Documents considered by the Committee on 4 May 2016 Contents

9European Globalisation Adjustment Fund

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; drawn to the attention of the Work and Pensions Committee

Document details

(a) Proposal for a Decision to authorise a payment from the European Globalisation Adjustment Fund to France; (b) Proposal for a Decision to authorise a payment from the European Globalisation Adjustment Fund to Greece

Legal base

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

HM Treasury

Document Numbers

(a) (37659), 7760/16, COM(16) 185; (b) (37665), 7977/16, COM(16) 210

Summary and Committee’s conclusions

9.1The European Globalisation Adjustment Fund (EGF) is designed to provide support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation. It was established in 2006 and renewed, for the financial period 2014–20 in 2013.

9.2The Government has previously recalled to us that it has opposed the EGF for many years, because it is highly sceptical about its effectiveness or efficiency. It told us that the findings of the Commission’s first biennial report on the EGF were deeply concerning and that it would continue to voice its objections in the planned Mid-Term Review of the EGF and work towards preventing a further extension of the Fund. The Government also told us that, although it objects to the continued existence and use of the EGF, it can only seek to ensure that any proposal properly meets the criteria in the EGF Regulation. However, it never supports any proposal for use of the EGF, although QMV means that none is ever denied.

9.3We now have before us two further applications, from France and Greece, for EGF assistance. Again the Government reminds us of its continued opposition to the existence and use of the EGF.

9.4On the understanding that the Government is continuing to oppose EGF applications (albeit unsuccessfully), whilst ensuring that the eligibility criteria are strictly enforced, we clear these documents from scrutiny.

9.5We have already drawn to the attention of the Work and Pensions Committee the Commission’s own disturbing review of the efficacy of the EGF, as it is relevant to any monitoring of the Government’s approach to the EGF Mid-Term Review that it might undertake. We note that other Member States continue to use this EU financial instrument of apparently little efficacy, although the UK Government opposes its use. We remind the House we have drawn a number of EGF applications, most recently from Sweden,34 to the attention of the Work and Pensions Committee.

Full details of the documents

(a) Proposal for a Decision on the mobilisation of the European Globalisation Adjustment Fund (application from France — EGF/2015/010 FR/MoryGlobal): (37659), 7760/16, COM(16) 185; (b) Proposal for a Decision on the mobilisation of the European Globalisation Adjustment Fund (application from Greece — EGF/2015/011 GR/Supermarket Larissa): (37665), 7977/16, COM(16) 210.

Background

9.6The European Globalisation Adjustment Fund (EGF) is designed to provide support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation. It was established in 2006 and renewed, for the financial period 2014–20, in 2013.

9.7The EGF is governed by strict criteria and eligibility rules. It can be used to co-fund a package of labour market measures for personalised support to integrate employees made, or at the risk of being made, redundant back into the labour market. However, there are some measures that are not eligible, such as actions which are the responsibility of enterprises by virtue of national law or collective agreements or actions receiving assistance from other EU financial instruments. Additionally, support for targeted beneficiaries should complement actions of Member States at national, regional and local level including those co-financed by EU funds. (There have been no cases in the UK where the eligibility criteria and rules for EGF funding would have been met.)

9.8In addition to Member States’ ability to apply for support from the EGF, the Commission may apply annually for finance for “technical assistance” of up to 0.5% of the fund’s current ceiling.

9.9The Government has previously recalled to us, in the context of the Commission’s first biennial report on the EGF, that it has opposed the EGF for many years, because it is highly sceptical about its effectiveness or efficiency. We noted that the predecessor Committee also opposed the use and renewal of the EGF and endorsed that opposition. Finally, we drew the Commission’s report to the attention of the Work and Pensions Committee, as relevant to any monitoring of the Government’s approach to the EGF Mid-Term Review that it might undertake.35

The documents

9.10The first proposed Decision, document (a), is to approve an application from France for a contribution from the EGF. Case EGF/2015/010 FR/MoryGlobal from France relates to 2,132 workers made redundant in courier, freight and related services who will benefit from support with a proposed EGF contribution of €5,146,800 (£4,074,207)—60% of the total budget. The Commission accepts the French authorities’ justification for the application, that is:

9.11The second proposed Decision, document (b), is to approve an application from Greece for a contribution from the EGF. Case EGF/2015/011 GR/Supermarket Larissa from Greece relates to 557 workers made redundant in the retail sector with the bankruptcy of Supermarket Larissa ABEE and 543 individuals not in education, employment or training (NEETs) in the areas affected, who are eligible under the Youth Unemployment Initiative,37 who will benefit from support with a proposed EGF contribution of €6,468,000 (£5,119,924)—60% of the total budget. The Commission accepts the Greek authorities’ justification for the application, that is:

9.12With regard to these applications the Commission argues 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

9.13In his Explanatory Memorandum of 21 April 2016 on the French application the Financial Secretary to the Treasury (Mr David Gauke) says, in familiar terms, that:

9.14In his Explanatory Memorandum of 26 April 2016 on the Greek application the Minister comments in very similar terms.

Previous Committee Reports

None.


34 See (37530), 6208/16: Twenty-sixth Report HC 342-xxv (2015–16), chapter 10 (16 March 2016).

35 See (37022), 11303/15 + ADD 1: Fourth Report HC 342-iv (2015–16), chapter 16 (16 September 2015).

36 See (36683), 6562/15: Fourth Report, HC 342-iv (2015–16), chapter 16 (16 September 2015) and Thirty-sixth Report, HC 219-xxxv (2014–15), chapter 9 (11 March 2015).

38 See (32134), 15740: Sixteenth Report HC 428-xiv (2010–12), chapter 13 (26 January 2011); (32528), 6577/11: Twenty-first Report HC 428-xix (2010–12), chapter 10 (9 March 2011); (33175), 14719/11: Forty-third Report HC 428-xxxviii (2010–12), chapter 22 (19 October 2011); (36390), 14063/14: Fifteenth Report HC 219-xv (2014–15), chapter 17 (22 October 2014) and (36507) 15409/14: Twenty-fourth Report HC 219-xxiii (2014–15), chapter 15 (3 December 2014).




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10 May 2016