Select Committee on European Union Fortieth Report


EUROPEAN GLOBALISATION ADJUSTMENT FUND (EGF) (7301/06)

Letter from the Chairman to James Plaskitt MP, Parliamentary Under-Secretary of State, Department for Work and Pensions

  Your Explanatory Memorandum dated 28 March was considered by Sub-Committee G on 11 May.

  We note that the Government believe that the proposed EGF could play a useful role in helping to alleviate the consequences of globalisation. But, at first sight, we are not sure how much impact a Fund limited to €500 million a year diverted from other sources might have when spread across 25 Member States to offset a minimum of 1,000 job losses in a given sector or company.

  We agree that the Fund should not undermine existing national policies or substitute for the responsibilities of companies. But we will want to look more closely at the proposed requirement that it should not overlap with other EU funding streams in view of the important role played by Structural and Cohesion Funds in this field.

  We also agree that the intervention criteria will need to be tightly-drawn to ensure effectiveness. We foresee real difficulties in administering the Fund between rival claims from Member States fairly, consistently, effectively and without disproportionate bureaucracy.

  We are retaining the document under scrutiny and will want to give it further consideration. We would be grateful if you would report on the progress of your negotiations before the House rises for the Summer Recess and again well before any Council decisions are required later in the year.

12 May 2006  

Letter from James Plaskitt MP to the Chairman

  I wrote to you in March of this year outlining the content of the proposed regulation creating the European Globalisation Fund and the UK position and would be happy to give you a further update on progress before recess.

  In the interim the Commission has issued a revised version of the Financial Statement for EGF, this is a detailed technical document laying out the financial mechanisms for creating the fund. We will be seeking clarification from the Commission to ensure that commitments outlined are in line with the terms of the Inter Institutional Agreement (IIA). I will update the Committee when further information is received.

6 July 2006

Letter from the Chairman to James Plaskitt MP

  Thank you for your letter dated 6 July which was considered by Sub-Committee G on 20 July.

  We note that the Government is studying the Commission's revised version of the Financial Statement for the EGF and will be seeking clarification from the Commission that the commitments proposed are in-line with Inter-Institutional Agreement. We are grateful for your promise to report further developments.

  We are content with this and will continue to retain the document under scrutiny pending your further report. But we are concerned that things will need to move rather rapidly in the Autumn if the Commission is to achieve its target of having the proposed Fund operative by 1 January 2007. We would therefore be grateful if you could let us know as soon as you have a clearer idea of the timetable envisaged for Council consideration.

20 July 2006

Letter from James Plaskitt MP to the Chairman

  I wrote to you in March of this year outlining the content of the Commission's proposed regulation creating the European Globalisation Fund (EGF) and setting out the UK position. In response you requested an update on negotiations prior to parliamentary summer recess. This letter is intended to answer that request. In addition at the start of July I wrote to inform you that the proposal's financial statement had been revised and we were examining its content closely.

  The UK position remains that laid out in my Explanatory Memorandum of March this year. We still believe EGF could play a useful role in responding to the consequences of globalisation, in particular the focus on funding active labour market measures designed to support redundant workers to return to work.

  In particular, we are seeking to ensure that measures supported under the EGF do not undermine existing national policies or overlap with other European Union funding streams such as the Structural and Cohesion Funds.

  The UK is also seeking to ensure that the intervention criteria, funding and monitoring arrangements are sufficiently tightly drawn to ensure the effectiveness of the EGF.

  Negotiations in the Social Questions Working Groups (SQWG) progressed at a steady pace under the Austrian Presidency. The main focus of discussions has been around article two (the intervention criteria), article three (the eligible actions) and finally the financial provisions of the regulation particularly the level of co-financing.

  There has been no clear endorsement of nor has any consensus emerged around proposals for alternative wording from Member States'. It is clear that Member States' thinking on the eligible actions and level of co-financing is still evolving.

  The Finnish Presidency looks set to make more rapid progress. The Finn's are still hoping to bring the EGF to the Employment Council in December for political agreement. Achievement of this rather ambitious objective is reliant on progress throughout the autumn in the SQWG.

  I also wrote to you at the start of July making you aware of the revised Legislative Financial Statement, the Commission now intends to provide a written note explaining the reasons for the changes to the Financial Statement. I will update the Committee further when this information is received.

21 July 2006



 
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