A Better Globablisation Fund. Bruegel policy brief 2007/01, February 2007

Wasmer, Etienne and von Weizsacker, Jakob (2007) A Better Globablisation Fund. Bruegel policy brief 2007/01, February 2007.

Abstract

Summary. The recently adopted European Globalisation Adjustment Fund (EGF) is an EU response to the challenge of globalisation. It is to spend up to €500m annually supporting active labour market policies in Member States targeting workers affected by trade-induced (mass) layoffs. In principle, this EU effort to help trade-displaced workers makes sense since trade policy is also decided at EU level. In practice, EGF rules leave too much room for discretionary decisions, exposing it to political posturing and lobbying. During its critical first few years, sound precedents must be established, eligibility rules should be strengthened, and rigorous evaluation should be built into the programme. Otherwise, the EGF may come to be regarded as a political gimmick instead of a useful European response to globalisation.