- European Globalisation Adjustment Fund (EGF)
- Why was the Fund set up?
- How does the EGF help?
- How is the EGF implemented?
European Globalisation Adjustment Fund (EGF)
The European Globalisation Adjustment Fund (EGF) was created as an employment policy tool by the European Union in early 2007. It is now in its second programming period (2014 - 2020). During the 2014 - 2020 programming period the EGF has an EU-wide maximum annual budget of 150 million euros. The EGF can be used to support workers and self-employed persons who have become unemployed or ceased their business activities in the context of mass redundancies (at least 500 redundancies) as a result of the adverse effects of globalisation or global financial and economic crises. Those receiving support from the EGF are provided with additional active labour market policy opportunities such as further education and training or coaching. The EGF aims to help the affected persons find and start a new job and to enhance their employability.
If workers from temporary employment agencies lose their jobs in a mass redundancy, they are also eligible for support from the EGF as long as the lay-off by the user enterprise also results in the termination of the employment relationship with the temporary employment agency.
Why was the Fund set up?
Increased globalisation and more free trade mean fiercer competition on global markets. This brings positive effects to the lives of people in the EU. It leads to greater product diversity and lower prices for consumers, new export markets and growth opportunities for EU companies, which come with job security for their workforces and additional jobs. But at the same time there is a risk of job losses in less competitive industries.
In order to help the EU Member States overcome structural crises, the EGF can lend a helping hand to workers and self-employed persons whose jobs have become redundant as a result of globalisation. Moreover, since January 2014 the EGF has also been able to support unemployed youth in regions with very high youth unemployment. However, thanks to its relatively low youth unemployment this does not apply to Germany.
How does the EGF help?
The support offered by the EGF caters to individual needs in an effort to be able to provide the affected persons with the most tailored and effective assistance possible. Examples include
- help with the job-search,
- coaching, workshops and special support applying for jobs,
- further education and training, skills development and
- support setting up a new business.
Once the application for funding has been formally submitted, an EGF project can run up to 24 months. Currently the EGF can fund up to 60% of the overall costs of a project. The German Government provides the remaining funds by way of national co-financing.
How is the EGF implemented?
In order to receive financial support from the EGF, the Federal Ministry of Labour and Social Affairs submits an application to the European Commission in its capacity as Germany's EGF Managing Authority. Prior to the actual application, the Federal Ministry of Labour and Social Affairs, the Federal Employment Agency as well as their local agencies, the workers' and employers' representatives of the affected company and relevant Trade Unions examine whether the mass redundancy in question fulfils the criteria for financial support from the EGF (e.g. whether there is a link to globalisation). The EU's Budgetary Authority (the European Commission, the Council and the European Parliament) decides whether to approve the application. Since the introduction of the EGF, Germany has successfully submitted ten applications requesting EGF funds totalling about 55 million euros in support of 14,000 persons (as of March2018).
In Germany, the implementation of the EGF builds on Germany's existing structures, which include the Federal Employment Agency. In addition, transfer service providers are normally part of the implementation process. They also act as the local point of contact for the laid-off workers.