Explanatory Memorandum to COM(2018)380 - European Globalisation Adjustment Fund (EGF) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)380 - European Globalisation Adjustment Fund (EGF). |
|---|---|
| source | COM(2018)380  |
| date | 30-05-2018 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives
The European Globalisation Adjustment Fund (EGF) was initially established by Regulation (EC) No 1927/2006 1 for the programming period 2007-2013. It was set up to provide the Union with an instrument to demonstrate solidarity with, and give support to, workers made redundant as a result of major structural changes in world trade patterns caused by globalisation and whose redundancies have a significant adverse impact on the regional or local economy. By co-funding active labour market policy measures, the EGF aims to facilitate the return to work of workers in areas, sectors, territories or labour markets suffering from the shock of serious economic disruption.
In the light of the scale and speed at which the financial and economic crisis developed in 2008, the Commission, in its European Economic Recovery Plan 2 , envisaged revising Regulation (EC) No 1927/2006. Apart from some permanent changes based on the first years of EGF implementation, the main aim of this revision 3 was to broaden the scope of the EGF from 1 May 2009 until 30 December 2011. The Commission wanted to enable the EGF to demonstrate Union solidarity and provide support for workers made redundant as a direct consequence of the financial and economic crisis and to increase the co-funding rate from 50 to 65 % to reduce the burden for Member States.
For the multiannual financial framework 2014-2020, the EGF’s scope was extended by Regulation (EU) No 1309/2013 4 of the European Parliament and of the Council, repealing Regulation (EC) No 1927/2006. The aim was to cover not only job displacements 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 to also cover any new global financial and economic crisis. The EGF could therefore also offer assistance in the event of unexpected crises leading to a serious disruption of the local, regional or national economy. Such unexpected crises could, for example, include a major recession in important trading partners or a collapse of the financial system comparable to the one that occurred in 2008. To ensure that EGF support was available to workers whatever their contract of employment or employment relationship, the notion of ‘workers’ was expanded. This meant that it was possible to include not only workers with contracts of employment of indefinite duration, as in Regulation (EC) No 1927/2006, but also workers with fixed-term contracts, temporary agency workers, owner-managers of micro enterprises and self-employed workers. Also, Member States could, under certain circumstances, include in their EGF applications as many young people not in education, employment or training (NEETs) as dismissed workers. This was in the light of the high level of youth unemployment and the fact that it is even more difficult for young people not in education, employment or training to find a job when there are major disruptions on the labour market, such as those caused by a major restructuring event.
The prime objective of this proposal is to ensure that the EGF continues to operate beyond 31 December 2020, without a temporal limitation to the period, as this is a special instrument beyond the multiannual financial framework ceilings.
To ensure that the EGF remains a valid European-level instrument, an application for EGF support for workers can be triggered when the number of redundancies reaches a minimum threshold. Experience with the functioning of Regulation (EU) No 1309/2013 has shown that a threshold of 250 redundancies within a given reference period is advisable, in particular when it is possible to submit applications for a lower number of redundancies in small labour markets or under exceptional circumstances. The threshold of 250 is lower than the threshold for the 2014-2020 programming period. This is because there is a general trend of fewer very large scale redundancies and because the dismissal of 250 workers usually has a significant impact in most regions. This is also to acknowledge the fact that in many Member States, most workers are employed by small and medium-sized enterprises (SMEs).
On 17 November 2017, the European Pillar of Social Rights 5 was jointly proclaimed by the European Parliament, the Council and the Commission as a response to social challenges in Europe. Taking into account the changing realities of the world of work, the EU has to be ready for the current and future challenges of globalisation and digitisation. This means making growth more inclusive and improving employment and social policies. The principles of the European Pillar of Social Rights will act as an overarching guiding framework for the European Globalisation Adjustment Fund (EGF) and will allow the Union to put the relevant principles into practice for major restructuring events.
At Union level, the European Semester of economic policy coordination is the framework to identify national reform priorities and monitor their implementation. Member States develop their own national multiannual investment strategies in support of those reform priorities. Those strategies should be presented alongside the yearly National Reform Programmes as a way to outline and coordinate priority investment projects to be supported by national and/or Union funding. They should also serve to use Union funding in a coherent manner and to maximise the added value of the financial support to be received notably from the programmes supported by the Union under the European Regional Development Fund, the Cohesion fund, the European Social Fund, the European Maritime and Fisheries Fund and the European Agricultural Fund for Rural Development, the European Investment Stabilisation Function and InvestEU, where relevant.
Nowadays' globalised world is characterised by an ever increasing interconnectedness and interdependence of world markets. Due to the interplay and mutual effects of open trade, technological change or other factors like the transition to a low carbon economy, it is increasingly difficult to single out a specific factor that causes job displacements. Paradoxically, due to these most recent trends in globalisation, an unchanged EGF would probably see fewer applications and uptake. The fact that the incidence of very large-scale restructuring cases (involving more than 500 redundancies) has been considerably less over the past decade would very likely further impact the uptake of the fund. Therefore, in the future, the EGF will only be mobilised when a restructuring event has a significant impact, which is defined by the minimum threshold of 250 displaced workers mentioned above.
Despite the still high levels of youth unemployment, experience has shown that other instruments could be more suitable for providing assistance to NEETs, notably the European Social Fund. Tying assistance to young people to an EGF application could be regarded as fostering inequity, as it would exclude most of the young people in need.
The focus of the EGF is on active labour market measures aimed at rapidly bringing dismissed workers back into stable employment. Like Regulation (EU) No 1309/2013, this proposal provides that the EGF financially contributes to a package of active labour market measures. These measures will primarily aim at providing tailor - made support to help reintegration into the labour market, increasing the emphasis on acquisition of digital skills and supporting mobility whenever relevant. The EGF cannot contribute to the funding of passive measures. Allowances may only be included if they are designed as incentives to make it easier for dismissed workers to participate in active labour market policy measures. In order to ensure a reasonable balance between genuinely active labour market policy measures and ‘activated’ allowances, the share of allowances in a coordinated package of active labour market measures is capped.
The EGF will remain one of the special instruments that allow the Union to react to unforeseen circumstances and is therefore being placed outside the budgetary ceilings of the multiannual financial framework. However, its effectiveness has suffered from the length and procedural requirements of the decision-making process. Shortening as much as possible the time between the notice of the dismissals and the actual payment of possible EGF assistance and simplifying the procedures should be a common concern for all parties involved in the EGF process: Member States should strive to submit a complete application as soon as possible once the relevant criteria are met; the Commission should assess and decide on eligibility soon after a complete application is submitted, and the budgetary authority should swiftly take its decision on deploying the EGF funding.
As applications will be based entirely on whether or not the restructuring event has a significant impact, defined by a threshold of 250 displaced workers, there will no longer be the extensive application requirements of the current and former programming periods that often prevented Member States from applying. Therefore, the administrative burden on the Member State will be reduced when it applies and on the Commission when it checks eligibility. This will make deciding on a contribution much easier and faster.
Experience in the implementation of the fund has shown that Member States only ask for its mobilisation in case of true emergency situations. Even though the threshold currently is 500 displaced workers, applications range widely, from 108 to 6120 workers who lost their jobs within the reference period. 6 In order to mitigate the risks of a potentially higher number of EGF applications, the EGF will operate under a higher annual maximum amount 7 and the reference period will also be shortened from nine to six months (in the framework of sectoral applications). Even though a higher uptake of the fund is expected and intended by removing obstacles to its use, there does not seem to be a risk of an excessive use of the fund by Member States.
To cover the needs arising at the beginning of the year, the Commission will continue to propose within the annual budgetary procedure a minimum amount in payment appropriations for the relevant budgetary line.
Assistance from the EGF will be in addition to the efforts of the Member States at national, regional and local level. For reasons of sound financial management, the EGF cannot replace measures that are already covered by Union funds and programmes included in the multiannual financial framework. Nor can the EGF’s financial contribution replace national measures or replace measures that are the responsibility of dismissing companies under national law or collective agreements.
The budget procedure in the proposal follows directly from point 9 of the draft Interinstitutional Agreement. Whenever possible, the process will be shortened and streamlined.
Given that the measures co-funded by the EGF are implemented by means of shared management with the Member States, the payment mechanism for the financial contribution will remain in line with the mechanism applied for this management mode of the Union budget. At the same time, the financing arrangements should reflect the scope of the measures to be carried out by the Member States as proposed in their applications.
To avoid any competition between instruments, the co-funding rate of the EGF will be aligned with the highest co-funding rate of the European Social Fund Plus (ESF+) in the respective Member State.
This overall proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.
• Consistency with existing policy provisions
As indicated in ‘A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020’ 8 , ESF+ and the European Regional Development Fund (ERDF) will continue to provide funding for structural actions for economic, social and territorial cohesion. Both the ESF+ and the ERDF consist of multi-annual programmes that support strategic, long-term goals, such as the anticipation and management of change and restructuring. The EGF, in turn, is established to provide support in exceptional circumstances and outside a multi-annual programming routine.
• Consistency with other Union policies
The ‘EU Quality Framework for anticipation of change and restructuring'’ 9 is the EU policy instrument that provides the framework for best practice for anticipating and dealing with corporate restructuring. The EU Quality Framework for anticipation of change and restructuring offers a comprehensive framework on how the challenges of economic adjustment and restructuring and their employment and social impact should be addressed using the right policy means. The EU Quality Framework for anticipation of change and restructuring calls upon Member States to use EU and national funding in such a way that the social impact of restructuring, especially the adverse effects on employment, can be cushioned more effectively. The main EU instruments to assist workers affected are ESF+, which is designed to offer assistance in an anticipatory way, and the EGF, which is designed to offer assistance in a reactive way in the case of unexpected major restructuring events.
The Commission proposal for the 2021-2027 Multiannual Financial Framework set a more ambitious goal for climate mainstreaming across all EU programmes, with an overall target of 25% of EU expenditure contributing to climate objectives. The contribution of this fund to the achievement of this overall target will be tracked through an EU climate marker system at an appropriate level of disaggregation, including the use of more precise methodologies where these are available. The Commission will continue to present the information annually in terms of commitment appropriations in the context of the annual draft budget.
To support the full utilisation of the potential of the fund to contribute to climate objectives, the Commission will seek to identify relevant actions throughout the fund preparation, implementation, review and evaluation processes.
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.
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 co-fund measures aimed at assisting displaced 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 displaced workers, and it is not the EGF’s aim to replace such programmes. However, unexpected restructuring events that cause a significant impact can test the limits of what regular national programmes are able to do. Therefore, because of the scale and effects of unexpected large-scale restructuring and because the EGF is an expression of solidarity across and between Member States, assistance can be better delivered at Union level. Mobilising a financial contribution from the EGF will require the agreement of both arms of the budgetary authority and therefore be an expression of solidarity by the Union and the Member States. In this way, the proposal will help to make the objective of Union solidarity in exceptional circumstances more tangible for that part of the labour force affected in particular and for Union citizens in general. The Union intervention will thus be limited to what is necessary to fulfil the objectives of showing Union solidarity with displaced workers.
The mobilisation of the EGF creates additional value compared to action of Member States alone. EGF co-financed measures not only increase the overall number of services offered to dismissed workers, but especially also the variety of services offered and their level of intensity. The moblilisation of the EGF furthermore creates role effects. These relate to the extent to which innovative ideas can be tested, best practices identified and incorporated into the regular package of provision. EGF co-financed measures also contribute to the general improvement of delivery processes.
• 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 obligations imposed on the Member States reflect the need to help the affected workforce to adapt to changing circumstances and to rapidly return to employment. The administrative burden on the Union and on the national authorities 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
Proposed instrument: a Regulation.
Other means would not be appropriate for the following reason: the objective of demonstrating Union-level solidarity can only be achieved through a directly applicable legal instrument.
3. RESULTS OF RETROSPECTIVE EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Retrospective evaluations/fitness checks of existing legislation
An ex- post evaluation of the existing Regulation has to be carried out by 31 December 2021. However, a mid-term evaluation of the 2014-2020 EGF 10 was conducted, and the results have been taken into account.
The mid-term evaluation of the 2014-2020 EGF suggests that the EGF’s design needs improving. Several challenges should be tackled for the future.
On the scope, the stakeholder consultations conducted for the evaluation show that the EGF’s design needs to be revised or better defined. This includes aspects such as the Fund’s exact scope and the criteria that trigger its use. In line with the principle of subsidiarity, any occurrence of restructuring must have a significant impact on the economy and the labour market to justify mobilising EGF assistance. However, the notion of ‘significant impact’ is not clearly defined. This is especially true for smaller redundancies below the current threshold of 500 workers made redundant (relevant for 2014-2020). In rural areas, such cases could well be eligible under the derogation clause specified in Article 4 i of the EGF Regulation, for example, but Member States are not sure how to prove the significant impact. Many implementers therefore suggested a lower threshold.
The terms ‘globalisation’ and ‘crisis’ are not clearly defined either. Member States are often unsure under which criterion they should submit an application. Identifying what actually triggered the redundancy to see if it could qualify for a potential application and evidencing it in an application is regularly seen as one of the main obstacles preventing a Member State from applying. In the light of these difficulties, and considering that more jobs are lost due to technological change (these redundant workers face the same challenges as workers made redundant because of globalisation, as their skills become outdated or obsolete), a possible solution could be to include within the EGF’s scope all large-scale redundancies that cause a significant impact. The evaluation suggests this would make the EGF more relevant and better suited for future economic challenges, and also fairer, as it would not focus on a very specific group of displaced workers. Such changes would lead to a more balanced use of the EGF, extending its potential to the EU-13 Member States (these Member States currently do not use the EGF very often). The burden of having to provide evidence for an application to prove that job losses were caused by globalisation or a crisis would be eliminated. As this is also one of the two most time-consuming steps in the application phase, this simplification would speed up the mobilisation of EGF assistance by a few weeks, because major background checks would no longer be required. A broadened scope and lower threshold would also offer more possibilities for smaller Member States to apply for assistance.
As for monitoring and reporting requirements, the evaluation concluded that in order to better analyse the EGF’s effectiveness, Member States should be required to collect more detailed monitoring data, especially on the category of workers (professional and educational background), their employment status and the type of employment found.
It appears that the EGF should be better aligned with other EU policies. The evaluation suggests embedding EGF assistance more closely in the ‘EU Quality Framework for anticipation of change and restructuring’ and designing a more coordinated approach 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 developing a more closely coordinated approach with other EU instruments such as the ESF+. Even though the EGF’s design shows a clear complementarity with the ESF+, Member States could better embed EGF assistance in 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.
During the 2014-2020 programming period, it is possible under certain circumstances to include as many NEETs in an EGF application as dismissed workers. Youth unemployment is and will continue to be a major challenge. Also, experience shows that EGF assistance, if offered to NEETs, is largely taken up. However, the evaluation suggests that thought should be given to whether the EGF is the right avenue to offer such assistance or if other channels would offer a better chance of reaching the young people concerned. It could be considered unfair if help is only offered to NEETs in regions affected by mass restructuring caused by globalisation or the financial crisis but not to those in regions affected by automation.
• Stakeholder consultations
Extensive stakeholder consultations, including open internet-based consultations, targeted consultations and focus group meetings, were core elements of the mid-term evaluation mentioned above and the impact assessment mentioned below.
The Commission also conducted stakeholder events where it discussed possible changes to the design of the EGF post-2020. These discussions took place during the regular EGF Contact Persons’ Meetings and Networking Seminars in October 2017 and March 2018, and during an extraordinary EGF Contact Persons’ Meeting in January 2018, which was fully dedicated to the post-2020 discussions.
In general, stakeholder views did not diverge from the Commission’s views and are reflected in this proposal.
• External expertise
In preparing the mid-term evaluation, the Commission contracted out an evaluation study to an external consultant.
Likewise, in preparing the impact assessment, the Commission contracted out a study to an external consultant.
• Impact assessment
An impact assessment was carried out. This impact assessment, which is part of the regulatory proposals of Directorate-General Employment, Social Affairs and Inclusion for the next multiannual financial framework, covers the following funds:
–the European Social Fund (ESF — one of the European Structural and Investment Funds (ESI Funds)) and Youth Employment Initiative (YEI);
–the Fund for European Aid to the Most Deprived (FEAD);
–the European Globalisation Adjustment Fund (EGF);
–the EU Health programme; and
–the Employment and Social Innovation (EaSI) programme.
The following options were assessed for the funds covered by the impact assessment:
Contents
- Option 1: merging the ESF, YEI, FEAD, EaSI, EU Health programme.
- Option 2: merging the ESF, YEI, FEAD, EaSI, EU Health programme and EGF
- Option 3: merging the funds under shared management (i.e. excluding the EaSI and the EU Health programme, but including the EGF) –
- Option 4: keeping the FEAD as a separate fund, but merging the two types of FEAD programmes (material assistance and social inclusion)
- Option 5: merging all ESI funds
- not applicable
- not applicable
–This was the preferred option based both on the results of evaluations and on stakeholder consultations. In the view of managing authorities, a broad integration of funds would improve their capacities to streamline their strategic intervention across the social policy scope. This would enhance their flexibility in planning interventions, and facilitate the delivery of the principles of the European Pillar of Social Rights. Beneficiaries confirmed that there is still untapped potential to strengthen synergies between programmes and projects funded;
–This would only result in an artificial reduction in the number of funds. The EGF's very specific objectives, high political visibility and budgetary flexibility would be lost if it were to be merged with the ESF+. This has been confirmed by stakeholders in the framework of the consultation process 11 ;
Option 3: merging the funds under shared management (i.e. excluding the EaSI and the EU Health programme, but including the EGF) –
–This would mean sacrificing the EGF’s high visibility as an EU-level emergency instrument to cushion the adverse side effects of globalisation. The potential flexibility and synergies to be gained from merging EaSI within the ESF+ would be lost;
Option 4: keeping the FEAD as a separate fund, but merging the two types of FEAD programmes (material assistance and social inclusion)
–This would allow for more synergies between the basic material assistance types of support and social inclusion measures while keeping the current implementation rules. It would not however ensure adequate demarcation vis-à-vis ESF-type social inclusion measures;
–This would impair policy delivery, as it would not be possible to adapt implementation rules to the specific requirements of the policies supported. It would also not increase synergies and coherence with other human capital funds.
The impact assessment was examined by the Regulatory Scrutiny Board (RSB), which gave a positive opinion with reservations. The RSB's opinion is available under Ares(2018)2265999. The comments of the RSB were taken into account. The comments relevant to the EGF primarily related to the explanation of the rationale of the EGF. The RSB also suggested a more precise presentation of the modalities of the use of the EGF, and a more detailed analysis of the extent to which the proposed changes address problems identified. The RSB also recommended setting out the reasons for keeping the EGF outside the multiannual financial framework more clearly.
The final policy proposal does not deviate from the findings of the impact assessment. The most important finding regarding the EGF is that as an emergency relief fund, the EGF should remain outside the budgetary ceilings of the multiannual financial framework. Emergency funds are not expected to absorb a specific budget. Being inside the multiannual financial framework would therefore mean the contrary, having a specific budget that the fund is supposed to spend, which would turn it into a tool of regular restructuring assistance. However, being outside the multiannual financial framework implies a lengthy mobilisation procedure, which counteracts its function as an emergency relief fund. Therefore, the mobilisation procedure needs to be sped-up and streamlined. The impact assessment underlines the importance of a lower threshold and of a broader scope of the EGF.
• Simplification
• Fundamental rights
4. BUDGETARY IMPLICATIONS
The EGF is one of the special instruments not included in the budgetary ceilings of the multiannual financial framework, with a maximum annual amount of EUR 200 Mio (in 2018 prices) from 1 January 2021 to 31 December 2027.
Its functioning is governed by point 9 of the draft Interinstitutional Agreement between the European Parliament, the Council and the Commission on cooperation in budgetary matters and on sound financial management.
The human and administrative resources required are set out in the Legislative Financial Statement.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Monitoring the performance of EGF will be strengthened by introducing provisions for a common monitoring system with output and result indicators in the EGF Regulation. Success will mainly be measured through re-employment rates, i.e. the share of people who found a job after receiving EGF assistance.
Member States will be required to include the delivery of common output and result indicators in their contracts with the implementing bodies. The requirements currently introduced in the EGF financing decisions will be incorporated in the EGF Regulation, meaning data on the employment status of beneficiaries is to be delivered when the respective Member State submits the final report a year later. This also includes information on the type and quality of employment (e.g. permanent/non-permanent) and changes in the beneficiaries’ employability at the end of the operations (e.g. qualifications gained). The data collected will need to be based on surveys and data provided by the national authorities. This will make it possible to assess the extent to which the assistance helped to improve the beneficiaries’ employability and change their employment status, in order to determine whether the EGF is functioning effectively.
Given the findings of previous evaluations and Court of Auditors reports, case-specific target setting will be introduced. These targets will need to take into account the specific characteristics of a case and the extent to which past cases are comparable. The targets should refer to beneficiaries’ re-integration rates. These are necessary for reporting and evaluation purposes but are not tied to penalty mechanisms or result-based payments. Emergency situations can be characterised by the fact that they occur unexpectedly, in often quickly changing unpredictable environments. Result-based payments would only be fair if the results could directly be attributed to the assistance granted and would not be heavily dependent on external factors as well. In the final reports, however, Member States will need to provide a reasoned analysis of the extent to which the targets have been reached. Evaluations have shown that result orientation as such was never an issue. Bringing people back into employment and/or increasing their employability have always been the greatest concern for Member States. However, result measurement has not always been possible due to the poor availability of data.
The EGF mid-term evaluation showed that future evaluations should be scheduled so as to ensure that enough data is available. Therefore, in line with the Better Regulation Guidelines, the timing of future evaluations will be better aligned with the implementation cycle of the EGF. This will mean that every four years an evaluation is to be completed.
Evaluations will be carried out in line with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 12 , where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action. The evaluations will assess the programme's effects on the ground based on the programme indicators/targets and a detailed analysis of the degree to which the programme can be deemed relevant, effective, efficient, provides enough EU added value and is coherent with other EU policies. They will include lessons learnt to identify any lacks/problems or any potential to further improve the actions or their results and to help maximise their exploitation/impact.
The Commission will continue to report every 2 years on the Fund’s activities.
• Detailed explanation of the specific provisions of the proposal
Articles 2 and 3 of the proposed draft Regulation set out the mission and the objectives of the EGF. As a change to the current EGF Regulation (EU) 1309/2013, the mission explicitly includes the EGF’s role in contributing to the relevant principles of the European Pillar of Social Rights. Furthermore, it is made clear in the objectives that the EGF will tackle any kind of unexpected major restructuring, making the Fund more adaptable to current and future economic challenges.
The intervention criteria are set out in Article 5. The proposed threshold of the redundancies is a minimum 250 displaced workers, whereas it is a minimum 500 displaced workers in the current Regulation. This is to better reflect the realities in many regions, where the occurrence of restructuring involving 250 displaced workers has a significant impact on the labour market. It is also to reflect that overall, the share of very large-scale redundancies is declining. A new provision has been added allowing Member States to apply for EGF assistance if redundancies occur in the same region but in different economic sectors. For less populous regions especially, a wave of dismissals in various sectors at the same time can have a very significant impact on the labour market. A new provision has been added setting out that the EGF, as a trade-oriented fund, cannot be mobilised if public sector redundancies are the direct consequence of public budgetary cuts. This is also to reflect the fact that the EGF does not give aid to the dismissing enterprise, which in this instance would be the public authorities of the Member State applying for EGF assistance.
Article 8 sets out the eligible measures. As a change to the current Regulation, the inclusion of the dissemination of skills required in the digital age is mandatory. In the light of the requirements of the job market, this is considered a necessary requirement. The measures offered are to be based on the personal needs and qualifications of the beneficiary.
Technical assistance from the Commission is to support any measures necessary to implement the proposed Regulation. According to Article 12 of the proposed Regulation, this could be up to an amount equalling 0.5 % of the annual maximum amount of the EGF. This is higher than in the current programming period, as specific assistance will be offered to Member States less experienced in implementing the EGF or restructuring assistance as such. This would also include additional measures to increase networking and the exchange of good practice between Member States.
The standard period for implementing EGF measures will remain 24 months. However, Article 15 of the proposed Regulation stipulates that the 24 months are to be counted from the time the decision to mobilise the EGF is adopted and not from the date of application for EGF support. This is to reflect the fact that many Member States have budgetary procedures in place that do not allow them to take the risk and pre-finance such measures without knowing if the assistance will actually be granted. However, if a Member State is willing to take the risk, measures are eligible from the time the redundancies are announced, as is the case in the current Regulation.
Article 16 of the proposed Regulation stipulates the budgetary procedure. Because decisions to mobilise the EGF are to be based on the formal requirement that a minimum of 250 workers have lost their job within a specific reference period, an extensive analysis of the background of the redundancies is no longer required. Therefore, Commission proposals to mobilise the EGF, which were based on such analyses, are no longer needed. The budgetary authority will decide on a transfer request. The Commission will attach the draft implementing decision and a brief summary of the application to the transfer request. This procedure will ensure a faster deployment of the financial contributions.
The division of responsibilities between the Commission and the Member States is set out in the proposed Article 23. The EGF will remain under shared management, and no significant changes are made to the provisions on the appointment of implementing bodies, audit issues, fraud prevention.