURPOSE: to
mobilise the
European Globalisation Adjustment Fund (EGF) to assist Belgium in
respect of redundancies in the manufacturing of
machinery.
PROPOSED ACT: ACT: Decision of the European Parliament
and of the Council.
CONTENT: Article 12 of Council Regulation (EU,
Euratom) No 1311/2013 laying down the
multiannual financial framework for the years
2014-2020 provides that the EGF shall not exceed a maximum
annual amount of EUR 150 million (2011 prices)
over and above the relevant headings of the financial
framework.
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 on the European Globalisation Adjustment Fund (2014-2020)
and repealing Regulation
(EC) No 1927/2006.
In this context, the Commission examined
the application for mobilisation of the EGF to assist Belgium and
concluded the following:
Belgium: EGF/2015/012 BE/Hainaut Machinery: on 17 December 2015,
Belgium submitted application EGF/2015/012 BE/Hainaut Machinery for
a financial contribution from the EGF, following redundancies in
the economic sector of manufacture of machinery and equipment (NUTS
level 2 region) of Hainaut in Belgium.
Belgium submitted application within the deadline of
12 weeks set out in the Regulation. This deadline within
which the Commission should finalise its assessment of the
application's compliance with the conditions for providing a
financial contribution expires on 5 May 2016.
In order to establish the link between the
redundancies and major structural changes in world trade patterns
due to globalisation, Belgium argued that Union trade in
construction machinery has undergone serious disruptions in recent
years. This has had a negative impact on the profitability in
Europe of the three enterprises, which are all specialised in
production of components and/or assemblage of machines used in the
construction sector.
The sector concerned by the proposal is characterised
by having production units close to the market. Therefore, the
three enterprises mainly produce for the European
market.
Due to declining public and private investments in
infrastructure, the demand for the products produced by the three
enterprises has decreased accordingly. The production of
construction engines in Europe has seen a decline of 45.1 %.
Simultaneously, steel prices in Europe have increased significantly. Declining economies of scale and
increasing unit costs have led to a loss of competitiveness for the
European plants. This decline in competitiveness has led to the
delocalisation to third countries of substantial production
capacity (in particular Asian plants have benefitted from this
development).
The primary event giving rise to these redundancies is
the announcement by Caterpillar Belgium S.A. on 23 February 2013 to
enter into a collective redundancy procedure at its production
plant located in Gosselies (the majority of the 1399 workers
concerned were the subjects of a first
EGF application involving redundancies at the enterprise). The
current proposal includes the remaining 169 workers at the
site. Carwall S.A., a principal supplier of cabs for
Caterpillar Belgium S.A., witnessed a falling demand for its
products, mainly due to fewer orders coming from Caterpillar, and
was forced to scale down production accordingly. The third
enterprise concerned by this proposal, Doosan S.A., produces
excavators. Falling demand for its products in Europe led to the
decision to close a production plant located in Frameries and
supply the European market from its production sites in South
Korea.
The impact of the redundancies on the local and
regional economy and employment is expected to be significant.
Hainaut is facing a difficult labour market situation with an
unemployment rate of 14.5 % (5.9 percentage points higher than the
national average).
To date, the Manufacture of machinery and equipment
n.e.c sector has been the subject of 14 EGF applications, eight of
which based on trade related globalisation and six on the global
financial and economic crisis.
Basis of the Belgian application: Belgium submitted the
application under the intervention criteria of Article 4(2)
derogating from the criteria of Article 4(1) (b) of the EGF
Regulation, which requires at least 500 workers being made
redundant over a reference period of nine months in enterprises
operating in the same economic sector defined at NACE Revision 2
Division and located in one region or two contiguous regions
defined at NUTS 2 level in a Member State.
There were 488 redundancies in the NUTS 2 region of
Hainaut (B32). The reference period of nine months for the
application runs from 25 December 2014 to 25 September
2015.
Having examined this application, the proposed
contribution from the EGF to the coordinated package of
personalised services is EUR 1 824 041.
BUDGETARY IMPLICATION: 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 Commission proposed to mobilise the EGF for the
amount of EUR 1 824 041, representing 60 % of the total costs of
the proposed actions, in order to provide a financial contribution
for the application.
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.
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 proposed amount.
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.