What are the objectives of the European Globalisation Fund (EGF)?
The EGF, an initiative proposed by the European Commission, was established by the European Parliament and the EU's Council of Ministers at the end of 2006 to show solidarity with, and provide support to, workers made redundant as a consequence of major changes in world trade patterns.
It was designed as a means to reconcile the overall long-term benefits of open trade in terms of growth and employment with possible short-term adverse effects, particularly on the employment of the most vulnerable and lowest skilled workers. The measures typically supported by the EGF include intensive personalised job-search assistance, a variety of training and up-skilling actions, entrepreneurship promotion as well as various financial incentives/allowances during the support period.
Based on the Commission's proposal, the Council and the European Parliament agreed on 11 October 2013 on the text for the new EGF Regulation for the 2014-2020 period. The scope of the EGF has been expanded in the new programming period to include workers made redundant because of an unexpected financial and economic crisis, as well as categories of workers not yet covered by the EGF, e.g. fixed-term and self-employed workers. Member States have been able to apply for EGF co-funding under the new Regulation from January 2014 onwards. In regions of high youth unemployment, the EGF will additionally be able to provide measures for young people not in employment, education or training by way of derogation until the end of 2017.
How much funding is available in 2014-2020
For 2014 to 2020, Article 12 of the Council Regulation laying down the multiannual financial framework for this period establishes the maximum annual financial ceiling and allows the use of the EGF up to a maximum annual amount of €150 million (2011 prices). The maximum amount which could be used by the EGF for the 2014-2020 period is €1.05 billion.
Who qualifies for EGF support under the current EGF Regulation and how does the Fund work?
EGF funding is for workers, not companies. It aims to complement the support provided by Member States and the employers concerned to help redundant workers find new job opportunities. Member States applying for funding must fulfil the criteria set out in the EGF Regulation.
For each application, the decision is taken by the Council and the European Parliament, on the basis of a Commission proposal.
The EGF only funds active employment measures to help people remain in the labour market, such as counselling, training and business creation. Passive social protection measures, such as retirement pensions or unemployment benefits, are excluded as these are the competence of the Member States. The EGF currently covers up to 60 % of the overall costs of support, the other 40 % being the responsibility of the Member State.
EGF applications can be justified by a financial and economic crisis or negative effects of globalisation
The 2009 amendment of the EGF Regulation, when the crisis criterion was first included, had a considerable impact on the number of applications received by the Commission: from May 2009 (when the relevant amendment became applicable) to the end of 2011, there was a significant rise in applications. From 2007 to 2014, there were 76 crisis-related applications and 58 trade-related applications. 82 % of the applications received between May 2009 and the end of 2011 related to the global financial and economic crisis.
A detailed overview of all 134 EGF applications received so far (from 1.1.2007 up to 31.12.2014) by Member State, year and application type is attached in the Annex.
What are the findings of the 2015 Biennial report?
The 2015 EGF Biennial Report covers the years 2013 and 2014. During this period, the Commission received 30 applications for contributions from the EGF, totalling €109 million. The budgetary authority took 28 decisions to make use of the EGF in 2013 and 2014, amounting to a total of €114.4 million from the EGF’s 2013-2014 budget.
Similarly to previous years, the measures for which the Member States requested EGF assistance included intensive, personalised job-search assistance and guidance, a variety of vocational training, up-skilling and retraining measures, temporary financial incentives and allowances during the support period, and other types of support such as business creation and public employment schemes.
The EGF complements the European Social Fund (ESF), which is the major EU instrument for supporting employment in the EU. While the EGF provides tailor-made assistance to redundant workers in response to specific, European-scale mass redundancies, the ESF supports strategic, long-term goals (e.g. increasing human capital, managing change) through pre-programmed multi-annual programmes, the resources of which cannot normally be reallocated to deal with crisis situations caused by mass redundancies.
What has the EGF achieved since its launch at the end of 2006?
The EGF contributions aim to co-finance active labour market policy measures proposed and organised for redundant workers by the Member State authorities.
Since 2007, when the Fund became operational, the Commission has received 134 applications for assistance amounting to €561.1 million from 20 Member States (situation until the 31.12.2014, see Annex). Over 122 000 redundant workers have been targeted for EGF help – and many of them have already received, or are about to receive, the tailor-made assistance. France requested the highest amount of EGF co-funding (€84.6 million for seven applications) followed by Ireland (€67.3 million for nine applications), Denmark (€63.7 million for 10 applications) and Italy (€62.5 for 12 applications).
From 2007 to 2014, the EGF received applications for workers made redundant in 45 sectors. Most of them were in manufacturing, but construction and services were also represented. Four manufacturing sectors accounted for the largest number of applications: the automotive industry is on the lead (20 applications or 15 % of the total), followed by machinery and equipment (13 applications, or 10 % of the total), textiles (11 applications, or 8 % of the total) and printing (9 applications, or 7% of the total).
The EGF has enabled Member States to act more intensively in the areas affected by redundancies, in terms of the numbers of people assisted and the duration, type and quality of support, than would have been possible without EGF funding. The EU funds enabled countries to respond more flexibly to the current employment challenges, to devote more attention to lower skilled people and harder-to-help job seekers, and to include innovative actions in their measures as well. The EGF has proved to be a useful instrument at a time of budget deficits and public sector cuts, when national resources have become scarce and when Member States and companies are struggling to recover from the crisis.
The outcomes of the skills enhancement measures implemented by Member States with the help of the EGF and the other 'softer' benefits for the workers indicate that the EGF supports Member States effectively in their efforts to prepare for future employment challenges (e.g. response to demographic ageing, greener and knowledge-based economy etc.).
Annex: Breakdown of EGF applications by Member State, year and application type (situation 31 December 2014)
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