A broader scope for the European Globalisation Adjustment Fund  

​Joan Calabuig

Local leaders back a shift that fosters preventive measures to alleviate the negative effects of globalisation and new technologies on local economies and employment

The European Committee of the Regions (CoR) has adopted an opinion on the European Globalisation Adjustment Fund (EGF). Local leaders ask to reinforce the role of regional authorities in the management of the Fund, to increase its budget from €200 million to €500 million annually and to set its intervention threshold to 150 employees. The CoR is reacting to the European Commission's legislative proposal on a new Regulation on the EGF, presented in May 2018.  Between 2007 and 2014, the Fund has provided €561.1 million to support 122 121 redundant workers (EC).

Globalisation has brought major structural changes in world trade patterns. Along with the recent financial crisis, it has negatively affected local and regional economies and provoked recession and raising unemployment rates. As economic trends confirm that digitalisation, artificial intelligence and processes of technological adaptation will not be without side effects, the EGF is now to be adapted to tackle the economic and technological challenges ahead.

With the EGF opinion, the CoR is contributing to its revision as a new legislative proposal was laid down by the European Commission last May. Originally designed to mitigate the effects of large-scale redundancies and mass lay-offs, local leaders support the Fund's enlarged scope, including a more generic dimension of adapting to structural change as well as a new category of beneficiaries to allow workers to acquire new skills for the digital age.

The opinion has been coordinated by the President of the Valencia Region Ximo Puig (ES/PES) and presented at the plenary session by Valencia's regional representative for European Affairs Joan Calabuig (ES/PES).

"We must not only preserve but also boost the competitiveness of our economies. Yet, the guarantees for protecting and promoting our welfare system and labour rights must be reinforced correspondingly. Workers threatened by displacement shall also be considered beneficiaries of the new Fund and have the capacity to access tailored trainings and capacity building programmes. To maximise its positive effects, the direct participation and action of local and regional authorities in the management of the Fund should be strengthened", said Joan Calabuig.

Valencia is one of the EU regions that has most significantly applied to and benefited from EGF. Since 2007, it has received €17 million for redundant workers in the ceramics, textiles, construction, footwear and metal sectors.

The adopted opinion proposes devoting more attention to the most vulnerable workers, such as those over 54 and under 30 years of age, people who suffer some type of disability, ethnic minorities and workers without any qualifications. The opinion proposes a change in the Fund's denomination, to be called the European Transition Support Fund.

Local leaders call on the European Commission to fix an intervention co-financing rate of a minimum of 60%, increased by a further 5% if anticipation and restructuring operational measures and instruments have been provided.

Members welcome the reduction of administrative burden when applying to the Fund as well as on verifying eligibility. Avoiding a detailed analysis of the causes of redundancies will speed up financial contributions, members say.

The CoR proposes to extend the current role of the European Monitoring Centre on Change (EMCC) and include impact assessments of trade agreements on European regions in their evaluation of globalisation and restructuring trends.

 

Background:

Click here for more information on the European Globalisation Adjustment Fund (EGF)

Contact: David Crous | david.crous@cor.europa.eu | +32 (0) 470 88 10 37