- European Globalisation Adjustment Fund for Displaced Workers (EGF)
- Why was the EGF created?
- How does the EGF help?
- How is the EGF implemented?
European Globalisation Adjustment Fund for Displaced Workers (EGF)
The European Globalisation Adjustment Fund for Displaced Workers (EGF) was created in 2007 and is an employment policy instrument of the European Union. The year 2021 marks the start of the EGF's third seven-year EU funding period (2021-2027). In the period 2021-2027, up to 186 million euros are available annually throughout the EU for EGF projects. The fund can be used to support employees and self-employed persons who have become unemployed or have given up their activities as a result of major restructuring measures (at least 200 redundancies). Major restructuring measures can be caused, for example, by globalisation-related challenges, such as changes in world trade patterns, trade disputes or far-reaching changes in the Union's trade relations or the composition of the internal market. Other examples include financial and or economic crises, the transition to a low-carbon economy, digitisationand automation. EGF-funded stakeholders receive additional offers of active labor market policy, such as further training or coaching. The aim of EGF funding is to support people in finding and taking up new employment and to increase their employability.
If temporary workers also lose their jobs at the companies affected, they can also be supported. The prerequisite is that the employment relationship with the temporary employment agency is terminated as a result of the layoffs at the user company.
Why was the EGF created?
Increasing globalisation and free trade are leading to fiercer competition on the world markets. This does have positive effects on the lives of people in the EU. These include increased product variety and falling prices for consumers, new sales markets, and opportunities for EU companies to expand. This is also associated with job security for employees and the creation of additional jobs. At the same time, however, there is a threat of job losses in less competitive sectors.
To help EU member states cope with major restructuring, the EGF can come to the aid of employees and self-employed workers who lost their jobs.
How does the EGF help?
Support from the EGF is based on the individual needs of those affected, so that they receive the most tailored and effective support offer possible. This can include measures such as
- support in finding a job,
- coaching, workshops and special job application support,
- further training and qualifications,
- support for business start-ups (up to € 22,000 per funding), and
- bonuses as an incentive for the dismissed employees (e.g. sprinter bonus, mobility bonus, qualification bonus).
The funding period can be more than 24 months. A grant of 60 % of the total costs is awarded from the EGF. The remaining funds are provided by the federal government by way of national co-financing.
How is the EGF implemented?
In order to receive funding from the EGF, the Federal Ministry of Labor and Social Affairs (BMAS), as the EGF managing authority, submits an application to the European Commission. Prior to this, the BMAS, together with the Federal Employment Agency and the social partners of the companies concerned, checks whether there is a major restructuring event that would allow EGF funding. The EU budgetary authority (European Commission, Council, European Parliament) decides whether to approve an application. Since the introduction of the EGF, Germany has successfully submitted eleven applications with a total EGF funding volume of more than 56 million euros to support over 15,000 affected persons.
The specific implementation of the support ties in with existing structures in Germany. The transfer service provider, which has been entrusted by the dismissing company with the implementation of the social plan, is at the centre. The transfer service provider acts as the local contact for those affected by redundancy and also implements the EGF funding.