The aid will be allocated to four regions, namely Sardinia, Piedmont, Lombardy and Tuscany, where a total of almost 6,000 workers have lost their jobs due to general trends of shifting clothing and accessories production towards extra-EU countries (where costs are lower) and increased imports of cheap textiles from low-wage economies, particularly in Asia.
The payments, approved by the budgetary authorities of the European Parliament and the Council on 19 November after the European Commission had given prior consent, will support the redundant workers as they seek other employment by funding job search assistance, providing allowances and establishing training programmes. At the same time, the money is aimed at creating incentives for companies to hire those made redundact, the EU executive explained.
The Commission stressed that the EGF was only intended to complement active labour market measures taken by employers and national authorities. It does not finance passive social protection measures, such as pensions or unemployment benefits.
Since the launch of the EGF last year, the EU has approved 12 aid applications worth €67.65 million. The most recent case concerned Finnish mobile phone company Nokia, which earlier this year announced that it was letting go 2,300 employees at its German plant in Bochum (EurActiv 21/01/08).
Other beneficiaries have included laid-off workers in the French, Portuguese and Spanish car industries, and vicitims of the ailing textile industries in Malta and Lithuania.
Competition Commissioner Neelie Kroes last month pledged that the EU would also make EGF money available to Polish shipyard workers at sites in Gdynia and Szczecin (EurActiv 07/11/08).
Meanwhile, the Commission will present a review of the EGF today (16 December), proposing that the fund to be used when 500 workers are laid off within a particular company or sector, instead of the previous figure of 1,000. The move would considerably widen the scope of the fund.