Explanatory Memorandum to COM(2015)37 - Globalisation Fund application EGF/2014/018 GR/Attica Broadcasting

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CONTEXT OF THE PROPOSAL

1. The rules applicable to financial contributions from the European Globalisation Adjustment Fund (EGF) are laid down in Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/20061 (the EGF Regulation).

2. The Greek authorities submitted application EGF/2014/018 GR/Attica Broadcasting for a financial contribution from the EGF, following redundancies and cessation of activities within the meaning of Article 3 of the EGF Regulation (hereafter referred to as redundancies) in 16 enterprises operating in the NACE Rev. 2 division 60 (Programming and broadcasting activities)2 in the NUTS 23 level region of Attica (EL 30) in Greece.

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/2014/018 GR/Attica Broadcasting
Member State:Greece
Region(s) concerned (NUTS level 2):Attica (EL 30)
Date of submission of the application:4.9.2014
Date of acknowledgement of receipt of the application:18.9.2014
Date of request for additional information:18.9.2014
Date of request for additional 2 weeks to provide the requested information29.10.2014
Deadline of provision of the additional information:13.11.2014
Deadline for the completion of the assessment:5.2.2015
Intervention criterion:Article 4(1)(b) of the EGF Regulation
Sector(s) of economic activity (NACE Rev. 2 division):Division 60 ('Programming and broadcasting activities')
Reference period (nine months):12 September 2013 – 12 June 2014
Number of redundancies or cessations of activity during the reference period:928
Number of eligible beneficiaries expected to participate in the actions:928
Number of targeted young persons not in employment, education or training (NEETs):0
Budget for personalised services (EUR)8 200 000
Budget for implementing EGF4 (EUR)210 000
Total budget (EUR)8 410 000
EGF contribution (60 %) (EUR)5 046 000

ASSESSMENT OF THE APPLICATION

Procedure

4. The Greek authorities submitted application EGF/2014/018 GR/Attica Broadcasting within 12 weeks of the date on which the intervention criteria set out in Art. 4 of the EGF Regulation were met, on 4 September 2014. The Commission acknowledged receipt of the application within two weeks of the date of submission of the application, on 18 September 2014. The Commission requested additional information from the Greek authorities on the same date. The Greek authorities provided such additional information within eight weeks of the date of the request, after an extension of the deadline by two weeks at the duly justified request of the Greek authorities. The deadline of 12 weeks 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 5 February 2015.

Eligibility of the application

Enterprises and beneficiaries concerned

5. The application relates to 928 workers made redundant5 in 16 enterprises6 operating in the NACE Rev. 2 division 60 (Programming and broadcasting activities) in the NUTS level 2 region of Attica (EL 30).

Intervention criteria

6. The Greek authorities submitted the application under the intervention criterion of Article 4(1)(b) of the EGF Regulation, which requires at least 500 redundancies over a reference period of nine months in enterprises operating in the same economic sector defined at NACE Rev. 2 division level and located in one region or two contiguous regions defined at NUTS 2 level in a Member State.

7. The reference period of nine months runs from 12 September 2013 to 12 June 2014.

Calculation of redundancies and of cessation of activity

8. All the redundancies have been calculated from the date of the de facto termination of the contract of employment or its expiry.

Eligible beneficiaries

9. The total number of eligible beneficiaries is 928.

Link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009

10. In order to establish the link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009, Greece argues that the Greek economy is for the sixth consecutive year (2008-2013) in deep recession. According to ELSTAT, the Greek Statistical Authority, since 2008 the Greek GDP has decreased by 25,7 percentage points; public consumption by 21 percentage points and private consumption by 32,3 percentage points whilst unemployment increased by 20,6 percentage points. Even though the Greek economy is estimated to be on the return to growth'' and forecasts for some of these indicators are already positive for 20147, the labour market shall continue to experience difficulties in the near future as well.

11. In order to deal with foreign debt payments, in 2008 the Greek government took unpopular measures such as increasing tax revenues, streamlining public expenditure and decreasing public employees' salaries. Wages in the private sector have also been decreasing in an attempt to increase the competitiveness of the Greek economy. Since 2008, thousands of enterprises have stopped their activities and closed down, making their staff redundant and thousands of self-employed persons have ceased their activities, contributing to the sharp increase of unemployment. An immediate effect of the reduced income has been a decrease in private consumption - especially of non-essential goods.

12. In 2009, the drop of household consumption in Greece followed the same negative trend as in the EU-27. In 2010 and 2011, there was a recovery in household consumption at EU-27 level followed by a drop in 2012. Household consumption in Greece has been declining since the beginning of the financial and economic crisis and the figures have been worsening every year.

Household consumption
(% change compared with the previous year)

20082009201020112012
EU-270,44-1,671,040,26-0,74
Greece4,67-1,91-6,39-7,91-9,07

Source: Eurostat.

13. According to the ELSTAT report on household income and living conditions, 23 % of Greeks were below the poverty threshold8 in 2012.

14. According to a recent study9 by INE-GSEE10, published in July 2014, three out of four workers or employees stated that his/her income level has declined in 2014 compared with the previous year due to salary cuts. Moreover, 38 % of respondents believe that their salaries be cut again in the next quarter. A majority of respondents have reduced their expenses accordingly, in particular the budget for non-essential items such as magazines and newspapers.

15. To date, the programming and broadcasting activities sector has not been the subject of any EGF application.

Events giving rise to the redundancies and cessation of activity

16. The events giving rise to the redundancies, according to the Greek authorities, were mainly two: (1) the decrease of available household income ― due to the increase in the tax burden, decreasing salaries (of both private and public employees) and rising unemployment ― resulting in a huge drop of purchasing power and the need to prioritise spending while dropping what is considered to be non-essentials for everyday life; (2) the drastic reduction of loans to enterprises and individuals due to the lack of cash in the Greek banks. According to the Bank of Greece, the annual growth rate for loans granted to households and enterprises (excluding financial undertakings) has been negative since 2010 due to cash shortfall in the Greek banks11.

17. During the years 2009-2012, companies operating in the mass media sector12, have terminated their activities or have reduced the salaries of their staff13. In this context, mass media companies show shrinkage in their revenues, as the advertising expenditure, comprising one of their basic sources of revenues, dropped drastically: in 2012 the advertising expenditure in mass media reached EUR 1,14 billion, while in 2008 it was still EUR 2,67 billion, a decrease of 57 %14.

18. As a result, companies of all types and categories in the mass media sector started to face serious problems in paying their liabilities. The balance of payments shows that the total liabilities of the mass media companies are more than EUR 3,2 billion during 2010 and 2011, 50% of them being short-term liabilities15.

19. In this framework, programming and broadcasting companies have met serious problems in terms of viability, as their financing elements and performance went from bad to worse during the crisis period. The table below presents the turnover evolution in the broadcasting companies and is illustrative of the constant downward trends in the last years: the turnover index of enterprises in the programming and broadcasting sector (div. 60) has decreased by more than 40% during the past three years (2010-2013).

Table 1: Evolution of turnover index in the broadcasting companies (div. 60 NACE rev.

2), in Greece for 2010-2014

2010201120122013CHANGE 2010-132014*
div. 60:
Programming and broadcasting
(base year:2010=100)
100,073,061,056,2-43,857,7

* Estimate

20. The cash flow shortage as a side effect of the recession of the Greek economy has added to the difficulties of the enterprises in the programming and broadcasting sector.

21. The new web media opportunities constantly reaching a greater number of visitors led to significant reduction in the advertising income ( 34,3 % 16over the period 2008 – 2011) of the broadcasting companies. The continuing decline in the incomes of the Greek consumers changed their consumption habits and attitude and therefore the demand for advertisements dropped significantly. Coupled with the cash flow shortage, this drop made it impossible for the companies to produce new programmes and eventually led to the corresponding drop in employment in the sector by 29,3 % in the 2010-2013 period.17

Expected impact of the redundancies as regards the local, regional or national economy and employment

22. The redundancies have a significant adverse impact on the local, regional and national economy. The number of unemployed in Greece in the period 2008-2013 increased four times.

Unemployment rate


Source: Eurostat18

23. On the other hand, the unemployment rate in the region of Attica stands in the 1st quarter of 2014 at 28% (while the average one for Greece is 27,8%)19. This region contributes with 43 % to the Greek GDP (therefore, the crisis suffered by enterprises in the region affects the entire Greek economy). It also comprises the largest part of the unemployed people in Greece as compared to the other 12 regions, a fact which affects negatively the position of the labour force in Attica.

24. Moreover, it has been identified that most of the enterprises in the broader area of Athens face common viability problems. In this framework, it is obvious that layoffs in programming and broadcasting enterprises have overburdened a region which has already been hit hard by the negative consequences of the crisis

Targeted beneficiaries and proposed actions

Targeted beneficiaries

25. The estimated number of targeted workers expected to participate in the measures is 928. The breakdown of these workers by sex, citizenship and age group is as follows:

CategoryNumber of
beneficiaries
Sex:Men:521(56,14 %)
Women:407(43,86 %)
Citizenship:EU citizens:926(99,78 %)
non-EU citizens:2(00,22 %)
Age group:15-24 years old:12(1,29 %)
25-29 years old:78(8,40 %)
30-54 years old:814(87,72 %)
55-64 years old:22(2,37 %)
over 64 years old:2(0,22 %)


Eligibility of proposed actions

26. The personalised services which are to be provided to the redundant workers consist of the following actions:.

Occupational quidance: This accompaning measure which will be offered to all participants, covers the following stages:.

1 Recording and investigation of the needs. The first measure provided to all participants includes recording of data and identifying the needs– personal, professional, social as well as provision of information on available services and training programmes and on skills and training requirements.

2 Personal and occupational paper. This is intended to help workers to identify their own skills and the opportunities related to their own interests and to establish a realistic career plan. The skills assessment involves intensive and personalised counselling, structured as a pathway consisting of various stages in which the worker and the counsellor work on an issue (e.g. opportunities, interests, analysis of the motivations and expectations, barriers, etc.). Following these assessments, a personal and occupational paper is put together, setting out a summary of the participant's skills, his/her individual project and an action plan.

3 Personal and professional development procedure. This includes: (1) defining professional targets alongside with job-search activities; (2) determining and evaluation the sources of job opportunities; (3) possible ways to submit a candidacy for a position; i writing a CV and an accompaning letter; (5) preparing for an interview; (6) provision of basic knowledge on the labour market and on institutional, labour, business and legal issues..

4 Conducting the individual action plan. The counsellors will also accompany the workers during the implementation of their training pathways and individual plans of reintegration into employment. The participants interested in setting up a business will receive general support and counselling towards entrepreneurship in the framework of this occupational guidance measure.

5 Monitoring. This provides a follow up of the participants during the six months that follow the end of the implementation of the measures.

Training, retraining and vocational training. This measure consists in providing vocational training courses to workers which correspond to their needs, as identified during the occupational consultancy activity, and in areas and sectors with good development prospects and that correspond to recognised needs in the labour market. Two types of training will be provided: continuous vocational training programmes as well as specialised trainings or educational programmes

Self-employment subsidy. The workers who set up their own businesses will receive up to EUR 15 000 as a contribution to cover setting-up costs. In Greece, one of the major difficulties that entrepreneurs face when starting up a business is access to funding. Banks, due to the shortage of cash, turn down the majority of loan requests. This measure aims to promote entrepreneurship through this financial support.

Job-search allowance and training allowance. To cover the expenses incurred when participating in the occupational guidance measure, the beneficiaries will receive EUR 50 per day of participation. While in training the allowance will be EUR 6 per hour.

1.

Mobility allowance. Those workers who accept a job involving a change of residence will receive a lump sum of EUR 2 000 to cover the necessary expenditure


27. The proposed actions, here described, constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation. These actions do not substitute for passive social protection measures.

28. The Greek authorities have provided the required information on actions that are mandatory for the enterprises 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 actions.

Estimated budget

29. The estimated total costs are EUR 8 410 000, comprising expenditure for personalised services of EUR 8 200 000 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 210 000.

30. The total financial contribution requested from the EGF is EUR 5 046 000 (60 % of total costs).

ActionsEstimated number of participantsEstimated cost per participant
(EUR)
Estimated total costs
(EUR)
Personalised services (Actions under Article 7(1)(a) and (c) of the EGF Regulation)
Occupational consultancy9281 2501 160 000
Vocational training6402 4001 536 000
Specialized training/education2884 0001 152 000
Self-employment subsidy12015 0001 800 000
Sub-total (a):
Percentage of the package of personalised services
5 648 000;
(68,88 %)
Allowances and incentives (Actions under Article 7(1)(b) of the EGF Regulation)
Job search allowances9281 2501 160 000
Training allowances6401 8001 152 000
Mobility allowances1202 000240 000
Sub-total (b):
Percentage of the package of personalised services:
2 552 000;
(31,12 %)
Actions under Article 7 i of the EGF Regulation
1. Preparatory activities
40 000
2. Management
40 000
3. Information and publicity
100 000
4. Control and reporting
30 000
Sub-total (c):
Percentage of the total costs :
210 000;
(2,50 %)
Total costs (a + b + c):8 410 000
EGF contribution (60 % of total costs)5 046 000

31. The costs of the actions identified in the table above as actions under Article 7(1)(b) of the EGF Regulation do not exceed 35 % of the total costs for the coordinated package of personalised services. The Greek authorities confirmed that these actions are conditional on the active participation of the targeted beneficiaries in job-search or training activities.

32. The Greek authorities confirmed that the costs of investments for self-employment, business start-ups and employee take-overs will not exceed EUR 15 000 per beneficiary.

Period of eligibility of expenditure

33. The Greek authorities started providing the personalised services to the targeted beneficiaries on 28 November 2014. The expenditure on the actions referred to in point 26 shall therefore be eligible for a financial contribution from the EGF from 28 November 2014 to 28 November 2016.

34. The Greek authorities started incurring the administrative expenditure to implement the EGF on 3 November 2014. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 3 November 2014 to 28 May 2017.

Complementarity with actions funded by national or Union funds

35. The source of national pre-financing or co-funding is the Public Investment Programme of the Greek Ministry of Development.

36. The Greek authorities have confirmed that the measures described above receiving a financial contribution from the EGF will not also receive financial contribution from other Union financial instruments.

Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities

37. The Greek authorities have indicated that the co-ordinated package of personalised services has been drawn up in consultation with the representatives of the targeted beneficiaries (the Journalists' Union of Athens Daily Newspapers (ΕΣΗΕΑ), the Employees Union of Athens Daily Newspapers (ΕΠΗΕΑ)) and the GSEE Institute of Labour). On 17 June 2014 they sent a letter to the Minister and Deputy Minister of Labour indicating the prevailing crisis in the whole media sector as a result of the economic recession in the country, reporting the huge number of companies operating in the Media sector which terminate their activities, reduce the salaries of their staff, dismiss workers etc. to check the eligibility of a potential EGF application. A first meeting was arranged between the management authority of the EGF in Greece (EYSEKT) and the representatives of ΕΣΗΕΑ, ΕΠΗΕΑ and GSEE’s Labour Institute on 27 June 2014. A second meeting was held on 31 July 2014 and was attended by representatives of the ESF Coordination and Monitoring Authority (EYSEKT), representatives of ΕΣΗΕΑ, ΕΠΗΕΑ and GSEE’s Labour Institute and representatives of the workers. In this meeting the representatives of the workers gave detailed data concerning the potential case and the representatives from ΕΣΗΕΑ, ΕΠΗΕΑ and GSEE’s Labour Institute undertook to inform all the workers about the request for funding from the European Globalisation Adjustment Fund. After that all the participants discussed the design of the proposed individualised actions for the beneficiaries.

38. The proposals of the representatives of the employees were presented based on their needs, as well as the position of the social partners - on the basis of the needs and particularities of the local labour market.

39. EYSEKT cooperated with all the parties involved on the design of the proposed individualised actions for the beneficiaries.

Management and control systems

40. The application contains a description of the management and control system which specifies the responsibilities of the bodies involved. Greece 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 (ESF) funding in Greece. The ESF Actions Coordination and Monitoring Authority (EYSEKT) will act as managing authority, the EDEL (Fiscal Audit Committee) as audit authority and the Special Paying Authority Service as certification authority.

Commitments provided by the Member State concerned

41. The Greek authorities have provided all necessary assurances regarding the following:

- the principles of equality of treatment and non-discrimination will be respected in the access to the proposed actions and their implementation;

- the requirements laid down in national and EU legislation concerning collective redundancies have been complied with;

- where the dismissing enterprises have continued their activities after the lay-offs, they have complied with their legal obligations governing the redundancies and have provided for their workers accordingly;

- the proposed actions will provide support for individual workers and will not be used for restructuring companies or sectors;

- the proposed actions will not receive financial support from other Union funds or financial instruments and any double financing will be prevented;

- the proposed actions will be complementary with actions funded by the Structural Funds;

- the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.

BUDGETARY IMPLICATION

Budgetary proposal

42. The EGF shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-202020.

43. Having examined the application in respect of the conditions set out in Article 13(1) 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 5 046 000, representing 60 % of the total costs of the proposed actions, in order to provide a financial contribution for the application.

44. The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council, as laid down in point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management21.

Related acts

45. 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 for the amount of EUR 5 046 000.

46. At the same time as it adopts this proposal for a decision to mobilise the EGF, the Commission will adopt a decision on a financial contribution, by means of an implementing act, which will enter into force on the date at which the European Parliament and the Council adopt the proposed decision to mobilise the EGF.

2.

Proposal for a


DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund
(application EGF/2014/018 GR/Attica Broadcasting)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/200622, and in particular Article 15 i thereof,

Having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management23, and in particular point 13 thereof,

Having regard to the proposal from the European Commission,

Whereas:

The European Globalisation Adjustment Fund (EGF) was established to provide support for workers made redundant and self-employed persons whose activity has ceased as a result of major structural changes in world trade patterns due to globalisation, as a result of a continuation of the global financial and economic crisis addressed in Regulation (EC) No 546/2009of the European Parliament and of the Council24, or as a result of a new global financial and economic crisis and to assist them with their reintegration into the labour market.

The EGF shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/201325..

On 4 September 2014 Greece submitted an application to mobilise the EGF, in respect of redundancies26 in 16 enterprises operating in the NACE Rev. 2 division 60 (Programming and broadcasting activities)27 in the NUTS 2 level region of Attica (EL 30) in Greece. It was supplemented by additional information pursuant to Article 8(3) of Regulation (EU) No 1309/2013. The application complies with the requirements for determining a financial contribution from the EGF in accordance with Article 13 of Regulation (EU) No 1309/2013. The Commission, therefore, has proposed to mobilise an amount of EUR 5 046 000.

The EGF should, therefore, be mobilised in order to provide a financial contribution of for the application submitted by Greece,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2015, the EGF shall be mobilised to provide the sum of EUR 5 046 000 in commitment and payment appropriations.

Article 2

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

For the European Parliament For the Council
The President The President
1OJ L 347, 20.12.2013, p. 855.
2Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Rev. 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC regulations on specific statistical domains (OJ L 393, 30.12.2006, p.

1).
3Commission Regulation (EU) No 1046/2012 of 8 November 2012 implementing Regulation (EC) No 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) as regards the transmission of the time series for the new regional breakdown (OJ L 310, 9.11.2012, p. 34).
4In accordance with the fourth paragraph of Article 7 of Regulation (EU) No 1309/2013.
5Within the meaning of Article 3(a) of the EGF Regulation.
6For the list of enterprises concerned and the number of workers made redundant in each enterprise see Annex.
7ec.europa.eu/economy_finance/eu/forecasts
8In Greece, the poverty line is EUR 5 708 per year per person (for individuals) and EUR 11 986 for households comprising two adults and two children up to 14 years old.
9www.inegsee.gr/wp-content/uploads/2014/07
10The Institute of Labour of the Greek General Confederation of Labour
11www.bankofgreece.gr/BogEkdoseis
12See also EGF application EGF/2014/015 GR/Publishing activities
13www.efsyn.gr/?p=5033
14www.3comma14.gr/pi/?survey=16005">www.3comma14.gr/pi/?survey=16005
15www.efsyn.gr/?p=5033
16www.3comma14.gr/pi/?survey=12106
17Greek Statistical authority. Data processed by INE GSEE ( The Greek Institute for Labour )
18Code tsdec450
19Source: Greek Statistical Authority, Labour Force surveys, 1st quarter’s data
20OJ L 347, 20.12.2013, p. 884.
21OJ C 373, 20.12.2013, p. 1.
22OJ L 347, 20.12.2013, p. 855.
23OJ C 373, 20.12.2013, p. 1.
24OJ L 167, 29.6.2009, p.26.
25Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884).
26Within the meaning of Article 3(a) of the EGF Regulation.
27Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC regulations on specific statistical domains (OJ L 393, 30.12.2006, p.

1).

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