PURPOSE: to enable the European Globalisation Adjustment Fund to support workers made redundant and self-employed persons as a result of the likely economic disruptions in the case of a Brexit without a withdrawal agreement.

LEGISLATIVE ACT: Regulation (EU) 2019/1796 of the European Parliament and of the Council amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund (2014-2020).

CONTENT: the European Globalisation Adjustment Fund (EGF) was created in 2006 to enable the Union to show solidarity with workers who have lost their jobs as a result of major structural changes in world trade patterns as a result of globalisation. For the period 2014-2020, the scope of the Fund has been extended to include redundancies resulting from any new global financial and economic crisis.

The withdrawal of the United Kingdom from the Union without a withdrawal agreement is likely to have negative effects on a number of branches of industrial activity and services by leading to redundancies in the sectors concerned.

Accordingly, this Regulation amending Regulation (EU) No 1309/2013 extends the scope of the EGF by stipulating that redundancies resulting from a withdrawal of the United Kingdom from the Union without a withdrawal agreement shall fall within the scope of the Fund. It thus adds the withdrawal of the United Kingdom from the EU without agreement to other major causes of redundancies, such as the delocalisation of jobs, the substantial increase in imports into the Union or the rapid decline in the Union market share in a given sector.

ENTRY INTO FORCE: 01.11.2019

The Regulation shall apply from the day following the day on which the treaties cease to apply in the United Kingdom if no withdrawal agreement is concluded. However, this Regulation shall not apply if an agreement is reached by the date of the withdrawal of the United Kingdom.

The European Parliament adopted by 516 votes to 23, with 17 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund (2014-2020).

Parliament adopted its position at first reading, in accordance with the ordinary legislative procedure, taking over the Commission proposal.

The EGF was established to enable the Union to show solidarity towards workers who lost their jobs as a result of major structural changes in world trade patterns due to globalisation.

The withdrawal of the United Kingdom from the Union without a withdrawal agreement is likely to negatively affect some industries and services by leading to people working in those sectors being made redundant. This Regulation should amend Regulation (EU) No 1309/2013 in order to specify that such redundancies fall within the scope of the EGF. This would ensure that the EGF can respond effectively by offering assistance to workers made redundant in areas, sectors, territories or labour markets subject to serious economic disruption due to the withdrawal of the United Kingdom from the Union without a withdrawal agreement.

This Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union and should apply from the day following that on which the Treaties cease to apply to the United Kingdom. However, it should not apply if a withdrawal agreement concluded with the United Kingdom in accordance with Article 50(2) TEU has entered into force by that date.

In a statement annexed to the legislative resolution, the European Parliament called on the Commission and the Member States to ensure a flexible application of Article 4(2) of Regulation (EU) No 1309/2013 on the EGF 2014-2020 in the event of withdrawal of the United Kingdom from the Union, in particular with regard to collective applications involving SMEs in single or multisectoral cases.

The Committee on Employment and Social Affairs adopted the report by Vilija BLINKEVIČIŪTĖ (S&D, LT) on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund (2014-2020).

The committee responsible recommended that the European Parliament adopt its position at first reading, in accordance with the ordinary legislative procedure, taking over the Commission proposal.

As a reminder, this proposal is part of the Union preparedness and contingency plan to mitigate the most significant disruptions caused by a withdrawal of the United Kingdom from the Union without a withdrawal agreement. The proposed amendments aim to clarify that redundancies resulting from a withdrawal of the United Kingdom from the Union without a withdrawal agreement fall within the scope of the EGF.

In a statement annexed to the draft resolution, the European Parliament called on the Commission and the Member States to ensure a flexible application of Article 4(2) of Regulation (EU) No 1309/2013 on the European Globalisation Adjustment Fund for the period 2014-2020 in the event of withdrawal of the United Kingdom from the Union, in particular with regard to collective applications involving SMEs in single or multisectoral cases.

The Committee on Budgets also expressed its support for the proposal for a regulation amending the EGF Regulation.

PURPOSE: to enable the European Globalisation Adjustment Fund to support workers made redundant as a result of the likely economic disruptions in the case of a Brexit without a withdrawal agreement.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: the United Kingdom has decided to leave the European Union using the procedure provided for in Article 50 of the Treaty on European Union (TEU).

Following a request from the United Kingdom, the European Council agreed on 11 April 2019 to further extend the deadline provided for in Article 50(3) of the TEU until 31 October 2019. Unless the United Kingdom ratifies the withdrawal agreement by 31 October 2019 or requests a third extension and it is adopted unanimously by the European Council, the United Kingdom will leave the Union without agreement and become a third country on 1 November 2019.

The European Globalisation Adjustment Fund (EGF) was established by Regulation (EC) No 1927/2006 of the European Parliament and of the Council for the duration of the multiannual financial framework from 1 January 2007 to 31 December 2013. It was established to enable the Union to show solidarity towards workers who lost their jobs as a result of major structural changes in world trade patterns due to globalisation.

After analysing the risks, the European Commission concluded that this proposal was necessary to ensure an effective response from the EGF and to show solidarity with workers made redundant in the Union as a result of a withdrawal from the United Kingdom from the Union without a withdrawal agreement.

CONTENT: the proposed contingency Regulation should amend Regulation (EU) No 1309/2013 in order to specify that redundancies resulting from the withdrawal of the United Kingdom from the Union without a withdrawal agreement fall within the scope of the EGF.

Such a withdrawal would represent a major change in the EU's trade relations and the structure of the internal market and would therefore probably have significant repercussions on business models, growth and employment.

The Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union and should apply from the date following that on which the Treaties cease to apply in the United Kingdom. However, it should not apply if a withdrawal agreement concluded with the United Kingdom in accordance with Article 50(2) TEU has entered into force by that date.