Changes from report parliamentary committee draft to plenary report

I. Background

The European Globalisation Adjustment Fund (EGF) was created to provide additional assistance to workers suffering from the consequences of major structural changes in world trade patterns.

In accordance with point 9 of the Interinstitutional Agreement of 16 December 2020, the Commission is required, following the positive assessment of an application, to submit a proposal to mobilise the Fund to the budgetary authority and to complement it with a corresponding request for transfer to the relevant budget lines.

II. Germany’s application and the Commission's proposal

On 15 November 2023, Germany submitted an application EGF/2023/003 DE/Vallourec for a financial contribution from the EGF, following 1 518 redundancies at the company Vallourec Deutschland GmbH (VAD) resulting from closure of its two production sites. This is the third such application of 2023 and the first to be examined under the 2024 budget.

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.

On 29 February 2024, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of Germany to support the reintegration in the labour market of 835 targeted beneficiaries, i.e. workers made redundant by VAD. In total, EUR 2 984 627 will be mobilised from the EGF for Germany, representing 60 % of the total costs of the proposed actions.

The Commission deemed the German application admissible under the intervention criteria of Article 4(2)(a) of the EGF Regulation, which requires at least 200 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.

EGF co-funding has been requested for the following types of actions, to be provided to redundant workers:

a) Upskilling Measures. Tailor-made courses provided individually or in groups. Emphasis on German courses for participants with a poor command of the language and specialised basic digital skills for participants with a low level of digital skills.

b) Guidance counseling and vocational orientation / activation measures. Personalized support from guidance counsellors. Peer groups and workshops, including with a focus on single mothers or older participants. A further focus will be on measures aiming at stabilising and improving the physical and mental health of participants.

c) Job search assistance: Professional job scouts will help to locate potential job vacancies that are not yet published, and which might suit eligible workers. In addition, a variety of job search events, such as job fairs, will be organised.

d) Support for business creation. Advisory services for those interested in starting their own businesses, including individualised tailor-made coaching measures as well as group coaching sessions.

e) Contribution to business creation. Grants of up to EUR 21 871 can be used for investments in equipment, but also for the rent of business premises or further coachings or trainings during the start-up phase.

f) Incentives and allowances. (1) Upskilling incentives. Can be paid upon successful participation in certain measures, depending on type, level and duration of a measure. (2) Further incentives. These will primarily focus on the integration of participants in the job market, and can be paid as a bonus for taking up employment during the duration of the transfer company or be paid in the form of salary top-ups to compensate for wage loss in the new job. (3) Training allowance. Allowance of EUR 1 296 is paid during workers’ stay in the transfer company. Participation in active labour market measures is a prerequisite for receiving an allowance.

According to the Commission, the described measures constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation and do not substitute passive social protection measures.

Germany provided the required information on actions that are mandatory for the enterprises 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.

Procedure

In order to mobilise the Fund, the Commission has submitted to the Budgetary Authority a request to transfer a global amount of EUR 2 984 627 from the EGF reserve (budget line 30 04 02; commitment appropriations) to the EGF (budget line 16 02 02; commitment appropriations).

According to an internal agreement within the Parliament, the Employment and Social Affairs Committee and the Committee on Regional Policy should be associated to the process, in order to provide constructive support and contribute to the assessment of the applications from the Fund.