What is the European Globalisation Adjustment Fund and how does it function?

The European Globalisation Adjustment Fund (EGF) is a financial instrument established by the European Union (EU) to provide support to workers who have lost their jobs due to globalization or major structural changes in world trade patterns. The fund aims to help affected workers by providing them with additional assistance to reintegrate into the labor market.

The EGF functions through a multi-step process. Firstly, when a significant number of workers are made redundant due to global trade changes, a Member State or a group of Member States can submit an application to the European Commission for financial support from the EGF. The application must demonstrate the scale and impact of the job losses and outline the proposed measures to support the affected workers.

Once the application is received, the European Commission assesses its eligibility and compliance with the EGF criteria. These criteria include the number of redundancies, the impact on the local economy, and the efforts made by the Member State(s) to provide support. If the application meets the criteria, the Commission prepares a proposal for the allocation of funds.

The proposal is then submitted to the European Parliament and the Council of the EU for approval. If both institutions agree, the funds are made available to the Member State(s) to implement the proposed measures. These measures can include training and retraining programs, job-search assistance, entrepreneurship support, and other forms of active labor market policies.

The EGF operates on a co-financing principle, where the EU provides a maximum of 60% of the total cost of the proposed measures, and the Member State(s) contribute the remaining 40%. The funds are managed by the Member State(s) and are subject to regular monitoring and evaluation by the European Commission.

Overall, the European Globalisation Adjustment Fund serves as a mechanism to mitigate the negative effects of globalization on workers by providing financial support and assistance to help them adapt to changing labor market conditions.