Annals of “Dunarea de Jos” University of Galati Fascicle I. Economics and Applied Informatics
Years XXII – no3/2016
ISSN-L 1584-0409 ISSN-Online 2344-441X www.eia.feaa.ugal.ro
European Globalisation Adjustment Fund-Assistance in
the Labour Market
Ramona Mariana CĂLINICĂ, Viorica IOAN
A R T I C L E I N F O A B S T R A C T
Article history: Accepted October Available online December JEL Classification F , F
Keywords:
Globalisation, Economic crisis, Labour market
The intensification of globalization and through intense manifestation of the effects on recent economic and financial crisis, employment market has been affected, and at European Union level was considered increasingly necessary granting support for counter of the negative effects of the two phenomena on this market. European Globalisation Adjustment Fund is designed for a rapid reintegration of fired workers and increase of the employment potential of the workforce, after mass dismissals linked to the two phenomena mentioned above.
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1. Introduction
Throughout history, it happened that a country's economy in its evolution to meet various unexpected problems such as the bankruptcy of important companies or a strong decrease of an important sector of the economy. These issues have a destabilizing impact of that country s economy, considering that many workers lost their jobs.
Most times, these situations can be the effect of economic and financial crisis, which, in an increasingly world intensive globalized economy, can be quickly transformed into a global crisis. The usual measures might be taken in these circumstances may not significantly improve the situation, especially considering that they are not timely manner. The key objective it should be the prevention of fatal consequences in the economy, thus taking effective measures in a very short time.
2. General aspects regarding the European Fund Concerning Globalisation Adjustment
The European Union set up the European Globalisation Adjustment Fund EGAF in order to support those remaining unemployed as a result of an economic and financial crisis as well as of the globalization process. The aim was the recruitment of the pupils concerned in the labor market in a short time.
)t provides assistance materialized in a package of personalized support, including finding employment, career change or re- training. These measures are delivered in a combination of projects lasting up to two years.
EGAF covers up to % of project costs designed to help dismissed workers to find another job or setting up their own business . Member States manage the EGAF contributions and resulting actions.[ ]
The maximum annual budget available for - for the EGAF is million EUR. The funds are for the projects designed to help unemployed find another jobs or to open their own business. Usually, the EGAF may be used solely when just one company laid off more than employees taking into consideration the layoffs among suppliers and downstream producers or if there are redundancies of many employees of a particular economic sector in one or more neighboring regions.
Projects funded by EGAF are managed and implemented by national or regional authorities. Each project lasts years.[ ]
Despite all these, funding of European Globalisation Adjustment Fund is directed to those who have lost their jobs as a result of mass layoffs, and in no case does not deal with helping big companies financing their modernization and restructuring.
The activities undertaken by European Globalisation Adjustment Fund include the supporting measures aiming at:
• Support for finding a new job;
• Professional development, career guidance; • Professional re-orientation;
• Education and Training;
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• Entrepreneurship and establishment of their own business; • Assistance to self-employment.
Employees affected by losing their jobs are entitled to get that support, and for this purpose the Member State should have to contact the European Commission and to draw up an application to the European Globalisation Adjustment Fund. This request aims to demonstrate urgent need to sustain, that the number of people left unemployed following redundancies is high and most important, that is caused by considerable change world trade patterns or because of the financial crisis.
The management of resources must have a maximum effect for respective region or country through integration of the dismissed persons. From the moment of the application the next step is: European Commission analize and proposes to European Parliament and the Council, and if is follow by a positive response, the European Globalisation Adjustment Fund finances the services.
)t should be noted that the initiative for the submission can come from stakeholders, but individuals or legal entities affected by redundancies who want to benefit from the Fund should contact their national authorities, since applicants are only mеmber states, and only they can submit applications.
The support period is limited by regulation which provides that all applications EGAF developed subsequent to the date May , must be used within months. )t means that it will only provide time-limited assistance. The services may continue after completion of months, but these cannot be co-financed through EGAF.[ ]
)nitially, the main objective of the EGAF was to combat somehow the negative effects of the globalization with emphasis on the beneficial consequences of free trade on the eсonomic development and employment labour, being especially targeted workers with low competences or socially vulnerable. Since , EGAF has introduced and considered a second criteria for providing support, namely, one related to financial and economic crisis tabel .
The fund was maintained for - , as the expression of EU solidarity, and how it works has been enhanced.
)ts scope was widened, so that includes fired workers as a result of the economic crisis, workers with fixed-term contract and freelance workers. Furthermore, by a derogation applicable until the end of , they target young people not in employment and which are not follow education or training, residents in eligible regions for funding under the )nitiative for Employment of Unemployment Young , subject to an equal number to those of assisted redundant workers. [ ]
The measures taken by the European Globalisation Adjustment Fund have not only short-term effects, which may causes consequences on a long-term. Namely, the supporting the employee to practice in another field in another specialization with other competences and responsibilities is corroborated with workforce filling, based on knowledge and consists the ground to replacement while industries without perspective, thereby improving some problems of the regional level economy.
3. Opportunities and results of the European Globalisation Adjustment Fund
Beginning with , the European Globalisation Adjustment has allocated over million in cases of reorganization by supporting more than , workers who lost their jobs, due to restructuring related to changes of the world trade, as a rezult of globalization or economic and financial crisis.[ ]
EU Commissioner for Employment, Social Affairs, Skills and Labor Mobility, Marianne Thyssen, said: ")n a time when public resources are limited, the EGAF has offered an welcome help to the workers left jobless as a result of mass redundancies caused by globalization or crisis. Through grant of a specific and customized assitance, we have supported the transition towards new jobs of some of the most vulnerable workers, which led to an impressive re-employment rate: approx.. %. [ ]
During - the number of applications to the EGAF increased, which may be identified and analyzed through the dynamics of applications, and, at the same time, were seen in the overall situation of their evolution. )n the table below is shown the evolution of the applications number of that have been submitted by member countries during - .
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Tabel 1. Number of applications submitted during 2007-2014
No./Year TOTAL
Related to crisis - - - -
Related to trade
TOTAL 8 5 28 29 24 10 12 18 134
% by total % % % % % % % % %
Source: European Commission [5]
By analyzing the data out in Table there is a considerable growth of the number of applications received by the EGAF in . )n the first place, this is influenced by introducing amendment Regulation and taking into account, in addition, to criteria related to trade and the related crisis. Thus, during - Member States submitted a total of applications, and most of them are those related by the crisis.
)n and , the Commission received applications for EGAF support. They were submitted by Member States Belgium, Germany, )reland, Finland, France, Greece, )taly, the Netherlands, Poland and Spain . Applications by which were requested a total amount of EUR from EGAF, targeted workers made redundant as a result of structural changes in world trade patterns due to globalization or the financial and economic crisis. All ten Member States requested funding from the EGAF in the past.[ ] Due to possibilities posed by globalization, the companies can be implented in countries with a low level of wages, so disastrous for the country where they functioned until taking such a decision, especially if it is the case of larger companies with many employees in that country. )n such situations EGF may act if requested.
A good example of the EGAF is the Nokia Company case, which operated in Germany, in Bochum city and during which a considerable number of people have lost their jobs.
Thus, in , Germany has submitted a request for funding from EGAF after losing jobs within this company during the period July-November . Funding of measures under EGAF were implemented from August to February . Among those workers who have participated in the measures co-financed by the EGF, . % had found new jobs after four weeks of the end of implementation. Of these,
people have become self-employed. Another - % have followed a process of education or training, and the rest were left either unemployed or . % or inactive for several personal reasons or
. % . [ ]
Financial contributions from the European Globalisation Adjustment Fund complements the actions to support beneficiaries of EU funds available or other policy or programs. This dynamic labor market measures, are aimed to improve their professional capacity and rapid reintegration in the work field.
4. Conclusion
Under the intensification of globalisation and against the background of intense effects of the recent economic and financial crisis, the labor force market has been affected, and at the level of European Union was considered more necessary providing support to overcome the negative effects of the two phenomena. European Globalisation Adjustment Fund is designed for the purpose of rapid reintegration of redundant workers and increase the employment potential of the workforce, as a result of mass redundancies related to the two phenomena mentioned above.
Throughout history, has happened as a country's economy in its development to meet several unexpected problems, such as the bankruptcy of large enterprises or strong decrease of a significant sector of the economy. These issues have a destabilizer impact to the economy of the respectives country, considering that a large number of workers lose their jobs. Most times these situations can be the effect of economic and financial crisis, which, in a increasingly intense globalized world economy can quickly turn into a global crisis. The usual measures what would might be taken in these circumstances may not significantly improve the situation, especially considering that these are timely manner. The key-objective should be the prevention of fatal consequences in the economy, thus taking effective action in a very short time. The EU set up the European Globalisation Adjustment Fund EGAF to support people left unemployed as a result of an economic and financial crisis as well as the globalization process. The aim: setting the people concerned in the labor market in a short time. Financing of European Globalisation Adjustment Fund is directed to those who have lost their jobs as a result of mass layoffs, and in no case does not deal with the help of large companies finance their modernization and restructuring.
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on the beneficial consequences of free trade on the eсonomic development and employment labour, being especially targeted workers with low competences or socially vulnerable. Since , EGAF has introduced and considered a second criteria for providing support, namely, one related to financial and economic crisis. )n , there was a significant increase of the number of applications received by the EGAF. )n the first place, this is influenced by introducing amendment Regulation and taking into account, in addition, to criteria related to trade and the related crisis. Thus, during - Member States submitted a total of applications, and most of them are those related by the crisis.
Due to possibilities posed by globalization, the companies can be implented in countries with a low level of wages, so disastrous for the country where they functioned until taking such a decision, especially if it is the case of larger companies with many employees in that country. )n such situations EGAF may act, if requested.
A good example of the EGAF is the Nokia Company case, which operated in Germany, in Bochum city and during which a considerable number of people have lost their jobs.
The measures taken by the European Globalisation Adjustment Fund have not only short-term effects, and can therefore cause effects on long-term, also. Namely, through supporting the worker to practice in another field, in another specialization with other competences and responsibilities, is corroborated with workforce filling, based on knowledge and consists the ground to replacement while industries without perspective, thereby improving some problems of the regional level economy.
References
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http://ec.europa.eu/social/main.jsp?catId=326&langId=ro
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lex.europa.eu/resource.html?uri=cellar:c32bc336-3050-11e5-9f85-01aa75ed71a1.0016.03/DOC_1&format=HTML&lang=ro&parentUrn=CELEX:52015DC0355 accesat în 17.08.2016
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