EU: Fonds voor globalisering om gevolgen crisis op te vangen (en)

The European Union will acquire another tool to help alleviate the effects of the economic crisis.

The Czech EU Presidency has reached agreement between the European Parliament and the EU Member States on new conditions under which dismissed workers will qualify for support from the European Globalisation Adjustment Fund (EGF). Under the agreement, Member States may apply for financial support for crisis-affected enterprises that will dismiss 500 workers, as opposed to the current threshold of 1,000. Furthermore, over the next two years, the level of EU-provided financial support will increase to 65%, compared to the current 50%.

The resources from the fund may be used for the retraining of workers and lifelong learning projects, support for workers’ mobility as well as for careers advice for jobseekers or for transition to self-employment. For this reason, the support has also a long-term impact. “With this agreement, we will kill two birds with one stone – in the short-term, it will alleviate the effects of the economic crisis, and it will strengthen European competition in the long-term”, says Deputy Permanent Representative of the Czech Republic to the EU Jana Reinišová, who, together with her colleagues, reached the agreement between the Member States and MEPs.

The compromise, negotiated with the European Parliament by the Czech Presidency, was given the green light on Tuesday 7 April at the Coreper I meeting. The text must be approved by the European Parliament at the meeting of the Committee on Employment and Social Affairs; then by a vote in the plenary and finally must be formally approved by EU ministers. The new rules could thus enter into effect before the end of the Czech Presidency. Moreover, they will be applicable retroactively to applications submitted to the European Commission as from May 2009.

The revision of the EGF is a part of the European Economic Recovery Plan. The agreement reached by the Czech Presidency will extend the scope of the fund. It will cover not only problems resulting from the changing global trade patterns, but also the alleviation of the impacts of the crisis. First and foremost, the conditions for allocating support will be simplified - including the following measures:

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  The limit for submitting an application for assistance from the EGF will be lowered from 1000 to 500 redundancies per enterprise, including its subcontractors and buyers; or per sector on the level of one or two neighbouring NUTS II regions.
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  The time for utilisation of the EGF assistance will be extended from 12 to 24 months
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  The amount of funds allotted from the EGF to individual measures for redundancies will increase from the current 50% to 65% over the next two years. The remaining amount must be provided by the applicant Member State, which remains the principal entity responsible for providing assistance to workers made redundant.