Reform of the European Globalisation Adjustment Fund

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4.8 • 13 Ratings

🗓️ 19 October 2018

⏱️ 7 minutes

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Summary

The European Globalisation Adjustment Fund (EGF) was created in 2006 to finance active labour market policies targeting workers who have lost their jobs because of trade adjustment. The fund was subsequently modified in 2009 to cover major structural changes triggered by the economic and financial crisis. The rules of the EGF are laid down in EU Regulation (EU) No 1309/2013, which stipulates that the fund will continue to be financed until 31 December 2020. In May 2018, the European Commission submitted a proposal to reform the EGF and maintain it as a special instrument outside the MFF ceiling. The proposal introduces modifications to the eligibility criteria, the co-financing rules and the mobilisation procedure. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.
https://www.europarl.europa.eu/RegData/etudes/BRIE/2018/628246/EPRS_BRI(2018)628246_EN.pdf

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Transcript

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0:00.0	You're listening to the European Parliamentary Research Service podcast on the reform of the European Globalisation Adjustment Fund.
0:09.0	Hardening economic trends call for policy changes, so the European Commission has decided its time for a reset of the European Globalisation Adjustment Fund.
0:18.0	The idea is to broaden the scope of the fund to cover structural changes that go beyond globalisation,
0:23.6	such as the consequences of digitalisation and moving to a low carbon economy, and to introduce changes to mobilise the fund's resources more quickly.
0:31.6	Stay with us.
0:33.6	Conventional wisdom holds that trade liberalisation leads to overall benefits for the economy
0:39.6	via the reallocation of resources away from inefficient firms and industries, as well as benefits
0:44.7	to consumers in terms of access to cheaper and more varied goods. However, this reallocation can
0:50.4	lead to some companies losing their markets and workers, their jobs.
0:58.9	The recognition that trade adjustments prompted by globalisation might hurt some workers led the European Union to set up a special fund to support their reintegration into the labour market.
1:04.1	So since 2006, the European Globalisation Adjustment Fund has been providing support to people losing their jobs
1:10.7	as a result of major structural changes in world trade patterns due to globalisation.
1:14.6	For example, when a large company shuts down or production is moved outside the EU.
1:19.6	In 2009, it was modified to cover major structural changes triggered by the global economic and financial crisis.
1:26.6	As an emergency fund, it has remained
1:28.8	outside the ceiling of the EU's multi-annual budget and so it is mobilised on an ad hoc basis.
1:34.1	With a maximum annual budget of 150 million euros for the period 2014 to 2020, the Globalisation
1:40.6	Fund can finance up to 60% of the cost of projects designed to help workers made
1:45.1	redundant, find another job or set up their own business. The remaining share has to be
1:49.9	covered by member states. As a general rule, it can be used only where at least 500 workers are
1:55.2	made redundant by a single company, including the ceasing of suppliers' activities and of
2:00.0	self-employed persons working for that firm,
	...

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