European Union institutions have agreed to expand the scope of the European Globalisation Adjustment Fund for Displaced Workers, known as the EGF.
Under the new rules, funding will be available not only to employees dismissed by companies facing financial difficulties, but also to workers at risk of losing their jobs as a result of corporate restructuring.
According to Bogdan Rzońca, a Member of the European Parliament representing Poland’s Law and Justice party, without substantial reforms to improve competitiveness, the problems facing EU companies will deepen and eventually exceed the EGF’s financial capacity.
“The European Globalisation Adjustment Fund for Displaced Workers was established many years ago, when the first signs of economic globalisation emerged. It was intended to serve as a lifeline in exceptional circumstances, when companies collapsed or went bankrupt for objective reasons. Today, it functions as support for companies across the European Union that are experiencing difficulties in the market,” Rzońca told the Newseria news agency.
Until now, the EGF has supported employees and self-employed people who lost their jobs following corporate restructuring, helping them return to the labour market.
Changes approved by the Council of the European Union in May 2026 have extended this support to employees at risk of unemployment. The new rules are expected to remain in force until the end of 2027, when the current EGF programme expires.
Funding is primarily used for training and new skills
“The process is very straightforward. A company that is experiencing difficulties, undergoing restructuring and dismissing more than 200 employees must report the situation to its national government. The government then applies for funding from the Globalisation Fund,” Rzońca explained.
“The application subsequently undergoes a formal assessment. Once it has been approved and all formal requirements have been met, the European Parliament votes on whether to grant funding in connection with the company concerned.
“Most of the money is allocated to employee training, further education and the development of new skills. Around 90% of the funding is used for this purpose. The European Commission supervises how the money is subsequently spent and accounted for. The crucial issue, however, is that the national government must submit the application to the Commission.”
The regulation adopted by the European Parliament and the Council of the EU on 20 May 2026 notes that the EGF has been used unevenly by the member states.
The European Commission is therefore expected to promote the fund more actively by providing broader information about available financing opportunities. The objective is to increase its use in countries that have rarely applied for assistance.
Poland has not submitted an application in six years
“In the six years that I have served on the European Parliament’s Committee on Budgets, I have not seen a single application from Poland. I do not know why that is,” Rzońca said.
“Perhaps companies do not want to report their problems to the government, or perhaps governments have not wanted to show that businesses in their countries are experiencing difficulties. This requires a separate analysis.
“I do not know why companies from Romania, Bulgaria or Poland do not use the fund. It is mainly accessed by companies from Belgium, Austria and Germany, including Goodyear’s operations in Germany, as well as businesses in the Netherlands—in other words, companies from the wealthier EU member states.”
Between 2021 and 2024, seven member states applied for a combined total of almost €60.19 million from the EGF.
France requested the largest amount, at €23.47 million, followed by Belgium with €18.3 million and Spain with €6.69 million. They were followed by Italy, which applied for €5.37 million, Germany with €2.98 million and Denmark with €1.88 million.
According to information published by the European Commission in July, the EGF has allocated €737 million since 2007 to support more than 185,000 workers in 20 EU countries.
“Recently, six Belgian companies applied to the EU budget for assistance because they were restructuring, partially reducing employment or relocating their operations to other continents,” Rzońca said.
“An Austrian automotive company also announced not long ago that it was ending its operations in Austria and moving to India because energy is cheaper there.”
Commission proposes further assistance for workers in Belgium and Spain
The European Commission recently proposed allocating €3.8 million from the fund to support more than 1,200 former employees of the Belgian Cora hypermarket chain.
It also proposed €2.7 million in assistance for 670 workers dismissed by 20 Spanish companies operating in the automotive sector.
Applications submitted in previous months concerned, among others, workers who lost their jobs following the bankruptcies of Belgian automotive glass manufacturer Soliver and Liberty Steel Belgium.
Support was also requested for employees dismissed by interior furnishings retailer Casa and Austrian motorcycle manufacturer KTM.
Fund reform will not solve Europe’s industrial problems
In Rzońca’s view, changing the EGF’s operating rules will not resolve the problems facing European industry.
He argues that the main causes are the deteriorating competitiveness of EU businesses and growing pressure from manufacturers based outside the European Union.
“The question now is whether the European Union will merely stand by and watch EU companies go bankrupt while Chinese businesses continue to expand. The offensive by Chinese investors in the European market is clearly visible,” the MEP said.
“Was the Globalisation Fund created so that the EU budget could compensate companies that are unable to compete because the Union failed to ensure a level playing field between, for example, Chinese and European industry?
“Can the EU afford to increase the Globalisation Adjustment Fund? If we expand the EGF because the number of bankruptcies continues to rise, taxpayers will ask us directly where this money is supposed to come from.”
Report estimates €87 billion in value added shifted to China
Rzońca referred to a report prepared by the Union of Entrepreneurs and Employers and the Centre for Eastern Studies.
According to its authors, €87 billion in value added was permanently transferred from European industry to China in 2025 alone.
The largest losses were recorded in strategically important sectors of EU industry. The automotive and electric mobility sector lost an estimated €28.5 billion, machinery and equipment €22.1 billion, and IT components and electronics €19.8 billion.
The report estimated Poland’s direct and indirect losses at €11.4 billion.
Its authors also warned that 45,000 Polish jobs could be at risk, particularly in battery manufacturing, automotive components, household appliances and steel production.
“Someone recently made the sensible observation that energy in the European Union should first become cheaper and only then greener. These two objectives certainly have to be reconciled in an appropriate way,” Rzońca said.
“Otherwise, we will face further company bankruptcies in the European Union and more businesses moving their operations to other continents, most often to China, the United States and India, as well as to the United Kingdom.
“This problem must be addressed by the European Commission and the European Parliament. We have to create better conditions for entrepreneurs in the European Union to invest and operate.”
