Annual report on the European Globalisation adjustment Fund 2007

03 July 2008
by eub2 -- last modified 03 July 2008

The Communication "Annual report on the European Globalisation adjustment Fund" contains a quantitative and qualitative report on the activities of the fund in the course of 2007.

Why is there a report on the EGF?

The production of an annual report on the EGF is a requirement of the Regulation which set up the Fund. This first annual report (for 2007) is also part of the Commission's Communication on a "Renewed Social Agenda: Opportunities, access and solidarity in 21st century Europe", which is an appropriate context for reflecting on how the EGF can maximise its effectiveness.

What happened in the first year of the EGF?

In 2007, the first four applications were approved providing EUR 18.6 million support for over 5,000 redundant workers in France, Finland and Germany. The sectors concerned were automobiles, mobile phones and textiles. Two further applications submitted in late 2007 were approved in early 2008, with a payment of EUR 2.4 million being made to help 1,549 Portuguese automotive industry workers get back into work as quickly as possible and a further EUR 681,000 to help 675 dismissed Maltese textile workers.

What does the report say about the EGF?

The Communication contains a quantitative and qualitative report on the activities of the fund in the course of 2007.

The report also suggests how the current operation of the EGF could be optimised, by (for example) simplifying its application procedures, promoting the exchange of experience between Member States, and intensifying awareness-raising activities.

Further options are set out which could form the basis of an amended EGF Regulation in the future. These include:

• covering redundancies caused by globalisation events other than changes in trade, e.g. rapid technological changes, changes in production patterns and access to as well as the price of raw materials and other inputs;
• expanding the scope of the EGF to smaller redundancy events, in particular by reviewing the eligibility rules (number of workers/duration of support);
• covering redundancies in other companies in the concerned geographical area;
• funding mobility allowances for workers looking for work in other Member States;

Has the take up of the Fund been lower than anticipated?

The relatively low take up of the Fund in 2007 is likely to increase in coming years as Member States become more familiar with it, procedures are simplified and best practices are developed. Furthermore, as the EGF is a demand-driven instrument it is reasonable to expect a low take-up of the Funds due to the few applications received from the Member States during periods when the labour market is performing well, as was the case in 2007.

What happens now?

The Report will be sent to the European Parliament and the Council, as well as the European Economic and Social Committee, the Committee of the Regions and the social partners.

The Commission will examine the options for future improvements of the Fund and, if appropriate, will present the results of its work in a proposal to modify the EGF Regulation.

Why is globalisation important?

Globalisation brings new opportunities in terms of competitiveness and job creation, provides access to wider markets and offers more and better choice for consumers. But it can also lead to job losses, with the most vulnerable and least qualified workers in some sectors and areas of the European Union most seriously affected.

Why should the EU be involved?

The EGF is an expression of EU solidarity with European workers who have lost their job because of the impacts of globalisation.

In 2005 Heads of State and Government at the Hampton Court Summit agreed that the EGF should be "designed to provide additional support for workers made redundant as a result of major structural changes in world trade patterns, to assist them with their re-training and job search efforts. Activation of the Fund will be subject to strict criteria relating to the scale of economic dislocation and its impact on local, regional and national economies".

Its objective is to retain workers in, or reintegrate workers into, the labour market, when they have lost their jobs due to major changes in global trade. The annual budget can be up to EUR 500 million.

The EGF provides additional support to the workers. It does not replace support measures that Member States or the dismissing enterprises must carry out on the basis of the national labour law or on the basis of collective agreements.

The EGF contributes directly to the creation of a more dynamic and competitive European economy by:

• improving the skills and employability of vulnerable workers, and
• facilitating the general up-skilling of European companies, leading towards better quality and higher value-added work.

Support from the EGF is available only to the concerned workers and only for active labour market measures such as training, job-search assistance or aid for self employment; the EGF cannot support enterprises nor can it finance passive social protection measures.

Source: European Commission