Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents


35 European Globalisation Adjustment Fund

Committee's assessment Politically important
Committee's decisionNot cleared from scrutiny; further information requested
Document detailsProposal for a Decision to authorise payment from the European Globalisation Adjustment Fund to Finland
Legal baseArticle 12(3) of Regulation (EC) No. 1927/2006 (based on Article 159 TEC) and (Article 15(4) of Regulation (EU) No. 1309/2013 (based on Article 175 TFEU), in conjunction with point 13 of the Interinstitutional Agreement of 2 December 2013 on budgetary discipline, on cooperation in budgetary matters and on sound financial management; co-decision; QMV
Department

Document numbers

HM Treasury

(36917), 9609/15, COM(15) 232

Summary and Committee's conclusions

35.1 The European Globalisation Adjustment Fund is designed to provide support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation. This draft Decision is to approve an application from Finland for a contribution from the Fund, in relation to redundancies in the telecommunications sector.

35.2 The Government tells us of its aim of ensuring budgetary restraint and discipline and that it will seek to ensure that all the Fund criteria have been respected in proposals for assistance.

35.3 We note the Government's comments on this application. However, it does not say as to whether it finds this application acceptable. Moreover, the Government has not addressed questions by the predecessor Committee in relation to ten earlier applications to the Fund, which remain under scrutiny. That Committee asked to what extent the Government's efforts to ensure that all Fund criteria are respected have resulted in limits to or even rejections of applications by the Council and whether these efforts are supported by any other Member States.[ 285]

35.4 So we will not consider this document again until the Government tells us of its view of the acceptability of the present application and answers the questions posed by the predecessor Committee. Meanwhile this document also remains under scrutiny.

Full details of the documents: Proposal for a Decision on mobilisation of the European Globalisation Adjustment Fund (application from Finland: EGF/2015/001 FI/Broadcom): (36917), 9609/15, COM(15) 232.

Background

35.5 The European Globalisation Adjustment Fund (EGF), established in 2006, is designed to provide support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation. The Government does not apply for finance from this fund. (The UK opposed its renewal in 2013, an opposition the predecessor Committee endorsed.) There is a fairly steady stream of successful applications from other Member States.

The document

35.6 This draft Decision is to approve an application from Finland for a contribution from the EGF. Case EGF/2015/001 FI/Broadcom relates to 568 redundant workers in the telecommunications sector who would benefit from support with a proposed EGF contribution of €1,365,000 (£980,000) — 60% of the total budget. The Commission accepts the Finnish authorities' justification for the application, that is:

·  the EU market for mobile chipset development has undergone serious disruption as a result of major structural changes in world trade patterns due to globalisation;

·  while the number of product development personnel has increased in the USA and Asia, it has declined steeply in the EU from 5,000 workers to only a few hundred;

·  this decline has been reflected in personnel employed in the Finnish electronics and electrical industry; and

·  this has had a significant adverse impact on the regional economy of Northern Ostrobothnia, where the majority of redundancies occurred.

35.7 The Commission says that after a thorough examination of the application and in accordance with all applicable provisions of the EGF Regulation, the conditions for a financial contribution from the EGF are met.

The Government's view

35.8 In his Explanatory Memorandum of 17 June 2015 the Financial Secretary to the Treasury (Mr David Gauke) says that:

·  the Government has been clear that it wants to see real budgetary restraint in the EU over the coming years;

·  reform of EU spending is a priority;

·  the Prime Minister's negotiation of the European Council agreement on the 2014-2020 Multiannual Financial Framework delivered important progress by securing the first real-terms cut on the previous Framework;

·  this negotiation also secured a very substantial reduction in the size of the EGF over the period 2014-2020;

·  the Government is committed to continue to work hard to limit EU spending, reduce waste and inefficiency, and deliver the best possible deal for taxpayers; and

·  in line with this approach, the Government will seek to ensure that all EGF criteria have been respected in proposals for EGF assistance.

Previous Committee Reports

None.


285   (36617), 5523/15 (36618), 5525/15 (36619), 5529/15 (36620), 5532/15 (36621), 5534/15 (36622), 5537/15 (36646), 5893/15 + ADD 1 (36648), 5895/15 + ADD 1 (36659), 6121/15 (36683), 6562/15: see Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 10 (25 February 2015) and Thirty-sixth Report HC 219-xxxv (2014-15), chapter 9 (11 March 2015). Back


 
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