Arbejdsdokument fra Kommissionens tjenestegrene - Ledsagedokument til forslag til Europa-Parlamentets og Rådets forordning om ændring af forordning (EF) nr. 1927/2006 om oprettelse af Den Europæiske Fond for Tilpasning til Globaliseringen - Resumé af konsekvensanalysen {KOM(2008) 867 endelig} {SEK(2008) 3055}
Date: 2008-12-16
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, dismissal, fund (EU), globalisation, impact study, reintegration into working life

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.12.2008 
SEC(2008) 3056 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a 

REGULATION OF THE EUROPEAN 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} 

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INTRODUCTION 

In the light of the scale and the speed of the current 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 November 2008, that it would propose to extend the 
scope of the EGF as part of Europe's crisis response and turn it into an early, more effective 
intervention instrument in line with the fundamental principles of solidarity 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 presented to the Impact Assessment Board. 

The impact assessment concerns the scheduled review of Regulation (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 its report on the first year of operation of the 
EGF on 2 July 2008 and indicated in that report that it would examine ways to improve the 
performance of the EGF. The impact assessment was carried out between July and September 
2008. Given the tight deadlines for making progress within the current European Parliament, 
the other departments concerned were consulted on an ad hoc basis during the preparation of 
the impact assessment. 

The Commission consulted the Member States' experts 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 annual report, and secondly at a conference of 
Member State representatives and other stakeholders 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  relevant  external  data.  It  has  been  revised  to 
take into account the opinions of the Impact Assessment Board. 

PROBLEM DEFINITION 

The  EGF  was  created  in  December  2006  in  order  to  enable  the  European  Union  to  show 
solidarity with and provide support for workers made redundant as a result of major structural 
changes in world trade patterns due to globalisation. It covers the period 2007–2013 and has 
an  annual  maximum  budget  of  EUR  500  million  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 for the EGF Regulation1 that the 
EGF could support 35 000 to 50 000 workers per year with between EUR 10 000 and 20 000 
each. 

The outcome of the first 18 months of EGF operations 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 million of EGF support for 15 000 workers, and giving an average 
of EUR 4 500 per worker. 

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SEC(2006) 274 accompanying COM(2006) 91. 

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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 crisis response. The current EGF Regulation specifies 
that only trade related redundancies are eligible for support. However global crisis impacts the 
real  economy  and  employment  in  many  other  ways  than  through(international)  trade.  In 
addition  to  lowering  the  threshold  for  support  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 will 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 redundant 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  (ERM)  recorded  66  cases  of  restructuring  of 
enterprises involving more than 1 000 workers, and there were a further 38 in the first half of 
2008, as compared to 12 EGF cases during 2007 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  States  have  informed  the  Commission  that  even 
under current rules further applications could have 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  that  cases  might  exist  where  redundancies  are 
stretched over a longer period, not allowing the threshold 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 events 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 concluded that the objective of solidarity of the EGF 
is only partially being met under the present rules and that this situation can be addressed by 
lowering the redundancy threshold for EGF applications 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 input from the Member States' experts and other 
stakeholders  indicate  that  the  combination  of  requirements  (especially  implementing  a 
coordinated package of personalised services within a 12-month period) is detrimental to the 
quality of the actions and does not leave sufficient time for the measures to be effective in re-
integrating particularly the most vulnerable workers 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. 

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OBJECTIVES 

The general policy objective is to provide the Union 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  effectiveness  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  continue  to  apply  unchanged. 
The advantages of this option relate 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 exceptionally low number of mass redundancy events, 
one would expect the number of EGF eligible 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 Regulation. These improvements would 
involve:  simplifying  procedures  and  application  requirements;  making  use  of  existing 
networks  to  promote  interest  in  the  EGF  among  potential  stakeholders  and  exchange  of 
good  experience;  clarifying  eligibility  of  the  services  sector  and  for  measures  such  as 
mobility allowances and micro-credits; stepping up awareness-raising activities to achieve 
greater  visibility  of  the  EGF.  However,  a  number  of  drawbacks  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 difficulties 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 eligibility criterion would continue to be changes 
in world trade patterns, but the EGF Regulation would be amended in the following ways: 
reduction  of  the  trigger  number  of  redundancies  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  Commission  and  broadening  of  the  scope  of  technical  assistance 
through the inclusion of forward-looking activities; clarification of the meaning of "use" of 
the financial  contribution; and increase  of the standard  intervention 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 

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would  be  significantly  positive  in  terms  of  re-integration  into  employment  and 
effectiveness of the measures co-funded. However, this variant would not allow the EGF to 
ensure equal treatment for workers made redundant as a result of major changes in world 
markets. 

•  Under "variant B: Markets" option 3, the EGF Regulation would be amended as described 
above  with  one  difference:  eligibility  would  be  expanded  from  major  changes  in  world 
trade  patterns  to  include  also  major  changes  in  world  markets,  such  as  changes  in 
production  and  product  technology,  changes  in  the  organisation  of  production  (such  as 
company  outsourcing)  and  the  access  to,  and  price  of,  raw  materials  and  other  inputs. 
Option 3 "variant B: Markets" would combine the positive impact of the variant described 
above with increased solidarity and social inclusion as a result of broadening the scope of 
globalisation events eligible for EGF support.  

•  Under  Option  4  "Improvements  and  operational  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 enlarged than in option "Markets" 
and this option would therefore represent all the positive elements of the other options and 
in  addition  enable  the  EGF  to  better  respond  to  the  needs  brought  about  by  the  global 
financial crisis 

CONCLUSION 

From the analysis carried out by the Commission, it appears 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 workers receiving assistance from the EGF. Option 
4  is  therefore  considered  to  better  fulfil  the  objective  of  solidarity  in  as  much  as  it  makes 
support available to more redundant workers. 

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