Policy paper 231

Towards a European Transition Support Fund

Since the establishment of the European Globalisation Adjustment Fund (EGF) in 2007, the EU co-funds, together with Member States, policies to facilitate the re-integration into employment of workers who have lost their jobs as a result of major restructuring events caused by globalisation.

By the end of 2017, the EGF had targeted 147,000 European workers. Yet, despite a relatively low budget, the fund has been under-used, with only 15% of its expenditure ceiling (EUR 611 million) being allocated. This is due to excessively restrictive eligibility criteria, lengthy procedures and a lack of visibility of the fund. In addition, it is difficult to measure the fund’s performance due to insufficient data. Eight EU Member States have never used the EGF.

Even though the EGF has not reached its potential over the last eleven years, this does not mean that it should be shelved. On the contrary, the far-reaching and swift changes underway in our economies and the political considerations on the specific added value of European action require to fully unlock the fund’s potential. The current negotiation of the next multiannual financial framework (MFF) for the 2021-2027 period is an opportunity to endow the EU with a genuine “European transition support fund”.

In this Policy Paper, Sofia Fernandes, senior research fellow at the Jacques Delors Institute, and Justine Daniel, research assistant at the Jacques Delors Institute, analyse the current functioning and performance of the EGF and then present a set of recommendations for this new fund:

  1. an extension of its scope of application to any major restructuring event, not only linked to globalisation but also to other transitions underway such as robotization, the digitisation of the economy and the energy transition, which may result in job losses;
  2. a simplification of its procedure and less restrictive eligibility criteria to increase its use;
  3. enhanced effectiveness of the re-integration into employment projects funded by the fund;
  4. improved synergies with the other European instruments;
  5. a significantly higher budget and greater visibility for the fund.