Solidarity in the face of Change: The European Globalisation Adjustment Fund: 2007 Review and Prospects

Solidarity in the face of Change: The European Globalisation Adjustment Fund: 2007 Review and Prospects

TUC Comments

The TUC welcomes the Communication from the Commission on the European Globalisation Adjustment Fund. In our view, globalisation should be a force for good in the world economy. It will help to bring economic growth, employment and a higher quality of life to poorer countries, while allowing richer countries to focus on high skill, high value industries. However, the adjustments created by globalisation can be abrupt and can result in job losses, lower pay and high anxiety for many workers affected.

It is important to respond flexibly and confidently to the changes brought about by globalisation. The European Globalisation Adjustment Fund (EGF), which came into operation on 1^st January 2007, is a necessary tool for such a response. The TUC welcomes the fact that the EGF assisted 13,273 workers in its first year. This is clearly a good start.

Of course, there are bound to be lessons to learn. Take up was limited in the first year of the EGF and it is important to understand why this was the case. Such funds have an inevitable degree of bureaucracy, but it is important to ensure that the EGF operates in such a way that it is clear and as user-friendly as possible. Information about eligibility for funding must be made as clear as possible, as a combination of doubt whether a particular company qualifies, with a large, complex funding application process, could deter potential bidders.

EGF has a maximum amount of 500 million euros per year. As the Communication explains, this is not an expenditure target, yet this is not a large amount of money in European terms and it is difficult to believe that there are not enough workers and companies affected by globalisation to have used this amount. The TUC believes that the three immediate steps identified to improve the operation of the EGF, namely simplifying procedures, promoting exchange of experience and good practice, and intensifying awareness raising activities, are broadly correct. If, having implemented these steps, it is found that demand exceeds 500 million euros, the Commission must look again at the funding available.

The TUC also urges the Commission to consider the issue of 'Europeanisation', as well as globalisation. The practice of jobs from Western nations migrating to the BRIC economies is well known, yet with the enlarged EU, some companies are migrating from Western to Eastern Europe, attracted by lower labour costs. In the light of this practice, the TUC believes that EGF funds should also be available for countries affected by the shocks of 'Europeanisation'. This is of primary importance if trust in the European project is to be maintained and its cohesiveness is to be protected.