The European Commission has today approved an application from Lithuania for assistance under the European Globalisation adjustment Fund (EGF).
The European Commission has today approved an application from Lithuania for assistance under the European Globalisation adjustment Fund (EGF). The application will now be sent to the European Parliament and the Council who have to approve the release of the funds. If approved, the €258,163 requested will help 480 employees made redundant from Snaigė – a manufacturer of electrical equipment – and two of its suppliers – UAB Jugos kabeliai and UAB Hoda.
EU Employment Commissioner Vladimír Špidla said: “ The Lithuanian electrical equipment industry has seen exports plummet and its workers are experiencing difficulties. I am glad that today's decision will help these workers return to employment by increasing their skills”.
The Lithuanian application relates to 651 redundancies in AB Snaigė, a manufacturer of electrical equipment, and two of its suppliers. The redundancies are a consequence of the rapid decline in demand for refrigerators and refrigerating equipment due to the current economic slowdown. Snaigė, which exports approximately 97% of its production (largely to the EU, the EEA, Ukraine and Moldova), has seen its sales in the EU and the rest of Europe fall by more than 80% since mid-2008.
The financial assistance from the EGF is targeted at the 480 workers among those dismissed facing the biggest difficulties in re-entering the labour market. The package of EGF assistance will help the workers with development of personalised employment plans, job-search assistance, training and re-training, promotion of entrepreneurship, outplacement assistance and training and job-search allowances.
The total estimated cost of the package is almost €397,175, of which the European Union has been asked to fund €258,163.
Alytus – where Snaigė is based – has already suffered from large-scale redundancies, particularly in the textile sector, which was the subject of an earlier contribution from the EGF to the reintegration of workers from the firm Alytaus Tekstilė in 2008 (see also IP/08/1244 ).
Background
There have been 34 applications to the EGF since the start of its operations in January 2007, for a total amount of over €226 million, helping more than 41,000 workers. EGF applications relate to the following sectors: automotive (France, Spain, Portugal, Austria, Germany, Sweden); textiles (Italy, Malta, Lithuania, Portugal, Spain and Belgium); mobile phones (Finland and Germany); domestic appliances (Italy); computers (Ireland); mechanical/electronic (Denmark); repair and maintenance of aircraft and spacecraft (Ireland); crystal glass (Ireland); ceramics (Spain); construction (Netherlands and Lithuania); carpentry and joinery (Spain); electrical equipment (Lithuania) and furniture (Lithuania). Initial reports from the first cases supported by the EGF show strong results in helping workers stay in the labour market and find new jobs.
The EGF, an initiative first proposed by President Barroso to provide help for people who lose their jobs due to the impact of globalisation, was established by the European Parliament and the Council at the end of 2006. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument. It forms part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July and applies to all applications received from 1 May 2009 onwards.