REPORT FROM THE COMMISSION Report from the Commission on the mid-term evaluation of the European Globalisation Adjustment Fund (EGF)
Date: 2018-05-16
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU Member State, European Globalisation Adjustment Fund, commitment of expenditure, dismissal, employment aid, financial aid, general budget (EU), globalisation, reintegration into working life

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.5.2018  COM(2018) 297 final  REPORT FROM THE COMMISSION Report from the Commission on the mid-term evaluation of the European Globalisation Adjustment Fund (EGF) {SWD(2018) 192 final}  
 
 
Background 
The  European  Globalisation  Adjustment  Fund  (EGF)  was  set  up  10  years  ago  with  the 
objective to show solidarity with, and provide support to, workers made redundant as a result 
of major structural changes in world trade patterns due to globalisation. The scope set out in 
the  initial  EGF  Regulation  (EC)  No  1927/2006  was  broadened  in  2009  by  Regulation  (EC) 
No  546/2009  to  also  include  redundancies  that  are  a  result  of  the  global  financial  and 
economic crisis. The EGF co-finances measures implemented by the Member States to help 
redundant workers re-integrate into the job market when their dismissal has had a significant 
impact  on  the  economy,  especially  on  the  employment  levels  in  a  region  or  in  a  sector.  A 
derogation  clause  in  Article 6(2)  of  the  current  Regulation  (EU)  No  1309/20131  (to  be 
referred  to  hereafter  as  "the  EGF  Regulation")  allows  Member  States  facing  high  youth 
unemployment  rates  to  include  young  people  ‘not  in  education,  employment,  or  training 
(NEET)’ in EGF applications until the end of 20172. 

Scope of the mid-term evaluation 
In compliance with Article 20 of the EGF Regulation, the Commission carried out this mid-
term evaluation to assess how and to what extent the EGF achieves its objectives.  

The  mid-term  evaluation  covers  all  29  EGF  cases  submitted  in  2014  and  20153.  The  cases, 
concerning  10  different  Member  States,  cover  21  economic  sectors,  with  the  automotive 
sector  (four  cases)  and  retail  sector  (three  cases)  accounting  for  the  most  EGF  applications 
over this time period. The number of EGF applications has fallen due to economic recovery, 
reducing the data available for analysis. 

The effectiveness, sustainability, efficiency, coherence, relevance and EU added value of the 
results  achieved  were  assessed.  This  goes  beyond  the  requirements  set  out  in  the  EGF 
Regulation  to  assess  effectiveness  and  sustainability,  allowing  for  a  comprehensive 
assessment to be carried out at instrument and case levels4. 

The mid-term evaluation is presented in the form of a Staff Working Document (SWD). The 
evaluation’s SWD is primarily based on an external contractor's evaluation study which was 
accepted by DG EMPL in December 2016. Further evidence for the SWD was gathered and 
analysed from previous reports, evaluations, and the general experience of managing the EGF. 

In compliance with Article 20(1)(a) of the EGF Regulation, the present report summarizes the 
main  results  to  the  EU  Institutions  and  bodies  and  to  social  partners.  The  results  of  the 

1 Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the 
European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006.  
2 Extension of derogation clause currently under review. 
3 Data on cases submitted in 2016 are available in the EGF Biennial Report, COM(2017)636 final. 
4  The  evaluation 
the  European  Commission's  Better  Regulation  Guidelines  (BRG) 
COM(2015)215 final.  The  BRG  had  been  introduced  in  2015  as  an  integrated  approach  covering  the  whole 
policy  cycle  aiming  to  improve  the  quality  of  the  design  of  EU  policies  and  laws  so  that  they  achieve  their 
objectives at minimum cost. Regarding evaluations, besides setting an extended framework of evaluation criteria 
to be assessed, the BRG also call for extensive stakeholder consultations. The Commission consulted as widely 
as  possible  in  order  to  ensure  that  the  general  public  interest  of  the  EU  -  as  opposed  to  special  interests  of  a 
narrow range of stakeholder groups - is well reflected in the future design of the EGF, in line with the BRG. 

is  based  on 

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evaluation shall also contribute to developing the future design and policy orientation of the 
EGF.  

Main conclusions 
The  early  timing  of  the  EGF  mid-term  evaluation  allowed  for  only  limited  information  and 
experience from the current period. Furthermore, the economic improvement has led to a fall 
in  the  number  of  EGF  applications,  further  reducing  available  evidence.  The  results  of  the 
evaluation  have  to  be  taken  with  caution,  due  to  the  limited  robustness  of  data  available, 
despite the Commission’s efforts to evaluate as broadly as possible and consult as widely as 
possible.  

On  organisational  learning,  an  important  lesson  learned  during  this  exercise  is  that  the 
timing  of  the  evaluation  as  set  out  in  the  EGF  Regulation  was  too  early.  Future  initiatives 
should be allowed to advance far enough in the implementation cycle so that ample evidence 
can be collected and analysed and evaluations should therefore be scheduled accordingly. 

On  the  effectiveness  of  the  EGF,  the  re-integration  rate  of  redundant  workers  into  the  job 
market  improved  compared  to  the  previous  funding  period  (from  49 %  to  56 %).  However, 
evidence  suggests  that  the  re-integration  rates  are  very  case  specific,  depending  on,  for 
example,  the  specific  economic  situation  in  the  area  concerned.  It  is  therefore  not  only 
difficult  to  compare  re-integration  rates  over  cases,  but  also  to  find  suitable  comparators  of 
similar measures. In order to overcome this obstacle it is highly recommended that Member 
States develop case-specific targets. 

The mobilisation of assistance offered to redundant workers can either be justified by showing 
that redundancies occurred as a result of ‘globalisation’ or the ‘financial and economic crisis’. 
However, neither of these two terms has been defined in the EGF Regulation. In general, the 
lack of definitions can be perceived as offering a certain flexibility, but also as leaving grey 
areas  of  uncertainty.  Finding  the  right  evidence  to  justify  a  case  is  a  major  challenge  and 
frequently keeps Member States from applying. This is also due to the fact that it is often not 
possible to identify and single out the decisive factor that triggered a restructuring event. 

Even  though  redundancy  cases  under  the  general  threshold  of  500  workers  made  redundant 
could be eligible under a derogation clause, Member States are not certain about how to show 
that  redundancies  are  likely  to  have  a  significant  impact  on  the  economy,  especially  on  the 
employment levels, as this impact is also not further defined by the Regulation. It seems to be 
very important that the significant impact be defined more clearly, for example by developing 
specific indicators or a scorecard that would help analyse the impact. 

Administrative  and  financial  capacity  problems  of  national  authorities  during  both  the 
application  and  implementation  phases  are  a  further  obstacle  for  Member  States  when 
deciding on a possible application. The problems primarily relate to the non-availability of co-
funding of the assistance granted, and the insufficient staffing of the authorities dealing with 
the EGF. This is particularly true when there is no or little experience with the use of EGF, or 
with restructuring assistance in general. 

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A decisive factor behind the EGF being less used by the 13 Member States that joined the EU 
since  2004  (EU-13),  is  the  countries’  industrial  structure.  The  loss  of  jobs  due  to  structural 
change caused by trade-related globalisation is less prevalent in the EU-13. 

EGF  measures  are  offered  on  top  of  regular  national  measures  and/or  intensify  them.  No 
displacement effects were observed at case level.  

The  help  offered  by  the  EGF  would  otherwise  not  have  been  available.  This  shows  the 
complementarity and additionality of EGF measures. 

EGF  assistance  also  removes  barriers  to  participating  in  national  or  EGF  measures,  by 
offering additional services such as travel assistance or childcare facilities. 

Regarding the NEETs derogation, Member States concerned showed a great interest in using 
it,  except  Spain.  However,  in  total,  the  derogation  was  used  only  in  nine  cases  in  three 
different Member States. Still, wherever it has been used, the help has been taken up to a very 
large extent by the young people targeted, help they would not otherwise have received.  

In a few cases, the evaluation highlighted certain problems in ensuring the timely delivery of 
monitoring data. Should this difficulty persist, the Commission would need to consider taking 
appropriate measures. 

On a more general note, the limited monitoring requirements set out in the EGF Regulation 
are an issue and an obstacle to carrying out a more thorough analysis. 

On the sustainability of results, since the implementation cycle was not advanced enough and 
the  evaluation  could  therefore  only  cover  a  two-year  time-span  (applications  submitted  in 
2014  and  2015),  no  robust  data  is  available.  General  employability  improved  due  to  the 
upgrading  and  updating  of  skills.  At  an  individual  level  it  was  observed  that  beneficiaries 
developed higher self-esteem, which was likely to result in a more proactive approach to job 
seeking. 

At  an  institutional  level,  the  use  of  EGF  assistance  fosters  the  development  of  a  general 
delivery  mechanism  of  restructuring  assistance  in  Member  States  with  little  experience  in 
dealing with mass redundancies. In Member States that have a lot of experience in this issue 
and  that  have  delivery  mechanisms  in  place,  the  EGF  serves  as  a  tool  to  test  innovative 
measures, which could later be incorporated into regular assistance. 

As for the efficiency of the assistance mobilised, the length of procedures during the decision-
making process has still been criticised despite the substantial shortening of the timing and the 
stricter  deadlines  for  Commission  and  Member  States.  The  duration  of  the  application 
procedure  has  been  limited  and  now  averages  around  200  days,  down  from  an  average  of 
about 300 days in the former programming period. 

In half of the cases Member States express a positive opinion on the guidance received from 
the European Commission during the application phase. 

More efforts are needed to ensure the coherence of funding. While at case level, no overlaps 
with other EU or national funding could be identified, there is scope to better align the EGF 
and  the  European  Social  Fund  (ESF).  The  EGF  was  designed  to  offer  measures  that 

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complement  other  instruments  such  as  the  ESF.  An  integrated  approach  can  at  best  be 
observed in the interplay of national funding and EGF. However, Member States currently do 
not design strategic human capital investment packages into which they could integrate EGF 
assistance when faced with  major  restructuring events.  In  addition, the EGF could be better 
coordinated with the recommendations set out in the EU Quality Framework for anticipation 
of change and restructuring (QFR). 

As  for  the  relevance  of  EGF  funding,  there  are  indications  that  the  EGF  is  an  important 
instrument for developing human capital. Stakeholders, particularly those with experience of 
putting  EGF  measures  into  practice  questioned  whether  the  EGF  was  the  right  channel  to 
provide  assistance  to  NEETs.  To  a  far  lesser  but  still  significant  degree,  the  crisis  criterion 
was regarded as being no longer relevant. In light of the changes in how globalisation works, 
the increasing interconnectedness of world economies and increasing development of global 
value chains are likely to further increase the relevance of the globalisation criterion, but will 
also  make  it  harder  to  prove  that  redundancies  were  actually  caused  by  globalisation. 
Considering the difficulties in providing evidence to back-up applications, it is clear that the 
EGF  could  be  mobilised  far  quicker  if  less  documentation  was  necessary.  The  EGF  would 
then better function as an emergency relief instrument.  

This would also need to be seen in the light of the EGF’s scope which covers globalisation 
and the financial crisis, but no other major economic developments. Workers made redundant 
due  to  other  reasons,  for  example  automation,  face  very  similar  challenges,  and  outnumber 
those  made  redundant  due  to  globalisation.  If  the  scope  was  widened  to  cover  any  type  of 
restructuring event that causes a significant adverse impact, the fund would be fit to respond 
to any developments. Therefore, arguing that these restructuring events should be covered by 
the EGF’s scope would no longer be necessary. 

The  evaluation  found  that  the  EGF  generated  EU  added  value.  This  is  particularly  true  in 
terms of its volume effects, meaning that EGF assistance not only increases the number and 
variety of services offered, but also their level of intensity. Moreover, EGF interventions have 
high visibility and demonstrate the EU added value of the intervention directly to the general 
public. 

Implications for future policy design 
The mid-term evaluation shows that the EGF is attaining its goals to contribute to the Europe 
2020  strategy  priority  of  inclusive  growth.  This  is  achieved  by  showing  solidarity  with  and 
supporting  workers  made  redundant  as  a  result  of  globalisation  and  the  financial  and 
economic crisis. There is common understanding and substantiated evidence that this help is 
useful, and if the EGF did not exist this help would not have otherwise been offered.  

However, the design of the EGF needs improving. Several challenges could be tackled for the 
future, especially in light of the post-2020 debates. 

On the scope 

Evidence  collected  during  the  stakeholder  consultations  conducted  in  the  course  of  the 
evaluation work shows that the EGF’s design requires revision or further definition, such as 
its  exact  scope  and  the  criteria  that  trigger  its  use.  In  line  with  the  subsidiarity  principle, 
restructuring events must have a significant impact on the economy and the labour market in 

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order to justify mobilising of EGF assistance. However, the notion of "significant impact" is 
not  clearly  defined.  Especially  for  smaller  redundancies  below  the  usual  threshold  of  500 
workers made redundant, in rural areas they could well be eligible under the derogation clause 
specified in Article 4(2) of the EGF Regulation, for example, but Member States are not sure 
of  how  to  evidence  the  significant  impact.  It  seems  important  to  define  a  clear  indicator 
related  to  employment  and  social  effects.  This  matters  especially  as  value  chains  become 
more integrated  and  less localised, and as  SMEs  make  up the largest  share of businesses  in 
many Member States.  

The terms globalisation and crisis are not clearly defined either, and Member States are often 
ambiguous under which criterion they should submit an application. Identifying what actually 
triggered a redundancy event to see if the event could qualify as a potential application, and 
evidencing  it  in  an application  is  regularly  seen as  one  of  the  main  obstacles  for  a Member 
State to apply. In the light of these difficulties, and considering that more jobs are lost due to 
technological  change  (in  these  cases  redundant  workers  face  the  same  challenges  as  those 
made  redundant  because  of  globalisation,  as  their  skills  become  outdated  or  obsolete),  a 
possible  solution  could be  to  include  within  its scope  all  large-scale redundancy  events that 
cause a significant impact. This would lead to a more balanced use of the EGF, extending its 
potential  to  the  EU-13  Member  States.  This  would  reduce  the  burden  of  having  to  provide 
evidence for an application to prove that job losses were caused by globalisation. As this is 
also  one  of  the  two  most  time-consuming  steps  during  the  application  phase,  this 
simplification would speed up the mobilisation of EGF assistance by a few weeks. This would 
also offer more possibilities for smaller Member States to apply for assistance. 

On monitoring and reporting 

In order to better analyse the effectiveness of the EGF, Member States should be required to 
collect  more  detailed  monitoring  data,  especially  regarding  the  category  of  workers 
(professional  and  educational  background),  their  employment  status  and  the  type  of 
employment found. 

Capacity to apply and implement EGF cases 

The  main reason that  keeps  Member States that would have  had a potential  EGF case from 
applying are financial and institutional capacity problems. On the one hand, it could simply 
be  a  lack  of  manpower  –  Member  States  currently  can  ask  for  Technical  Assistance  only  if 
they  implement  an  EGF  case.  Since  redundancies  can  happen  unexpectedly,  it  would  be 
important that Member States are ready to react immediately and can submit an application 
without  any  delays.  Furthermore,  in  certain  Member  States,  more  profound  institutional 
capacity  building  efforts  seem  necessary  in  order  to  ensure  an  efficient  and  effective 
implementation  of  EGF  cases.  Therefore,  a  permanent  Technical  Assistance  budget  could 
help ensure a constant capacity building in the Member States. This is the case in Greece, for 
example,  where  authorities  are  confronted  with  the  challenge  of  implementing  various  EGF 
cases, without being able to build upon a wealth of experience in restructuring assistance. 

Supportive measures 

It seems necessary to embed EGF assistance more closely into the EU Quality Framework for 
anticipation of change and restructuring (QFR) and to design a better co-ordinated approach 

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for  both  preventive  measures  in  anticipation  of  major  restructuring  events,  and  one-off 
reactive measures such as those currently co-financed by the EGF. This could mean widening 
the range of the EGF’s activity, or a more closely co-ordinated approach together with other 
EU  instruments  such  as  the  ESF.  Even  though  the  instrument's  design  shows  a  clear 
complementarity  of  the  funds,  Member  States  could  better  embed  EGF  assistance  into  a 
comprehensive  package  of  restructuring  aid.  Labour  market  transitions  require  intensive 
investments in human capital, both in the form of proactive anticipative measures and reactive 
measures. 

NEETs derogation clause 

Youth  unemployment  will  still  remain  a  major  challenge.  Experience  shows  that  EGF 
assistance,  if  offered  to  NEETs,  is  largely  taken  up.  However,  thoughts  should  be  given  to 
whether the EGF is the right avenue to offer such assistance or if other channels would offer 
better chances of reaching out to the young people concerned. It could be regarded as unfair if 
help  is  only  offered  to  NEETs  in  regions  affected  by  a  mass  restructuring  event  caused  by 
globalisation or the financial crisis, but not to those in regions affected by automation. 

Political implications 

In  its  White  Paper  on  the  Future  of  Europe,  the  Commission  expresses  concerns  regarding 
isolationist  movements,  growing  doubts  over  the  benefits  of  open  trade  and  the  EU's  social 
market economy in general. 

In  its  Reflection  Paper  on  Harnessing  Globalisation,  the  Commission  identifies  the 
combination of trade related globalisation and technological change as the major drivers of an 
increased demand for skilled labour and decreasing demand for lower-skilled labour. Despite 
the  overall  tremendous  advantages  of  more  open  trade  and  further  integration  of  world 
economies,  these  negative  side  effects  need  to  be  tackled.  As  the  current  benefits  of 
globalisation  are  already  unequally  distributed  among  people  and  regions,  causing  a 
significant impact on those adversely affected, there is a danger that the ever faster evolving 
technological advances will further fuel these effects. In order to prevent the gap from further 
widening,  Europe  will  need  to  help the  workforce  attain  the  required  skills.  With  a  specific 
view to the EGF, the Reflection Paper argues it should be considered to make the instrument 
more  operational,  in  order  to  ensure  a  faster  deployment  in  case  of  a  major  restructuring 
event. In order to enable it to support a broader range of economic development actions than 
the current focus on the affected workers, more flexibility would be needed. The gap between 
short-term measures and longer-term conversion strategies supported by cohesion policy will 
need to be bridged. 

The Commission launched the European Pillar of Social Rights which takes into account the 
changing  realities  of  the  work  environment.  More  specifically,  the  Pillar  puts  forward  a 
principle related to activation and facilitating transitions on the labour market: ”Everyone has 
the  right  to  timely  and  tailor-made  assistance  to  improve  employment  or  self-employment 
prospects.  This  includes  the  right  to  receive  support  for  job  search,  training  and  re-
qualification.  Everyone  has  the  right  to  transfer  social  protection  and  training  entitlements 

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during  professional  transitions.”  The  EGF  offers  an  important  and  visible  instrument  at  EU 
level  to  put  this  principle  into  practice  in  the  case  of  major  restructuring  events.  The  EGF 
proves to be a useful tool to tackle the adverse effects of globalisation, and its high visibility 
might help reduce concerns regarding the EU's social market economy. 

The  mid-term  evaluation  has  shown  that  the  EGF  is  creating  EU  added  value  by  offering 
assistance  to  workers  made  redundant  in  major  restructuring  events.  The  Commission  is 
therefore looking forward to further discussing the assistance currently delivered by the EGF 
with the European Parliament and Council and all major stakeholders. The EGF is regarded as 
an  essential  part  of  the  overall  package  of  human  capital  investment  measures  offered.  The 
Commission is considering further developing the EGF in order to be ready for the challenges 
of the post-2020 period. 

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