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Reform of the European Globalisation Adjustment Fund

11-01-2019

The European Globalisation Adjustment Fund (EGF) was created in 2006 to finance active labour market policies targeting workers who have lost their jobs because of trade adjustment. The fund was subsequently modified in 2009 to cover major structural changes triggered by the economic and financial crisis. The rules of the EGF are laid down in EU Regulation (EU) No 1309/2013, which stipulates that the fund will continue to be financed until 31 December 2020. In May 2018, the European Commission submitted ...

The European Globalisation Adjustment Fund (EGF) was created in 2006 to finance active labour market policies targeting workers who have lost their jobs because of trade adjustment. The fund was subsequently modified in 2009 to cover major structural changes triggered by the economic and financial crisis. The rules of the EGF are laid down in EU Regulation (EU) No 1309/2013, which stipulates that the fund will continue to be financed until 31 December 2020. In May 2018, the European Commission submitted a proposal to reform the EGF and maintain it as a special instrument outside the MFF ceiling. The proposal introduces modifications to the eligibility criteria, the co-financing rules and the mobilisation procedure. The report was voted in the EMPL committee on 27 November 2018, and the report is due to be debated in plenary in January 2019, with a view to finalising Parliament's position for trilogue negotiations. Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

European Social Fund Plus and European Globalisation Adjustment Fund

08-10-2018

The Commission proposes to establish a European Social Plus (ESF+) by merging different funds and programmes, and a strengthened European Globalisation Adjustment Fund (EGF). These proposals would contribute to implement the European Pillar of Social Rights and enhance social Europe. The impact assessment report (IA) concerning the proposals explains the challenges of funding and the defined objectives of the proposals. In relation to the proposed measures, risks and mitigating measures have also ...

The Commission proposes to establish a European Social Plus (ESF+) by merging different funds and programmes, and a strengthened European Globalisation Adjustment Fund (EGF). These proposals would contribute to implement the European Pillar of Social Rights and enhance social Europe. The impact assessment report (IA) concerning the proposals explains the challenges of funding and the defined objectives of the proposals. In relation to the proposed measures, risks and mitigating measures have also been discussed. It can be noted that the IA essentially concentrates in providing a thorough assessment of the selected measures, rather than discussing possible alternatives and comparing and assessing them. In addition, it would have benefited the analysis, if the link with the specific objectives had been elaborated more, as the description of social impacts is quite limited, and health impacts are not discussed although the Health Programme is merged into the ESF+. It would have been useful to have further explanation on the merger of the Health Programme into the ESF+ and its expected synergy impacts. A more detailed description would have been welcome concerning the results of the targeted stakeholder consultations.

Policy measures to respond to trade adjustment costs

24-11-2017

Trade liberalisation is generally expected to bring net welfare gains to the domestic economy by reallocating resources to more productive firms or to industries with a comparative advantage. However, these gains are not always distributed evenly and can involve transitional costs for certain firms and workers. Trade adjustment measures are designed to compensate for these costs. The literature proposes mainly active labour policies (including training and other measures for re-employment) for dealing ...

Trade liberalisation is generally expected to bring net welfare gains to the domestic economy by reallocating resources to more productive firms or to industries with a comparative advantage. However, these gains are not always distributed evenly and can involve transitional costs for certain firms and workers. Trade adjustment measures are designed to compensate for these costs. The literature proposes mainly active labour policies (including training and other measures for re-employment) for dealing with these adjustments. Other policies, such as passive labour policies (unemployment benefits), credit financing, housing policies, etc., can also play a role. The EU's main instrument is the European Globalisation Adjustment Fund (EGF), which focuses on active labour policies. In the USA, trade adjustment assistance includes assistance for workers as well as firms and farmers. Assessments of these measures have shown some positive results. In both the EU and the USA, the effectiveness of the measures was found to be greater the higher the educational level of workers or, in the case of measures targeting firms, the higher the growth of the industry's market. This would suggest that structural policies (such as education) play a key role. The EGF has tended to target redundancies from big multinational or national champions, and its co-financing rules are less favourable than other funds, leading to uneven use of the fund by Member States and different views with respect to the reforms needed. The Commission is planning to propose improvements to the EGF in the near future. This briefing may be read together with the 2016 European Implementation Assessment on the EGF for the EMPL Committee, and the recent study on Interactions between trade, investment and trends in EU industry: EU regions and international trade.

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