The European Globalisation Adjustment Fund: Easing the pain from trade?

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The European Globalisation Adjustment Fund: Easing the pain from trade?

With the European Globalisation Adjustment Fund (EGF), the EU now has an instrument to help workers negatively affected by trade find new jobs. Howev

Publishing date: 22 March 2018
Authors: André Sapir Grégory Claeys

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The European Union created the European Globalisation Adjustment Fund (EGF) in 2007 to co-fund, together with EU member states, policies to help workers negatively affected by globalisation find new jobs.

The EGF was a political acknowledgment that the EU, which has exclusive competence over trade policy, needed to assume some budgetary responsibility for the economic displacement arising from globalisation.

This policy contribution attempts to evaluate the EGF programme after ten years of implementation and in the context of the negotiations on the EU’s 2021-27 Multiannual Financial Framework.

The EGF programme is relatively modest in size. During the decade from 2007 to 2016, it financed 147 cases (involving either large firms or regionally-concentrated groups of small firms), covering 140,000 dismissed workers. But only about half of the cases and job losses were related to globalisation. The other half were related to the economic and financial crisis, which became eligible for EGF assistance in 2009.

Our evaluation addresses both the political visibility of the EGF programme and its economic effectiveness, and concentrates on cases and dismissed workers related to globalisation.

The authors find the programme was highly politically visible in the sense that EGF beneficiaries tended to work for large firms prior to their redundancies and these job losses were widely reported in the media.

The economic effectiveness of the EGF programme is more difficult to evaluate, mainly because the available data is insufficient. Estimates, however, suggest that only a small proportion of EU workers who lost their jobs because of globalisation received EGF financing. Unfortunately it is impossible at this time to assess whether workers who received EGF assistance did better in their job searches than those who did not receive EGF assistance.

Three main recommendations are made to improve the EGF programme: 1) collect more and better data on EGF cases and assisted workers to enable a proper evaluation of the programme; 2) revise the eligibility criteria to qualify for EGF assistance and the co-funding rate for the contribution from low-income countries or regions; and 3) enlarge the scope of the EGF programme beyond globalisation to also assist workers displaced by intra-EU trade and offshoring that result from the working of the single market, which like international trade is also an exclusive competence of the EU.

Corrections regarding Lawrence (2014) and Cernat and Mustilli (2017) have been implemented on this publication on 23 March 2018.

About the authors

André Sapir

André Sapir, a Belgian citizen, is a Senior fellow at Bruegel. He is also University Professor at the Université libre de Bruxelles (ULB) and Research fellow of the London-based Centre for Economic Policy Research.

Between 1990 and 2004, he worked for the European Commission, first as Economic Advisor to the Director-General for Economic and Financial Affairs, and then as Principal Economic Advisor to President Prodi, also heading his Economic Advisory Group. In 2004, he published 'An Agenda for a Growing Europe', a report to the president of the Commission by a group of independent experts that is known as the Sapir report. After leaving the Commission, he first served as External Member of President Barroso’s Economic Advisory Group and then as Member of the General Board (and Chair of the Advisory Scientific Committee) of the European Systemic Risk Board based at the European Central Bank in Frankfurt.

André has written extensively on European integration, international trade and globalisation. He holds a PhD in economics from the Johns Hopkins University in Baltimore, where he worked under the supervision of Béla Balassa. He was elected Member of the Academia Europaea and of the Royal Academy of Belgium for Science and the Arts.
Grégory Claeys

Grégory Claeys, a French and Spanish citizen, joined Bruegel as a research fellow in February 2014, before being appointed senior fellow in April 2020.

Grégory Claeys is currently on leave for public service, serving as Director of the Economics Department of France Stratégie, the think tank and policy planning institution of the French government, since November 2023.

Grégory’s research interests include international macroeconomics and finance, central banking and European governance. From 2006 to 2009 Grégory worked as a macroeconomist in the Economic Research Department of the French bank Crédit Agricole. Prior to joining Bruegel he also conducted research in several capacities, including as a visiting researcher in the Financial Research Department of the Central Bank of Chile in Santiago, and in the Economic Department of the French Embassy in Chicago. Grégory is also an Associate Professor at the Conservatoire National des Arts et Métiers in Paris where he is teaching macroeconomics in the Master of Finance. He previously taught undergraduate macroeconomics at Sciences Po in Paris.

He holds a PhD in Economics from the European University Institute (Florence), an MSc in economics from Paris X University and an MSc in management from HEC (Paris).

Grégory is fluent in English, French and Spanish.