EU globalisation adjustment fund should cushion Brexit consequences

Since 2002, the EGF has allowed member states to request the EU Commission for help if more than 500 workers have been made redundant because of "changes in world trade patterns", such as an economic crisis. [Foto: EU Parlament]

On Monday (21 October), the European Parliament voted in favour of using funds from the Globalisation Adjustment Fund (EGF) in the event of a hard Brexit to help workers of the remaining EU-27 who will have lost their jobs as a result of the UK’s withdrawal. EURACTIV Germany reports.

The Commission’s proposal to use the Globalisation Adjustment Fund (EGF) in the event of a so-called ‘hard Brexit’ was approved by a vast majority of MEPs (516 in favour, 23 against).

The Parliament’s legislative resolution is due to be presented to the Council’s configuration that deals with employment, social policy, health and consumer affairs (EPSCO) on Thursday.

This means that the EGF will now become another tool in a series of EU measures to prepare the EU for a no-deal Brexit.

A spokesman for the European Commission told EURACTIV that the Parliament’s move was welcome and that the Council was expected to give its approval.

Member state support

So far, during the negotiations on the EU’s seven-year budget, the Multiannual Financial Framework (MFF), member states have shown a great deal of support towards the idea of using the EGF in the event of a hard break between the EU and the UK.

Some European regions will be strongly affected in case of a hard Brexit.

Ireland, for instance, has already set aside €1.2 billion to shield itself from the consequences of such a scenario. According to Agriculture Minister Michael Creed, €110 million have been earmarked for Irish farmers.

“We are very confident that the EU will make considerable funds available to increase the current amount of €110 million set for the agriculture and food sector,” the Irish minister said.

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The Globalisation Adjustment Fund

Since 2002, the EGF has allowed member states to request the Commission for help if more than 500 workers have been made redundant because of “changes in world trade patterns”, such as an economic crisis.

If the Parliament and the Council agree to such a request, measures can be co-financed for those affected. These include measures to support laid-off workers with their job search, career guidance and retraining.

The most recent example is the dismissal of 1,019 workers at the Carrefour supermarket in Belgium. At the beginning of October, the Commission proposed to make €1.6 million available for those affected.

Even in the event of the bankruptcy of travel group Thomas Cook, a request to use the fund could be made. According to media reports, the Spanish government is also intending to make a request, as 2,500 Thomas Cook employees are based in Spain.

But the future shape of the EGF is currently still being debated within the framework of EU budget negotiations.

In May 2018, the Commission presented its proposal to expand the fund’s scope slightly. The proposal provides for the fund to take effect already in cases where 250 workers have been laid off. The Commission also proposed to extend the range of possible reasons for requesting funds, as well as to slightly increase the fund’s total budget to  €1.4 billion euros.

In March, the Council approved the draft in large parts, but negotiations for the EU budget are likely to continue until late next year.

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[Edited by Zoran Radosavljevic]

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