Globalisation fund: Budgets Committee backs aid to Germany and Lithuania

Published: 24 February 2010 y., Wednesday

Eurai
Three thousand former car, refrigerator and construction workers in Germany and Lithuania could get €7.6 million in EU globalisation adjustment fund aid for training, self-employment and professional orientation under plans approved by the Budgets Committee on Tuesday. But the plans still need to be approved by Parliament as a whole and the EU Council of Ministers.
Parliament's reports on the plans were drafted by Reimer Böge (EPP, DE).

Germany - help for former Karmann workers

Between December 2008 and March 2009 2,476 workers lost their jobs at the Karmann car manufacturing group (Wilhelm Karman GmbH and Karmann-Rheine GmbH & Co.KG). Of these, 1,793 would be eligible for help from the European Globalisation Adjustment Fund (EGF).

The German authorities argue that the redundancies are a consequence of structural changes in world trade patterns, combined with a rapid decline in worldwide demand for motor vehicles caused by the global financial and economic crisis. The EU's market share (in numbers of cars produced) declined from 32.1% in 2000 to 25.8% in 2008. Over the same period, the market share of Brazil, Russia, India and China rose from 8.9% to 21.2%.

 Karmann lost work on small production runs of “niche” models for major manufacturers, such as the Audi A4 cabriolet, Chrysler Crossfire and Mercedes SLK for Mercedes, when they responded to the crisis by bringing it back in house.. The Chrysler/Daimler break-up in 2007 also meant that the Chrysler Crossfire was phased out earlier than originally planned.

 The planned help for unemployed car workers includes short-time allowance, basic, individual and group qualifications, workshops, counselling on how to set up a business, international job applications, job research and aftercare should none of these measures work.

The total cost of this help is estimated at €9,537,449 of which EU aid would cover €6,199,341.

Lithuania - former construction workers

A total of 1,612 people lost their jobs at 128 building firms in Lithuania between October 2008 and July 2009. Of these, 806 would be eligible for EU help.

The Lithuanian authorities say these job losses are due to a steep slowdown in the construction sector as a result of the economic crisis. This slowdown was unforeseen, as the building industry was doing well before the onset of the economic crisis.

Lithuania has one of the highest rates of unemployment in the EU and alternative employment opportunities are few and far between.

If endorsed by Parliament in plenary and the Council, the aid would help cover the costs of job-search assistance, developing personalised employment plans, training and re-training, outplacement assistance, promoting entrepreneurship, job-search allowances and training allowances. The total cost is expected to be €1,721,374, of which the globalisation adjustment fund would cover €1,118,893.

Lithuania - former Snaigė workers

A total of 651 people lost their jobs at refrigerator manufacturer AB Snaigė and two of its suppliers, UAB Jugos kabeliai and UAB Hoda. between December 2008 and May 2009. Of these, 480 would be eligible for help.

The Lithuanian authorities argue that the redundancies are a consequence of a steep decline in refrigerator sales due to the economic crisis and that Snaigė's closure was unexpected as the company was doing well before the economic crisis. The city of Alytus, where Snaigė is based, has also been badly hit by the closure of textile producer Alytaus Tekstilė, so new jobs are especially hard to find.

The proposed measures include job-search assistance, developing personalised employment plans, training and re-training, outplacement assistance, promoting entrepreneurship, job-search allowances and training allowances. These measures are expected to cost €397,175, of which Lithuania has applied for €258,163 from the EU fund.

Rules

The German application is based on the Article 2(a) of the European Globalisation Adjustment Fund regulation: at least 500 redundancies over four months in an enterprise in a Member State, including workers made redundant in its suppliers or downstream producers.

The Lithuanian application for construction workers is based on the Article 2(b): at least 500 redundancies over nine months, particularly in small or medium-sized enterprises, in the same industry sector in one region or two contiguous regions.

The second Lithuanian application, regarding the company Snaigė, is for aid under exceptional circumstances, as foreseen in Article 2 (c) of the EGF regulation.

“A contribution from the EGF may be considered admissible even if the conditions laid down in subparagraphs (a) and (b) are not entirely met, when redundancies have a serious impact on employment and the local economy”. The exceptional circumstances are the particularly difficult economic and labour market situation in Alytus, where Snaigė is based and the fact that the redundancies occurred at a time when the unemployment rate of Lithuania increased within 12 months from 6.4% to 16.7%.

The three applications approved by the Budgets Committee are the first to be dealt with in 2010. To finance the EGF support, money will be transferred from the European Social Fund's budget. Transferring money from other budget lines is the normal way of funding payments through the European Globalisation Adjustment Fund.

Parliament's and Council's endorsement is required to mobilise the funds. The plenary vote is scheduled for 8-11 March.

 

Šaltinis: europa.eu
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment


Captcha

Associated articles

The most popular articles

Emerging Market Countries Partner with World Bank to Achieve Risk Management Objectives

The World Bank is seeing a surge in demand from borrowers seeking the Bank’s expertise to mitigate currency and interest rate risk. more »

State aid: Commission authorises support package for Lithuanian financial institutions

The European Commission has approved under EU state aid rules a Lithuanian package intended to stabilise the markets as a response to the global financial crisis. more »

European Commission forecasts average crop production for 2010 in the EU despite extreme weather

Total cereal production in 2010 should be close to the average from the last five years. While the yield per hectare will be 5% above average, overall cultivated areas have decreased. more »

In the first half of this year AB Bank SNORAS and its financial group worked profitably

According to the unaudited data, AB Bank SNORAS profit prior to provisions and tax exemption within the first half of this year comprised LTL 51 million, the bank formed almost LTL 48 million provisions. more »

Denmark: EU €10m to help 1,149 former Linak A/S and Danfoss Group workers find new jobs

The European Commission today approved two applications from Denmark for assistance from the EU Globalisation Adjustment Fund (EGF). more »

EIB provides EUR 150 million innovative recovery support loan to SMEs in Turkey

The European Investment Bank today signed two loans for a total amount of EUR 150 million in support of small and medium-sized enterprises (SMEs) in Turkey. more »

AB Bank SNORAS will increase the authorized capital by LTL 82.3 million up to LTL 494.2 million

On 23 July 2010 the Board of the Bank of Lithuania permitted Bank SNORAS to register a change to the articles of association related to the increase of the authorized capital of the bank by LTL 82.3 million up to LTL 494,217,107. more »

Heads of State, WB President Zoellick Agree on Action Plan to Boost Integration and Development

Heads of State and top officials from the Central American Integration System and World Bank Group President, Robert B. Zoellick, agreed to join efforts towards regional cooperation and integration and adopted a comprehensive agenda that includes an action plan with more than 20 specific measures. more »

IMF Executive Board Cancels Haiti’s Debt and Approves New Three-Year Program to Support Reconstruction and Economic Growth

The Executive Board of the International Monetary Fund (IMF) today approved the full cancellation of Haiti’s outstanding liabilities to the Fund, of about SDR 178 million (equivalent to US$268 million). more »

IMF Completes Third Review Under Stand-By Arrangement with Latvia and Approves €105.8 Million Disbursement

The Executive Board of the International Monetary Fund (IMF) today completed the third review of Latvia's performance under an economic program supported by a Stand-By Arrangement (SBA). more »