COMMISSION STAFF WORKING PAPER Ex-ante Evaluation
Date: 2011-10-06
Institutions: European Commission
Subjects: European Globalisation Adjustment Fund, agricultural labour force, agricultural situation, collective dismissal, economic recession, integration into employment, labour force, trade agreement (EU)

EUROPEAN COMMISSION 

Brussels, 6.10.2011 
SEC(2011) 1133 final 

COMMISSION STAFF WORKING PAPER 

Ex-ante Evaluation 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the European Globalisation adjustment Fund 2014-2020 

{COM(2011) 608 final} 

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TABLE OF CONTENTS 

Introduction and policy background ............................................................................ 3 

Introduction .................................................................................................................. 3 

Policy background........................................................................................................ 3 

Problem definition and needs assessment .................................................................... 5 

Globalisation and unexpected crisis............................................................................. 5 

Trade agreements ......................................................................................................... 6 

Needs assessment ......................................................................................................... 7 

Objectives and expected results ................................................................................... 7 

Available policy options (alternative delivery mechanism): ....................................... 8 

Option 1........................................................................................................................ 9 

Option 2...................................................................................................................... 11 

Option 3...................................................................................................................... 15 

Comparing the options ............................................................................................... 18 

Implementation of the preferred option ..................................................................... 19 

Structure and implementation .................................................................................... 19 

Active vs. passive measures....................................................................................... 19 

Volume of appropriations, human resources and other administrative expenditure.. 20 

Lessons learnt from the past....................................................................................... 20 

Helping and hindering factors.................................................................................... 21 

Impact of measures on participants, localities and implementing bodies.................. 22 

Impact on delivery organisations and localities ......................................................... 24 

Overall use and efficiency of use of resources........................................................... 25 

Sustainability outcomes ............................................................................................. 25 

Added value of the Union involvement ..................................................................... 25 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

2.3. 

3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

5. 

5.1. 

5.2. 

5.3. 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

7. 

7.1. 

Subsidiarity ................................................................................................................ 26 

8. 

Monitoring and evaluation ......................................................................................... 26 

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1. 

INTRODUCTION AND POLICY BACKGROUND  

1.1. 

Introduction 

In line with the Commission's guidance on evaluation, the ex-ante evaluation accompanying 
the Proposal for the Regulation on the European Globalisation Adjustment Fund (EGF) 2014-
2020 was prepared by Directorate-General for Employment, Social Affairs and Inclusion. The 
report duly takes account of contributions from Directorate-general for Agriculture and Rural 
Development. The report also benefitted from the interim report of the mid-term evaluation of 
the EGF prepared by GHK.  

In  its  Communication  'A  Budget  for  Europe  2020'1 the  Commission  stressed  the  need  to 
tackle effectively a number of challenges that constitute a serious threat to social cohesion and 
competitiveness.  These  pressing  challenges  are  mainly:  shortfalls  in  skills  levels,  under-
performance  of  active  labour  market  policy  and  education  systems,  social  exclusion  of 
marginalised  groups  and  low  labour  mobility.  In  this  context,  the  need  is  recognised  to 
provide,  for  the  duration  of  the  Multiannual  Financial  Framework  (MFF)  2014  –  2020, 
specific,  one-off  support  to  workers  made  redundant  as  a  result  of  major  structural  changes 
triggered by the increasing globalisation of production and trade patterns. As in the previous 
programming  period,  this  specific  support  should  be  provided  through  the  EGF,  one  of  the 
five special instruments not included in the MFF. 

In the same Communication the Commission indicated that through the EGF the Union will 
also  be  able  to  provide  support  in  the  event  of  large-scale  redundancies  resulting  from  a 
serious disruption of the local, regional or national economy caused by an unexpected crisis. 
The scope of the EGF will furthermore be extended to provide transitory support to farmers to 
facilitate  their  adaptation  to  a  new  market  situation  resulting  from  the  conclusion  by  the 
Union of trade agreements affecting agricultural products.  

1.2. 

Policy background 

The EGF was established in 20062 and is based on the third paragraph of Article 175 of the 
Treaty  on  the  Functioning  of  the  European  Union  (TFEU).  It  was  set  up  to  demonstrate 
solidarity at Union level with large numbers of workers made redundant within a short period 
of time as a result of major structural changes in world trade patterns due to globalisation. The 
EGF  co-funds  a  package  of  active  labour  market  policy  measures  aimed  at  re-integrating 
redundant  workers  into  employment.  The  EGF  is  implemented  under  shared  management 
with a strong focus on subsidiarity as regards the measures offered and their implementation.  

The EGF is an instrument that is used in major structural changes; therefore it was decided to 
intervene  in  the  cases  of  defined  thresholds  of  redundancies.  Originally,  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 

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COM(2011) 500 final, 29.6.2011. 
Regulation (EC) No 1927/2006, 20.12.2006 

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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 and of experience collected so far, the Commission, in its European Economic Recovery 
Plan3,  revised  the  EGF  Regulation.  The  new  regulation4,  reduced  the  eligibility  threshold 
from 1 000 to 500 redundancies and prolonged the maximum implementation period from 12 
to  24  months  to  leave  sufficient  time  for  the  measures  to be  effective. Since the  experience 
showed  that  some  Member  States  had  difficulty  because  of  the  lack  of  flexibility  for  the 
inclusion  of  workers  made  redundant  by  the  same  company  shortly  after  submission  of  any 
EGF application, the flexibility in eligibility criteria was also enlarged and the new regulation 
provided  the  possibility  to  assist  workers  made  redundant  before  and  after  the  reference 
period.  

Two  crisis-related  temporary  amendments  were  also  introduced:  the  possibility  to  apply  for 
EGF support for redundancies that result directly from the financial and economic crisis and 
an  increase  of  the  EGF  co-funding  rate  from  50  to  65  %.  Since  these  temporary  provisions 
expire  on  31  December  2011  and  in  the  light  of  the  current  economic  situation,  the 
Commission presented a Proposal5 to extend these until 31 December 2013.  

It is important to recognize the differences between the EGF and the European Social Fund 
(ESF),  the  main  European  instrument  used  to  promote  employment,  social  inclusion, 
investment in skills, education and life-long learning, and institutional capacity. The ESF – as 
well  as  other  Structural  Funds  and  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD) – consists of multi-annual programmes in support of strategic, long-term goals, its 
measures  are  pre-programmed  and  cannot  be  shifted  to  deal  easily  with  crisis  situations 
caused  by  collective  redundancies.  Since  it  is  not  easy  to  modify  multi-annual  operational 
programmes in order to respond to rapid changes in world trade patterns, there is a need of the 
instrument  geared  towards  helping  workers  soon  after  losing  their  job  as  a  result  of  trade-
related restructuring,  unexpected  crisis or an initialled  trade  agreement.  Until  now,  that  role 
was played by the EGF which was used as a specific, emergency tool providing tailor-made 
support for redundant workers.  

Since the establishment of the EGF the Commission has received 78 applications for a total 
amount  of  EGF  funding  of  EUR 355  million  and  supporting  around  76 000  dismissed 
workers. The effectiveness and sustainability of results of the EGF will be assessed during its 
mid-term evaluation. The final report shall be available by 31 December 2011 as foreseen in 
the EGF Regulation. 

On the basis of the Communication 'A Budget for Europe 2020' the EGF will remain outside 
the financial framework. It will be allocated the maximum amount from January 2014 to 31 
December 2020 of EUR 3 billion, while the amount in support of the agricultural sector shall 
not exceed EUR 2,5 billion (2011 prices). 

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COM(2008) 800 final, 26.11.2008. 
Regulation (EC) No 546/2009, 29.6.2009 
COM(2011) 336 final, 10.06.2011. 

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2. 

PROBLEM DEFINITION AND NEEDS ASSESSMENT  

2.1. 

Globalisation and unexpected crisis 

Increased global competition is one of the significant challenges for Europe's societies6. The 
major structural changes in world trade patterns caused by globalisation are expected to have 
further impact on the structure of the labour market in the Union. Moreover, the labour market 
can be affected by disruptions of the economy caused by an unexpected crisis.  

Restructuring and offshoring of activities to lower-cost centres is set to continue as companies 
constantly look for ways to safeguard their competitiveness in a globally open economy. The 
significance of this issue will vary depending on the sectors and sub-sectors which companies 
operate in. Restructuring can be also a consequence of an unexpected crisis that could result 
in a large loss in economic activity, a substantial increase in unemployment and a steep fall in 
productivity. 

Without  a  proactive  response,  especially  when  collective  redundancies  are  involved, 
restructuring can have adverse effects on the regions where closures take place and be socially 
destabilising,  as  well  as  traumatic  for  the  individuals  concerned.  Support  to  workers  made 
redundant can improve their ability to adapt to structural changes, enhance their employability 
so that they could reintegrate fast into the labour market. The lack of necessary skills among 
the workforce and insufficient match between the supply of skills and labour market demands 
make adapting to change more difficult.  

One difficulty is that limiting the scope of the interventions to the workers with open-ended 
contracts  would  leave  the  workers  under  fixed-term  and  temporary  contracts  without  any 
assistance in case of being affected by collective redundancies. The exclusion of workers on 
fixed-term  or  temporary  agency  contracts  affects  the  overarching  principles  of  equality  and 
solidarity of the EGF. As indicated in the 'Employment in Europe' report, 13,5 % of the Union 
working population in 2009 were workers with fixed-term contract and 1,5 % were temporary 
agency  workers.  A  similar  problem  refers  to  owner-managers  of  micro,  small  and  medium-
sized enterprises and self-employed workers including all members of the household who are 
active in the business. The inclusion of self-employed workers is particularly relevant for the 
agricultural  sector  where  in  20107 the  share  of  self-employed  in  the  EU-27  reached  54  % 
when considering people of more than 15 years old and 57 % for those of more than 25 years 
old.  

As  experience  showed,  another  difficulty  lied  in  lack  of  flexibility  in  adapting  the 
implementation of the Fund to changing economic circumstances in the affected territory (or 
indeed the global economy). Some countries felt that further flexibility in the implementation 
of measures would have been needed following the onset of the economic crisis. Therefore, 
the flexibility during the implementation process will be enlarged. 

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COM(2010) 2020 final, 3.3.2010. 
Eurostat, Labour force survey. 

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2.2. 

Trade agreements 

As indicated in the 'Trade, Growth and World Affairs Communication'8, globalisation brings 
profits to consumers and positively influences economic growth. Moreover, 36 million jobs in 
Europe depend, directly or indirectly, on the Union's ability to trade with the rest of the world. 
However,  despite  the  benefits  that  globalisation  brings,  international  trade  agreements  can 
also  negatively  affect  certain  sectors  in  the  Union,  particularly  the  agricultural  sector. 
Examples  of  such  possible  forthcoming  trade  agreements  are  those  under  negotiation  with 
Mercosur countries, or in the context of the World Trade Organisation (WTO) under the Doha 
Development  Agenda  (DDA).  The  degree  of  the  effects  varies  considerably  across 
agricultural products and regions, yet it is predicted that globalisation will continue to have an 
impact on the livelihoods of the farmers. The sector will need to carry out adaptations brought 
about by trade agreements concluded by Union. 

The  Union  continues  its  efforts  to  seek  the  conclusion  of  an  ambitious,  balanced  and 
comprehensive  agreement  in  the  Doha  Development  Round.  As  part  of  an  overall  package 
deal,  the  Union  has  indicated  its  readiness  to  accept  a  steep  reduction  in  the  ceiling  on  its 
trade-distorting subsidies, the elimination of its export subsidies and a significant reduction of 
its border protection. 

Furthermore the ongoing trade liberalisation process is expected to exert additional pressure 
on  the  economic  perspectives  of  the  European  farm  sector  and  on  agricultural  employment. 
Analysis of the implementation of a possible DDA Agreement under the WTO indicates that 
this  could  lead  to  a  considerable  increase  in  projected  Union  imports  for  many  products 
compared to the baseline at the horizon 2020. Union producer prices could drop for most of 
the products, with the volume of production expected to fall accordingly. The sharpest price 
fall (more than 10 %) is expected for sugar and beef. Price drops could in most cases trigger 
an increase in consumption, somewhat mitigating the fall in domestic production. As a whole, 
the DDA could generate a drop of about 8 % in agricultural income in 2020 compared to the 
baseline9. 

Average effects mask more pronounced potential impacts at the level of single Member States 
and  regions,  especially  those  specialised  in  livestock  production.  Pressure  on  the  extensive 
livestock sector would have a negative effect on biodiversity in these areas, much of which is 
a by-product of traditional farming systems there. Additional, and similar in nature challenges 
for  Union  agriculture  stem  from  further  trade  liberalisation  achieved  under  bilateral 
agreements between the Union and various third countries. 

In  this  respect,  the  possible  Free  Trade  Agreement  with  the  Mercosur  countries  is  the  one 
potentially generating the most significant impacts for Union agriculture as it could lead to a 
decline  in  Union  farm  income  and  agricultural  employment.  The  precise  magnitude  of  the 
impacts would depend on the extent of the liberalisation agreed under the trade deal. As in the 

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COM(2010) 612 final, 9.11.2010. 
The  effect  of  a  possible  DDA  agreement  was  analysed  using  the  AGLINK-COSIMO  model,  as 
compared  to  the  baseline  prospects  for  agricultural  markets  by  2020  (of  December  2010).  In  this 
simulation exercise, DDA provisions were implemented for the Union only. Thus, the positive impacts 
for the Union stemming from the new market access opportunities on third countries' markets are not 
taken into account. 

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case of the DDA, average effects are likely to be unevenly distributed by agricultural sector 
and at national/regional level. 

In  conclusion  it  is  difficult  to  anticipate  all  the  adverse  impacts  that  trade  negotiations  and 
agreements  can  have  on  economic  activities  and  employment.  Economic  modelling  and 
forecasts might not take into account all the factors that affect the decisions made – at micro 
level – by economic operators. Moreover, once the negative aspects of trade agreements arise, 
Member  States  might  implement  diverging  strategies  and  measures  to  mitigate  them.  In  the 
light of the forthcoming conclusions of both Mercosur and DDA negotiations, there is a need 
for an instrument at Union level addressing the negative impacts of globalisation. 

2.3. 

Needs assessment 

The  target  group  for  the  EGF  assistance  are  workers  made  redundant  as  a  result  of  major 
structural  change  or  unexpected  crisis  and  the  farmers  whose  livelihoods  were  affected  by 
trade agreements. In order to ensure that the EGF can meet the identified needs and problems 
of  workers  notwithstanding  their  employment  relationship,  there  is  a  need  to  provide  the 
support  not  only  to  workers  with  contracts  of  employment  of  indefinite  duration  but  also 
fixed-term  workers,  temporary  agency  workers,  owner-managers  of  micro,  small  and 
medium-sized enterprises and self-employed workers (including farmers). 

A package of active labour market policy measures co-financed by the EGF will address the 
problems of not matching the skills with the labour market demands across different sectors 
(including the agriculture). Evidence shows that for workers affected by mass redundancies it 
is  important  to  increase  their  confidence,  renew  and  improve  their  job  search  skills  and 
upgrade their skills and capacities, making it more likely for them to find employment or to 
become  self-employed.  Therefore,  a  scope  of  support  measures  will  range  from  job-search 
assistance,  occupational  guidance,  advisory  services,  entrepreneurship  and  self-employment 
promotion,  aid  for  business  start-up,  through  special  time-limited  measures,  such  as  job-
search  or  training  allowances  to  measures  to  stimulate  disadvantaged  or  older  workers  to 
remain in or return to the labour market. 

For  farmers,  including  all  members  of  the  farm  household  active  on  the  farm,  the  measures 
will  focus  on  the  acquisition  of  appropriate  training  and  skills  and  use  of  advisory  services 
enabling them to adjust their activities, including carrying out new activities, within and / or 
outside  agriculture,  as  well  as  to  support  to  a  limited  extent  the  initial  investments  in  these 
new  activities  allowing  them  to  become  structurally  more  competitive  and  secure  their 
livelihoods. Support could also be given to cooperation activities with a view to creating new 
market options especially for small-scale farmers. 

3. 

OBJECTIVES AND EXPECTED RESULTS 

The EGF will seek to achieve the general objective: 

- show solidarity with the workers and farmers during the adaptation processes due to major 
structural changes, unexpected crisis and conclusions of trade agreements. 

The specific objectives for the EGF would address the workers' and farmers' needs during the 
adaptation processes: 

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1. - to provide support to the workers made redundant as a result of major structural change or 
unexpected crisis; 

-  to  improve  the  ability  of  redundant  workers  to  adapt  to  the  structural  change  and  to 
reintegrate into the labour market; 

2. - to support farmers changing or adjusting their previous agricultural activities; 

- to facilitate the adaptation of farmers to a new market situation following the conclusion by 
the Union of a trade agreement. 

The operational objective for the EGF is as follows: 

-  the  rate  of  assisted  workers  on  different  employment  contracts  and  coming  from  different 
sectors reintegrating into employment or new activities after 12 months should increase. 

4. 

AVAILABLE POLICY OPTIONS (ALTERNATIVE DELIVERY MECHANISM): 

This  section  assesses  three  policy  options  available  to  address  the  negative  impacts  that  the 
major structural changes in world trade patterns caused by globalisation or unexpected crisis 
or  conclusion  of  a  trade  agreement  may  have  on  employment:  option  1:  no  policy  change; 
option 2: option 1 and extension of the EGF to fixed-term and temporary workers; option 3: 
option 2 and extension to owner-managers of micro, small and medium-sized enterprises and 
self-employed persons (including farmers). 

Before detailing the outcome of this assessment, it should be highlighted that two additional 
options – which could have been theoretically considered – have been disregarded because of 
their irrelevance: the discontinuation of the EGF; and the option relating to the administrative 
improvements in the functioning of the EGF. 

The discontinuation of the EGF is not an available policy option because the Commission has 
stated  in  its  Communication  'A  Budget  for  Europe  2020'  that  the  EGF  would  continue  to 
provide  specific  support  to  workers  made  redundant  as  a  result  of  major  structural  changes 
over  the  programming  period  2014-2020.  The  abovementioned  Communication  was 
addressed  to  the  relevant  European  institutions  and  it  aimed  at  presenting  the  shape  of  the 
Union policies, with a particular emphasis on the Union financial instruments. It is therefore 
not  relevant  to  assess  an  option  (i.e.  the  discontinuation  of  the  EGF)  which  could  not  be 
implemented. 

The option relating to the administrative improvements in the functioning of the EGF, on the 
other hand, is not considered because of its limited scope. As part of its package of acts and 
documents related to the Multiannual Financial Framework 2014-2020, the Commission has 
adopted  a  draft  Interinstitutional  Agreement10 on  cooperation  in  budgetary  matters  which 
proposes the financial mechanism to be applied to the EGF for the period 2014-2020. Apart 
from  technical  details  (e.g.  the  deletion  of  a  reference  to  a  simplified  trialogue  between  the 
Commission and both branches of the Budgetary Authority), the Commission has proposed to 
maintain the current financial mechanism of the EGF.  

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COM(2011) 403 final, 29.6.2011. 

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To  ensure  flexibility  of  the  Fund  and  its  nature  of  a  'crisis  instrument',  the  Commission 
decided  to  exclude  the  EGF  from  the  financial  framework.  The  EGF  will  indeed  remain  a 
financial  instrument  which  will  be  mobilised  when  exceptional  shocks  caused  by 
globalisation or any unexpected crisis lead to mass redundancies. It is difficult to foresee how 
much  funding  will  be  required,  as  the  number  and  level  of  applications  depend  on 
unforeseeable  circumstances.  At  times  when  budgets  need  to  be  carefully  planned,  the 
Commission  has  considered  it  would  be  preferable  to  maintain  the  EGF  into  a  flexible 
reserve. As a consequence of this decision, the available possibilities to bring administrative 
improvements  in  the  functioning  of  the  EGF  are  limited  and  do  not  consist  in  a  coherent 
policy option addressing the objectives defined in section 3 of this document. The procedure 
to shorten the time gap between application for and payment of EGF support will be based on 
further streamlining of the application process. This will require the submission of a complete 
application, making the provision of additional information an exception and limiting the time 
for  Member  States  to  submit  this  information  and  Commission  to  assess  it.  In  addition,  the 
Commission will adopt its financing decision 'sous clause suspensive' at the same time as it 
adopts a Proposal for a Decision to mobilise the EGF. 

4.1. 

Option 1 

Option 1 corresponds to the no policy change and represents the base-line scenario with the 
EGF operating under its current rules as amended in 2009 by the so-called "crisis derogation", 
i.e.: 

• 

• 

• 

the  EGF  would  provide  assistance  to  workers  who  have  been  made  redundant  (i.e. 
whose  contract  of  employment  has  been  broken)  because  of  structural  changes  in 
world trade patterns or because of an unexpected crisis11; 

the EGF would be mobilised when at least 500 redundancies occur over a period of 
four  months  in  an  enterprise  and  its  suppliers  and  downstream  producers  or  over  a 
period of nine months in enterprises operating in the same economic sector (NACE 
Revision 2 Division) and in the same territory (one region or two contiguous regions 
at  NUTS  II  level).  If  none  of  those  two  criteria  were  met,  the  EGF  would  be 
mobilised  in  exceptional  circumstances  duly  substantiated  or  in  small  labour 
markets; 

the  EGF  would  co-finance  –  for  a  period  of  24  months  maximum  –  a  package  of 
personalised services consisting in active labour market policy measures up to 65 % 
of their cost and aiming at the redundant workers' reintegration into employment. 

Coherence 

Option  1  (i.e.  the  continuation  of  the  EGF  as  it  currently  operates)  would  not  have  any 
significant implication on the consistency of the Fund with other Union activities compared 
with the present situation. 

11 

When the EGF Regulation was amended in 2009, the scope of the Fund was extended to the workers 
made  redundant  because  of  the  global  financial  and  economic  crisis  that  was  affecting  the  economy 
across the Union. The baseline scenario consists in maintaining the current scope of the EGF, including 
in  its  "crisis"  aspects.  This  will  require  a  slight  rewording  of  the  current  rules  to  enable  the  EGF  to 
intervene in any type of crisis and not specifically to the one that arose in 2008-09. 

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The  EGF  would  pursue  the  objectives  defined  in  the  EU  2020  Strategy,  in  particular  its 
inclusive growth dimension. The EGF would contribute to the latter by increasing – through 
skills and training – the European workers' ability to adapt to changing labour markets and by 
helping  the  modernisation  of  welfare  systems  –  through  its  focus  on  active  labour  market 
measures.  Besides  the  EGF  would  remain  fully  consistent  with  the  interventions  of  the 
Structural  Funds:  the  EGF  would  continue  to  act  as  a  solidarity  and  crisis  instrument 
mitigating  the  impact  of  mass-redundancy  events  on  a  case-by-case  basis,  whereas  the 
Structural  Funds  would  continue  to  seek  the  achievement  of  structural  labour  reforms  via 
multi-annual operational programs. 

Effectiveness 

Option 1 would allow the EGF to demonstrate solidarity with, and provide support to, some 
categories of redundant workers during their adaptation to changing labour markets. However 
the EGF would still limit its assistance to workers legally made redundant, i.e. whose contract 
of employment would be broken. According to the "Employment in Europe 2010" Report the 
latter  represent  71 %  of  the  labour  force  in  the  Union.  Option  1  would  therefore  leave 
temporary  agency  workers  and  workers  with  fixed-term  contract  –  who  represent 
approximately  15 %  of  the  labour  force  in  the  Union  –  without  any  additional  assistance  if 
they  were  to  suffer  the  negative  impact  of  structural  changes  in  world  trade  patterns  or  any 
unexpected  crisis.  In  addition  option  1  would  in  practice  make  it  impossible  for  owner-
managers  of  micro,  small  and  medium-sized  enterprises  and  self-employed  workers 
(including  farmers)  to  benefit  from  EGF  assistance.  By  maintaining  the  current  eligibility 
criteria, it would leave a further 15,5 % of the European active population out of the eligible 
population of the EGF. 

Under option 1 the Commission would therefore not deliver on the policy objectives set out in 
the Communication 'A Budget for Europe 2020'. There is a need to go beyond the limitations 
imposed by the current eligibility criteria of the EGF and entailed by option 1. 

Relevance 

Under  option  1  the  scope  of  the  EGF  would  be  too  restricted  to  address  the  problems  and 
needs  of  all  categories  of  workers  negatively  affected  by  globalisation  or  any  unexpected 
crisis.  This  option  contains  the  risk  that  the  intervention  will  not  be  relevant  in  respect  to 
identified needs and problems of all target groups. 

Efficiency 

Under option 1 the EGF would remain a crisis instrument mobilised when mass-redundancy 
events which could be neither avoided nor expected occur. This makes it difficult to foresee 
how  much  funding  will  be  actually  spent,  as  the  number  of  applications  submitted  to  the 
Commission  and  the  number  of  workers  targeted  for  EGF  support  depend  on  unforeseeable 
circumstances. Experience acquired so far with the EGF suggests that the interventions under 
option  1  (i.e.  the  continuation  of  the  EGF  as  it  currently  operates)  would  amount  to 
EUR 20 million to EUR 150 million per year. 

The overall cost of operations of the EGF under option 1 cannot be precisely predicted over 
the  next  programming  period,  but  the  efficiency  of  that  option  can  be  better  assessed  on  a 
case-by-case  basis.  For  a  given  application,  the  EGF  co-finances  a  tailor-made  package  of 
active  labour  market  policy  measures  which  is  specifically  designed  to  facilitate  their 

EN 

10 

   EN 

 
reintegration  into  employment.  Those  measures  are  often  designed  in  close  cooperation 
amongst stakeholders (e.g. representatives of the workers and of the employers) and take into 
consideration the demand on local labour markets in order to further improve the redundant 
workers' reintegration. The interim report of the mid-term evaluation12, submitted by GHK in 
August 2011, does quote those elements amongst the success factors (emphasis added): 

• 

• 

• 

"Provision  of  intense  individualised  support.  Where  stakeholders  reported  that  a 
number of cases had been successful is in the key mechanism underpinning support 
and establishing a pathway to employment through a profiling service undertaken by 
deliverers.  This  had  two  main  impacts.  Firstly,  it  established  an  individual 
connection  between  beneficiaries  which  assured  them  that  they  were  going  to  be 
assisted. Secondly, it provided beneficiaries with a personalised plan which they 
could work with the PES [Public Employment Service] to implement. 

Provision of a package of measures. This was seen as key to success in a number of 
cases. The mix of measures was very important in order to provide a differentiated 
response  to  workers  with  varying  profiles.  The  strength  of  the  EGF  lies  in  the 
flexible combination of several offers. As illustrated in the individual cases, many of 
these offers are already provided in mainstream employment service measures. It is, 
therefore, imperative that EGF cases develop a mix which addresses the needs of 
individuals and compliments existing provision. 

Involvement  of  a  wide  range  of  partners. Stakeholders  consulted in many of the 
cases  considered  highlighted  the  catalytic  effect  that  EGF  had  in  harnessing  the 
Public Employment Service to mobilise resources and provide special attention to 
particular groups of workers." 

Finally  experience  gathered  so  far  shows  that  the  costs  for  implementing  the  EGF  (i.e. 
preparation  of  an  application,  implementation  of  the  measures,  management  and  control  of 
expenditure, publicity…) rarely exceed 4 % of the total costs of the measures. 

Under option 1 the EGF would remain an efficient instrument to support workers affected by 
globalisation or any unexpected crisis provided those workers have been made redundant (i.e. 
their  contract  of  employment  broken).  This  option  would  nonetheless  fail  to  achieve  the 
objectives  of  the  proposal  as  regards  temporary  agency  workers,  workers  with  fixed-term 
contracts, owner-managers of micro, small and medium-sized enterprises and self-employed 
workers (including farmers). 

4.2. 

Option 2 

Option  2  corresponds  to  the  combination  of  option  1  and  an  extension  of  the  eligible 
population of the EGF, i.e.: 

• 

12 

the  EGF  would  provide  assistance  to  workers  who  have  been  made  redundant  or  – 
for those who are temporary agency workers or workers with fixed-term contracts – 

Mid-term evaluation of the European Globalisation Adjustment Fund: Interim Report. 

EN 

11 

   EN 

 
                                                 
• 

• 

whose contract of employment have not been renewed because of structural changes 
in world trade patterns or because of an unexpected crisis13; 

the  EGF  would  be  mobilised  when  at  least  500  redundancies  (including  temporary 
agency  workers  and  workers  with  fixed  term  contracts  when  their  contract  is  not 
renewed)  occur  over  a  period  of  four  months  in  an  enterprise  and  its  suppliers  and 
downstream producers or over a period of nine months in enterprises operating in the 
same  economic  sector  (NACE  Revision  2  Division)  and  in  the  same  territory  (one 
region  or  two  contiguous  regions  at  NUTS  II  level).  If  none  of  those  two  criteria 
were  met,  the  EGF  would  be  mobilised  in  exceptional  circumstances  duly 
substantiated or in small labour markets; 

the  EGF  would  co-finance  –  for  a  period  of  24  months  maximum  –  a  package  of 
personalised services consisting in active labour market policy measures up to 65 % 
of their cost and aiming at the redundant workers' reintegration into employment. 

The  temporary  agency  workers  and  the  workers  with  fixed-term  contracts  targeted  under 
option  2  would  be  the  ones  affected  by  a  collective  dismissal,  together  with  workers  with 
open-ended  contracts.  They  would  be  identified  by  the  Member  State  –  when  preparing  its 
application for EGF funding – on the grounds that their contract of employment would have 
expired  and  would  have  not  been  renewed  during  the  reference  period  of  the  EGF  (i.e.  the 
period of four or nine months during which the redundancies are being calculated). 

Coherence 

Option  2  (i.e.  the  extension  of  the  eligible  population)  would  not  have  any  significant 
implication  on  the  consistency  of  the  Fund  with  other  Union  activities  compared  with  the 
present situation. 

The  EGF  would  pursue  the  objectives  defined  in  the  EU  2020  Strategy,  in  particular  its 
inclusive  growth  dimension.  The  EGF  will  contribute  to  the  latter  by  increasing  –  through 
skills and training – the European workers' ability to adapt to changing labour markets and by 
helping  the  modernisation  of  welfare  systems  –  through  its  focus  on  active  labour  market 
measures.  Besides  the  EGF  would  remain  fully  consistent  with  the  interventions  of  the 
Structural  Funds:  the  EGF  would  continue  to  act  as  a  solidarity  and  crisis  instrument 
mitigating  the  impact  of  mass-redundancy  events  on  a  case-by-case  basis,  whereas  the 
Structural  Funds  would  continue  to  seek  the  achievement  of  structural  labour  reforms  via 
multi-annual operational programs. 

Effectiveness 

Option 2 would allow the EGF to demonstrate solidarity with, and provide support to, some 
categories of redundant workers during their adaptation to changing labour markets. The EGF 
would no longer limit its assistance to workers legally be made redundant, i.e. whose contract 

13 

When the EGF Regulation was amended in 2009, the scope of the Fund was extended to the workers 
made  redundant  because  of  the  global  financial  and  economic  crisis  that  was  affecting  the  economy 
across the Union. The baseline scenario consists in maintaining the current scope of the EGF, including 
in  its  "crisis"  aspects.  This  will  require  a  slight  rewording  of  the  current  rules  to  enable  the  EGF  to 
intervene in any type of crisis and not specifically to the one that arose in 2008-09. 

EN 

12 

   EN 

 
                                                 
of employment would be broken. It would also provide support to temporary agency workers 
and workers with fixed-term contract if their contracts were not renewed because of structural 
changes  in  world  trade  patterns  or  any  unexpected  crisis.  By  eliminating  the  current 
discrimination  amongst  redundant  workers  affected  by  globalisation  –  according  to  whether 
they  have  an  open-ended  contract  of  employment  –  the  EGF  would  further  demonstrate  the 
Union solidarity towards a larger number of workers. 

It is not possible to precisely predict the number of temporary agency workers and workers 
with fixed-term contracts who could benefit from the EGF under option 2 because the EGF 
would  remain  a  crisis  instrument  mobilised  when  mass-redundancy  events  which  could  be 
neither avoided nor expected occur. This makes it difficult to foresee how much funding will 
be actually spent, as the number of applications submitted to the Commission and the number 
of  workers  targeted  for  EGF  support  depend  on  unforeseeable  circumstances.  However,  the 
potential  eligible  population  of  the  Fund  would  increase  by  approximately  33,3 million 
workers  as  13,5 %  of  the  Union  working  population  in  2009  were  workers  with  fixed-term 
contract and 1,5 % were temporary agency workers14. In addition option 2 would enable the 
EGF to provide assistance to a category of workers – the temporary ones – who face the most 
precarious living conditions and need to adapt themselves very rapidly to the labour demand 
from one mission to another. As a consequence this option would bring the EGF closer to its 
objective  of  solidarity  both  in  quantitative  terms  (i.e.  the  number  of  workers  potentially 
benefiting from its support would increase) and qualitative terms (i.e. the EGF support would 
also be provided to those workers with the least job security). 

The recourse to the possibility offered by option 2 to provide EGF-co-financed assistance to 
temporary agency workers and workers with fixed-term contracts will largely depend on the 
applicant  Member  States.  In  order  to  make  this  new  provision  effective  the  Commission 
services  would  raise  awareness  amongst  the  EGF  Contact  Persons15 and  stakeholders.  This 
new provision would be assessed – and its implementation steered if necessary - following the 
mid-term evaluation of the future EGF which will be due by 30 June 2018 according to the 
draft Proposal for a Regulation on the EGF 2014-2020. 

On  the  other  hand,  option  2  would  in  practice  make  it  impossible  for  owner-managers  of 
micro, small and medium-sized enterprises and self-employed workers (including farmers) to 
benefit from EGF assistance. By not extending the current eligibility criteria to the latter, it 
would  leave  15,5 %  of  the  European  active  population  out  of  the  eligible  population  of  the 
EGF. 

Under option 2 the Commission would therefore partly deliver on the policy objectives set out 
in  the  Communication  'A  Budget  for  Europe  2020'.  There  is  a  need  to  go  beyond  the 
limitations entailed by option 2. 

Relevance 

14 
15 

'Employment in Europe' report. 
The EGF Contact Persons are the national experts designated by the Member States – usually working 
for  the  Ministry  responsible  for  Employment  –  responsible  for  implementing  the  EGF  in  their 
respective  countries  and  meeting  twice  a  year  to  discuss  development  in  the  implementation  of  the 
EGF. 

EN 

13 

   EN 

 
                                                 
Under  option  2  the  scope  of  the  EGF  would  be  too  restricted  to  address  the  problems  and 
needs  of  all  categories  of  workers  negatively  affected  by  globalisation  or  any  unexpected 
crisis.  This  option  contains  the  risk  that  the  intervention  will  not  be  relevant  in  respect  to 
identified needs and problems of all target groups. 

Efficiency 

Based on the assumption that temporary agency workers and workers with fixed-term contract 
would increase the number of workers receiving EGF assistance by 15 % (i.e. the share they 
represent  amongst  all  employees of  the  Union  and  which  is  currently  not  eligible  under  the 
EGF)  and  that  the  amount  of  EGF  contributions  would  consequently  increase  in  the  same 
to 
proportion, 
EUR 172 million per year. 

interventions  under  option  2  would  amount 

to  EUR 23 million 

the 

The overall cost of operations of the EGF under option 2 cannot be precisely predicted over 
the  next  programming  period,  but  the  efficiency  of  that  option  can  be  better  assessed  on  a 
case-by-case  basis.  For  a  given  application,  the  EGF  co-finances  a  tailor-made  package  of 
active  labour  market  policy  measures  which  is  specifically  designed  to  facilitate  their 
reintegration  into  employment.  Those  measures  are  often  designed  in  close  cooperation 
amongst stakeholders (e.g. representatives of the workers and of the employers) and take into 
consideration the demand on local labour markets in order to further improve the redundant 
workers' reintegration. The interim report of the mid-term evaluation16, submitted by GHK in 
August 2011, does quote those elements amongst the success factors (emphasis added): 

• 

• 

• 

"Provision  of  intense  individualised  support.  Where  stakeholders  reported  that  a 
number of cases had been successful is in the key mechanism underpinning support 
and establishing a pathway to employment through a profiling service undertaken by 
deliverers.  This  had  two  main  impacts.  Firstly,  it  established  an  individual 
connection  between  beneficiaries which assured them that they were not going to 
be  assisted.  Secondly,  it  provided  beneficiaries  with  a  personalised  plan  which 
they could work with the PES [Public Employment Service] to implement. 

Provision of a package of measures. This was seen as key to success in a number of 
cases. The mix of measures was very important in order to provide a differentiated 
response  to  workers  with  varying  profiles.  The  strength  of  the  EGF  lies  in  the 
flexible combination of several offers. As illustrated in the individual cases, many of 
these offers are already provided in mainstream employment service measures. It is, 
therefore, imperative that EGF cases develop a mix which addresses the needs of 
individuals and compliments existing provision. 

Involvement  of  a  wide  range  of  partners. Stakeholders  consulted in many of the 
cases  considered  highlighted  the  catalytic  effect  that  EGF  had  in  harnessing  the 
Public Employment Service to mobilise resources and provide special attention to 
particular groups of workers." 

Finally  experience  gathered  so  far  shows  that  the  costs  for  implementing  the  EGF  (i.e. 
preparation  of  an  application,  implementation  of  the  measures,  management  and  control  of 
expenditure, publicity…) rarely exceed 4 % of the total costs of the measures. 

16 

Mid-term evaluation of the European Globalisation Adjustment Fund: Interim Report. 

EN 

14 

   EN 

 
                                                 
Under  option  2  the  EGF  would  be  an  efficient  instrument  to  support  workers  affected  by 
globalisation  or  any  unexpected  crisis  without  any  distinction  based  on  their  employment 
status. Besides since mass-redundancy events often affect temporary workers in the first place 
and workers with open-ended contracts in the second, it is expected that under option 2, the 
EGF  would  provide  assistance  to  both  categories  of  workers  through  a  single  intervention. 
The  costs  for  implementing  the  EGF  related  to  each  application  would  therefore  be  spread 
over a larger number of workers and increase the efficiency of the Fund. 

Option 2 would nonetheless fail to achieve the objectives of the proposal as regards owner-
managers  of  micro,  small  and  medium-sized  enterprises  and  self-employed  workers 
(including farmers). 

4.3. 

Option 3 

Option 3 corresponds to the combination of option 2 and a further extension of the eligible 
population and set of eligible actions of the EGF, i.e.: 

• 

• 

• 

• 

in  addition  to  workers  who  have  been  made  redundant  or  whose  contract  of 
employment  have  not  been  renewed,  the  EGF  would  provide  assistance  to  owner-
managers of micro, small and medium-sized enterprises and self-employed workers 
who cease their activities, and farmers who change or adjust their activities  

the  EGF  would  be  mobilised  when  at  least  500  redundancies  (including  temporary 
agency workers and workers with fixed-term contracts) occur over a period of four 
months in an enterprise and its suppliers and downstream producers or over a period 
of  nine  months  in  enterprises  operating  in  the  same  economic  sector  (NACE 
Revision 2 Division) and in the same territory (one region or two contiguous regions 
at  NUTS  II  level).  If  none  of  those  two  criteria  were  met,  the  EGF  would  be 
mobilised  in  exceptional  circumstances  duly  substantiated  or  in  small  labour 
markets; 

for workers made redundant (including temporary agency workers and workers with 
fixed-term  contracts)  the  EGF  would  co-finance  –  for  a  period  of  24  months 
maximum  –  a  package  of  personalised  services  consisting  in  active  labour  market 
policy measures and aiming at the redundant workers' reintegration into employment. 
The  co-funding  rate  will  be  modulated,  with  a  50 %  contribution  to  the  cost  of  the 
package and its implementation as the norm, and the possibility to raise this rate to 
65 % in the case of applications submitted by those Member States on the territory of 
which  at  least  one  region  at  NUTS  II  level  is  eligible  under  the  "Convergence" 
objective of the Structural Funds 

for  owner-managers  of  micro,  small  and  medium-sized  enterprises  and  self-
employed workers (including farmers) the EGF would co-finance – for a period of 24 
months maximum – a set of measures including active labour market measures with 
an emphasis on the acquisition of training, skills and advisory services enabling them 
to adjust their activities, including carrying out new activities. Those measures would 
also  support  –  to  a  limited  extent  –  the  initial  investments  in  these  new  activities, 
allowing them to secure their livelihoods. 

EN 

15 

   EN 

 
The  owner-managers  of  micro,  small  and  medium-sized  enterprises  and  self-employed 
workers (including farmers) targeted under option 3 would be identified by the Member State 
on the grounds that they would change or adjust their previous activities. 

Taking  into  account  the  specificities  of  the  agricultural  sector,  the  Commission  would 
designate  –  on  the  basis  of  data  analyses  carried  out  by  its  departments  –  the  agricultural 
sectors and/or products and regions affected by new trade agreements. It would also set the 
reference  periods  during  which  farmers  could  be  counted  towards  the  EGF  triggering 
mechanism and establish the deadline by which applications would have to be submitted. 

Coherence  

Option 3 (i.e. the further extension of the eligible population and set of eligible actions of the 
EGF)  would  positively  affect  the  consistency  of  the  Fund  with  other  Union  activities 
compared with the present situation. 

The  EGF  would  pursue  the  objectives  defined  in  the  EU  2020  Strategy,  in  particular  its 
inclusive  growth  dimension.  The  EGF  will  contribute  to  the  latter  by  increasing  –  through 
skills and training – the European workers' ability to adapt to changing labour markets and by 
helping  the  modernisation  of  welfare  systems  –  through  its  focus  on  active  labour  market 
measures.  Besides  the  EGF  would  remain  fully  consistent  with  the  interventions  of  the 
Structural  Funds:  the  EGF  would  continue  to  act  as  a  solidarity  and  crisis  instrument 
mitigating  the  impact  of  mass-redundancy  events  on  a  case-by-case  basis,  whereas  the 
Structural  Funds  would  continue  to  seek  the  achievement  of  structural  labour  reforms  via 
multi-annual operational programs. 

Furthermore the extension of the eligible population of the EGF to farmers would fit the latter 
in line with the objectives of the rural development policy, in particular the interventions of 
the  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  in  the  field  of  vocational 
training, advisory services and business start-up. Both instruments would provide assistance 
to farmers. However, their respective approaches would be different: the EAFRD would aim 
at structural improvements in the field of rural development, whereas the EGF would act as a 
solidarity  and  crisis  instrument  mitigating  the  negative  impact  of  new  trade  agreements  on 
specific agricultural activities. 

Effectiveness 

Option  3  would  allow  the  EGF  to  demonstrate  solidarity  with,  and  provide  support  to,  all 
categories of redundant workers during their adaptation to changing labour markets. The EGF 
would  no  longer  limit  its  assistance  to  workers  made  redundant  or  whose  contracts  of 
employment  have  not  been  renewed,  since  the  Fund  would  provide  assistance  to  self-
employed workers. By eliminating the current discrimination between redundant workers and 
self-employed workers would allow the EGF to further demonstrate Union solidarity. 

It is not possible to precisely predict the number of managers  of micro, small  and  medium-
sized enterprises and self-employed workers (including farmers) who could benefit from the 
EGF under option 3. The EGF would indeed remain a crisis instrument mobilised when mass-
redundancy events which could be neither avoided nor expected occur. However, compared 
with option 2, the potential eligible population of the Fund would increase by approximately 

EN 

16 

   EN 

 
34,5 million persons as 15,5 % of the Union working population in 2009 were self-employed 
workers (including farmers)17. 

The recourse to the possibility offered by option 3 to provide EGF-co-financed assistance to 
owner-managers  of  micro,  small  and  medium-sized  enterprises  and  self-employed  workers 
(including farmers) will largely depend on the applicant Member States. In order to make this 
new  provision  effective  the  Commission  services  would  raise  awareness  amongst  the  EGF 
Contact  Persons  and  stakeholders.  This  new  provision  would  be  assessed  –  and  its 
implementation  steered  if  necessary  -  following  the  mid-term  evaluation  of  the  future  EGF 
which  will  be  due  by  30  June  2018  according  to  the  draft  Proposal  for  a  Regulation  on  the 
EGF 2014-2020. 

Under  option  3  the  Commission  would  deliver  on  the  policy  objectives  set  out  in  the 
Communication 'A Budget for Europe 2020'. 

Relevance 

Under option 3 the scope of the EGF would address the problems and needs of all categories 
of workers negatively affected by globalisation or any unexpected crisis. This option would 
therefore be relevant in respect to identified needs and problems of all target groups. 

Efficiency 

The overall cost of operations of the EGF under option 3 cannot be precisely predicted over 
the  next  programming  period,  but  the  efficiency  of  that  option  can  be  better  assessed  on  a 
case-by-case  basis.  For  a  given  application,  the  EGF  co-finances  a  tailor-made  package  of 
active  labour  market  policy  measures  which  is  specifically  designed  to  facilitate  their 
reintegration  into  employment.  Those  measures  are  often  designed  in  close  cooperation 
amongst stakeholders (e.g. representatives of the workers and of the employers) and take into 
consideration the demand on local labour markets in order to further improve the redundant 
workers' reintegration. The interim report of the mid-term evaluation18, submitted by GHK in 
August 2011, does quote those elements amongst the success factors (emphasis added): 

• 

• 

17 
18 

"Provision  of  intense  individualised  support.  Where  stakeholders  reported  that  a 
number of cases had been successful is in the key mechanism underpinning support 
and establishing a pathway to employment through a profiling service undertaken by 
deliverers.  This  had  two  main  impacts.  Firstly,  it  established  an  individual 
connection  between  beneficiaries which assured them that they were not going to 
be  assisted.  Secondly,  it  provided  beneficiaries  with  a  personalised  plan  which 
they could work with the PES [Public Employment Service] to implement. 

Provision of a package of measures. This was seen as key to success in a number of 
cases. The mix of measures was very important in order to provide a differentiated 
response  to  workers  with  varying  profiles.  The  strength  of  the  EGF  lies  in  the 
flexible combination of several offers. As illustrated in the individual cases, many of 
these offers are already provided in mainstream employment service measures. It is, 

'Employment in Europe' report. 
Mid-term evaluation of the European Globalisation Adjustment Fund: Interim Report. 

EN 

17 

   EN 

 
                                                 
therefore, imperative that EGF cases develop a mix which addresses the needs of 
individuals and compliments existing provision. 

• 

Involvement  of  a  wide  range  of  partners. Stakeholders  consulted in many of the 
cases  considered  highlighted  the  catalytic  effect  that  EGF  had  in  harnessing  the 
Public Employment Service to mobilise resources and provide special attention to 
particular groups of workers." 

The same approach would apply to the package of measures which the EGF would co-finance 
in  favour  of  owner-managers  of  micro,  small  and  medium-sized  enterprises  and  self-
employed workers (including farmers). 

Finally  experience  gathered  so  far  shows  that  the  costs  for  implementing  the  EGF  (i.e. 
preparation  of  an  application,  implementation  of  the  measures,  management  and  control  of 
expenditure, publicity…) rarely exceed 4 % of the total costs of the measures. 

Under option 3 the EGF would be an efficient instrument to support all categories of workers 
affected  by  globalisation,  any  unexpected  crisis  or  new  trade  agreements  without  any 
distinction based on their employment relationship. It is therefore expected that under option 
3,  the  EGF  would  provide  assistance  to  all  categories  of  workers  through  a  single 
intervention. The costs for implementing the EGF related to each application would therefore 
be spread over a larger number of workers and increase the efficiency of the Fund. 

4.4. 

Comparing the options  

All  three  options  could  help  to  achieve  the  objectives  to  different  degrees.  However,  the 
differences would be significant as options 1 and 2 are expected to limit the effectiveness of 
the  proposal  as  they  do  not  address  the  specific  objective  relating  to  farmers  negatively 
affected by new trade agreements. As regards efficiency, the greater eligible population of the 
EGF offered under option 3 – i.e. workers with open-ended contracts, plus temporary agency 
workers,  plus  workers  with  fixed-term  contracts,  plus  self-employed  persons  –  would  bring 
each  EGF  intervention  closer  to  a  critical  mass  in  terms  of  targeted  workers  and  financial 
contributions. It is also important to highlight the strong Union interest in achieving the MFF 
objectives.  Therefore,  taking  into  account  the  limitations  of  option  1  and  2,  option  3  is  the 
preferred option. 

Effectiveness 

Efficiency 

Relevance 

Overall 
Assessment 

Option 1 

Option 2 

Option 3 

+ 

++ 

+++ 

+ 

++ 

+++ 

+ 

++ 

+++ 

- 

+ 

++ 

EN 

18 

   EN 

 
 
 
 
5. 

IMPLEMENTATION OF THE PREFERRED OPTION  

5.1. 

Structure and implementation 

The budgetary arrangements are covered under point 13 in the section B.4 of the draft Inter-
institutional Agreement19 between the European Parliament, the Council and the Commission 
on budgetary discipline and sound financial management. Similarly to the procedure applied 
under Regulation (EC) No 1927/2006, every application submitted by the Member State will 
require a substantial assessment by the Commission which afterward will make a Proposal for 
a Decision of the European Parliament and of the Council. After the Decision is adopted by 
both arms of the Budgetary Authority, the Commission will take a financing Decision which 
will  allow  paying  out  the  approved  contribution  to  the  applicant  Member  State.  Whenever 
possible, the process will be shortened and streamlined.  

In  order  to  ensure  the  European  dimension  of  the  EGF  an  application  for  EGF  support  for 
workers  can  be  triggered  when  the  number  of  redundancies  reaches  a  minimum  threshold. 
Experience with the functioning of Regulation (EC) No 1927/2006 has shown that a threshold 
of 500 redundancies within a given reference period is an acceptable threshold, in particular 
taking into account the possibility to submit applications for a lower number of redundancies 
in small labour markets or in exceptional circumstances. 

For the agricultural sector an EGF application would be triggered on a different basis. Ex-ante 
information about the sectors and / or products likely to be affected by increased imports as a 
direct  result  of  trade  agreements  will  be  provided  in  the  analysis  carried  out  by  the 
Commission departments for the trade negotiations. Once the trade agreement is initialled, the 
Commission  departments  further  check  the  sectors  or  products  for  which  a  substantial 
increase  in  imports  and  a  significant  drop  in  prices  are  expected  and  will  assess  the  likely 
effect  on  sectoral  income.  On  this  basis  the  Commission  would  designate  (by  adopting 
delegated  acts)  agricultural  sectors  or  products  and  regions  as  eligible  for  possible  EGF 
support.  Member  States  would  have  the  possibility  to  submit  applications  for  an  EGF 
contribution provided that they can prove that eligible sectors or  products have  experienced 
significant  trade-related  losses,  that  farmers  operating  in  these  sectors  are  affected  and  that 
they have identified and targeted the affected farmers. 

Initiating,  designing  and  implementing  the  EGF  active  labour  measures  will  involve  the 
national and regional authorities in accordance with the principle of subsidiarity. Such process 
will mobilise stakeholders at all levels, including the social partners. The Commission would 
supervise  the  implementation  of  the  measures  and  approve  the  interim  and  final  reports 
submitted by the Member States.  

5.2. 

Active vs. passive measures 

The focus of the EGF is on active labour market measures aimed at re-integrating dismissed 
workers  rapidly  into  stable  employment.  As  does  Regulation  (EC)  No  1927/2006,  the  EGF 
will  continue  to  provide  a  financial  contribution  for  a  package  of  active  labour  market 
measures. It cannot contribute to the funding of passive measures as these are not compatible 

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with  the  growth  and  employment  objectives  of  the  Europe  2020  strategy.  Allowances  may 
only be included if they are designed as incentives to facilitate the participation of dismissed 
workers  in  active  labour  market  policy  measures.  In  order  to  ensure  a  reasonable  balance 
between genuinely active labour market policy measures and 'activated' allowances, the share 
of allowances in a coordinated package of active labour market measures is capped.  

5.3. 

Volume  of  appropriations,  human  resources  and  other  administrative 
expenditure  

As  far  as  the  use  of  the  budget  is  concerned  (maximum  EUR 3 billion  for  the  period  2014-
2020), up to EUR 2,5 billion can be used for agriculture. 

The funds may also cover the technical assistance at the initiative of the Commission, subject 
to  a  ceiling  of  0,50 %  of  the  annual  amount  of  the  EGF.  It  may  be  used  to  finance  the 
preparation,  monitoring,  information  and  creation  of  a  knowledge  base  relevant  to  the 
implementation of the EGF, as well as administrative and technical support, audit control and 
evaluation activities necessary to implement the EGF Regulation.  

In order to ensure that the Union’s expression of solidarity with workers is not hampered by a 
lack of Member State co-funding resources, the co-funding rate should be modulated, with a 
maximum 50 % contribution to the cost of the package and its implementation as the norm, 
and  the  possibility  to  raise  this  rate  to  up  to  65 %  in  the  case  of  applications  submitted  by 
those Member States on the territory of which at least one region at NUTS II level is eligible 
under the "Convergence" objective of the Structural Funds.  

Expenditure  should  be  eligible  either  from  the  date  on  which  a  Member  State  incurs 
administrative  expenditure  for  implementing  the  EGF  or  from  the  date  on  which  a  Member 
State starts to provide personalised services or, in the case of farmers, from the date set in a 
Commission's delegated act.  

In  order  to  cover  the  needs  arising  in  particular  in  non-agricultural  sectors  during  the  final 
months of each year, it is necessary to ensure that at least one quarter of the annual maximum 
amount  of  the  EGF  remains  available  on  1  September.  Financial  contributions  made  during 
the remainder of the year should be allocated taking into account the overall ceiling laid down 
for support to farmers in the Multiannual Financial Framework. 

Furthermore,  the  management  of  the  EGF  will  entail  related  administrative  work  by  the 
departments of the Commission. By expanding the scope of the Fund, it is expected to receive 
more  applications  from  the  Member  States  than  under  the  current  intervention  criteria  that 
will need to be assessed and followed by the officials of the Commission.  

6. 

LESSONS LEARNT FROM THE PAST 

The evaluation of the effectiveness and sustainability of the EGF is being carried out by GHK 
in  the  ongoing  mid-term  evaluation.  The  interim  report20 submitted  by  the  GHK  describes 
first  findings  about  the  applications  received  under  the  eligibility  criteria  before  the  crisis-
related  amendments.  It  should  be  highlighted  that  those  preliminary  findings  relate  to 

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Mid-term evaluation of the European Globalisation Adjustment Fund: Interim Report . 

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applications which were submitted before the entry into force of the amending Regulation of 
2009. The latter brought improvements to the rules governing the EGF and addressed most of 
the  issues  detailed  below  (e.g.  period  of  implementation  extended  from  12  to  24  months; 
possibility to provide assistance to workers dismissed before and after the reference period). 
The  Proposal  for  a  Regulation  on  the  EGF  2014-2020  aims  at  improving  the  EGF  and  at 
addressing the remaining issues discovered in the course of the ongoing mid-term evaluation. 

The first findings described by GHK are as follows: 

"The aims and objectives formulated for EGF intervention at Member State level were closely 
related  to  the  intentions  of  the  EGF  as  an  instrument,  i.e.  to  provide  assistance  in  crisis 
situations resulting from restructuring linked to globalisation in order to ensure the rapid and 
sustainable re-integration of affected workers into the labour market. Another goal is to help 
localities  affected  by  preventing  significant  rises  in  unemployment  and  potential  social 
tensions. Re-integration was largely to be achieved through a mixture of measures focussing 
on a personalised approach including up-skilling and wider personal development, as well as 
support for mobility, employment creation or self-employment. 

Over 50 % of stakeholders consulted considered that the goals set out in the EGF application 
were  either  fully  or  almost  fully  achieved  (54 %).  A  further  39 %  considered  that  they  had 
been partially achieved, with only 7 % arguing that goals had not been achieved. It is notable 
that  90%  of  respondents  considered  the  measures  carried  out  to  be  either  very  relevant  or 
relevant to the needs redundant workers. 

6.1. 

Helping and hindering factors 

When looking at factors helping or hindering the achievement of original project intentions, it 
is possible to point to factors external to the EGF architecture, as well as factors internal to the 
EGF. 

External factors include: 

The  nature  of  the  beneficiary  group.  In  most  cases  considered  as  part  of  the  mid-term 
evaluation  the  beneficiary  group  faced  a  range  of  barriers  to  reintegration  to  the  labour 
market. The most significant of these issues were low skills and low confidence levels as well 
as age or gender profile. These issues combined to mean that labour market reintegration is a 
long term challenge, with EGF funding potentially too short to achieve lasting outcomes.  

Local  economic  climate.  In  many  of  the  cases  evaluated  the  company  closure  related  to  a 
dominant  local  employer  in  a  declining  sector,  with  relatively  low  levels  of  employment  in 
growing sectors. Indeed, many of the local labour markets concerned could be characterised 
as  operating  in  a  state  of  low-skill  equilibrium  –  with  low  demand  for  high  skilled  labour 
driving  low  supply  (or  vice-versa).  Related  to  this  issue  there  were  also  some  cases  where 
beneficiaries  reported  a  reluctance  to  retrain  for  a  job  or  sector  which  would  provide  them 
with lower wages than their previous employment. 

Global  economic  climate.  Taking  into  account  that  the  general  economic  climate  has  been 
worsening during the implementation of the EGF and afterwards, improving the employment 
situation  of  dismissed  workers  supported  by  EGF  was  very  challenging.  Many  companies 
were seeking to make further redundancies during this period and those that were taking on 
additional staff had a greater level of choice from which to appoint.  

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Internal factors include: 

- The length of funding available (12 months during the time period being evaluated – this has 
already  been  extended  to  24  months),  which  –  as  mentioned  above  –  made  it  difficult  to 
achieve sustainable employment outcomes for those beneficiaries with the greatest barriers to 
re-entering an increasingly challenging labour market; 

-  The  delay  in  applications  being  approved  was  noted  in  a  number  of  cases  as  a  significant 
challenge.  As  it  is  generally  considered  that  early  invention  is  vital  to  achieve  positive  and 
sustainable  outcomes  for  dismissed  workers,  this  is  something  which  impacted  directly  on 
outcomes for beneficiaries in the cases. It was considered to detrimental to the vision of the 
EGF as a ‘rapid response service’ to provide the funding at the locality 12 months (and later) 
after the redundancies have occurred. In many cases, where national authorities were unable 
to  start  programme  with  their  own  funding  mechanisms,  this  led  to  implementation  periods 
becoming  compressed,  making  it  difficult  to  provide  significant  measures  particularly  with 
regard to training; 

- The rigidity was noted in terms of the fact that additional beneficiaries, dismissed soon after 
the  application  was  submitted  and  then  approved,  could  not  be  included  in  the  funded 
provision.  This  was  confusing  for  the  dismissed  workers  concerned  who  could  not  access 
provision available to former colleagues; 

- The former is an issue impacting on perception of solidarity and equality. These core goals 
of the EGF can be considered to be insufficiently implemented, particularly in relation to the 
involvement of supplier companies and individuals on non-standard contracts in the measures. 
The latter can partly be attributed to the nature of restructuring processes, which often develop 
over a period of time and often include companies’ shedding their “flexible workforce” early 
on, meaning that they are often no longer with the company if and when mass redundancies 
occur; 

- National capacity and information sharing issues. In some cases this was the first experience 
for partners of delivering Commission funded provision, therefore monitoring and reporting 
requirements took some time to understand. Of more consequence, however, was the fact that 
delivery  challenges  were  encountered  where  partners  were  unclear  about  time  periods  of 
eligibility and activities eligible for EGF funding.  

6.2. 

Impact of measures on participants, localities and implementing bodies 

The  outcomes  and  success  (or  otherwise)  of  EGF  cases  is  largely  assessed  by  looking  at 
employment  integration  outcomes.  This  is  clearly  an  important  indicator,  but  should  not  be 
considered  as  the  sole  measure  of  benefits  achieved.  Other,  less  tangible  outcomes  relate  to 
distance  travelled  towards  the  labour  market,  even  if  sustainable  labour  market  integration 
was  not  achieved  during  or  within  a  measured  period  following  EGF  intervention.  Many 
stakeholders  remarked  that  beneficiaries  had  significantly  increased  in  confidence,  renewed 
and improved their job search skills and upgraded their skills and capacities, making it more 
likely for them to find employment. 

It is notable that employment outcomes achieved vary widely within and across countries, and 
within and across sectors and years of implementation, demonstrating that outcomes achieved 
are closely linked to local circumstances and the effectiveness of the implementation model 
and  partnership.  Overall,  integration  rates  varied  widely  between  4-78%.  For  illustrative 

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purposes,  in  Spain  (with  3  cases)  it  ranged  from  15-40%,  in  the  textiles  sector  (in  different 
Union countries) from 4-65% and in year 2008 from 6-78%.  

On  the  whole  those  with  higher  underlying  skills  and  qualification  levels  were  significantly 
more  likely  to  find  new  employment.  Those  with  very  low  or  outdated  skill  levels 
experienced  more  difficulties  and  the  same  is  true  for  women  with  caring  responsibilities, 
whose flexibility in relation to working hours might be more limited. Other hindering factors 
to successful integration include the specific local labour market situation (also influenced by 
the position in the economic cycle). 

Case  study  research  in  the  majority  of  cases  demonstrates  the  significant  link  between  the 
national restructuring framework and the design and implementation of EGF measures (e.g. in 
relation to the public policy framework particularly for active labour market policy, the role 
and  resourcing  of  the  PES,  the  role  played  by  the  social  partners  and  the  legislative 
framework etc). 

It is difficult to disentangle the effectiveness of different measures implemented in relation to 
employment  and  integration  outcomes  as  it  was  generally  a  package  of  measures  which 
service to achieve these goals. Some analysis which was possible on the basis of detailed data 
in  Lithuania  shows  that  any  single  given  measures  on  its  own  was  less  successful  than  the 
receipt of a package of measures. Of particular relevance were the provision of tailor made, 
personalised  assistance  and  access  to  training.  Here  it  is  important  to  note  that,  in  line  with 
European  Guidelines,  many  PES  have  been  actively  working  to  increase  the  provision  of 
personalised assistance to job seekers (through profiling, counselling and the development of 
individual  action  plans),  there  is  a  significant  difference  between  this  support  and  that 
provided by PES or other nominated agencies for EGF beneficiaries. The key differences are: 

- A lower ratio between counsellors and jobseekers: in many national PES this ratio is at best 
1:150 and at worst 1:700. EGF (and other support) in many cases contributed to reducing this 
ratio  significantly  (e.g.  the  ratio  between  transfer  company  counsellors  and  beneficiaries  in 
the German EGF cases was between 1:30 and 1:50); 

-  A  higher  frequency  of  personal  meetings:  while  many  registered  unemployed  jobseekers 
meet  their  PES  counsellor  once  a  month  or  even  less  frequently,  contact  was  much  more 
regular and often possible at the request of the beneficiary (sometimes even twice a week); 

-  Availability  of  this  service  to  all  workers  affected  irrespective  of  their  profile,  previous 
employment status or length of unemployment: in many countries, profiling and personalised 
PES  advice  is  only  available  to  job  seekers  meeting  certain  conditions  (usually  related  to 
length of unemployment). EGF support therefore allows for earlier personalised intervention, 
which has been shown to have more successful integration outcomes; 

-  Availability  of  a  nominated  counsellor  familiar  with  the  individual’s  circumstances: 
although  many  PES  are  striving  towards  a  model  of  providing  named  counsellors  for  job-
seekers, considering the volume of clients being dealt with, this is often not possible, whereas 
in most EGF cases offering personalised counselling this was the case. This enables not only 
the  recruitment  of  counsellors  skilled  in  assisting  workers  affected  by  mass  layoffs 
(psychological  training  etc)  but  also  prevents  beneficiaries  from  feeling  that  they  have  to 
repeat their story and requirements to a stranger each time; 

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-  A  potentially  greater  emphasis  on  working  towards  delivering  sustainable  employment 
outcomes:  as  some  of  the  remarks  made  by  stakeholders  in  the  German  cases  highlight,  in 
some  countries  the  emphasis  of  PES  provision  is  clearly  on  earliest  possible  re-integration. 
While this is generally a very desirable goal, it was felt that matching (even to temporary or 
fixed-term  vacancies)  is  often  done  at  the  expense  of  offering  or  completing  training  which 
could contribute to a more sustainable re-integration; 

-  Stronger  contacts  with  employers  to  determine  their  requirements  and  to  source  “hidden 
vacancies”  not  reported  to  the  PES:  in  cases  where  EGF  support  was  delivered  by  external 
agencies,  a  particular  added  advantage  was  their  regional  and  local  expertise  and  contacts 
with employers and their explicit role in sourcing vacancies and providing targeted matching 
services to employers; 

-  The  availability  of  a  broader  spectrum  of  measures  which  can  be  offered:  in  many  cases 
counsellors were able to refer EGF beneficiaries to a wider range of suitable measures than 
would otherwise have been available to PES beneficiaries; 

-  The  ability  of  counsellors  to  follow-up  beneficiaries  post-placement  in  employment:  in  an 
ordinary PES context such follow-up is either not offered at all or is offered only to certain 
target groups (e.g. those with health problems). This support was offered in some EGF funded 
cases and was considered to be particularly valuable for individuals who had worked with the 
same  employer  for  a  considerable  period  of  time  and  where  not  used  to  different  company 
cultures. 

-  The  ability  to  acquire  additional  training  or  re-training  was  among  the  most  important 
success  factors  for  EGF  beneficiaries.  With  regard  to  training  offered,  the  following  factors 
are important to bear in mind as they often contribute to the success of measures with regard 
to achieving successful labour market outcomes: 

-  Achieving  a  strong  link  between  qualifications  offered  and  local/regional  labour  market 
requirements:  This  can  be  ensured  through  harnessing  the  knowledge  of  the  delivery 
organisations  and  the  close  involvement  of  the  local  offices  of  the  PES  in  the  designs  of 
training measures. 

- The ability to achieve the right mix between training measures which enhance existing skills 
and  make  them  more  marketable  and  measures  which  enhance  professional  mobility  by 
allowing individuals to explore occupations and sectors they had not previously considered. 

6.3. 

Impact on delivery organisations and localities 

Emerging evidence points to learning effects achieved in the delivery organisations involved 
in  the  EGF  assistance.  These  include  embedding  learning  into  mainstream  practice  and 
enhancing experience  with  the management of  large-scale  redundancies.  These  impacts  will 
be analysed in more detail in the draft final report. 

In  addition  to  benefits  realised  by  individuals,  there  were  a  number  of  impacts  on  localities 
which  were  evident  from  the  case  studies  undertaken.  It  is  also  important  to  state  that  the 
reemployment  of  individuals  has  important  benefits  for  the  state  in  terms  of  reduced  social 
security  costs  but  also  has  wider  social  benefits  for  beneficiaries’  families  and  local 
communities  as  it  prevents  social  discord  which  can  accompany  unemployment.  Further 
analysis of this aspect will be contained in the draft final report. 

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6.4. 

Overall use and efficiency of use of resources 

The  budget  implementation  rate  shows  the  extent  to  which  the  approved  EGF  funding  was 
spent in each EGF case to fund the measures planned to assist the dismissed workers. The rate 
differs  significantly  across  the  15  cases  evaluated,  from  1%  to  99%.  There  is  a  range  of 
factors  behind  this  variation,  ranging  from  the  arrival  of  the  EGF  funding  at  the  locality, 
adequate  communication,  planning,  capacity  and  coordination  structures,  local  economic 
climate and rapidly changing conditions on the labour market.  

The  majority  of  interviewees  (67  %)  were  of  the  opinion  that  the  resources  had  been  used 
efficiently. Only 7 % answered that the resources had not been used efficiently and 26 % were 
of  the  opinion  that  they  had  been  used  very  efficiently.  Very  little  information  is  available 
which would allow a comparison between the cost and cost efficiency of resources used in the 
EGF  cases  compared  to,  for  example,  similar  measures  implemented  by  the  PES  or  other 
agencies involved in managing restructuring in the Member States. For the next report, further 
work  will  be  carried  out  to  seek  to  compare  the  cost  of  different  measures  in  the  same 
countries  and  in  different  countries,  but  it  must  be  considered  that  the  veracity  of  such  an 
analysis may well be limited and can only be understood in the full context of national and 
local cost structure as well as the types of beneficiaries being addressed.  

With regard to outcomes achieved, some analysis is possible comparing similar PES measures 
for EGF and non-EGF beneficiaries and their employment outcomes, as well as, for example 
the outcomes achieved by transfer agencies or vocational training agencies (as in the case of 
France)  in  restructuring  cases  or  a  similar  scale  or  localities.  On  the  whole,  they  appear  to 
show  more  positive  outcomes  being  achieved  with  additional  EGF  funding,  but  analysis  in 
this area will be elaborated further for the draft final report. 

6.5. 

Sustainability outcomes 

For many cases, the sustainability of the outcomes of EGF cases proved difficult to analyse. 
Information on the sustainability of labour market outcomes is available for 9 out of 15 cases. 
This data shows contradictory trends. The employment rate of EGF beneficiaries has: 

Increased  over  time  in  Piemonte,  Finnish  (Perlos),  Spanish  (Castilla  y  Leon  /  Aragon)  and 
both Portuguese cases. 

Declined over time in Lithuanian (Alytaus Tekstile) and Sardinian cases." 

7. 

ADDED VALUE OF THE UNION INVOLVEMENT 

As  indicated  in  the  Communication 21 on  the  MFF  the  European  Social  Fund  (ESF)  will 
provide  funding  for  structural  actions  for  economic,  social  and  territorial  cohesion.  This 
funding  will  be  concentrated  on  the  key  priorities  of  the  Europe  2020  strategy,  namely 
employment promotion, investment in skills, education and life-long learning, social inclusion 
and the fight against poverty as well as enhancing institutional capacity and efficient public 
administration.  The  ESF  consists  of  multi-annual  programmes  in  support  of  strategic,  long-
term goals, in particular the anticipation and management of change and restructuring.  

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As  indicated  in  the  same  Communication,  the  Common  Agricultural  Policy  (CAP)  will 
maintain its current two-pillar structure and will continue to provide direct support to farmers 
and to support market measures, entirely funded by the Union budget. It will also continue to 
deliver  specific  environmental  public  goods,  improve  the  competitiveness  of  the  agriculture 
and forestry sectors and promote the diversification of economic activity and quality of life in 
rural  areas  under  its  second  pillar,  and  in  particular  under  the  support  provided  by  the 
European Agricultural Fund for Rural Development (EAFRD).  

The EGF, in its turn, is established to provide European Union solidarity by means of time-
limited  support  to  workers  being  made  redundant  and  to  farmers  needing  to  change 
production  sector  in  exceptional  circumstances  and  outside  the  multi-annual  programming 
routine. 

7.1. 

Subsidiarity  

The  legal  basis  of  the  EGF  in  its  current  form  is  the  third  paragraph  of  Article  175  of  the 
TFEU, i.e. it is considered a specific action necessary to strengthening the economic, social or 
territorial  cohesion  of  the  Union.  Actions  from  the  EGF  shall  complement  actions  of  the 
Member  State  at  national,  regional  and  local  level,  including  those  co-financed  by  the 
structural funds. 

The objectives of demonstrating solidarity at Union level in exceptional circumstances to that 
part of the workforce that has been negatively impacted by globalisation, an unexpected crisis 
or trade agreements, cannot be sufficiently achieved by the Member States alone. They can be 
better achieved at Union level taking into account that the EGF is an expression of solidarity 
across  and  between  Member  States.  Mobilising  a  financial  contribution  from  the  EGF  will 
require the agreement of both arms of the budgetary authority, thus expressing solidarity by 
the  Union  and  the  Member  States.  In  this  way,  the  proposal  will  contribute  to  making  the 
objective of Union solidarity in exceptional circumstances more tangible for that part of the 
labour force affected in particular and for Union citizens in general. 

8. 

MONITORING AND EVALUATION 

As in the current Regulation on the functioning  of the EGF the future EGF  Regulation will 
provide  for  a  mid-term  evaluation  to  assess  the  effectiveness  and  sustainability  of  results 
obtained (by 30 June 2018) and an ex post evaluation to measure the impact of the EGF and 
its added value (by 31 December 2022). 

At  the  level  of  the  individual  applications  the  Commission  will  continue  to  monitor 
specifically  the  achievement  of  the  operational  objectives,  in  terms  of  number  of  workers 
benefited from the support and reintegrated into employment or new activities after 12 and 24 
months  of  implementation,  on  the  basis  of  interim  and  final  reports  on  each  case.  The 
obligation for Member States to deliver this information will be laid down in the future EGF 
Regulation. 

Moreover,  with  the  technical  assistance,  the  exchange  of  good  practice  for  the  purpose  of 
mutual learning will be promoted and proposed.  

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