European Globalisation Adjustment Fund: European Council agrees its position

European Union EFG employment

The European Council agreed last week (March, 15) its position (partial general approach) on the European Globalisation Adjustment Fund (EGF).

The fund is designed to support Member States where unexpected major restructuring events occur as a result of globalisation-related challenges. Among these are changes in world trade patterns, trade disputes, financial or economic crises or the transition to a low-carbon economy.

Pending further progress on the next multiannual financial framework (MFF), this agreement does not cover the budgetary aspects or provisions of horizontal nature.

Among the new elements in the proposal are:

– a lower threshold of 250 dismissed workers for a case to be eligible;
– an extended scope to include additional reasons for restructuring as eligible for funding;
– alignment of the co-financing rate with the highest ESF+ co-financing rate for a given Member State, but not less than 60%.

The position of the Council provides for the alignment of the period of functioning of the EGF with the period of the MFF from 1 January 2021 to 31 December 2027.

It also adds important changes in the trade relations of the EU and the composition of the internal market to the globalisation-related challenges that can give rise to unexpected major restructuring events.

Background
The EGF was initially set up in 2006 for the period 2007-2013 to support workers who have lost their jobs as a result of globalisation-related major structural changes.

For the period 2014-2020, the scope of the Fund was broadened to include job displacements resulting from any new global financial and economic crisis. In May 2018 the Commission published its proposal on the continuation of the EGF beyond 2020.

Next steps
Without prejudice to ongoing horizontal negotiations on the MFF 2021-2027, the partial general approach reached by the Council will serve as basis for the future negotiations with the European Parliament.

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