The European Globalisation adjustment Fund
Encyclopedia
The European Globalisation Adjustment Fund (EGF) was set up by the European Union
in late 2006 to support to workers (not companies or institutions) who have been made redundant as a result of trade liberalisation, so that they can either remain in employment or find a new job quickly. It provides counselling; job search and mobility allowances; new ICT
skills and other forms of training; entrepreneurial support, including micro-credits.
Since 2007 the EGF has spent almost EURO
68 million to help over 15,000 workers in eight Member States to find new jobs. The workers supported so far had been previously employed in the manufacture of vehicles, or mobile phones, or textiles and clothing.
The EGF is open to all persons who work legally in the EU. It operates under the principle of subsidiarity, and in a system of shared management between the European Commission
and the Member State. Responsibility for implementing the EGF lies with the authorities of the Member States concerned.
The maximum amount available through the EGF is €500 million per year for the period of 2007 to 2013.
It complements support provided by the employers and national authorities concerned in terms of active labour market policy measures. It does not fund passive social protection measures such as retirement pensions or unemployment benefits, which are the competence of the Member States.
Member States who have successfully applied for an EGF intervention can also use EGF money for information and communication activities highlighting the role of the Fund in their interventions to support workers.
, in particular the European Social Fund (ESF), consist of multi-annual programmes in support of strategic, long-term goals, and management of change and restructuring in the 2007-2013 period, with activities such as life-long learning. The EGF is a response to a specific, European scale crisis; it provides one-off, time limited individual support geared directly to helping workers who have become redundant for reasons related to international trade.
This proposal was submitted to the Council and the European Parliament in December 2008. It is expected that the amendment will be adopted in mid-2009. There is a need of this fund because the difference in labor costs at the international level remains an important determinant of the geographical distribution of production, because the large apparel companies are constantly seeking production bases lower labor costs. Additionally, the ongoing globalization of trade has intensified this situation. The search for lower labor costs have led to significant changes in the image of global apparel industry. The production of clothing gradually moved from Europe to Asia, which now hold nearly 45% of global garment production.
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
in late 2006 to support to workers (not companies or institutions) who have been made redundant as a result of trade liberalisation, so that they can either remain in employment or find a new job quickly. It provides counselling; job search and mobility allowances; new ICT
Information and communication technologies
Information and communications technology or information and communication technology, usually abbreviated as ICT, is often used as an extended synonym for information technology , but is usually a more general term that stresses the role of unified communications and the integration of...
skills and other forms of training; entrepreneurial support, including micro-credits.
Since 2007 the EGF has spent almost EURO
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
68 million to help over 15,000 workers in eight Member States to find new jobs. The workers supported so far had been previously employed in the manufacture of vehicles, or mobile phones, or textiles and clothing.
Conditions for assistance
The Fund is activated, upon a request introduced by a Member State when one or more companies (national, multinational or SMEs) announce at least 1,000 redundancies either in an enterprise, or in a sector within a region, due to structural changes in world trade patterns. The Fund is designed to intervene in cases where the redundancies have a significant impact on a region or a sector and therefore there is an EU dimension in terms of scale and impact.The EGF is open to all persons who work legally in the EU. It operates under the principle of subsidiarity, and in a system of shared management between the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
and the Member State. Responsibility for implementing the EGF lies with the authorities of the Member States concerned.
The maximum amount available through the EGF is €500 million per year for the period of 2007 to 2013.
Activities
Since 1 January 2007, the EGF has been funding active labour market policies helping workers made redundant as a result of globalisation, for example through:- job-search assistance, occupational guidance, tailor-made training and re-training including IT skills and certification of acquired experience, outplacement assistance and entrepreneurship promotion or aid for self-employment,
- special time-limited measures, such as job-search allowances, allowances to individuals participating in lifelong learning and training activities,
- measures to stimulate in particular disadvantaged or older workers, to remain in or return to employment.
It complements support provided by the employers and national authorities concerned in terms of active labour market policy measures. It does not fund passive social protection measures such as retirement pensions or unemployment benefits, which are the competence of the Member States.
Member States who have successfully applied for an EGF intervention can also use EGF money for information and communication activities highlighting the role of the Fund in their interventions to support workers.
Relationship to other funds
The EU Structural FundsStructural Funds and Cohesion Funds
The Structural Funds and the Cohesion Fund are financial tools set up to implement the Cohesion policy also referred to as the Regional policy of the European Union. They aim to reduce regional disparities in terms of income, wealth and opportunities...
, in particular the European Social Fund (ESF), consist of multi-annual programmes in support of strategic, long-term goals, and management of change and restructuring in the 2007-2013 period, with activities such as life-long learning. The EGF is a response to a specific, European scale crisis; it provides one-off, time limited individual support geared directly to helping workers who have become redundant for reasons related to international trade.
Global economic crisis
The European Commission proposed on 16 December 2008 that, in addition to its current scope, the Fund should be able to support workers made redundant as a result of the global financial and economic crisis. In addition, it proposes to reduce the threshold of redundancies from the current 1,000 to 500, to extend the period of each case from 12 months to 24 months, and to increase its contribution from 50 % of total cost to 75 % (the rest being contributed by the Member State).This proposal was submitted to the Council and the European Parliament in December 2008. It is expected that the amendment will be adopted in mid-2009. There is a need of this fund because the difference in labor costs at the international level remains an important determinant of the geographical distribution of production, because the large apparel companies are constantly seeking production bases lower labor costs. Additionally, the ongoing globalization of trade has intensified this situation. The search for lower labor costs have led to significant changes in the image of global apparel industry. The production of clothing gradually moved from Europe to Asia, which now hold nearly 45% of global garment production.
See also
- European Commissioner for Employment, Social Affairs & Equal OpportunitiesEuropean Commissioner for Employment, Social Affairs & Equal OpportunitiesThe Commissioner for Employment, Social Affairs and Inclusion is the member of the European Commission. The current commissioner is László Andor....
- Directorate-General for Employment, Social Affairs and Equal Opportunities (European Commission)Directorate-General for Employment, Social Affairs and Equal Opportunities (European Commission)The Directorate-General for Employment, Social Affairs and Equal Opportunities is a Directorate-General of the European Commission. The Directorate-General for Employment, Social Affairs and Equal Opportunities has the task of contributing to the development of a modern, innovative and sustainable...
- European Social FundEuropean Social FundThe European Social Fund is the European Union’s main financial instrument for supporting employment in the Member States as well as promoting economic and social cohesion. ESF spending amounts to around 10% of the EU’s total budget....
External links
- http://ec.europa.eu/egf