French car sector gets first EU globalisation cash

The Commission has made its first payments from Europe’s Globalisation Adjustment Fund, aimed at helping countries cope with job losses caused by intensified competition from low-cost countries, it announced on 13 December. 

The initial payments, worth €2.56 million and €1.26 million, will go to suppliers of France’s Peugeot-Citroën and Renault respectively for the retraining of workers made redundant due to company failures caused by globalisation pressures, the Commission said.

The automobile sector is one of the sectors that has been particularly hard hit by changing global trade patterns, with German car manufacturer Volkswagen also announcing 4,000 lay-offs in Brussels alone last year (EURACTIV 22/11/06). 

The Commission also said it would be providing Malta with roughly €681,000 to help 675 redundant workers get back into employment after two of the island’s textiles manufacturing companies were unexpectedly forced to shut down their operations due to the massive delocalisation of the clothing industry to lower-cost countries such as China, India and Turkey. 

Despite the general rule that financial assistance from the Fund’s annual €500 million pot should only be given in cases where at least 1,000 employees are laid off due to “major structural changes in world trade patterns”, the Commission said that the small size of the Maltese labour market entitled it to a contribution. 

“Malta is a small country where a relatively limited number of redundancies can have a big impact. I am confident that the EGF will help take the edge off the job losses,” said EU Employment Commissioner Vladimír Špidla. 

He added that the first payments came as “an important signal to the workers who were made redundant […] and shows that the creation of the EGF has come at the right time.” 

The creation of the Globalisation Fund was decided upon in December 2005 and launched in January 2007, after EU leaders agreed that they should do more to convince their citizens to support trade opening despite restructurings and job losses, in the face of growing protectionist calls across the continent. 

At the European summit on 14 December 2007, EU heads of state and government are also due to adopt a declaration on a common strategy for responding to the challenges posed by globalisation, including increased competitive pressure from China and global warming (EURACTIV 14/12/07). 

The paper is expected to call on member states to reject protectionism and focus instead on “shaping globalisation” by breaking down trade barriers in third countries and demanding reciprocity. 

However, the discussion could raise tensions between French President Nicolas Sarkozy – the EU’s strongest advocate for a more protectionist Europe, who wants the accent to be on the reciprocity principle and insists that the bloc’s strict environmental and social requirements should also be placed on non-European businesses – and UK Prime Minister Gordon Brown, who believes the EU should lead by example in breaking down barriers to create a free and fair multilateral trading system. 

Read more with Euractiv

EU to focus on 'shaping globalisation' after Treaty

A declaration to be endorsed by European leaders at a summit on Friday seeks to shift the debate away from institutional matters to focus the EU on 'shaping globalisation in the interest of all citizens and business'.