Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund (2014-2020)
Date: 2019-09-04
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: European Globalisation Adjustment Fund, United Kingdom, dismissal, employment aid, financial aid, general budget (EU), globalisation, reintegration into working life, withdrawal from the EU

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   EUROPEAN COMMISSION  Brussels, 4.9.2019  COM(2019) 397 final 2019/0180 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund (2014-2020)  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The aim of this proposal is to enable the European Globalisation Adjustment Fund ('the EGF') 
to support workers made redundant as a result of the likely economic disruptions caused by a 
withdrawal  of  the  United  Kingdom  of  Great  Britain  and  Northern  Ireland  (the  ‘United 
Kingdom’) from the Union without a withdrawal agreement. 

The  United  Kingdom  submitted  on  29 March 2017  the  notification  of  its  intention  to 
withdraw  from  the  Union  pursuant  to  Article 50  of  the  Treaty  on  European  Union  (TEU). 
Following  a  request  by  the  United  Kingdom,  the  European  Council  (Article 50)  agreed  on 
11 April 20191  to  extend  further2  the  period  provided  for  in  Article 50(3)  TEU  until 
31 October 2019.  Unless  the  United  Kingdom  ratifies  the  Withdrawal  Agreement3  by 
31 October 2019  or  requests  a  third  extension,  to  which  the  European  Council  (Article 50) 
agrees by unanimity, the United Kingdom will leave the Union without an agreement and then 
become  a  third  country  as  of  1 November 2019.  In  the  absence  of  a  withdrawal  agreement, 
such withdrawal is likely to have significant negative effects on some industries and services 
leading to people working in those sectors made redundant. 

The  purpose  of  the  EGF  is  to  support  workers  made  redundant  and  self-employed  persons 
whose activity has ceased as a result of major structural changes in world trade patterns due to 
globalisation or as a result of a global financial and economic crises. 

Under  the  globalisation  criterion,  the  scope  of  the  EGF  covers  redundancies  caused  by 
offshoring of jobs to third countries, a serious shift in Union trade in goods or services, or a 
rapid  decline  of  the  Union  market  share  in  a  given  sector.  This  proposal  specifies  that  the 
scope  of  the  EGF  includes  workers  made  redundant  in  areas,  sectors,  territories  or  labour 
markets suffering serious economic disruption due to the withdrawal of the United Kingdom 
from  the  Union  without  a  withdrawal  agreeement.  Such  a  withdrawal  will  constitute  an 
important change in the trade relations of the EU and the composition of the internal market, 
and can therefore be expected to have a significant impact on trade patterns, growth and jobs. 

• 

Consistency  with  existing  policy provisions  in  the  policy  area  and  other  Union 
policies 

This  proposal  is  part  of  the  Union  preparedness  and  contingency  plan  to  mitigate  the  most 
significant  disruptions  caused  by  a  withdrawal  of  the  United  Kingdom  from  the  Union 
without a withdrawal agreement. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  legal  basis  is  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU),  and  in 
particular the third paragraph of Article 175. 

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3 

European Council Decision (EU) 2019/584, OJ L 101, 11.4.2019, p. 1. 
Following  a  request  by  the  United  Kingdom,  the  European  Council  decided  a  first  extension  on 
22 March 2019 (European Council Decision (EU) 2019/476, OJ L 80I, 22.3.2019, p. 1). 
Agreement on the  withdrawal of the United Kingdom of Great Britain and Northern Ireland from the 
European Union and the European Atomic Energy Community, OJ, C 144I, 25.4.2019, p. 1. 

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If specific actions prove necessary outside the Structural Funds and without prejudice to the 
measures  decided  upon  within  the  framework  of  the  other  policies  of  the  Union, 
Article 175(3) allows the European Parliament and the Council to take action in accordance 
with  the  ordinary  legislative  procedure  and  after  consulting  the  European  Economic  and 
Social Committee and the European Committee of the Regions. 

• 

Subsidiarity (for non-exclusive competence)  

Funding  from  the  Union  budget  concentrates  on  activities  whose  objectives  cannot  be 
sufficiently achieved by the Member States alone, and where the Union intervention can bring 
additional value compared to action of Member States alone. The mobilisation of the EGF to 
fund  measures  aimed  at  assisting  redundant  workers  find  new  employment  respects  the 
principle of subsidiarity, and it creates European added value. 

It is standard practice for national labour market programmes to assist redundant workers, and 
the EGF does not aim to replace such programmes. In case of unexpected restructuring events 
that have a significant impact on the labour market, the regular national programmes are put 
at test. Therefore, because of the scale and effects of unexpected large-scale restructuring and 
as the EGF is an expression of solidarity across and between Member States, assistance can 
be  better  delivered  at  Union  level.  The  support  from  EGF  will  make  Union  solidarity  in 
exceptional  circumstances  more  tangible  for  workers  affected  and  for  Union  citizens  in 
general. 

The  mobilisation  of  the  EGF  creates  additional  value  by  increasing  the  overall  number  of 
services offered to redundant workers, as well as the variety of services offered and their level 
of  intensity.  The  EGF  also  allows  to  test  innovative  ideas,  identify  best  practices  and 
incorporate  them  into  the  national  support  package.  EGF  co-financed  measures  also 
contribute in general to improving the delivery of the support to the redundant workers. 

• 

Proportionality 

In accordance with the principle of proportionality, the provisions of this proposal do not go 
beyond what is necessary to achieve its goals. The administrative burden on the Union and on 
the national authorities applying for EGF support has been limited to what is necessary for the 
Commission  to  exercise  its  responsibility  for  implementing  the  Union  budget.  Since  the 
financial contribution is made to the Member State under the principle of shared management, 
the Member State will be required to report on how the financial contribution was used. 

• 

Choice of the instrument 

As  this  proposal  is  an  amendment  of  Regulation (EU) No 1309/2013,  it  has  to  be  a 
Regulation. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

This  proposal  is  adopted  in  the  context  of  contingency  measures  to  mitigate  the  most 
significant  disruptions  caused  by  a  withdrawal  of  the  United  Kingdom  from  the  Union 
without a withdrawal agreement. The European Commission analysed the risks and concluded 
that this proposal  is  necessary in  order to  ensure the effective response of the EGF so as to 
show solidarity with workers made redundant in the Union as a consequence of a withdrawal 
of  the United Kingdom from the Union without a withdrawal agreement. 

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4. 

BUDGETARY IMPLICATIONS 

Article 12  of  Council  Regulation (EU,  EURATOM) No 1311/2013  of  2 December 2013 
laying down the multiannual  financial framework for the  years 2014-2020 provides that the 
EGF may not exceed a maximum annual amount of EUR 150 million (in 2011 prices). 

The present proposal does not modify the maximum annual amount of the EGF. 

5. 

• 

OTHER ELEMENTS 

Detailed explanation of the specific provisions of the proposal 

The  proposed  amendment  to  Article 2  specifies  that  a  withdrawal  of  the  United  Kingdom 
from the Union without a withdrawal agreement falls within the scope of the EGF. The aim is 
to  ensure  that  the  EGF  can  respond  effectively  by  providing  support  to  workers  made 
redundant  in  the  Union  as  a  result  of  a  withdrawal  of  the  United  Kingdom  without  a 
withdrawal agreement. 

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2019/0180 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment 
Fund (2014-2020) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the European Commission, 

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

After consulting the European Economic and Social Committee, 

After consulting the Committee of the Regions, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

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Regulation (EC) No 1927/2006  of  the  European  Parliament  and  of  the  Council4 
established  the  European  Globalisation  Adjustment  Fund  (EGF)  for  the  multiannual 
financial  framework  from  1 January 2007  to  31 December 2013.  The  EGF  was 
established to enable the Union to show solidarity towards workers who lost their jobs 
as a result of major structural changes in world trade patterns due to globalisation. 

The scope of the EGF was broadened in 2009 by Regulation (EC) No 546/2009 of the 
European Parliament and of the Council5 as part of the European Economic Recovery 
Plan  to  include  support  to  workers  made  redundant  as  a  direct  consequence  of  the 
global financial and economic crisis. 
Regulation (EU) No 1309/2013  of  the  European  Parliament  and  of  the  Council6 
established  the  EGF  for  the  period  of  the  multiannual  financial  framework  from 
1 January 2014 to 31 December 2020. It also extended the scope of the EGF to cover 
not only redundancies resulting from major structural changes in world trade patterns 
due  to  globalisation  and  redundancies  resulting  from  a  serious  economic  disruption 
caused  by  a  continuation  of  the  global  financial  and  economic  crisis  addressed  in 
Regulation (EC) No 546/2009,  but  also  redundances  resulting  from  any  new  global 
financial  and  economic  crisis.  Furthermore,  Regulation (EU,  Euratom) 2018/1046  of 

Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on 
establishing the European Globalisation Adjustment Fund (OJ L 406, 30.12.2006, p. 1). 
Regulation  (EC)  No 546/2009  of  the  European  Parliament  and  of  the  Council  of  18  June  2009 
amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund 
(OJ L 167, 29.6.2009, p. 26). 
Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on 
the 
repealing 
Fund 
Regulation (EC) No 1927/2006 (OJ L 347, 20.12.2013, p. 855). 

Globalisation 

(2014-2020) 

Adjustment 

European 

and 

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the European Parliament and of the Council7 amended Regulation (EU) No 1309/2013 
to  introduce,  inter  alia,  rules  allowing  EGF  to  exceptionally  cover  collective 
applications involving small and medium-sized enterprises located in  one region  and 
operating  in  different  economic  sectors  defined  at  NACE  Revision  2  division8  level, 
where  the  applicant  Member  State  demonstrates  that  small  and  medium-sized 
enterprises are the main or the only type of business in that region. 

On 29 March 2017, the United Kingdom submitted the notification of its intention to 
withdraw  from  the  Union  pursuant  to  Article 50  of  the  Treaty  on  European  Union 
(TEU). The Treaties cease to apply to the United Kingdom from the date of entry into 
force of a withdrawal agreement or failing that, two years after that notification, unless 
the European Council, in agreement with  the  United Kingdom,  unanimously decides 
to extend that period. 

On 11 April 2019, following a request by the United Kingdom, the European Council 
agreed9  to  extend  further10  the  period  provided  for  in  Article 50(3)  TEU  until 
31 October 2019. Unless the United Kingdom ratifies the Withdrawal Agreement11 by 
31 October 2019 or requests a third extension, to which the European Council agrees 
by unanimity, the United Kingdom will leave the Union without an agreement and will 
become  a  third  country  as  of  1 November 2019.  Such  withdrawal  without  an 
agreement is likely to negatively affect some industries and services leading to people 
working in those sectors made redundant. 

This contingency Regulation should amend Regulation (EU) No 1309/2013 in order to 
specify that redundancies resulting from the withdrawal of the United Kingdom from 
the  Union  without  a  withdrawal  agreement  fall  within  the  scope  of  the  EGF.  This 
ensures that the EGF can respond effectively by offering assistance to workers made 
redundant  in  areas,  sectors,  territories  or  labour  markets  suffering  serious  economic 
disruption  due  to  the  withdrawal  of  the  United  Kingdom  from  the  Union  without  a 
withdrawal agreement. 

This  Regulation  should enter  into  force  as  a  matter  of  urgency  on  the  day  following 
that of its publication in the Official Journal of the European Union and should apply 
from  the  date  following  that  on  which  the  Treaties  cease  to  apply  to  the  United 
Kingdom. However, it should not apply if a withdrawal agreement concluded with the 
United Kingdom in accordance with Article 50(2) TEU has entered into force by that 
date. 

to 

(EU) No 223/2014, 

(EU) No 1303/2013, 

(EU) No 1301/2013, 

(EU) No 1316/2013, 

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  Union,  amending  Regulations 
the  financial  rules  applicable 
the  general  budget  of 
(EU) No 1304/2013, 
(EU) No 1296/2013, 
and 
(EU) No 1309/2013, 
Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, 
p. 1). 
Regulation (EC) No 1893/2006  of  the  European  Parliament  and  of  the  Council  of  20  December  2006 
establishing the statistical classification of economic activities NACE Revision 2 and amending Council 
Regulation (EEC) No 3037/90  as  well  as  certain  EC  Regulations  on  specific  statistical  domains  (Text 
with EEA relevance) (OJ L 393, 30.12.2006, p. 1). 
European Council Decision (EU) 2019/584, OJ L 101, 11.4.2019, p. 1. 
Following  a  request  by  the  United  Kingdom,  the  European  Council  decided  a  first  extension  on 
22 March 2019 (European Council Decision (EU) 2019/476, OJ L 80I, 22.3.2019, p. 1). 
Agreement on the  withdrawal of the United Kingdom of Great Britain and Northern Ireland from the 
European Union and the European Atomic Energy Community, OJ, C 144I, 25.4.2019, p. 1. 

(EU) No 283/2014, 

(4) 

(5) 

(6) 

(7) 

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HAVE ADOPTED THIS REGULATION: 

In Regulation (EU) No 1309/2013, in Article 2, point (a) is replaced by the following: 

Article 1 

“(a)  workers  made  redundant  and  self-employed  persons  whose  activity  has  ceased 
as  a  result  of  major  structural  changes  in  world  trade  patterns  due  to  globalisation, 
demonstrated,  in  particular,  by  a  substantial  increase  in  imports  into  the  Union,  a 
serious shift in Union trade in goods or services, a rapid decline of the Union market 
share in a given sector, a delocalisation of activities to third countries or as a result of 
the  withdrawal  of  the  United  Kingdom  from  the  Union  without  a  withdrawal 
agreement, provided that these redundancies have a significant adverse impact on the 
local, regional or national economy;". 

Article 2 

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

It shall apply from the day following that on which the Treaties cease to apply to the United 
Kingdom pursuant to Article 50(3) of the Treaty on European Union. 

However,  this  Regulation  shall  not  apply  if  a  withdrawal  agreement  concluded  with  the 
United  Kingdom  in  accordance  with  Article 50(2)  of  the  Treaty  on  European  Union  has 
entered  into  force  by  the  date  following  that  on  which  the  Treaties  cease  to  apply  to  the 
United Kingdom. 

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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