The European Globalisation Adjustment Fund for Displaced Workers (EGF) was set up by the

European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...

in late 2006 to support to workers (not companies or institutions) who have been made redundant as a result of

trade liberalisation Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econo ...

, 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 EGF has received more than 100 applications from 20 EU member states for programs that would support more than 100,000 workers who either lost their jobs due to

globalization Globalization, or globalisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is the process of foreign relation ...

(56%) or as a result of the global economic and financial crisis (44%). The hardest-hit industries were in automobile manufacturing (22.5%), machinery and equipment (13.5%), textile and apparel (12%), computers, mobile phones and ICT (11.6%) and construction (9.6%).

Conditions for assistance

The Fund is activated upon request of a member state when a company (whether national, multinational or SMEs) lays off more than 1,000 people either in an enterprise, or in a sector within a region, due to structural changes in world trade. The Fund seeks to intervene when 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 The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...

and the member state. Responsibility for implementing the EGF lies with the authorities of the member states. 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 Active labour market policies (ALMPs) are government programmes that intervene in the labour market to help the unemployed find work. Many of these programmes grew out of earlier public works projects, in the United States particularly those impl ...

helping workers made redundant as a result of globalisation, for example through: *Job-search assistance, occupational guidance, tailor-made training and

retraining Retraining or refresher training is the process of learning a new or the same old skill or trade for the same group of personnel. Retraining is required to be provided on a regular basis to avoid personnel obsolescence due to technological change ...

including IT skills and certification of acquired experience,

outplacement Outplacement is a support service provided by some organizations to help former employees transition to new jobs. A consultancy A consultant (from la, consultare "to deliberate") is a professional (also known as ''expert'', ''specialist'', se ...

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 Social protection, as defined by the United Nations Research Institute for Social Development, is concerned with preventing, managing, and overcoming situations that adversely affect people's well-being. Social protection consists of policies and ...

measures such as retirement pensions or

unemployment benefits Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to unemployed people. In the United States, benefits are funded by a comp ...

. Member states can also use EGF money to publicize activities highlighting the EGF's role in their support for workers.

Relationship to other funds

The EU Structural Funds, in particular the European Social Fund (ESF), consist of multi-annual programmes"Multiannual financial framework"
European Commission Financial Programming and Budget in support of strategic, long-term goals, and management of change and restructuring in the 2007–2013 period, with activities such as lifelong 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

proposed 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 on 16 December 2008. 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 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 The European Parliament (EP) is one of the legislative bodies of the European Union and one of its seven institutions. Together with the Council of the European Union (known as the Council and informally as the Council of Ministers), it adopts ...

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 labour 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 labour costs. Additionally, the ongoing globalisation of trade has intensified this situation. The search for lower labour 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 accounts for nearly 45% of global garment production.

References

External links