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The failure of the Globalization Fund. Quarrel of figures but real question!

(B2) Asking, gently (yes!), today during the daily press briefing at the European Commission the assessment of its Globalization fund, Chantal Hughes, the spokesperson for the Commissioner in charge of Employment (Vladimir Spidla), and former “social” advisor to the British permanent representation (it should be noted), gave up with a smile (charming but not sufficient in the face of the brutal rigor of the figures). She notably refused to give details of the sums paid, year by year, preferring to stick to a figure
overall: 67 million euros paid in 2 years. From a communication point of view, she is not wrong. It is difficult to admit from the stands that what the president recently presented
of the Commission, José-Manuel Barroso, as being a “personal proposal” (interview with Agence Europe at the end of January), is in fact… a failure. Because 67 million euros in 2 years is not only weak compared to the scale and brutality of the economic crisis hitting Europe, which we can deny is linked to globalization. It is also very very low compared to the available budget (1 billion euros) – a record for budgetary unuse! (*). But above all it is a Fund in decline. 9 to 11 files filed in 2007 for 53/67 million euros paid. And 1 to 3 deposited in 2008 for 0,3/15 million euros (and again in the first half!).

Confusion maintained around the figures. Chantal Hughes claimed that my figures were false... The only problem is that they are taken from the official website of the European Commission, at
Globalization Fund page. A site normally very well informed since the spokesperson's service refers to it directly, as this communicated. For Chantal Hughes, we should not trust it: “The website is difficult to understand as it classifies the application as to when they were made, not when approved or when the money was paid out. On top of that, the amounts in the website are the amounts requested, not necessarily the amounts finally paid out. ” Fair comment. Indeed, it’s rather the b… The figures differ depending… on the versions linguistics! The version English thus displays different versions of the version French, and the other versions, for 2008. Except that “it is expressly mentioned “paid-in full” in the English version (**) – which, unless my English is faulty, means “paid in full” – do not rely on it: the amounts indicated sometimes correspond to the are paid but not always. Basically, the figures announced by the spokesperson's service... are, if not totally false, a little inaccurate!

To be complete, here is the detail as I was able to reconstruct it (without the help of the spokesperson's service which was still redoing the additions yesterday evening...):
• In 2007, there were 9 requests for a total amount of 53 million euros (to which must be added a Spanish request for 14 million withdrawn – to be “reformulated” – it was not
complete and risked “not passing”)
• In 2008, there were 3 requests for an amount just under 15 million euros. Of these three requests, in fact, two correspond to files from 2007: the Spanish request refiled (10,9 million euros instead of 14 million) and an Italian regional file (Tuscany) which supplemented the three others filed in 2007 (and were educated at the same time). In reality, for 2008, there was only one real request, that of Lithuania for an amount of less than… 300 euros. We thus arrive at a utilization rate of less than 000% of funds (on an available budget of nearly 1 million euros). A record loss. And above all a huge waste. While 500 was not “excellent” for employment!

The Globalization Fund: a gadget fund?
One may ask. Because beyond the quarrels over figures, the only interesting question is: why so few requests? So there, Chantal Hughes – usually more verbose – begins by not responding then when faced with a follow-up (by email), kicks in: “Member States should be asked why there are so few requests … " That's all ! It seems a bit easy. Indeed, it is no secret that this Fund is not functioning properly. Everything was done for this, right down to the initial proposal. Germany and the United Kingdom, in particular, worked hard when creating the Fund to do everything they could to limit its use. First of all, the procedure is very cumbersome and technocratic: it is necessary - as for a financial procedure -, an investigation by the services of the Commission of the file, and - as in a legislative procedure -, a proposal from the Commission, a opinion of the parliamentary committees (budget and employment) of the European Parliament and a decision of the Council. Suffice it to say, you have to wait many months before the money is paid. Then, the conditions are drastic (and very far from the real market): departure of a minimum of 1000 employees, in a company (or several from neighboring regions), directly suffering the effects of globalization, etc. Result: for an overall quite low sum, compared to the sums available in other Funds such as the European Social Fund or the Regional Funds, and the time devoted, the Member States prefer not to submit any more applications! Too hard. We are the very opposite of “better regulation” displayed as a slogan by this European Commission.

The need to overhaul this Fund in depth. It was clear – already a year ago – that what threatened the Fund was not the backlog of files but the low number of files. Last year, the German member of the Budget Commission, Raimer Böge, himself, although he had not been an ardent defender of the Fund, recognized that it was necessary to move forward and relax the operating rules. The European Commission only finally moved last December, proposing a modification of the Fund (download the proposal), who I think is still very shy. This proposal is still under discussion in the parliamentary committee. A first draft report has just been presented on February 11 (download the draft report).

(*) This is not strictly speaking a budget line but a possibility of using unspent budgetary margins, basically a “drawing right”.
(**) The only version to be updated apparently is the English version, it is confirmed at DG Employment.


Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).