Explanatory Memorandum to COM(2021)618 - Globalisation Fund application from Spain - EGF/2021/001 ES/País Vasco metal - Main contents
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| dossier | COM(2021)618 - Globalisation Fund application from Spain - EGF/2021/001 ES/País Vasco metal. |
|---|---|
| source | COM(2021)618  |
| date | 07-10-2021 |
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 25 June 2021, Spain submitted an application EGF/2021/001 ES/País Vasco metal for a financial contribution from the EGF, following displacements in the economic sector classified under the NACE Revision 2 division 25 (Manufacture of fabricated metal products, except machinery and equipment) in the NUTS 2 region of País Vasco (ES21) 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
| EGF application | EGF/2021/001 ES/País Vasco metal |
| Member State | Spain |
| Region(s) concerned (NUTS 2 level 2) | País Vasco (ES21) |
| Date of submission of the application | 25 June 2021 |
| Date of acknowledgement of receipt of the application | 28 June 2021 |
| Date of request for additional information | 9 July 2021 |
| Deadline for provision of the additional information | 30 July 2021 |
| Deadline for the completion of the assessment | 8 October 2021 |
| Intervention criterion | Article 4(2)(b) of the EGF Regulation |
Number of enterprises concerned | 6 |
| Sector(s) of economic activity (NACE Revision 2 division) 3 | Division 25 (Manufacture of fabricated metal products, except machinery and equipment) |
| Reference period (six months): | 2 June 2020 – 2 December 2020 |
| Number of displacements during the reference period | 491 |
| Total number of targeted beneficiaries | 300 |
| Budget for personalised services (EUR) | 1 384 950 |
| Budget for implementing EGF 4 (EUR) | 0 044 000 |
| Total budget (EUR) | 1 428 950 |
| EGF contribution (85 %) (EUR) | 1 214 607 |
ASSESSMENT OF THE APPLICATION
Procedure
4. Spain submitted application EGF/2021/001 ES/País Vasco metal within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met, on 25 June 2021 5 . The Commission acknowledged receipt of the application on 28 June 2021 and requested additional information from Spain on 9 July 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 8 October 2021.
Eligibility of the application
Contents
- Enterprises and beneficiaries concerned
- Intervention criteria
- Calculation of displacements and of cessation of activity
- Eligible beneficiaries
- Description of the events that led to the displacements and cessation of activity
- Expected impact of the displacements as regards the local, regional or national economy and employment
- Unemployment in Basque region in 2020
- Complementarity with actions funded by national or Union funds
- Consultation of targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
- Targeted beneficiaries
- Proposed measures
- Estimated budget
- Period of eligibility of expenditure
5. The application relates to 491 displaced workers whose activity has ceased in the economic sector classified under the NACE Revision 2 division 25 (Manufacture of fabricated metal products, except machinery and equipment), out of which 192 in the course of collective redundancies notified to the authorities. The collective redundancies concern 6 enterprises in total 6 . All the displacement occurred in the NUTS 2 region of País Vasco (ES21).
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 491 displaced workers in the NUTS 2 region of País Vasco (ES21).
7. The reference period of six months for the application runs from 2 June 2020 to 2 December 2020.
8. The cessation of activities of the displaced workers during the reference period have been calculated as follows:
–192 from the date on which the employer, in accordance with Article 3(1) of Council Directive 98/59/EC 7 , notified the competent public authority in writing of the projected collective redundancies. Spain confirmed prior to the date of the completion of the assessment by the Commission that these 192 redundancies have actually been effected, and
–299 from the date of the employer's individual notice to lay off or to terminate the contract of employment of the worker.
9. The total number of eligible beneficiaries is therefore 491.
10. The event giving rise to these displacements is the economic crisis caused by the COVID-19 pandemic.
11. The strict lockdown measures implemented in Spain in Q2 2020 resulted in a curtail of non-essential economic activities and services, which hit the metal sector hard. When the lockdown measures were softened other issues linked to the pandemic, such as shortages of supplies and raw materials, difficulties to adapt facilities to anti-COVID19 protocols, contagions and workers' confinement, or mobility issues, also hit the metal sector.
12. According to data from Confemetal 8 , the pandemic has had a significant impact on the activity and turnover of the enterprises operating in the metal sector, with negative consequences on employment and on the liquidity of enterprises (payment defaults, access to credit, etc.).
13. In 2020 (year on year variation), production fell by more than 50% in 18% of the metal enterprises. Turnover fell by more than 50% in 16% of the businesses. A third of metal enterprises experienced a decrease between 30% and 50% of both production and turnover 9 .
14. The production, turnover and prices indices for the fabricated metal products sector declined year on year in all quarters in 2020.
| 2019 | 2020 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Production index (IPIMET) | 6,4 | 4,5 | 1,9 | 3,6 | -9,4 | -32,9 | -8,2 | -2,7 |
| Metal industry turnover index (ICNMET) | 4,9 | 2,8 | -0,7 | 1,6 | -10,4 | -34,5 | -8,5 | -3,9 |
| Industrial Price Index (IPRIMET) | 1,3 | 0,9 | 0,4 | 0,2 | -0,3 | -0,7 | -0,5 | 0,2 |
Source: Confemetal 10
15. The decline in activity and turnover resulted in displacements. Despite the extensive use of short-time work schemes 11 , displacements occurred in 14% of the enterprises in the metal sector, affecting 10,6% of their workforce 12 . The displacements concerned by this application started in 2020 Q2.
Expected impact of the displacements as regards the local, regional or national economy and employment
16. In the Basque region, the fabricated metal products sector represents 27,4% of the gross value added (GVA) of the industry. The relative weight of the industry over the regional GVA as a whole is around 24%. At the national level, the GVA of the industry represents 14,5% of the GVA 13 , while the EU-28 average is 18,8% 14 .
17. Due to its high weight in the regional economy, the difficulties in the fabricated metal products sector has had a significant impact on the regional economy and employment. At the beginning of 2020, unemployment (year on year) in the sector was decreasing. However, since March 2020, the trend changed drastically, because of the pandemic. In August 2020, there were 25% 15 more unemployed persons than six months before. Job destruction in industry has been greater than in all other sectors together.
(year on year)
(%)
Source: Lanbide - Servicio Vasco de Empleo 16
18. Although from January to May 2021, registered unemployment has been declining (6,21%), it is still 4,6% higher than the pre-pandemic levels 17 . Moreover, recovery is not benefiting all groups equally. In May 2021, long-term unemployment represented 55,6% of total unemployment (3,6 p.p. higher than in January 2021) and unemployed persons with basic education or less represented 60,8% (1,1 p.p. higher than in January).
Application of the EU Quality Framework for anticipation of change and restructuring
19. In its application for EGF support, Spain has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring were taken into account. Spain highlights the key concepts of the Basque Vocational Training Plan, Basque Employment Strategy and the Green jobs program. The Observatory of Industrial Situation monitors the economic situation. HOBETUZ (Basque Foundation for Continuing Professional Training continuing education) offers training for people in active employment, while AukerabeRRi 18 is a new outplacement program launched in 2021 with the aim of reskilling and redeploying workers displaced from sectors in crisis. Both are integrated into the structure of Lanbide (País Vasco Public Employment Service). Social partner involvement is ensured by their representation in Lanbide's governance board, which is made up of representatives of the regional government, trade unions and employers organizations.
20. Regarding the activities already undertaken for the assistance of the displaced workers Spain has indicated that Lanbide (País Vasco Public Employment Service) has provided the workers with access to its general services. The workers were also informed of their eligibility to participate in the pilot programme AukerabeRRi. The 178 workers entitled to outplacement plans 19 have already completed them.
21. Spain has confirmed that the measures receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.
22. The coordinated package of personalised services complements actions funded by other national or EU funds such as AukerabeRRi or the outplacement plans, already mentioned.
Consultation of targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
23. Spain has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners.. The application, previously discussed in various technical meetings, was aproved by Lanbide’s governance board in the meeting held on 2 July 2021.
24. Additional meetings were held on 19 January and 2 February 2021 with Federación Vizcaína de Empresas del Metal, (federation of metal enterprises of Biscay), Asociación de Empresas de Guipúzcoa - ADEGI (Business association of Gupúzcoa) and SEA-Empresas Alavesas (business associations of Alava). All these employers organisations along with relevant cluster associations 20 contributed to the proposal.
Targeted beneficiaries and proposed measures
25. The estimated number of displaced workers expected to participate in the measures is 300. The breakdown of these workers by gender, age group and educational level is as follows:
| Category | Number of expected beneficiaries | ||
| Gender: | Men: | 265 | (88,3 %) |
| Women: | 35 | (11,7 %) | |
| Non-binary | 0 | (0,0 %) | |
| Age group: | Below 30 years: | 22 | (7,3 %) |
| 30-54 years: | 216 | (72,0 %) | |
| Over 54 years: | 62 | (20,7 %) | |
| Educational level | Lower secondary education or less 21 | 107 | (35,7 %) |
| Upper secondary 22 or post-secondary education 23 | 68 | (22,6 %) | |
| Tertiary education 24 | 125 | (41,7 %) |
26. The personalised services to be provided to displaced workers consist of the following measures:
–General information, welcome and profiling sessions: The information session is the first measure to be offered to all targeted beneficiaries and includes general information on available vocational counselling, training programmes and incentives. The individual information sessions include the profiling of the participant and the allocation of the counsellor who will accompany the worker along the process towards reemployment.
–Occupational guidance will be provided through collective and individual sessions.
–Intensive job-search assistance, including workshops on job-search and recruiting processes, the active search for local and regional employment opportunities, and job-matching.
–Support for business creation: Workers interested in becoming self-employed will receive individual tutoring sessions and training, which might cover planning, carrying out feasibility studies, preparing business plans, help with identifying financing possibilities, etc.
–Contribution to business start-up: Workers who start a business or an activity as self-employed persons will receive a contribution up to EUR 8 000, to help them with setting-up costs.
–Training: This will include (1) training on key and horizontal competencies, such as digital skills, quality management, prevention of occupational risks, etc.; (2) re-skilling vocational training — for those who choose to redirect their career outside the metal sector —, such as logistics, warehouse management, construction and energy efficiency, food industry, urban and industrial waste management, recreational activities for the elderly, etc.; (3) up-skilling vocational training to cater for the skills in demand in the metal sector such as 3D CAD 25 assembly and part modelling; CNC 26 machine tool programming; CATIA 27 mechanical design; forklifts, overhead cranes and lifting platforms; fine sheet metal work and boilermaking; welding (oxy-fuel, semi-automatic, TIG 28 , etc.); machining by chip removal, abrasive machining, deformation machining etc.; and (4) On-the-job training designed for vacancies that lack suitable candidates. After successfully completing the training, the worker in question will be offered a contract.
–Participation, job-search and training allowances: A participation allowance up to EUR 300 is foreseen for those participating in all the individual counselling session set in their personalised itinerary of insertion. The workers participating actively in the measure Intensive job search assistance or completing training will receive a lump sum of EUR 400.
27. The Measures were planned to be in line with the Spanish Circular Economy Strategy 29 . Training contributes to boost the process of digital transformation in the industry. The conclusions of the DESI 2020 report 30 have been taken into account to set the contents of the training in digital skills. The package will contribute to the dissemination of horizontal skills required in the digital industrial age as well as in a resource-efficient economy, in line with Article 7.2 of the EGF Regulation.
28. 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.
29. 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.
30. The estimated total costs are EUR 1 428 950, comprising expenditure for personalised services of EUR 1 384 950 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 44 000.
31. The total financial contribution requested from the EGF is EUR 1 214 607 (85 % of total costs).
32. The national pre-financing and co-funding is provided by Lanbide, the Basque public employment service.
| Measures | Estimated number of participants | Estimated cost per participant (EUR) 31 | Estimated total costs (EUR) 32 |
| Personalised services (measures under Article 7(2)(a) of the EGF Regulation) | |||
| General information. Welcome and profiling sessions (Difusión y presentación del proyecto. Acogida) | 300 | 406 | 121 800 |
| Occupational guidance (Asesoramiento y orientación laboral) | 300 | 455 | 136 500 |
| Intensive job-search assistance (Apoyo a la búsqueda de empleo) | 280 | 750 | 210 000 |
| Support for business creation (Apoyo a personas emprendedoras) | 20 | 1 838 | 36 750 |
| Contribution to business start-up (Ayuda al emprendimiento) | 10 | 8 000 | 80 000 |
| Training (Desarrollo profesional y prácticas en empresas) | 300 | 1 486 | 445 900 |
| Sub-total (a): Percentage of the package of personalised services | – | 1 030 950 | |
| (74,44 %) | |||
| Allowances and incentives (measures under Article 7(2)(b) of the EGF Regulation) | |||
| Incentives (Ayuda por la participación) | 300 | 1 180 33 | 354 000 |
| Sub-total (b): Percentage of the package of personalised services: | – | 354 000 | |
| (25,56 %) | |||
| Activities under Article 7(5) of the EGF Regulation | |||
| 1. Preparatory activities | – | 3 000 | |
| 2. Management | – | 3 000 | |
| 3. Information and publicity | – | 3 000 | |
| 4. Control and reporting | – | 35 000 | |
| Sub-total (c): Percentage of the total costs : | – | 44 000 | |
| (3,08 %) | |||
| Total costs (a + b + c): | – | 1 428 950 | |
| EGF contribution (85 % of total costs) | – | 1 214 607 |
33. 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.
34. Spain confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 22 000 per beneficiary.
35. Spain started providing the personalised services to the targeted beneficiaries on 11 June 2021. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 11 June 2021 until 24 months after the date of the entry into force of the Financing Decision.
36. Spain started incurring the administrative expenditure to implement the EGF on 1 February 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 February 2021 until 31 months after the date of the entry into force of the Financing Decision.
Management and control systems
37. 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. Lanbide will be the intermediate body for the managing authority.
Commitments provided by the Member State concerned
38. 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 actions 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
39. 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 34 .
40. Having examined the application in respect of the conditions set out in Article 13(1) and i 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 1 214 607, representing 85 % of the total costs of the proposed actions, in order to provide a financial contribution for the application.
41. 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 35 .
Related acts
42. 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 1 214 607.
43. 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 36 . 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.