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Mr. László ANDOR

EU Commissioner responsible for Employment, Social Affairs and Inclusion

"The future of the European Globalisation Adjustment Fund"

European Parliament – EGF Conference

Brussels, 2d March 2011

Ladies and gentlemen,

I want to thank our hosts for organising this Conference and Ms Matera in particular for her invitation.

I am grateful for the work she has done to raise awareness of the European Globalisation Adjustment Fund and for her suggestions for improving it.

As you may know, the Commission has started consulting the Fund’s main stakeholders, including Member State authorities and the social partners at EU and sector level.

The Commission will be listening to their feedback carefully — and their criticism too — as it looks at options for the Fund after 2013.

This Conference will certainly give us food for thought when redesigning the Fund to ensure it keeps on providing assistance to those who have lost their jobs following mass redundancies across the Union.

There are many options on the table for the Fund from 2014 on. I cannot say what the Commission will decide when it takes a decision later this year, but I would like to rule out two options.

The first is to doing away with the kind of support that the Fund delivers altogether.

The Fund may not be perfect, but let’s not forget what it has already done or is doing in the short time since it was set up:

  • It has co-financed job-search assistance, guidance, counselling and training for almost 80 000 workers.

  • It has paid over 380 million euros to Member States to help them keep those workers on the labour market, consolidate their skills or adapt them to the needs of emerging sectors.

  • The applications for 80% of that money and those workers were submitted over the last two years — when the impact of the financial and economic crisis started to hit. So the Fund has also shown its value as an instrument for demonstrating solidarity in a time of crisis.

I was pleased to hear of the Fund’s positive impact at worker level at our first Stakeholders' Conference in January. Several Member State delegations told us there how the Fund had bolstered redundant workers’ self-esteem, fostered solidarity and allowed them to envisage new career opportunities. They may not all have found new jobs when the support from the Fund came to an end, but they did feel the EU had taken care of them directly and personally. Their job prospects are better than what they would have been without the Fund’s support. This is the sort of help vulnerable groups in society need.

The second is to maintain the status quo

Currently, ten months elapse between submitting an application and receiving the contribution.

Because the Fund is not part of the EU budget, it is mobilised on an ad hoc basis through a long and complicated procedure:

  • First, the Commission adopts a proposal in 23 languages;

  • then, five committees or working groups in the Council and Parliament draft a decision;

  • finally, once the Budgetary Authority has taken its decision, the Commission must adopt another, allowing the financial contribution to be paid.

This time lag means that some Member States are understandably reluctant to pre-finance measures and the EGF support to the workers is delayed. Think of the effect losing a job has on workers' daily lives and self-confidence! We have to cut the red tape and help the workers more quickly.

Some Member States also feel that the Regulation on the Globalisation Fund is too inflexible technically — for example, in the way it defines an economic sector or the duration of the implementation period. That may not stop them applying for a contribution, but it could discourage them from applying for their first choice of measures.

We must therefore take advantage of the opportunity in the Regulation to review and improve the Fund by the end of 2013.

The EGF within the Multiannual Financial Framework

Whatever technical changes are made to the Fund in the future, I believe that, in any case, it should be included in the forthcoming Multiannual Financial Framework.

In practice, this can be done either by creating a self-standing EGF with its own budget line within the EU budget, or by incorporating it within the European Social Fund in the form of a ring-fenced budget managed by the Commission at EU level. Either of these two approaches could cut five or six months off the time elapsing between an application being made and the contribution being paid out.

If the EGF were to be integrated into the normal EU budget as a self-standing fund, the Commission would be able to take decisions on each EGF application. Their approval of an application would lead to a grant agreement with the Member State, rather than the current Financing Decision of the Commission, following the approval of the budgetary authority.

If, on the other hand, the EGF became a ring-fenced instrument within the ESF, Member States would apply to the Commission, which would assess the application and pay out according to ESF rules. The instrument would be able to benefit fully from the ESF structures and procedures in the Member States, as well as from ESF audits. A significant simplification would be achieved, to the benefit of those being supported by the EGF and also of the administration, both in the Member States and within the Commission.

These new approaches would significantly simplify and speed up the way the Fund works and would benefit the redundant workers and the Member State institutions planning to help them. In both cases, reports on applications received and approved would be provided at regular intervals to the European Parliament and the Council.

I am very much in favour of moving forward in either of these directions. We are currently completing our EGF Stakeholder Consultations with a final conference, which will be held next week, and I intend to come forward with a proposal in the very near future.

In the meantime, I also intend to propose extending the so-called "crisis derogation" until the end of 2013.

This would allow the Fund to continue to provide support to workers who are still losing their jobs because of the financial and economic crisis and to do so by co-financing expenditures at a rate of 65% instead of 50. This is crucial not only because the impact of the crisis on restructuring and the related company closures continues to be felt, but also to help Member States overcome their fiscal limitations in addressing the risk of long term unemployment and social exclusion.

Ladies and Gentlemen,

The Globalisation Adjustment Fund has played a very practical, visible and meaningful role as a crisis instrument, but its mission in this respect is not finished. I therefore hope that the Commission — together with the European Parliament and the Council — will agree to extend the "crisis derogation" and I also hope for your support to the longer term proposals I intend to make.

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