Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EC) No 1927/2006 establishing the European Globalisation Adjustment Fund
Date: 2011-06-10
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, dismissal, employment aid, globalisation, integration into employment

EUROPEAN COMMISSION 

Brussels, 10.6.2011 
COM(2011) 336 final 

2011/0147 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) No 1927/2006 establishing the European Globalisation 
Adjustment Fund 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The European Globalisation Adjustment Fund (EGF) was established in 2006 by Regulation 
(EC) No 1927/20061 with the main objective of showing solidarity with and providing support 
to  workers  affected  by  redundancies  resulting  from  changes  in  world  trade  patterns.  By  co-
funding active labour market policy measures, the EGF aimed at facilitating the re-integration 
into  employment  of  workers  in  areas,  sectors,  territories,  or labour  market  regions  suffering 
the shock of serious economic disruption. The eligibility requirements for EGF support were 
at least 1 000 redundancies either during a four-month period in an enterprise and its suppliers 
and downstream producers or during a nine-month period in an economic sector defined as a 
NACE  Revision  2  Division  in  a  region  or  two  contiguous  regions  determined  at  NUTS  II 
level. The maximum contribution from the EGF was set at 50 % of the total costs of the active 
labour market measures and the period of implementation of EGF supported measures could 
not exceed 12 months from the date of application. 

In the light of the scale and the speed of development of the financial and economic crisis in 
2008, the Commission, in its European Economic Recovery Plan2, envisaged the revision of 
Regulation (EC) No 1927/2006. The aim of this revision, brought about by Regulation (EC) 
No 546/20093, was to extend the scope of the EGF as part of Europe's crisis response and to 
turn it into an early, more effective crisis intervention instrument in line with the fundamental 
principles  of  solidarity  and  social  justice.  The  amendments  included  permanent  changes  to 
Regulation  (EC)  No  1927/2006,  such  as  the  reduction  from  1 000  to  500  of  the  required 
number of redundancies to trigger an application for EGF support and an extension from 12 to 
24  months  of  the  implementation  period  for  EGF  supported  measures.  A  temporary 
derogation  was  introduced  in  order  (1)  to  enlarge  the  scope  of  the  EGF  to  cover  support  in 
favour  of  workers  made  redundant  as  a  direct  consequence  of  the  financial  and  economic 
crisis  (paragraph  1a  of  Article  1  of  Regulation  (EC)  No  1927/2006)  and  (2)  to  increase  the 
level of EGF co-funding from 50 to 65 % (Article 10(1) of Regulation (EC) No 1927/2006). 
The temporary derogation expires on 30 December 2011 and the possibility of reviewing it is 
provided for in the second paragraph of Article 20 of Regulation (EC) No 1927/2006. 

Between  1  January  2007  and  30  April  2009  (i.e.  before  the  crisis  derogation  existed)  the 
Commission received 15 applications, targeting EGF support to 18 430 workers and the total 
amount of the requested EGF contribution was EUR 78 776 367. 

Since  the  entry  into  force  on  1  May  2009  of  Regulation  (EC)  No  546/2009  revising 
Regulation  (EC)  No  1927/2006  the  number  of  applications  has  significantly  increased  as 
shown below. 

1 
2 
3 

OJ L 48, 22.2.2008, p. 82 
COM(2008)800, 26.11.2008 
OJ L 167, 29.6.2009, p. 26 

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Applications for EGF support submitted under the temporary crisis derogation 

 Year 

Number of 
applications 

Number of 
workers 
targeted 

2009 
2010 

Total 

22 
24 
46 

19 381
25 083
44 464

Sum of EGF contributions 
requested (EUR) 

99 396 898
115 353 865
214 750 763

Applications for EGF support submitted under the trade related criterion  

 Year 

Number of 
applications 

Number of 
workers 
targeted 

2009 
2010 

Total 

4 
6 
10 

6 569
3 074
9 643

Sum of EGF contributions 
requested (EUR) 

25 990 290
17 126 749
43 117 039

Following  a  consultation  launched  by  the  Commission,  Member  States  have  indicated  that, 
without the temporary derogation it would have been impossible to submit most of the crisis 
related applications, thus leaving about 45 000 workers who suffered from the consequences 
of  the  economic  and  financial  crisis  without  EGF  support.  In  addition,  the  increased  co-
funding rate of 65 % reduced the financing burden of EGF supported measures for applicant 
Member  States  globally  by  about  EUR 60 million  for  all  applications  submitted  between  1 
May 2009 and 31 December 20104. 

The decision on the expiry of the temporary crisis derogation was taken in 2009. At that time, 
the latest available Commission Economic Forecasts5 (Autumn 2008) for the European Union 
(EU) as a whole indicated a gradual recovery from mid-2009 with an expected GDP growth 
of 0.2% in 2009 and 1.1% in 2010. Employment was forecast to decline by 0.5% in 2009 and 
to increase by 0,1 % in 2010. The unemployment rate was expected to reach 7.8% and 8,1 % 
of  the  labour  force  respectively  in  2009  and  2010.  Compared  with  these  forecasts,  the 
situation  in  2009  turned  out  to  be  significantly  worse.  EU  GDP  declined  by  4,2 %,  while 
employment decreased by 1.9% and the rate of unemployment reached 8.9%. Despite the fact 
that  GDP  growth  in  2010  is  foreseen  to  have  been  higher  than  expected  at  some  1.8%, 
employment  has  further  decreased  by  0,6 %  while  the  unemployment  rate  reached  a  record 
high of 9,6 %. 

Moreover,  the  latest  Commission  Economic  Forecast  (Spring  2011)  indicates  that  the 
prospects for economic and especially labour market recovery for 2011 and 2012 are worse 
than those broadly expected in autumn 2008. This is particularly true as regards the creation 
of  new  jobs  and  the  rate  of  unemployment..  For  2011,  the  Spring  forecast  foresees  a  small 
increase of employment by 0.4% and a stable unemployment rate of 9,5 %. For 2012 the same 
forecast predicts employment growth to remain subdued at 0.7% and the unemployment rate 
to still be at 9,1 %. This reflects the fact that recovery in employment normally lags that of 

4 
5 

Excluding applications withdrawn or rejected 
http://ec.europa.eu/economy_finance/publications/european_economy/forecasts_en.htm  

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GDP.  The  relatively  weak  labour  market  conditions6  despite  a  gradual  improvement  of  the 
Gross  Domestic  Product  (GDP)  growth  prospects  demonstrate  that  besides  the  effect  of  an 
unwinding  of  the  policy  measures  taken  in  response  to  the  crisis  to  dampen  its  effect  on 
unemployment, structural adjustment resulting from the crisis continues to take place across 
sectors  and  enterprises  and  consequently  further  job  losses  due  to  closure  of  enterprises 
should be expected to continue for a certain time. As a result, a more substantial improvement 
of employment conditions could only be expected from 2013 onwards. .  

This  outlook  for  a  rather  jobless  recovery  is  confirmed  by  the  Commission  in  its  Annual 
Growth Survey: advancing the EU's comprehensive response to the crisis7. In order to avoid 
the  risk  of  a  return  to  growth  without  sufficiently  dynamic  job  creation,  tackling 
unemployment  and  preventing  long  term  exclusion  from  the  labour  market  are  seen  as 
essential. Restoring the main growth drivers would require a reallocation of labour and capital 
across sectors and enterprises and better financial incentives to move from unemployment to 
employment. 

As  stated  by  the  Commission  the  crisis  has  resulted  in  a  large  loss  in  economic  activity,  a 
substantial increase in unemployment, a steep fall in productivity, and badly weakened public 
finances.  This  is  a  particularly  difficult  context  for  Member  States  to  provide  tailor-made 
support to a large number of workers simultaneously made redundant as a result of the crisis. 
An  extension  of  the  increased  EGF  co-financing  rate  of  65 %  would  make  it  possible  to 
alleviate to some extent the burden on Member States' public finances. 

The  expected  continued  impact  of  the  crisis  on  company  closures  and  the  need  for  fiscal 
consolidation  in  Member  States  justify  an  extension  of  the  crisis  related  derogation  in 
Regulation (EC) No 1927/2006. 

Therefore, it is proposed to extend the temporary crisis-related derogation, which expires on 
30 December 2011, until 31 December 2013, i.e. until the end of the implementation period of 
Regulation (EC) No 1927/2006. This will make it possible for Member States to continue to 
present  applications  for  EGF  support  in  favour  of  workers  still  made  redundant  as  a 
consequence of the financial and economic crisis and to benefit from an EGF co-funding rate 
of 65 %. 

•  General context 

Since  the  introduction  of  the  temporary  crisis-related  derogation,  there  has  been  a  sharp 
increase  in  the  number  of  applications  for  EGF  support  and  an  increase  in  the  number  of 
Member States applying for EGF support. This indicates that the role of the EGF as a crisis 
intervention  instrument  in  case  of  large  scale  redundancies  resulting  from  the  financial  and 
economic crisis is genuinely being accepted. 

The  European  Parliament  called  for  the  extension  of  the  crisis  related  derogation  in  its 
resolution  of  7  September  20108  on  the  funding  and  functioning  of  the  European 
Globalisation  Adjustment  Fund.  The  European  Parliament  took  the  view  that  'the  period  of 
validity of the derogation inserted in 2009 with a view to assisting workers who lose their jobs 
as a result of the economic and financial crisis should be extended until the end of the current 

6 
7 
8 

Ibid. 
COM(2011)11, 12.1.2011 
European Parliament Resolution (2010/2072/INI) 

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Multiannual  Financial  Framework  and  that  the  co-financing  rate  should,  therefore,  be 
maintained at 65 %, given that the underlying causes on which their approval was based are 
far from having been removed.' 

•  Existing provisions in the area of the proposal 

The  European  Social  Fund9  (ESF)  was  established  to  contribute  to  the  priorities  of  the 
Community  as  regards  strengthening  economic  and  social  cohesion  by 
improving 
employment  and  job  opportunities,  encouraging  a  high  level  of  employment  and  more  and 
better jobs. It supports the European Employment Strategy as well as Member States' policies 
aiming  to  achieve  full  employment  and  quality  and  productivity  at  work,  promote  social 
inclusion, including the access of disadvantaged people to employment, and reduce national, 
regional and local employment disparities.  

The  main  difference  with  the  EGF  is  that  the  ESF  consists  of  multi-annual  programmes  in 
support  of  strategic,  long-term  goals  –  notably  anticipation  and  management  of  change  and 
restructuring,  with  activities  such  as  life-long  learning.  The  EGF,  in  turn,  provides  one-off, 
time-limited  individual  support,  geared  directly  to  workers  affected  by  redundancies  as  a 
result  of  trade  globalisation  or  the  financial  and  economic  crisis.To  promote  an  effective 
support of displaced workers the duration of the EGF support measures and the choice of the 
instrument  are  based  on  an  assessment  of  whether  redundancies  are  caused  by  a  possibly 
temporary decline in activity of the relevant enterprise and suppliers or economic sector or by 
permanent structural factors.  

•  Consistency with the EU's other policies and objectives 

The EGF contributes to the objectives of the Europe 2020 Strategy which should enable the 
Union to emerge stronger from the crisis, and to turn its economy towards smart, sustainable 
and  inclusive  growth,  accompanied  by  a  high  level  of  employment,  productivity  and  social 
cohesion.  In  the  Communication10  Europe  2020  –  A  strategy  for  smart,  sustainable  and 
inclusive growth, the Commission sees a clear role for the EGF is under the Flagship initiative 
'An industrial policy in the globalisation era', in particular in view of a quick redeployment of 
skills to emerging high growth sectors and markets. 

By aiming at a rapid re-integration into employment of workers made redundant as a result of 
globalisation  or  the  economic  and  financial  crisis  the  EGF  contributes  to  the  following 
guidelines11 for Member States' employment policies: 

–  Guideline 7: Increasing labour market participation of women and men, reducing structural 

unemployment and promoting job quality; 

–  Guideline  8:  Developing  a  skilled  workforce  responding  to  labour  market  needs  and 

promoting lifelong learning; 

–  Guideline 10: Promoting social inclusion and combating poverty. 

9 
10 
11 

Regulation (EC) No 1081/2006, OJ L 210, 31.7.2006, p. 12 
COM(2010)2020, 3.3.2010 
Council Decision of 21 October 2010 on guidelines for the employment policies of the Member States. 
OJ L 308, 24.11.2010, p. 46 

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Finally,  in  its  Communication  on  New  Skills  for  New  Jobs  –  Anticipating  and  matching 
labour market needs12 the Commission highlighted the necessity for the EU in order to pave 
the way towards recovery to enhance its human capital and employability by upgrading skills, 
as well as ensuring a better match between the supply of skills and labour market demands. 
Activation,  retraining  and  skills  upgrading  measures  were  identified  as  means  to  promote 
employment and reintegration into the labour market. Co-funding skills upgrading activities is 
amongst the main objectives of the EGF. 

•  Impact on fundamental rights 

The proposal has no impact on fundamental rights. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

The Commission consulted the Member States twice: firstly, by means of a questionnaire on 
26 August 2010 and secondly, at a meeting held in Porto on 29 and 30 September 2010. The 
main  purpose  of  these  consultations  was  to  collect  views  on  the  effectiveness  of  the  crisis 
related  amendments  introduced  in  2009  by  Article  1.1a  and  Article  10(1)  into  Regulation 
(EC) No 1927/2006, which expire on 30 December 2011 and the need to extend these until 31 
December 2013. 

Summary of responses and how they have been taken into account 

As regards the possibility to submit applications for redundancies directly resulting from the 
global  financial  and  economic  crisis  (Article  1.1a  of  Regulation  (EC)  No  1927/2006)  the 
consultation indicated that this had indeed enabled Member States to ask for support from the 
EGF  for  workers  who  lost  their  job  as  a  result of  the  crisis  and  provide  EGF  assistance  for 
their  reintegration  into  employment.  A  vast  majority  of  Member  States  indicated  that  these 
workers  could  not  have  benefitted  from  EGF  support  on  the  basis  of  trade-related 
globalisation  criteria.  The  consultation  further  indicated  that  it  was  generally  felt  easier  to 
gather  evidence  and  to  establish  a  demonstrable  link  between  the  redundancies  and  the 
financial  and  economic  crisis,  than  with  the  changes  in  world  trade  patterns  due  to 
globalisation. 

On  the  need  to  extend  the  crisis-related  derogation  until  the  end  of  2013  a  vast  majority  of 
responding Member States wished the possibility of submitting applications for redundancies 
resulting from the global financial and economic crisis to continue. The arguments in favour 
of such an extension included comments on the positive experience with the impact of EGF 
support on workers' capacity to reintegrate the labour market in a situation where the effects 
of  the  economic  crisis  would  be  felt  after  2011,  it  had  affected  different  Member  States  at 
different times, and where its effects on employment would still be strong. Moreover, it was 
pointed out that an extension by two years did not prejudge the future beyond the end of 2013. 

12 

COM(2008)868, 16.12.2008 

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As  regards  the  possibility  for  applicants  to  benefit  from  a  co-funding  rate  of  65 %  (Article 
10(1)  of  Regulation  (EC)  No  1927/2006),  the  consultation  indicated  that  the  increased  co-
funding  rate  had  facilitated  the  decision  to  apply  for  EGF  support  for  a  number  of  reasons. 
The  extra  15 %  had  made  it  possible  to  give  the  equivalent  in  extra  help  to  the  workers 
concerned. The gap between the ESF rate and the EGF rate had been reduced for the Member 
States  who  could  obtain  higher  rates  from  the  ESF  and  without  this  reduction  no  EGF 
applications  would  have  been  submitted  by  them.  National  co-funding  remained  a  problem, 
but at 35 % instead of 50 %, this problem was less acute. A large majority of Member States 
found the rate of 65 % during the crisis to be appropriate  and  favoured an extension of  this 
higher intervention rate until the end of 2013. 

The  outcome  of  these  consultations  is  reflected  in  the  proposed  amendments  to  Regulation 
(EC) No 1927/2006. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

There was no impact assessment required for this proposal. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

In order to extend the temporary derogation to support workers made redundant as a result of 
the  global  financial  and  economic  crisis  the  date  laid  down  in  the  second  paragraph  of 
paragraph  1a  of  Article  1  of  Regulation  (EC)  No  1927/2006  is  replaced  by  31  December 
2013.  This  amendment  also  automatically  extends  the  increased  co-financing  rate  of  65 % 
until the same date, as laid down in Article 10(1) of Regulation (EC) No 1927/2006. 

•  Legal basis 

The Treaty on the Functioning of the European Union, and in particular the third paragraph of 
Article 175. 

•  Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the  exclusive 
competence of the EU. 

The  objectives  of  the  proposal  cannot  be  sufficiently  achieved  by  the  Member  States.  They 
can only be achieved through an amendment of Regulation (EC) No 1927/2006. 

Action at the level of the EU will better achieve the objectives of solidarity embedded in the 
proposal for the following reasons below. 

The adaptation of the EGF, a financial instrument made available at the level of the EU, to the 
needs of the current economic and financial situation can only be carried out by a legislative 
initiative taken at the level of the EU. 

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In  making  this  proposal,  the  Commission  has  based  itself  on  the  needs  arising  from  the 
current  assessment  of  the  economic  and  financial  situation  of  the  Member  States  and  the 
economic forecasts for the period 2012–13. These differ significantly from the assessment and 
forecasts available at the end of 2008 and the beginning of 2009, when the temporary crisis-
related amendments were introduced in Regulation (EC) No 1927/2006. 

This proposal therefore complies with the principle of subsidiarity. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

In accordance with the principle of proportionality, the proposed amendments to Regulation 
(EC) No 1927/2006 do not go beyond what is necessary to adjust the functioning of the EGF 
to  the  current  forecasts  concerning  the  economic  and  financial  crisis  and  its  impact  on 
employment  and  on  Member  States'  deficits  by  (1)  maintaining  the  possibility  to  apply  for 
EGF support for workers made redundant as a result of the continuing financial and economic 
crisis and (2) providing for a co-funding rate of 65 % instead of 50 %. 

The crisis related derogation gives Member States the possibility to apply for EGF support for 
workers  made  redundant  as  a  consequence  of  the  crisis  for  cases  where  a  clear  and 
demonstrable link can be established between these redundancies and the crisis. It is obvious 
that if no such cases occur, the possibility will not be used. 

The  proposal  does  not  impose  any  additional  administrative  burden  upon  Member  States 
compared  to  the  requirements  imposed  by  the  current  provisions  of  Regulation  (EC)  No 
1927/2006. 

•  Choice of instrument 

Proposed instrument: a Regulation. 

Other means would not be adequate for the following reason: 

A regulation is the appropriate legal instrument to amend an existing regulation. 

4. 

BUDGETARY IMPLICATION 

Article 28 of the Interinstitutional Agreement between the European Parliament, the Council 
and  the  Commission  of  17  May  200613  on  budgetary  discipline  and  sound  financial 
management  provides  that  the  EGF  may  not  exceed  a  maximum  annual  amount  of 
EUR 500 million. 

Based  on  the  requests  for  EGF  support  in  the  past14  the  proposed  extension  of  the  crisis 
related derogation in Regulation (EC) No 1927/2006 is not expected to exceed this maximum 
annual amount. These requests reached EUR 51,8 million in 2007 and EUR 20,6 million in 
2008.  In  2009  the  total  amount  of  EGF  support  requested  reached  EUR  131,7  million,  of 

13 
14 

OJ C 139, 14.6.2006, p. 1. 
Excluding withdrawn and rejected applications 

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which 75 % concerned crisis related applications and 25 % trade related applications. In 2010 
the total amount of EGF support requested reached EUR 132,5 million, of which 87 % related 
to crisis related applications and 13 % to trade related applications. 

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2011/0147 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) No 1927/2006 establishing the European Globalisation 
Adjustment Fund 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
third paragraph of Article 175 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee15, 

Having regard to the opinion of the Committee of the Regions16, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 
December  200617  has  established  the  European  Globalisation  Adjustment  Fund 
(hereinafter  "EGF")  to  enable  the  Union  to  provide  support  and  show  solidarity  to 
workers made redundant as a result of major structural changes in world trade patterns 
due to globalisation. 

As  part  of  the  response  to  the  financial  and  economic  crisis  Regulation  (EC)  No 
546/2009 of the European Parliament and of the Council of 18 June 200918 amended 
the  Regulation  (EC)  No  1927/2006  by  providing,  in  particular  for  a  temporary 
derogation  aimed  at  broadening  its  scope  to  cover  crisis-related  redundancies  and  a 
temporary increase in the EGF co-financing rate. 

(3) 

In  the  light  of  the  current  economic  and  financial  situation  in  the  Union,  it  is 
appropriate to extend this derogation before its expiry on 30 December 2011. 

(4) 

Regulation (EC) No 1927/2006 should therefore be amended accordingly. 

15 
16 
17 
18 

OJ C , , p. . 
OJ C , , p. . 
OJ L 48, 22.2.2008, p. 82 
OJ L 167, 29.6.2009, p. 26 

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HAVE ADOPTED THIS REGULATION: 

Article 1 

In Article 1(1a) of Regulation (EC) No 1927/2006 

the second subparagraph is replaced by the following: 

"This  derogation  shall  apply  to  all  applications  submitted  no  later  than  by  31  December 
2013." 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative  

1.2.  Policy area(s) concerned in the ABM/ABB structure 

1.3.  Nature of the proposal/initiative  

1.4.  Objective(s)  

1.5.  Grounds for the proposal/initiative  

1.6.  Duration and financial impact  

1.7.  Management method(s) envisaged  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

2.2.  Management and control system  

2.3.  Measures to prevent fraud and irregularities  

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

3.2.  Estimated impact on expenditure  

3.2.1. Summary of estimated impact on expenditure  

3.2.2. Estimated impact on operational appropriations  

3.2.3. Estimated impact on appropriations of an administrative nature 

3.2.4. Compatibility with the current multiannual financial framework 

3.2.5. Third-party participation in financing  

3.3.  Estimated impact on revenue

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  Amending 
Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund 

1.2. 

Policy area(s) concerned in the ABM/ABB structure19  

ABB  Activity:  European  Globalisation  Adjustment  Fund  as  included  in  DG  EMPL  2010 
Management Plan 

1.3. 

Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133) The proposal/initiative relates to a new action following a pilot project/preparatory action20  

X The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

The proposal falls under the Flagship initiative 'An industrial policy for the globalisation era' 
which  is  part  of  the  Commission  Europe  2020  Strategy  for  smart,  sustainable  and  inclusive 
growth. 

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific  objective  No.1:  Maintain  participation  in  the  labour  market  of  workers  made 
redundant as a result of changes in world trade patterns and the economic and financial crisis. 

Specific objective No 2: Raising awareness of the EGF, as an expression of solidarity, among 
the general public 

ABM/ABB activity(ies) concerned: European Globalisation Adjustment Fund (EGF) 

19 
20 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 

EN 

12 

   EN 

 
                                                 
1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

The proposal will enable the European Union to continue its support through the EGF at a co-
funding rate of 65 % for active labour market measures for workers made redundant as a result 
of the global financial and economic crisis. In addition, this co-funding rate will also benefit 
workers made redundant as a result of trade globalisation. 

1.4.4. 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

- Number of applications for EGF support received 

- Number of redundant workers targeted for EGF assistance 

-  Number  of  redundant  workers  reintegrated  into  employment  following  EGF  supported 
measures 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

In the light of the economic and financial crisis Regulation (EC) No 1927/2006 was amended 
in 2009 and provided for a time-limited crisis related derogation. This derogation expires on 
30  December  2011.  However,  the  most  recent  economic  forecasts  predict  the  effects  of  the 
crisis,  and  in  particular  its  negative  impact  on  the  pace  of  restructuring,  job  creation  and 
unemployment rate to continue at least until the end of 2012. This proposal should enable the 
EGF to intervene in support of workers made redundant as a result of the global financial and 
economic crisis until 31 December 2013 at an intervention rate of 65 %. 

1.5.2.  Added value of EU involvement 

EU involvement through the EGF makes it possible to complement national means available 
for the re-integration of workers made redundant as a consequence of trade globalisation or the 
global  economic  and  financial  crisis.  Experience  achieved  so  far  with  the  EGF  seems  to 
indicate  that  EU  involvement  makes  it  possible  to  provide  more  tailor  made  support  for  a 
longer  period  of  time,  often  involving  measures  that  would  not  have  been  provided  without 
EU involvement. 

1.5.3.  Lessons learned from similar experiences in the past 

See  the  experience  since  the  revision  of  Regulation  (EC)  No  1927/2006  set  out  in  the 
explanatory Memorandum. 

1.5.4.  Coherence and possible synergy with other relevant instruments 

The EGF is coherent and offers a synergy with the European Social Fund. 

EN 

13 

   EN 

 
1.6. 

Duration and financial impact  

–  X Proposal/initiative of limited duration  

–  X  Proposal/initiative in effect from 31 December 2011 to 31 December 2013 

–  (cid:133)  Financial impact from YYYY to YYYY  

(cid:133) Proposal/initiative of unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged21  

(cid:133) Centralised direct management by the Commission  

(cid:133) Centralised indirect management with the delegation of implementation tasks to: 

–  (cid:133)  executive agencies  

–  (cid:133)  bodies set up by the Communities22  

–  (cid:133)  national public-sector bodies/bodies with public-service mission  

–  (cid:133)  persons entrusted with the implementation of specific actions pursuant to Title V of the 
Treaty  on  European  Union  and  identified  in  the  relevant  basic  act  within  the  meaning  of 
Article 49 of the Financial Regulation  

X Shared management with the Member States  

(cid:133) Decentralised management with third countries  

(cid:133) Joint management with international organisations (to be specified) 

If more than one management mode is indicated, please provide details in the "Comments" section. 

Comments  

21 

22 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the  BudgWeb  site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

EN 

14 

   EN 

 
                                                 
2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

Article 16 of Regulation (EC) No 1927/2006 requires the Commission to present each year to 
the European Parliament and the Council a quantitative and qualitative report on the activities 
carried  out  under  this  Regulation  in  the  previous  year.  This  report  contains  i.a.  the 
Commission's observations on the monitoring activities during the year under consideration. 

In accordance with Article 17 of Regulation (EC) No 1927/2006, the Commission will carry 
out before the end of 2011, in close cooperation with Member States, a mid-term evaluation of 
the  effectiveness  and  sustainability  of  the  results  obtained  under  the  EGF.  By  31  December 
2014, the Commission is required to carry out, with the assistance of external experts, an ex-
post evaluation in order to measure the impact of the EGF and its added value. 

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

The risks are those related to shared management of Community Funds.  

2.2.2.  Control method(s) envisaged  

The requirements applicable to management and financial control are laid down in Article 18 
of Regulation (EC) No 1927/2006. 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

The measures to prevent, detect and correct irregularities are laid down in Article 18 (1) (d) 
and in Article 18 (2) of Regulation (EC) No 1927/2006. 

EN 

15 

   EN 

 
3. 

3.1. 

Heading of 
multiannual 
financial 
framework 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

DA/NDA 
(23) 

from 
EFTA24 
countries 

from 
candidate 
countries25 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

04.0501 
Adjustment Fund 

European  Globalisation 

1.1 

04.010414  European  Globalisation 
Adjustment  Fund  –  Expenditure  on 
administrative management 

40.0243  Reserve  for  the  European 
Globalisation Adjustment Fund 

•  New budget lines requested  

NDA 

NO 

NO 

NO 

NO 

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure

Contribution  

Number  
[Heading……………………………………..] 

Diff./non-
diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

Heading of 
multiannual 
financial 
framework 

n.a. 

n.a. 

[…] 

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

23 
24 
25 

DA= Differentiated appropriations / DNA= Non-Differentiated Appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

EN 

16 

   EN 

 
                                                 
3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework:  

Number 

EUR million (to 3 decimal places) 

DG: EMPL 

(cid:121) Operational appropriations PM 

Number of budget line 

Number of budget line 

Appropriations 
of 
 from the envelop of specific programs27  
Number of budget line 

an 

administrative 

TOTAL appropriations 
for DG EMPL 

Year 
201226 

Year 
2013 

TOTAL 

Commitments 

Payments 

Commitments 

Payments 

(1) 

(2) 

(1a) 

(2a) 

nature 

financed 

Commitments 

Payments 

(3) 

=1+1a 
+3 

=2+2a 

+3 

26 
27 

EN 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), indirect research, direct 
research. 

17 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING EMPL 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

EN 

18 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

EUR million (to 3 decimal places) 

Year 
2012 

Year 
2013 

TOTAL 

No 
impact 

No 
impact 

DG: EMPL 

(cid:121) Human resources  

(cid:121) Other administrative expenditure  

TOTAL DG EMPL 

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

Year 
N28 

Year 
N+1 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

Payments 

28 

Year N is the year in which implementation of the proposal/initiative starts. 

EN 

19 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

–  X  The proposal/initiative does not require the use of operational appropriations  

–  (cid:133)  The proposal/initiative requires the use of operational appropriations, as explained below: 

Year 
2012 

Year 
2013 

… enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

TOTAL 

Commitment appropriations in EUR million (to 3 decimal places) 

Indicate 
objectives and 
outputs  

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

Total 
numbe
r of 
ouputs 

Total  
cost 

(cid:216) 

Type 
of 
output
29 

Avera
ge 
cost 
of the 
ouput 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

SPECIFIC OBJECTIVE No 130… 

- Output 

- Output 

- Output 

Sub-total for specific objective N°1 

SPECIFIC OBJECTIVE No 2… 

- Output 

Sub-total for specific objective N°2 

TOTAL COST 

29 
30 

EN 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.4.2. "Specific objective(s)…" 

20 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  X  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:133)  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

Year 
2012 31 

Year 
2013 

… enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 532 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

31 
32 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

21 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.2.   Estimated requirements of human resources  

–  (cid:133)  The proposal/initiative does not require the use of human resources  

–  X  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full amounts (or at most to one decimal place) 

Year 
2012 

Year 
2013 

… enter as many years as 
necessary to show the 
duration of the impact 
(see point 1.6) 

XX 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

XX 01 02 01 (CA, INT, SNE from the "global 
envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

XX 01 04 yy 33 

- at Headquarters34 

- in delegations  

XX 01 05 02 (CA, INT, SNE - Indirect 
research) 

10 01 05 02 (CA, INT, SNE - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to 
management of the action and/or have been redeployed within the DG, together if necessary 
with any additional allocation which may be granted to the managing DG under the annual 
allocation procedure and in the light of budgetary constraints. 

Description of tasks to be carried out: 

Officials and temporary agents 

External personnel 

33 
34 

Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

22 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4.  Compatibility with the current multiannual financial framework  

–  X  Proposal/initiative is compatible the current multiannual financial framework. 

–  (cid:133)  Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

N/A 

–  (cid:133)  Proposal/initiative requires application of the flexibility instrument or revision 

of the multiannual financial framework35. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

N/A 

3.2.5.  Third-party contributions  

–  X The proposal/initiative does not provide for co-financing by third parties  

–  The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to 3 decimal places) 

Year 
2012 

Year 
2013 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
cofinanced  

35 

See points 19 and 24 of the Interinstitutional Agreement. 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

–  X  Proposal/initiative has no financial impact on revenue. 

–  (cid:133)  Proposal/initiative has the following financial impact: 

– 

– 

(cid:133) 

(cid:133) 

on own resources  

on miscellaneous revenue  

EUR million (to 3 decimal places) 

Appropriation
s available for 
the ongoing 
budget 
exercise 

Budget revenue line: 

Article …………. 

Year 
2012 

Year 
2013 

… insert as many columns as necessary 
in order to reflect the duration of the 
impact (see point 1.6) 

For miscellaneous assigned revenue, specify the budget expenditure line(s) affected. 

N/A 

Specify the method for calculating the impact on revenue. 

N/A 

EN 

24 

   EN