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European Globalisation Adjustment Fund

European Globalisation Adjustment Fund

Outline of the Community (European Union) legislation about European Globalisation Adjustment Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Priorities and objectives: the social agenda

European Globalisation Adjustment Fund

Document or Iniciative

Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund.

Summary

The European Globalisation Adjustment Fund (EGF) supports the re-integration of European workers affected by redundancies directly associated with major changes in global commercial trade. The support is provided on an individual basis and for a limited period. In the longer term, the measures contained in the fund aim to help redundant workers find and hold on to a new job.

Until 31 December 2011, the fund also provides aid to workers who have lost their jobs due to the global financial and economic crisis.

Intervention criteria

For the EGF to intervene, an application for a grant must be submitted by a Member State.

A financial contribution can be provided where major structural changes in world trade patterns lead to a serious economic disruption in a European Union (EU) country. This could be a substantial increase in imports, a decline in market share in a given sector or a delocalisation of undertakings to third countries. The EGF may also intervene where redundancies are directly and demonstrably the result of the financial and economic crisis.

The economic crisis or disruption must result in:

  • at least 1000 redundancies over a period of 4 months in an enterprise, including redundancies in its suppliers or downstream producers; or
  • at least 1000 redundancies, over a period of 9 months, in a NACE 2 sector in one region or two contiguous regions at NUTS II level;
  • in small labour markets or in exceptional circumstances, the EGF may intervene even if the intervention conditions are not entirely met, when the redundancies have a serious impact on employment and the local economy. The aggregated amount of contributions for exceptional circumstances may not exceed 15 % of the EGF each year.

Financed measures

More specifically, the EGF finances:

  • job-search assistance;
  • tailor-made retraining;
  • entrepreneurship promotion;
  • aid for self-employment;
  • special temporary “income supplements” (job-search allowances, mobility allowances, training allowances, measures to stimulate disadvantaged or older workers to remain in or return to the labour market, etc.).

The EGF does not finance passive social protection measures such as unemployment benefits.

Operation

The annual number of workers to benefit from the fund depends on several factors. These factors include the development of the employment market, the number of eligible applications made by the Member States and the budgetary resources available, although the potential annual funding of EUR 500 million has not been fully allocated to date.

Workers will benefit from the EGF assistance via the Member States. The assistance is not handed out to enterprises. In addition, the period of validity of the fund is limited to 24 months from the date on which the application was submitted.

The EGF is a solidarity fund intended to respond to an emergency or crisis situation. It does not finance the restructuring of companies or sectors.

Context

Generally speaking, the effects of opening up economies to international competition are positive. Globalisation boosts competitiveness and opens up new opportunities for growth and employment.

Nonetheless, at the same time, this exposure to world trade may also have adverse effects on the economy. The intensification of trade flows means that local, national and regional socio-economic systems face greater competition, which affects the less competitive sectors where the adjustment costs (retraining of the workforce and conversion of production structures) are high. This can sometimes result in massive job losses.

In addition to the Structural Funds or the European Strategy for Growth and Jobs which already offer a general response in terms of managing and anticipating the challenges of globalisation, this specific fund is essential in order to avert any threat of lasting individual impoverishment.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1927/2006

19.1.2007

OJ L 406 of 30.12.2006

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 546/2009

2.7.2009

OJ L 167 of 29.6.2009

Related Acts

Report from the Commission to the European Parliament and the Council on the activities of the European Globalisation Adjustment Fund in 2009 [COM(2010) 464 final – Not published in the Official Journal].

Report from the Commission to the European Parliament and the Council on the activities of the European Globalisation Adjustment Fund in 2008 [COM(2009) 394 final – Not published in the Official Journal].

Communication from the Commission to the European Parliament and the Council of 2 July 2008 “Solidarity in the face of Change: the European Globalisation Adjustment Fund (EGF) in 2007” Review and Prospects [COM(2008) 421 final – Not published in the Official Journal].
The Commission gives a positive report on the implementation of the European Globalisation Adjustment Fund (EGF) after its first year. However the effectiveness of the Fund could be improved in the short term, by simplifying its procedures, increasing its visibility and promoting exchange of experience.
The Commission studies the possibility of reinforcing its impact on the creation of jobs and training for Europe’s workers. The EGF could also be used to foster mobility of workers, and to better analyse and anticipate changes in the economy.

The renewed social agenda

The renewed social agenda

Outline of the Community (European Union) legislation about The renewed social agenda

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Priorities and objectives: the social agenda

The renewed social agenda

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 2 July 2008 – Renewed social agenda: Opportunities, access and solidarity in 21st century Europe COM(2008) 412 final – Not published in the Official Journal].

Summary

This Communication establishes the priorities which should direct European social policy for the period 2008-2010. The renewed social agenda is based upon the results of the Lisbon Strategy with regard to economic stability and employment. Furthermore, so as to better respond to the socio-economic challenges of the XXIst century, its scope is extended to new areas of policy action structured around three goals:

  • creating new opportunities in the employment market;
  • facilitating access to education, social protection, health care and quality services for all;
  • developing solidarity at the heart of European society, so to foster social inclusion and equal opportunities for all.


These goals will be achieved, at Community level, through the implementation of legislation, appropriate financing and the cooperation of Member States. The Commission supports the renewal of the Open Method of Coordination (OMC) in the area of youth and the reinforcement of the OMC in the areas of social protection and social inclusion as well as the development of social dialogue, civil dialogue and active European citizenship.

PRIORITY AREAS FOR ACTION

Children and youth

Quality education systems adapted to the needs of the employment market should contribute to the inclusion of young people in society. New initiatives from the Commission should, in particular, target the protection of the rights of the child and the fight against child poverty.

More and better jobs and the enhancement of skills

In line with the Lisbon Strategy and the European Sustainable Development Strategy, the social agenda encourages the modernisation of employment markets. To this end, Member States should apply common principles relating to flexicurity and promoting lifelong education and training.

In particular the Commission proposes to improve the functioning of European Works Councils. The Commission announces a new initiative for the assessment of labour market and skills needs up to 2020. It also promotes entrepreneurship and the use of Information and Communication Technologies (ICT).

Mobility

The Commission should pursue actions promoting the free movement of workers, the protection of their social rights and their working conditions, as well as the total suppression of obstacles to their free movement within the European Union (EU). Social partners must take an active part in achieving the objectives of the European Job Mobility Action Plan.

The Commission proposes action in favour of the mobility of knowledge, notably with the aim of facilitating the mobility of researchers, young entrepreneurs, students and volunteers.

Improving the quality of life and the inclusion of the elderly

In the context of an ageing European society, Member States should be able to ensure quality, viable and accessible health systems. The Commission proposes, in particular, the development of patients’ rights to cross-border health care. It supports the development of ICTs in the field of health care, personal services and research.

The fight against poverty and social exclusion

The social agenda anticipates an integrated strategy of active inclusion of the most disadvantaged such as the unemployed, the handicapped, the elderly and women. It aims at encouraging income support, access to employment and services, the information society, education and training.

The fight against discrimination

The Commission pursues the reinforcing of the legal framework with regard to the fight against discrimination both within and outside the field of employment. Community policies specifically target equal treatment between men and women, notably through the promotion of access by women to the labour market and equal pay between men and women.

The promotion of social rights at worldwide level

The EU plays a role at international level in promoting high social standards protecting workers, consumers and the environment. The action is carried out within the framework of external cooperation agreements, trade policies, development assistance and EU accession negotiations. The Commission also encourages Member States to apply the conventions of the International Labour Organisation (ILO).

CONTEXT

In 2007 the Commission launched a public consultation in order to take stock of social reality in Europe. The renewed social agenda takes into account the global economic slowdown, the ageing population and the latest technological progress.

The goals and measures in the social agenda will be reviewed in 2010 together with the Lisbon Strategy.

Restructuring and employment: the role of the European Union in anticipating and accompanying restructuring in order to develop employment

Restructuring and employment: the role of the European Union in anticipating and accompanying restructuring in order to develop employment

Outline of the Community (European Union) legislation about Restructuring and employment: the role of the European Union in anticipating and accompanying restructuring in order to develop employment

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Job creation measures

Restructuring and employment: the role of the European Union in anticipating and accompanying restructuring in order to develop employment

Document or Iniciative

Communication from the Commission of 31 March 2005, Restructuring and employment – anticipating and accompanying restructuring in order to develop employment: the role of the European Union.

Summary

This communication is fully in line with the updated Lisbon Strategy which, in addition to higher and more sustainable growth, focuses on job creation. It proposes measures to respond to the social and economic cost of the restructuring of European enterprises.

THE CURRENT CHALLENGES

It is estimated that, every year, 10% of European enterprises are set up and destroyed. In the light of this, the European Union has long been applying policies and instruments to accompany these developments, in particular in the iron and steel, shipbuilding and textiles sectors. These measures do not relate solely to sectors in difficulty. They may also involve the establishment of strategies for many other sectors.

At enterprise level, restructuring is the permanent reshaping of the fabric of production by several factors:

  • the development of the European Single Market and globalisation have allowed competitiveness to be improved and new, high quality jobs to be created;
  • technological innovation generates new applications which, in turn, lead to more creative, higher-quality jobs;
  • developments in the regulatory framework and significant changes in consumer demand (ageing population and environmental issues) lead to changes in products and labour markets.

From the workers’ point of view, restructuring often puts a large number of people out of work at the same time; often the least qualified and most vulnerable are affected first. Moreover, restructuring is having a major impact in certain European countries that are still in transition.
It is therefore important to help people who have been made unemployed to quickly find new jobs of an equivalent quality and to provide responses for the entire territory of the European Union by anticipating change through proximity to regions and their populations (identification of potential comparative advantages).

THE ROLE OF THE EUROPEAN UNION

Although most of the social and economic challenges thrown up by restructuring are matters for the national authorities, the European Union can intervene through:

  • policies which contribute to anticipating and accompanying restructuring (employment policy, financial support instruments, industrial and company policy and rural development policy);
  • the identification of sectoral trends and intervention instruments;
  • recognising the role that the social partners can play in the phase preceding anticipation, and which characterises the change.

COMMUNITY POLICIES IN ACTION

Reform of the financial instruments and the role of the structural funds

The draft new European Social Fund (ESF) regulations reaffirm the latter’s role in funding measures to anticipate and manage restructuring by improving the adaptability of workers and enterprises, investing in human resources and lifelong learning and establishing employment pacts at national, local and regional level.

The European Regional Development Fund will also play a major role, thanks to investment in research and development, dissemination of innovation and the creation of infrastructures.
8. In the area of rural development, the Agriculture and Rural Development Fund should allow sectoral policies (in agriculture, industry, services) and territorial policies (regional, rural, urban, local) to complement each other in order to optimise the impact on employment.

Moreover, the Commission recommends that a contingency reserve for unforeseen events be created within the structural funds and proposes the creation of a growth adjustment fund of one billion euros per year.

Finally, other programmes can contribute to managing change more effectively, for example the research framework programme, the education and training programmes and the integrated lifelong learning programme.

Industrial policy

As part of the implementation of the revamped industrial policy, as set out in the Communication of April 2004, the Commission proposes improving the regulatory framework applicable to companies and supporting innovation and competitiveness. A new communication on the sectoral dimension of industrial policy is to be drafted in 2005. This communication will set out how the Commission intends to monitor more closely the sectors that are at risk.

The Commission is proposing the launch of joint technological initiatives, such as the action plan for ecotechnologies to fund programmes for the development of social products and services, the aim being to create a competitive advantage that will open up new markets and create new jobs.

Competition policy

The Commission is focusing on the strict application of the competition rules, including in the area of state aid, as well as monitoring mergers. It is proposing:

  • a reform of the state aid monitoring policy, encouraging Member States to award aid in sectors contributing most to growth and jobs;
  • a new regulation on mergers in order to facilitate industrial restructuring.

Other policies and instruments

14 .In order to better anticipate and accompany restructuring, the Commission wishes to:

  • improve protection of intellectual property and step up the fight against forgery, and continue to act to ensure that the Doha Round of negotiations on global free trade is a positive factor for development;
  • revise the European Employment Strategy during 2005, in order to focus on the priorities for anticipating and managing restructuring;
  • step up the role of the European Monitoring Centre on Change which will be called on to develop tools for the quantitative and qualitative analysis and monitoring of restructuring;
  • increase the convergence of and synergy between policies by way of an internal task force involving the relevant Commission departments and involving regular dialogue with the European Parliament and the Council.

CONSULTATION OF THE SOCIAL PARTNERS

This Communication launches the second phase of consultation of the European social partners on company restructuring and European works councils. The Commission will be analysing the results of this consultation before the 2006 Tripartite Social Summit.

Two other initiatives are planned:

  • publication of a new communication on the social responsibility of enterprises, showcasing positive initiatives taken by enterprises in the event of restructuring;
  • the creation of a Restructuring Forum, the mission of which will be to monitor trends and promote link-up between the various initiatives.

CHANGING THE REGULATORY FRAMEWORK

This communication recalls the modernisation and simplification measures already provided for in the Lisbon programme of action and recommends the following initiatives:

  • a new Green Paper on labour law development which will analyse the role of labour law in effective transitions;
  • a new proposal for a directive on improving the portability of supplementary pension rights, so as to facilitate the mobility of workers within the Community.
Key statistics
  • Between 1977 and 2002, Europe created 30 million jobs, with an increase of more than 44 million in services and a loss of at least 7 million in industry and 7.5 million in agriculture.
  • Each year, 10% of European enterprises are created and destroyed.
  • Between 5 000 and 15 000 jobs are created and destroyed every day on average in each of the Member States.
  • Employment in the services sector has risen in the past 20 years, employing two out of three people in 2003.
  • Employment in business services has increased by 25% over the last five years.