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Article

Information on the EGF

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 (EU). The year 2021 marks the start of the EGF's third seven-year EU funding period (2021–2027). Between 2021 and 2027, up to EUR 30 million are available annually throughout the EU for EGF projects. The fund can be used to support workers and self-employed persons who have been displaced or have given up their activities as a result of major restructuring measures (at least 200 redundancies). Under the new EGF Regulation, effective June 2026, the scope of application will be extended to include workers who are threatened by job displacements due to major restructuring measures.

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, digitisation and automation. EGF beneficiaries receive additional offers related to active labour market policies, such as further training or coaching. The aim of EGF funding is to support workers in finding and taking up new employment and to increase their employability.

If temporary workers also lose their jobs at the enterprises affected, they can also be supported through the fund.

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. Furthermore, these developments are associated with job security for employees and the creation of additional jobs. At the same time, however, there is a threat of job displacements in less competitive sectors.

To help EU member states manage major restructuring efforts, the EU supports workers and self-employed individuals whose jobs are threatened by or affected by job displacements through the EGF.

How does the EGF help?

Support from the EGF is based on individual needs, so that those affected 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 displaced workers (e.g., sprinter bonus, mobility bonus, qualification bonus).

The measures differ depending on whether a specific redundancy event has already occurred or whether job displacements are still imminent. For workers who are still employed by the enterprise, the last two measures (business start-ups and bonuses) do not apply.

The funding period can last up to 24 months. The EGF provides funds covering 60% of the total costs. In the case of a specific redundancy event (standard EGF), the remaining funds are provided through national co-financing by the federal government. Under the new funding option for imminent job displacements, the participating enterprise assumes 40% of the co-financing cost.

How is the EGF implemented?

In order to receive funding from the EGF, the Federal Ministry of Labour and Social Affairs (BMAS, Bundesministerium für Arbeit und Soziales) as the EGF managing authority submits an application to the European Commission. Prior to this, the BMAS, together with the Federal Employment Agency (Bundesagentur für Arbeit, BA) and – in case of a specific redundancy event – the social partners of the affected enterprises, assesses whether a major restructuring event has occurred that qualifies for EGF funding. If job displacements are imminent, the enterprise interested in EGF funding should contact the BMAS or the BA. Questions regarding the application process and eligibility requirements should be directed to the BA. The EU budgetary authority (the Council and the European Parliament) decides on the approval of an application after it has been submitted by the European Commission. Since the introduction of the EGF, Germany has successfully submitted thirteen applications with a total EGF funding volume of more than EUR 62 million to support over 16,000 affected persons.

In Germany, the practical implementation of the funding builds on existing structures. In case of a specific redundancy event, the central stakeholder is the outplacement service provider that the affected enterprise entrusted with implementing the social plan. Under this EGF funding option, the outplacement service provider acts as the local point of contact for those affected by the redundancies and also implements the EGF funded measures. If job displacements are imminent, the enterprise implements the EGF funded measures itself.