Agreement on European Globalisation Fund brokered by Presidency

An amendment to the Regulation on the European Globalisation Fund (EGF), successfully mediated by the Czech Presidency, was approved by the European Parliament Committee on Employment and Social Affairs.

The amendment forms part of the European Recovery Plan and aims to mitigate the effects of the current crisis on the economy and labour markets of the European Union. The speed with which the Presidency managed to broker the agreement of the European Council and Parliament is of great importance, as the new rules might become valid prior to the end of the Czech Presidency. "It is an important tool that may help mitigate the impacts of the financial and economic crisis", said Depute Prime Minister and Czech Minister of Labour and Social Affairs Petr Nečas.

The new rules will simplify the rules that govern drawings from the fund, support employees who have become redundant due to globalisation more efficiently, and, above all, extend the framework covered by the fund to those who have been laid off due to the financial and economic crisis.

“We expect to see basic changes, for instance because the limit for applying for aid from the European Globalisation Fund is lowered from 1000 to 500 people made redundant in one affected company, including its suppliers and customers. The period in which contributions from the fund can be received is prolonged from 12 to 24 months and in the next two years also the rate of financing from the fund for individual measures for people laid off is increased from 50% to 65%,” explained Deputy Prime Minister Petr Nečas. “The rest must be financed by the applying Member State which will then bear the major part of the responsibility for aid to its unemployed citizens,” he added.

Money from the fund may be used to fund employee retraining programmes and lifelong learning projects, to support employee mobility or to fund counselling in job searching or transition to self-employment. In addition, the new rules will apply retroactively to applications filed with the European Commission since May 2009.

In the first week of May the negotiated agreement on the Regulation on the European Globalisation Fund will be put to the vote in the European Parliament, which will conclude the approval at its first reading. The result will then be formally adopted by the EU Ministers.