European Globalisation Fund pays €25.3 million to help redundant workers in France, Ireland, The Netherlands, Spain and Sweden

European Globalisation Fund pays €25.3 million to help redundant workers in France, Ireland, The Netherlands, Spain and Sweden

The European Commission has just made payments to France, Ireland, The Netherlands, Spain and Sweden from the European Globalisation adjustment Fund (EGF). The total amount of €25.3 million will help 4722 workers in those countries back into employment, following their dismissals in a wide variety of sectors including aluminium, broadband services, metal products, construction, car manufacture and the pharmaceutical industry.

European Commissioner for Employment, Social Affairs and Inclusion László Andor said "This is the result of the proposals made by the Commission to the European Parliament and to the Council of Ministers following applications for funding from the EGF by the authorities of these countries. Council and Parliament have approved the proposals leading to the release of the funds". He added "The EGF is an effective tool in supporting workers laid off as a result of changing world trade patterns. It has also proven its worth in cases of lay-offs resulting from the economic crisis. The Commission calls on the Member States to ensure that the EGF continues to be available for the next programming period 2014-2020".

The break-down of the total €25.3 million is as follows:

• €11.9 million will help 2089 former workers of PSA Peugeot-Citroën in France. The redundancies are a consequence of the financial and economic crisis which resulted in a substantial decrease in demand for new motor vehicles in the second half of 2008, especially in Western Europe.
• €4.3 million will help 700 former workers of the pharmaceutical enterprise AstraZeneca in Sweden. The dismissals are linked to major structural changes in world trade patterns due to globalisation. Many non-European countries are designing strategies for biosciences and industry in areas of pharmaceuticals, biotechnology and medical technology. European companies have had to adapt their production to this situation. AstraZeneca followed the trend and adopted a new R&D strategy in 2010. This included the necessity to focus on fewer disease areas, closures of sites and significantly greater utilisation of external resources through outsourcing.
• €2.8 million will help 435 dismissed workers from 54 Dutch enterprises operating in the construction sector. The redundancies are a consequence of the financial and economic crisis. The construction sector in the Netherlands as well as in the entire European Union has been severely affected by the crisis. Loans to the construction sector and to individuals have been drastically reduced, prices of the construction materials increased while the demand for new houses decreased due to declining consumer confidence and the lack of cash. Moreover the economic and financial crisis resulted in reduction of public expenditure which had a direct negative impact on investments in infrastructure and housing programmes.
• €2.6 million will help 432 former workers of Talk Talk, a broadband services provider, in Ireland. The redundancies were a direct result of the company’s decision to consolidate activities with three chosen outsourcers. In 2011, the company adopted strategic alliances with three non-EU providers. As a result a significant bulk of work has been transferred to these third country providers.
• €2 million will help 450 dismissed workers from 35 Spanish manufacturers of fabricated metal products for shipbuilders. Order books of European shipyards decreased dramatically since 2008. As a consequence the workforce in shipbuilding and its ancillary industries in Europe declined.
• €1.4 million will help 616 former workers of the aluminium manufacturer Zalco Aluminium Zeeland Company NV in The Netherlands. The dismissals were a consequence of the financial and economic crisis which resulted in a substantial decrease in demand for aluminium products.

Background

There have been 102 applications to the EGF since the start of its operations in 2007. Some €438.4 million has been requested to help about 91000 workers. EGF applications are being presented to help redundant workers in a growing number of sectors, and by an increasing number of Member States.

More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost some jobs, particularly in vulnerable sectors and affecting lower-skilled workers. This is why Commission President Barroso first proposed setting up a fund to help those adjusting to the consequences of globalisation. The EGF was established at the end of 2006 and was designed to demonstrate solidarity from the many who benefit from openness to the few who face the sudden shock of losing their jobs. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument forming part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and applied to all applications received from 1 May 2009 to 31 December 2011. In the absence of an agreement in the Council, the EGF's crisis response function could not be prolonged beyond 2011.

Building on the experience acquired with the EGF since 2007 and its value added for the assisted workers and affected regions, the Commission has proposed to maintain the Fund also during the 2014-2020 multiannual financial framework, while further improving its functioning. This includes covering lay-offs resulting from the economic crisis as well as new categories of workers such as temporary and self-employed workers. The proposal is currently under discussion at Council and Parliament.

For more information about the Commission's proposals related to those cases, including details about the proposed measures to help the dismissed workers, see also: IP/12/785 regarding the Dutch construction enterprises; IP/12/786 regarding the pharmaceutical company AstraZeneca; IP/12/861 regarding Talk Talk broadband services, IP/12/892 regarding the aluminium manufacturer Zalco; IP/12/893 regarding the Spanish manufacturers of fabricated metal products for shipbuilders and IP/12/907 concerning PSA Peugeot-Citroën in France.