EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 16.12.2008 
SEC(2008) 3056 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
Proposal for a 
 
REGULATION OF THE EUROPE AN PARLIAMENT AND THE COUNCIL 
 
amending Regulation (EC) No 1927/2006 on establishing the European Globalisation 
Adjustment Fund 
  
SUMMARY OF THE IMPACT ASSESSMENT  
{COM(2008) 867 final} 
{SEC(2008) 3055} 
 
EN 2   EN INTRODUCTION  
In the light of the scale and the speed of the cu rrent economic crisis the proposal prepared by 
the present impact assessment had to be adapted. The Commission announced in its European Economic Recovery Plan, adopted on 26 Novembe r 2008, that it would propose to extend the 
scope of the EGF as part of Europe's crisis re sponse and turn it into an early, more effective 
intervention instrument in line with the fundamenta l principles of solidar ity and social justice. 
This led to the introduction in the final proposal of the extension of the scope to "a serious disturbance in the economy due to globalisation", an element that was not covered by the 
version of the impact assessment presen ted to the Impact Assessment Board.  
The impact assessment concerns the scheduled  review of Regulati on (EC) No 1927/2006 on 
the European Globalisation Adjustment Fund ("the EGF Regulation"), which Article 20 
provides that the Commission may submit a proposal  to review the Regulation on the basis of 
its first annual report.  The Commission adopted it s report on the first year  of operation of the 
EGF on 2 July 2008 and indicated in that repor t that it would examine ways to improve the 
performance of the EGF. The impact assessmen t was carried out between July and September 
2008. Given the tight deadlines for making progre ss within the current European Parliament, 
the other departments concerned were consulted on an ad hoc ba sis during the preparation of 
the impact assessment. 
The Commission consulted the Member States' expert s and social partners twice: first in July 
2008 by way of a questionnaire relating to EGF operations and management and to the possible improvements identified in the EGF an nual report, and secondly  at a conference of 
Member State representatives and other stakeh olders held in Brussels on 4 September 2008. 
Besides the views expressed by Member States and other stakeholders in response to the 
consultation, the impact assessment also used re levant external data. It  has been revised to 
take into account the opinions of the Impact Assessment Board. 
P
ROBLEM DEFINITION  
The EGF was created in December 2006 in order to enable the European Union to show 
solidarity with and provide support for workers ma de redundant as a result of major structural 
changes in world trade pattern s due to globalisation. It covers the period 2007–2013 and has 
an annual maximum budget of EUR 500 milli on to support active labour market policy 
measures such as assistance with job-search, training and mobility allowances. It was assumed in the impact assessment of the original proposal fo r the EGF Regulation
1 that the 
EGF could support 35 000 to 50 000 workers pe r year with between EUR 10 000 and 20 000 
each. 
The outcome of the first 18 months of EGF operati ons is significantly lower than that: during 
2007 and the first half of 2008 the EGF received 12 applications for support from 8 Member States, totalling EUR 67.5 milli on of EGF support for 15 000 workers, and giving an average 
of EUR 4 500 per worker. 
                                                
 
1 SEC(2006) 274 accompanying COM(2006) 91. 
 
EN 3   EN Moreover in its proposal for An European Economic Recovery Plan the Commission has 
identified the need to make the EGF a more effective early intervention instrument and to 
fully exploit its potential as part of the cris is response. The current EGF Regulation specifies 
that only trade related redundancie s are eligible for s upport. However global crisis impacts the 
real economy and employment in many other wa ys than through(international) trade. In 
addition to lowering the threshold for s upport the Commission is proposing to include 
changes in the definition of EGF eligibility to encompass redundancies that occur as a result of a serious disturbance in the economy and thus directly respond to the effects on 
employment of the crisis. In this way the EGF w ill be able to provide support to more workers 
who are in fact made redundant by globalisation but  who could not be assisted so far. The key 
problems are: 
• whether the stated objective of solidarity is being met by the current EGF, i.e. whether the 
EGF is available to the re dundant workers concerned,; 
• whether its actions match the needs of the individuals, and 
• whether the EGF is an adequate instrument in the face of the gloal financial crisis. 
In 2007 the European Restructuring Monitor (E RM) recorded 66 cases of restructuring of 
enterprises involving more than 1 000 workers, a nd there were a further 38 in the first half of 
2008, as compared to 12 EGF cases during 20 07 and 2008. ERM figures cover all recorded 
events regardless of their nature and some of them quite clearly fall outside the current EGF 
definition of eligibility. However, Member Stat es have informed the Commission that even 
under current rules further applications could ha ve been made for EGF assistance, but were 
not for a variety of reasons. Evidence gathered  from national administrations and opinions 
expressed during the consultation suggest th at cases might exist where redundancies are 
stretched over a longer period, not allowing the th reshold to be reached within the reference 
period It is particularly difficult to collect of  information from the regional and local levels 
within short reference periods.  
The ERM also recorded 73 even ts involving between 500 and 1 000 workers and, just as for 
the larger cases, it is likely that some of these events are caused by changes in international trade patterns. However, these trade-redundant workers cannot benefit from EGF assistance 
because of its current eligibility criteria. 
From these two considerations it can be conclu ded that the objective of solidarity of the EGF 
is only partially being met under the present rule s and that this situation can be addressed by 
lowering the redundancy threshold for EGF a pplications from 1 000 to 500 workers. 
On the issue of whether EGF actions match the needs of individual workers, analysis of the 
EGF cases, the FAQs to the Commission and inpu t from the Member States' experts and other 
stakeholders indicate that the combinati on of requirements (especially implementing a 
coordinated package of personali sed services within a 12-month period) is detrimental to the 
quality of the actions and does not leave sufficien t time for the measures to be effective in re-
integrating particularly the most vulnerable work ers into new jobs. It is therefore proposed to 
extend the implementation period to 24 months.  
Besides, in order to make the EGF co-funding more  attractive to Member States it is proposed 
to increase the common intervention rate to 75% to bring it more into line with the Structural 
Funds. 
 
EN 4   EN OBJECTIVES  
The general policy objective is to provide the Un ion with an efficient instrument to respond 
flexibly and confidently to serious economic disruption brought about by globalisation. The 
specific policy objective is to make the EGF a better performing and more  flexible instrument 
by extending the coverage of the Fund and enhancing its eff ectiveness in re-integrating 
workers made redundant by globalisation into employment The aimed operational objectives 
are to: (1) adapt the eligibility criteria to better reflect labour  market characteristics; (2) 
increase the effectiveness of re-integration measures; (3) make co -funding from the EGF 
more attractive to Member States; (4) ensure equivalent treatment of all workers affected by 
developments in global markets; (5) improve the quality of applications  and measures; and (6) 
provide legal certainty about  undefined key elements in the current EGF Regulation. 
POLICY OPTIONS AND ASSESSMENT  
Four options — with two variants  for the third option — have been  assessed as to their social, 
economic and budgetary impact: 
• Under option 1, " No change ", the EGF Regulation would c ontinue to apply unchanged. 
The advantages of this option re late to continuity in terms of  the legislative framework and 
practical aspects of implementation of  EGF-funded actions. As 2007 and 2008 were 
particular years in that there was an excep tionally low number of mass redundancy events, 
one would expect the number of EGF e ligible events to double in 2009 and beyond. 
• Under option 2, " No change plus improvements ", a number of operational improvements 
would be introduced without changes to the EGF Regulatio n. These improvements would 
involve: simplifying procedures and applica tion requirements; maki ng use of existing 
networks to promote interest in the EGF am ong potential stakeholders and exchange of 
good experience; clarifying eligibility of the se rvices sector and for measures such as 
mobility allowances and micro-credits; stepping  up awareness-raising activities to achieve 
greater visibility of the EG F. However, a number of draw backs with this option would 
make the EGF less effective as a financing instrument than was intended by the legislator: Member States would continue to face difficu lties in meeting the intervention criteria and 
the short funding period would still make it difficult to provide actions which meet the 
needs of the workers concerned. 
Under option 3, " Improvements and operational changes ", the Commission assessed two 
variants related to the eligibility criterion: 
• Under "variant A: Trade" of option 3, the elig ibility criterion would c ontinue to be changes 
in world trade patterns, but the EGF Regulati on would be amended in the following ways: 
reduction of the trigger number of redundanc ies from 1 000 to 500; inclusion of 
redundancies occurring before the start of  the reference period among the redundant 
workers eligible for EGF support; extension of the time period for implementation of EGF 
support from 12 to 24 months; clarification of the amount available for technical assistance 
at the initiative of the Comm ission and broadening of the sc ope of technical assistance 
through the inclusion of forward- looking activities; clarificati on of the meaning of "use" of 
the financial contribution; and increase of the standard interventi on rate for EGF support 
from 50% to 75% of the total costs. Option 3 "variant A: Trade" would enable a greater 
number of redundant workers to benefit from  the EGF and for a longer period. The impact 
 
EN 5   EN would be significantly positiv e in terms of re-integration into employment and 
effectiveness of the measures co-funded. However, this varian t would not allow the EGF to 
ensure equal treatment for workers made redunda nt as a result of ma jor changes in world 
markets. 
• Under "variant B: Markets" option 3, the EG F Regulation would be amended as described 
above with one difference: e ligibility would be expanded fr om major changes in world 
trade patterns to include also major change s in world markets, such as changes in 
production and product technology , changes in the organisati on of production (such as 
company outsourcing) and the access to, and price of, raw material s and other inputs. 
Option 3 "variant B: Markets" would combine the positive impact of the variant described 
above with increased solidarity and social in clusion as a result of broadening the scope of 
globalisation events eligible for EGF support.  
• Under Option 4 "Improvements and operati onal changes responding to a serious 
disturbance in the economy due  to globalisation" the Regulation would be amended as in 
variant "Trade" above, but the scope would be further enlarg ed than in option "Markets" 
and this option would therefore represent all the positive elemen ts of the other options and 
in addition enable the EGF to better respond to the n eeds brought about by the global 
financial crisis 
CONCLUSION  
From the analysis carried out by the Commission, it app ears that option 4  " "Improvements 
and operational changes responding to a serious disturbance in the economy due to globalisation" provides all the benefits of the other options and has the potential to address 
more globalisation events and reach more work ers receiving assistance from the EGF. Option 
4 is therefore considered to better fulfil the ob jective of solidarity in as much as it makes 
support available to more redundant workers.