European Global Adjustment Fund (EGF)

The European Global Adjustment Fund promotes skills training, advice and support for people who have become unemployed.

Under which conditions can an application be made?

The European Globalisation Adjustment Fund can become active when a large number of employees are made redundant due to the globalisation of the world economy or severe global financial and economic crises. The conditions are firstly that a minimum number of persons are affected, and secondly that the application is based on reasoned content:

At least 200 persons must be affected by the redundancies (exceptions in the case of so-called small labour markets are possible). The redundancies must must be taking place in a company (plus its suppliers and custome enterprises), in small and medium-sized enterprises (SMEs) in different sectors in the same region, or in SMEs in the same sector in one or more neighbouring regions. Job losses can be caused by increasing globalisation, such as outsourcing of production to other countries. Funding is also possible due to redundancies caused by the Corona crisis, financial and economic crises, digitalisation, automation or because of the transition to a low-carbon economy.

Applications for support from the fund are made by the Member States to the European Commission. Individuals and companies cannot apply directly to the European Commission. In Austria, the administrative authority which makes the applications and directs their implementation is Department III/A/3 of the Ministry of Work and Economy (BMAW). It observes the economic situation, decides on whether to make an application, and then submits it to the EU Commission.

What does the EGF subsidise?

The EGF finances active labour market policy measures to support the affected persons. More specifically, these are offers which support people in looking for work, provide careers advice and further education, outplacement services, and assistance in setting up a business. In Austria, EGF measures are managed via labour foundations or similar projects.

How big is the EGF’s budget, and who bears the costs of an EGF project? How long can the support last for?

The EGF has an annually EU-wide budget of around €210 million for the period 2021-2027; however, individual Member States have no specific entitlement to support. The EGF subsidises a maximum of 58 percent of the costs of an EGF project. The remaining 15 percent are financed on a national basis. The duration of EGF subsidies for a project is 24 months at the most.

Which EGF projects have there been in Austria until now?

There have been six EGF projects in Austria until now, which were realised as labour foundations or similar measures.

• Styrian Automotive Foundation: Due to the financial and economic crisis (2008), there was a drastic downturn in the export of vehicles. This particularly affected the Austrian automobile industry. Workers from a total of nine companies in the fields of car manufacturing or the production of parts were impacted. From around 330 Persons supported under the EGF, 44 percent succeeded in completing technical college or a university degree, eleven percent trained to become a foreman or forewoman, and 24 percent obtained a different advanced technical qualification. Eleven percent obtained qualifications in the field of care, while ten percent completed commercial or other training. The foundation was financed as follows: two thirds (€5.6m) from EGF funding, just under a third from the affected companies, and to a lesser degree from national public funding.
• The AT&S Leoben Hinterberg/Styria Foundation: The EGF support package for former AT&S workers benefited around 30 of the most disadvantaged persons and included measures such as support in looking for work as well as obtaining additional skills, and also covered the necessary subsidies. The total cost of the package was just under €700,000, of which the European Union contributed approx. €450,000 from the EGF. The project lasted until March 2012.
• The Lower Austrian/Styrian Steel Foundation:  Due to the economic and financial crisis, exports in the metalworking industry collapsed at the end of 2008. This led to 1,180 redundancies in 54 companies. Via the Steel Foundation, the EGF supported around 300 workers who had been made redundant by providing careers orientation advice, support for those actively looking for a job, and initial and further training courses. The financing was provided as follows: two thirds (€5m) from EGF funding, just under a third from the affected companies, and to a minor degree from national public funding. The project ended in March 2012.
• Transport workers in Lower and Upper Austria: Due to the economic and financial crisis, a large number of persons were made redundant in the transport sector in 2010. The haulage business had seen a severe downturn in 2009, and this trend continued in 2010. Many of these people were able to find a job again quickly, and around 140 persons were ultimately supported by the EGF. They received careers orientation advice, were able to undergo further training or learn a new trade, or were supported in their search for work. To this end, the EGF made around €600,000 available, while €300,000 came from national funding. The project lasted until the end of 2012.
• The Styrian Social Services Foundation: In 2011, a large number of people in the social services sector in Styria became redundant. An EGF project was thus initiated to offer them support in occupational re-orientation, skills training, and in the search for jobs. To support these efforts, there were offers of work assistance, careers orientation advice, individual coaching sessions, and initial and further training courses. 225 persons participated in the labour foundation’s activities. Around €3m was provided by the EGF and €1.6m came from national funding. The project continued until 21 December 2013.
• Austria Tabak: 320 employees of the Austria Tabak tobacco products company in the Lower Austrian town of Hainburg lost their jobs due to the closure of the factory. In December 2011 an application was therefore made to the European Commission for joint financing of the labour foundation for those who had been made redundant. The EGF support package for Austria Tabak workers in Lower Austria covered measures such as re-orientation, skills training and support in the search for jobs. Overall, measures costing €2.1m were financed by the EGF, while an additional €1.1m came from national funding. 193 persons took part in the project, which continued until 2013.