PURPOSE: to amend certain existing provisions of the Regulation on the European Globalisation Adjustment Fund (EGF) with a view to enhancing its performance in terms of re-integrating into employment workers who are made redundant as a consequence of globalisation.

LEGISLATIVE ACT: Regulation (EC) No 546/2009 of the European Parliament and of the Council amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund.

CONTENT: following an agreement reached at first reading with the European Parliament, the Council adopted a revised version of the Regulation on the European Globalisation Adjustment Fund (EGF) . German voted against with the United Kingdom and Latvia abstaining.

In its European Economic Recovery Plan , the Commission announced its intention to make the EGF a more effective early intervention instrument as part of Europe's crisis response. The Commission reaffirmed its intention to revise the rules of the EGF so that it can intervene more rapidly in key sectors, inter alia to co-finance training and job placements for those who are made redundant as a result of the economic crisis.

The new Regulation provides in particular for the following:

lowering the eligibility threshold for EGF applications from 1000 to 500 redundant workers over a period of 4 months (or over 9 months following the sector and the regions); extending to 24 months the duration of EGF support (currently 12 months) so as to allow sufficient time for the measures to be effective in re-integrating particularly the most vulnerable workers into new jobs; broaden temporarily the EGF’s scope to enable it to react more effectively. In order to provide additional EGF support during the period of the financial and economic crisis. The amount of the financial contribution of the EGF may not exceed 50% but for applications submitted before 31 December 2011, the amount may not exceed 65% ;

Member States applying for an EGF contribution under this derogation shall establish a direct and demonstrable link between the redundancies and the financial and economic crisis .

For the purposes of calculating the number of redundancies , the new Regulation stipulates that a redundancy shall be counted from:

the date of the employer’s individual notice to lay off or to terminate the contract of employment of the worker, or; the date of the de facto termination of the contract of employment before its expiry, or; the date on which the employer notifies the competent public authority in writing of the projected collective redundancies; in this case, the applicant Member State(s) shall provide the Commission with additional information on the actual number of redundancies effected and the estimated costs of the coordinated package of personalised services, prior to the completion of the assessment provided for in this Regulation.

For each enterprise in question the Member State(s) shall specify in the application how the redundancies are being counted.

Moreover, Member States can provide personalised services co-financed by the EGF to affected workers.

In the case of grants , indirect costs, declared on a flat-rate basis, shall be expenditure eligible for a contribution from the EGF of up to 20% of the direct costs of an operation, provided that the indirect costs are incurred in accordance with national rules, including accountancy rules.

Transitional provisions : this Regulation shall apply to all applications for assistance from the EGF received from 1 May 2009 . As regards applications received before that date, the rules in force on the date of the application shall continue to apply throughout the entire duration of the EGF assistance.

ENTRY INTO FORCE: 02/07/2009.

The European Parliament adopted, 538 votes in favour to 35 against with 37 abstentions a legislative resolution amending, under the first reading of codecision procedure, the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund.

The amendments are the result of a compromise between Parliament and Council. The main amendments are as follows:

Direct link: the compromise text insists that Member States applying for an EGF contribution under the derogation for redundant workers shall establish a direct and demonstrable link between the redundancies and the financial and economic crisis.

The derogation will apply to all applications submitted before 31 December 2011.

Intervention criteria : the new text amends the criteria on how the number of redundancies will be counted. This is either: the date of the employer's individual notice to lay off or to terminate the contract of employment, or the date of the de facto termination of a contract of employment before its expiry, or the date on which the employer notifies the competent public authority in writing of the projected collective redundancies.

Eligible persons: a new article provides that Member States can provide personalised services co-financed by the EGF to certain affected workers.

Financial contribution : the amount of the financial contribution of the EGF may not exceed 50% but for applications submitted before 31 December 2011, the amount may not exceed 65% .

In the case of grants, indirect costs, declared on a flat-rate basis, shall be expenditure eligible for a contribution from the EGF up to 20% of the direct costs of an operation, provided that the indirect costs are incurred in accordance with national rules, including accountancy rules.

Transitional provisions: the Regulation will apply to all applications for assistance from the EGF received from 1 May 2009. As regards applications received before that date, the rules in force on the date of the application shall continue to apply throughout the entire duration of the EGF assistance.

The Committee on Employment and Social Affairs adopted the report drawn up by Gabriele STAUNER (EPP-ED, DE) approving, under the first reading of codecision procedure, the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1927/2006 on establishing the European Globalisation Adjustment Fund.

On the basis of a report of the Presidency, the Council took note of the progress achieved with regard to a revision of the Regulation concerning the European Globalisation Adjustment Fund.

A number of Member States intervened by expressing their wish to get an agreement as soon as possible, in order to help citizens who lose their job because of the current economic crisis. Some Ministers called for making the assistance available already from the moment when redundancies are announced by the employer.

Despite the progress so far achieved in the preparatory instances of the Council, more discussion is needed, in particular on the proposal to reduce the trigger from 1 000 to 500 redundancies, to increase the co-financing rate from 50% to 75% and to expand temporarily the scope of the fund.

The Presidency concluded the debate by asking the Permanent Representatives Committee to continue the work in order to reach a first reading agreement with the Parliament which is expected to adopt its opinion at its plenary early May 2009.

PURPOSE: to amend certain existing provisions of the Regulation on the European Globalisation Adjustment Fund (EGF) with a view to enhancing its performance in terms of re-integrating into employment workers who are made redundant as a consequence of globalisation.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: the European Globalisation Adjustment Fund is a response to a specific, European-scale crisis caused by globalisation. The Fund is an expression of EU solidarity with European workers left vulnerable because of the impact of globalisation. It provides one-off, time-limited individual support, geared directly to the redundant workers. Its objective is to reintegrate workers into the labour market, when they had been made redundant due to globalisation. It has at its disposal a potential maximum of EUR 500 million per year, an amount which may be reviewed in the light of the implementation of the revised Regulation.

In the Communication “Solidarity in the face of change: the EGF in 2007 - review and prospects”, the Commission announced its intention to amend the EGF Regulation before issuing the next annual report, which is due by mid-2009 (see COD/2006/0033 in “ Follow-up documents ”). In its European Economic Recovery Plan , published in November 2008, the Commission announced its intention to make the EGF a more effective early intervention instrument as part of Europe's crisis response. The Commission reaffirmed its intention to revise the rules of the EGF so that it can intervene more rapidly in key sectors, inter alia to co-finance training and job placements for those who are made redundant as a result of the economic crisis.

CONTENT: the proposed action aims to amend the EGF Regulation in order to ensure that the EGF fully meets the stated objective of solidarity with workers who have lost their job as a consequence of major changes brought about by globalisation, including a temporary provision to support workers made redundant as a result of the global financial and economic crisis . The changes should enhance the performance of the Fund by:

lowering the eligibility threshold for EGF applications from 1000 to 500 redundant workers; extending to 24 months the duration of EGF support (currently 12 months) so as to allow sufficient time for the measures to be effective in re-integrating particularly the most vulnerable workers into new jobs; ensuring equitable and non-discriminatory treatment of those workers whose redundancy occurred before or after the 4-month reference period of the Regulation but can be clearly linked to the same redundancy event; increasing the EU financial contribution from 50% to 75% to better reflect the emergency nature of the contribution (the other portion being paid by Member States); providing that the European Parliament and the Council may review the EGF Regulation, including the temporary derogation that includes workers affected by the financial and economic crisis, on the basis of a proposal from the Commission.

PURPOSE: to amend certain existing provisions of the Regulation on the European Globalisation Adjustment Fund (EGF) with a view to enhancing its performance in terms of re-integrating into employment workers who are made redundant as a consequence of globalisation.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: the European Globalisation Adjustment Fund is a response to a specific, European-scale crisis caused by globalisation. The Fund is an expression of EU solidarity with European workers left vulnerable because of the impact of globalisation. It provides one-off, time-limited individual support, geared directly to the redundant workers. Its objective is to reintegrate workers into the labour market, when they had been made redundant due to globalisation. It has at its disposal a potential maximum of EUR 500 million per year, an amount which may be reviewed in the light of the implementation of the revised Regulation.

In the Communication “Solidarity in the face of change: the EGF in 2007 - review and prospects”, the Commission announced its intention to amend the EGF Regulation before issuing the next annual report, which is due by mid-2009 (see COD/2006/0033 in “ Follow-up documents ”). In its European Economic Recovery Plan , published in November 2008, the Commission announced its intention to make the EGF a more effective early intervention instrument as part of Europe's crisis response. The Commission reaffirmed its intention to revise the rules of the EGF so that it can intervene more rapidly in key sectors, inter alia to co-finance training and job placements for those who are made redundant as a result of the economic crisis.

CONTENT: the proposed action aims to amend the EGF Regulation in order to ensure that the EGF fully meets the stated objective of solidarity with workers who have lost their job as a consequence of major changes brought about by globalisation, including a temporary provision to support workers made redundant as a result of the global financial and economic crisis . The changes should enhance the performance of the Fund by:

lowering the eligibility threshold for EGF applications from 1000 to 500 redundant workers; extending to 24 months the duration of EGF support (currently 12 months) so as to allow sufficient time for the measures to be effective in re-integrating particularly the most vulnerable workers into new jobs; ensuring equitable and non-discriminatory treatment of those workers whose redundancy occurred before or after the 4-month reference period of the Regulation but can be clearly linked to the same redundancy event; increasing the EU financial contribution from 50% to 75% to better reflect the emergency nature of the contribution (the other portion being paid by Member States); providing that the European Parliament and the Council may review the EGF Regulation, including the temporary derogation that includes workers affected by the financial and economic crisis, on the basis of a proposal from the Commission.