Brussels, 16/11/2011 (Agence Europe) - The European Globalisation Adjustment Fund (EGF) should be reinforced and not used as a weapon of sanctions, said French MEP Pervenche Berès (S&D, France), the chair of the committee on employment and social affairs of the European Parliament, in an interview with Agence Europe on Tuesday 15 November. Although the EGF is no longer used in the framework of its initial function, in other words to provide support to states whose companies were suffering from the ill effects of the global market (just 13% of applications of this kind in 2010), but is instead used mainly to repair the damage caused by the economic and financial crisis, its action is still characterised by immediate and concrete effects for thousands of redundant workers (76,000 since 2007). The idea of setting in place macro-economic criteria for the allocation of structural funds, including the EGF, which was put forward by the European Commission on 6 October (EUROPE 10466), strongly implies to Berès that this would equate to “wanting to use the funds as a basis for sanctions”. However, if the basis of this idea, in other words including criteria of this kind in the action mechanism of the funds, does make some sense, then it should instead be used to “give more structural funds to the countries in macro-economic difficulties”, said the MEP.
A delegation of the European Parliament headed by Berès went to Spain on 3-4 November, to see how the EGF's actions take shape at a local level and how its results look (EUROPE 10492). A request for assistance led to EGF intervention in the Catalan textiles sector in 2009. According to the French MEP, although certain aspects of the European mechanism need to be revised, particularly as regards the involvement of unions at a local level and the treatment of workers coming up to retirement age, the benefits brought about by the EGF are considerable, with training and accompaniment options to help workers find new jobs.
By means of this example, the role of the EGF can be described as a support instrument with a mainly regional framework of action, as it is deployed mainly in the industrial sectors or mostly localised services in most of the states. This means that suspending the intervention of the EGF, as the Commission is planning, preferring instead to make the granting of aid conditional, would equate to penalising the regions “for the mistakes made by the state”, Berès stresses. The European Parliament is not alone in expressing misgivings as to this conditionality. In an interview with Agence Europe (10495), Mercedes Bresso, the president of the Committee of the Regions (CoR), said that this proposal has seen such a weight of opposition that she now regards it instead as largely “an analysis which is part of a previous stage of the checks on the recalcitrant states”, because other “crude and binding” mechanisms have been set in place. Although the conditionality does not appear to infringe the subsidiarity rules, its legal basis “is very weak”, she added.
Could the EGF, together with the structural funds, possibly become a sanctions weapon in any case? “When we ask the Commission about this, it tells us that it is in order to be a deterrent, which means that it will not end up being used as a sanction”, Berès told us. But the chair of the committee on employment and social affairs pointed out that recent discussions on reinforcing the Stability and Growth Pact suggest that the Commission no longer believes in the deterrent effect of sanctions. This is not emanating solely from Brussels, but also from states such as Germany, the trauma of the sovereign debt crisis in Greece and now in Italy having fostered an approach of mistrust towards the national governments and a desire to control the financial management of the eurozone states externally. Berès does not rule out altogether the idea of a more scrupulous eye on the national budgets, including the possibility of sanctions, but she would prefer instead to use “intelligent sanctions” to “oblige the member state to act on its taxation, increase its rate of VAT, for example”. (JK/transl.fl)