Explanatory Memorandum to COM(2023)470 - Globalisation Fund application from Belgium - EGF/2023/002 BE/Makro - Main contents
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| dossier | COM(2023)470 - Globalisation Fund application from Belgium - EGF/2023/002 BE/Makro. |
|---|---|
| source | COM(2023)470 |
| date | 12-10-2023 |
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 1309/20131.
2. On 3 July 2023, Belgium submitted an application EGF/2023/002 BE/Makro for a financial contribution from the EGF, following displacements in Makro Cash & Carry Belgium NV (Makro) 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
| EGF application | EGF/2023/002 BE/Makro |
| Member State | Belgium |
| Region(s) concerned (NUTS2 level 2) | Provincie Antwerpen (BE21),Contents
|
| Date of submission of the application | 3 July 2023 |
| Date of acknowledgement of receipt of the application | 3 July 2023 |
| Date of request for additional information | 17 July 2023 |
| Deadline for provision of the additional information | 8 August 2023 |
| Deadline for the completion of the assessment | 17 October 2023 |
| Intervention criterion | Article 4(2), point (a), of Regulation (EU) 2021/691 |
| Primary enterprise | Makro Cash & Carry Belgium |
| Number of enterprises concerned | 1 |
| Sector(s) of economic activity (NACE Revision 2 division)3 | Division 47 (Retail trade, except of motor vehicles and motorcycles) |
| Reference period (four months): | 10 January 2023 – 10 May 2023 |
| Number of displacements during the reference period | 1 431 |
| Total number of eligible beneficiaries | 1 431 |
| Total number of targeted beneficiaries | 421 |
| Budget for personalised services (EUR) | 3 233 822 |
| Budget for implementing EGF4 (EUR) | 0 093 500 |
| Total budget (EUR) | 3 327 322 |
| EGF contribution (85 %) (EUR) | 2 828 223 |
ASSESSMENT OF THE APPLICATION
Procedure
4. Belgium submitted application EGF/2023/002 BE/Makro within 12 weeks of the date on which the intervention criteria set out in Article 4(2), point (a), of Regulation (EU) 2021/691 were met, on 3 July 2023. The Commission acknowledged receipt of the application and requested additional information from Belgium on 17 July 2023. 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 17 October 2023.
Eligibility of the application
Enterprises and beneficiaries concerned
5. The application relates to 1 431 displaced workers whose activity has ceased in Makro. The enterprise operated in the economic sector classified under the NACE Revision 2 division 47 (Retail trade, except of motor vehicles and motorcycles). The redundancies are located in the NUTS 2 regions of Provincie Antwerpen (BE21), Provincie Oost-Vlaanderen (BE23), Provincie Vlaams-Brabant (BE25), Province Hainaut (BE32), and Province Liège (BE33).
Intervention criteria
6. Belgium submitted the application under the intervention criteria of Article 4(2), point (a), 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 an enterprise in a Member State, including workers displaced in 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 10 January 2023 to 10 May 2023.
8. There were 1 431 displaced workers in Makro during the reference period.
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 1 431.
Description of the events that led to the displacements and cessation of activity
11. The event giving rise to these displacements is the bankrupcy of the enterprise.
12. In 1970, Makro Cash &Carry Belgium NV opened stores for self-employed, liberal profession practitioners, and hospitality professionals selling food and non-food products. In 2017, after about ten years of financial difficulties, the enterprise decided to open access of its Makro shops also to general customers, whilst its Metro shops remained limited to food and beverage services professionals (hotels, restaurants, and caterers).
13. Despite the decision, the losses amounted to EUR 67 million in the financial year 2018/2019 and EUR 44 million in 2019/20205.
14. Makro's sales continued to decline: EUR 738 million in 2018/2019, EUR 714 million in 2019/2020, and EUR 646 million in 2020/20216. During the pandemic, the hospitality sector stopped activity for several months, affecting Makro's sales line for food and beverage services professionals. Makro's sales line for general customers was affected as well, because of mandatory closures of non-food stores and non-food aisles in supermarkets, which led to a drop in sales and an increased use of e-commerce, that has continued after the restrictive measures were lifted.
15. On 1 September 2022, Makro applied for judicial reorganisation by transfer of undertakings under judicial authority to the Antwerp Business Court. A tender process for the enterprise started.
16. Makro sales line for food and beverage services professionals (branded as Metro) consisted of 11 stores, nine of which were sold to Sligro Food Group and one to food wholesaler Van Zon, at the end of 2022. All 400 jobs in Metro stores were saved, along with 100 jobs at headquarters. The employees of the one store that was not bought, were offered a job in the nearby Sligro-ISPC facility in Antwerp7.
17. Makro’s sale line for general customers (branded as Makro) consisted in 6 stores. The receivers rejected the only offer for the Makro stores because it did not meet the bidding requirements and was not sound8. Makro was declared bankrupt on 10 January 20239 and 1 431 workers were made redundant.
Expected impact of the displacements as regards the local, regional or national economy and employment
18. Makro stores for general customers were in Flanders (four stores) and in Wallonia (two stores). The territories affected by the redundancies are the Flemish provinces of Antwerpen, Oost-Vlaanderen and Vlaams-Brabant and the Walloon provinces of Hainaut and Liège.
19. Due to the differences between the Flemish and the Walloon labour markets, the territorial impact of the redundancies varies.
20. Unemployment rate rose from 8,5% to 8,8% in Wallonia and declined from 3,3% to 3,1% in Flanders, in Q1 2023, compared with Q4 2022, whilst year over year variation shows an increase in both regions (by 0,4 percentage points in Wallonia and by 0,3 pp in Flanders)10.
21. At national level, half (50,5%) of the people who were unemployed in the first quarter of 2022 are still unemployed one year later; 26% are out of the labour market (inactive) and only 24% are back into employment. However, there are regional differences: the percentage of those still unemployed one year later is slightly higher in Wallonia (55,1%) than the national average but falls to 36,4% in Flanders1112.
22. In the first quarter of 2023, the employment rate in Flanders was 77,3% with a year-on-year change of 0,7 pp. The employment rate in Wallonia was 65% (12,3 pp lower than in Flanders) with a year-on-year decrease of 0,9 pp13.
23. Older workers are facing more obstacles to employment. In the first quarter of 2023, there is a difference of 18,7 pp between the employment rate for the age group 20-54 (76,4%) and the employment rate for the age group 55+ (56,8%). In the Walloon labour market, the registered job seekers aged fifty or more represent about 25% of the total job seekers in March 202314. Two out of three Makro redundant workers (65%) are over 50 years old.
While the COVID-19 crisis has accelerated the search for more qualified workers in the Belgian labour market15, Makro workforce is essentially made up of cashiers and warehouse workers. For these workers, it is more difficult to re-integrate into employment.
24. Belgium applied for EGF co-financing only in support of former Makro workers in Wallonia. The Flemish regional authorities consider that there is no need to top-up the support available to former Makro workers in Flanders with co-financing from the EGF, given the situation on its regional labour market.
Application of the EU Quality Framework for anticipation of change and restructuring (QFR)
25. Belgium has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring have been taken into account.
26. Belgium has reported that national labour law16 on the active management of restructuring requires enterprises undergoing restructuring to set up an employment unit (cellule pour l’emploi)17, 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 in six months for workers aged 45+). However, this requirement does not apply in the event of bankruptcy.
27. Wallonia's regional legislation18 provides for specific support for redundant workers, in the form of a redeployment unit (cellule de reconversion)19 by the Regional Public Employment and Vocational Training Service (Forem), at the request of workers’ representative organisations. The redeployment unit does not constitute an obligation for the employer, nor for Forem. The implementation of the EGF co-financed measures will be managed through such a redeployment unit.
28. Regarding the activities undertaken to assist the displaced workers, Belgium has reported that the redeployment unit was set up on 1 February 2023, shortly after the redundancies.
Complementarity with actions funded by national or Union funds
29. Belgium has confirmed that the measures described below receiving a financial contribution from the EGF will not receive financial contributions from other Union financial instruments.
30. 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
31. Belgium has indicated that the co-ordinated package of personalised services has been drawn up in consultation with targeted beneficiaries, their representatives, and the social partners, in compliance with Article 7 i of Regulation (EU) 2021/691.
32. Aiming to prepare a sound package of tailored measures to support Makro workers’ efforts to return to work, Forem, trade unions (FGTB20 and CSC21), and other partners met on 27 January, 2 March, 20 March and 5 May 2023, to better understand workers' retraining needs. The social counsellors who accompanied the workers after their dismissal were also consulted. These meetings resulted in a coordinated package of EGF measures that complies with Article 7 i of Regulation (EU) 2021/691.
Targeted beneficiaries and proposed measures
Targeted beneficiaries
33. The estimated number of displaced workers expected to participate in the measures is 421. 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:
| Category | Number of | ||
| Gender: | Men: | 189 | (44,9 %) |
| Women: | 232 | (55,1 %) | |
| Non-binary | 0 | (0,0 %) | |
| Age group: | Below 30 years: | 2 | (0,5 %) |
| 30-54 years: | 229 | (54,4 %) | |
| Over 54 years: | 190 | (45,1 %) | |
| Educational level | Lower secondary education or less22 | 87 | (20,7 %) |
| Upper secondary23 or post-secondary education24 | 297 | (70,5 %) | |
| Tertiary education25 | 37 | (8,8 %) |
Proposed measures
34. 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:
- Information services, occupational guidance and outplacement assistance: Workers will be offered individual guidance and job-search services along with support by social workers, throughout the implementation period. Particular attention will be paid to vulnerable people in a situation of psychological distress, indebtedness, or recognised disability through professionals specialised in assisting these groups.
- Training, retraining and vocational training: Workers will have access to the standard training offer of Forem and its partners. In addition, after the profiling and agreement of individual projects with the vocational counsellor, specific training will be offered to cater for the identified needs.
- Support towards business creation. The measure aims at workers who wish to become self-employed. It will include a diagnosis and guidance phase, awareness-raising actions on entrepreneurship, information sessions on the potential for business creation through territorial economic diagnoses and networking with relevant entrepreneurs and with certified coaches in business creation.
- Contribution to business creation. 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 installments, based on supporting documents proving the start and development of the business activity.
- Incentives and allowances: (1) Job-search and training allowances. Workers will receive EUR 2 per hour of effective participation in training or job-search activities. (2) Bonus for improving IT skills. Workers, who follow the module for access to digital autonomy will receive a lump sum of EUR 400 conditional on their active participation and completion of the training. The bonus aims to reduce digital illiteracy by encouraging former Makro workers to improve their IT skills. (3) Bonus for improving languages skills. Workers who follow an intensive language training module organized by Forem or a language immersion course in an enterprise to improve their Dutch, English or German language skills as part of a specific job search will receive a lump sum of EUR 500. The objective of the bonus is to encourage the development of cross-disciplinary language skills to facilitate workers’ reintegration into jobs. (4) Return-to-school allowance. A monthly allowance of EUR 350 will be granted to workers who embark on secondary and tertiary studies full-time for at least one year, or qualifying training of at least 3 months to acquire the necessary skills for jobs that are in demand and for which recruiting is difficult, linked to critical functions26, or significantly gender-unbalanced. (5) Allowance towards business creation. To support the workers while setting up their business, a monthly allowance of EUR 350 for a maximum of 12 months will be granted.
35. Training to gain digital autonomy along with the bonus for improving IT skills mentioned above, together with a module on circular economy and efficient use of resources are in line with the requirements set out in Article 7(2) of Regulation (EU) 2021/691. The module on circular economy and efficient use of resources developped for former Swissport workers (EGF/2020/005 BE)27 is now part of Forem's standard training offer co-financed by ESF+. Therefore, it is not budgeted in this proposal. Besides, resource efficient economy is at the core of the training offer of Forem environment training center28.
36. 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.
37. Regarding the activities already undertaken for the assistance of the displaced workers, Belgium informed that the employer's legal obligation to provide outplacement services to the redundant workers does not apply due to the enterprise’s bankruptcy. However, support to the workers through the redeployment unit started three weeks after the redundancies.
38. 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
39. The estimated total costs are EUR 3 327 322, comprising expenditure for personalised services of EUR 3 233 822 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 93 500.
40. The total financial contribution requested from the EGF is EUR 2 828 223 (85 % of total costs).
41. 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 Wallonia.
| Measures | Estimated number of participants | Estimated cost per participant (EUR)29 | Estimated total costs (EUR)30 |
| Personalised services (measures under Article 7(2), second subparagraph, point (a), of Regulation (EU) 2021/691) | |||
| Information services, occupational guidance and outplacement assistance (reconversion: accompagnement/orientation/mobilisation) | 421 | 5 350 | 2 252 335 |
| Training, retraining and vocational training (formations et modules spécifiques) | 421 | 944 | 397 367 |
| Support towards business creation (dispositif d'accompagnement à l'entrepreneuriat) | 50 | 2 660 | 132 982 |
| Contribution to business creation (bourse de lancement) | 12 | 10 000 | 120 000 |
| Sub-total (a): | – | 2 902 684 | |
| (89,76 %) | |||
| Allowances and incentives (measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691) | |||
| Incentives and allowances (allocation de recherche d'emploi et de formation, prime numérique, prime langue, allocation de reprise d'études, allocation d'entrepreneuriat) | 421 | 787 | 331 138 |
| Sub-total (b): | – | 331 138 | |
| (10,24 %) | |||
| Activities under Article 7 i of Regulation (EU) 2021/691 | |||
| 1. Preparatory activities | – | 031 | |
| 2. Management | – | 43 400 | |
| 3. Information and publicity | – | 15 000 | |
| 4. Control and reporting | – | 35 100 | |
| Sub-total (c): | – | 93 500 | |
| (2,81 %) | |||
| Total costs (a + b + c): | – | 3 327 322 | |
| EGF contribution (85 % of total costs) | – | 2 828 223 |
42. The costs of the measures identified in the table above as measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691 do not exceed 35 % of the total costs for the coordinated package of personalised services. Belgium confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.
43. In accordance with Article 7(2), fourth subparagraph, of Regulation (EU) 2021/691, Belgium confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 22 000 per beneficiary.
Period of eligibility of expenditure
44. Belgium started providing the personalised services to the targeted beneficiaries on 1 February 2023. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 1 February 2023 until 24 months after the date of the entry into force of the Financing Decision.
45. Belgium started incurring the administrative expenditure to implement the EGF on 1 January 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 10 January 2023 until 31 months after the date of the entry into force of the Financing Decision.
Management and control systems
46. 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 and controlled by the same bodies that manage and control the ESF+.
Commitments provided by the Member State concerned
- 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,
- 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
48. 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 202732.
49. 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 2 828 223, representing 85 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.
50. 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 resources33.
Related acts
51. 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 2 828 223.
52. 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) 2018/104634. 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.