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Friday, May 4, 2012

The EU wants to help Spanish workers through the European Globalisation Adjustment Fund (EGF)

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News 350 footwear industry workers in the Valencia region might get a job back thanks to the European Commission’s proposal to provide Spain with 1 600 000 euro from the European Globalisation Adjustment Fund (EGF). Indeed, this money should enable 143 small enterprises to get back on track. The proposal now needs to be approved by the European Parliament and the EU’s Council.

EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "Spanish shoe industry workers have been hit hard by rising global competition. This proposal for 1.6 million euros from Europe's Globalisation Fund would help them to get new jobs by training them in new skills."

The Spanish application relates to 876 workers made redundant in 143 small and medium sized footwear manufacturing enterprises in in the region of 'Comunidad Valenciana'. The dismissals were the result of increased competition from shoes produced elsewhere in the world and compounded by the current economic crisis. China and India increasingly dominate the world trade in footwear, with countries such as Vietnam and Indonesia continuing to increase their share of world production.

The EGF money proposed would target the 350 workers with the most difficulties finding a new job. The support package proposed is to help the workers by providing them with one-to-one counselling and guidance; skills assessment and outplacement; coaching; general training and re-training; individual vocational training; entrepreneurship promotion and support; job-search allowance and a contribution to commuting expenses.

The total estimated cost of the package is €2.5 million, to which the EGF would provide €1.6 million.


Imports of footwear from non-EU countries into the EU increased almost 6% during the period 2006-2009 while EU exports declined by 16.4% during the same period. As a direct consequence of the fall in exports, the number of footwear producers in the EU's 27 Member States decreased by 11.58% in 2008 compared to 2005 and 78 800 direct jobs - representing almost 20 % of the total - were lost in the sector during the period 2005-2008.

Imports of footwear into Spain have also increased, growing by almost 20% during the period 2006-2010. However, the impact of the imbalance between imports and exports in the Spanish footwear industry was bigger than in the EU as a whole: the number of manufacturers decreased by 35.96 % during 2006-2010 (or 24.27 % during the period 2006-2009), as the number of firms fell from 2 283 to 1 462. Employment contracted by 31.80 %, with 10 663 direct jobs lost, during the same period.

The employment situation in the affected area is particularly fragile, given the impact of the current economic crisis on various other sectors, such as construction, furniture, textiles, ceramics and toys, which under other circumstances could have offered alternative employment for former shoe manufacturing workers. The support of the EGF is therefore all the more essential, as it can help these workers to explore new and different opportunities.

There have been 97 applications to the EGF since the start of its operations in 2006. The Fund has paid out a total of some €451.4 million, helping nearly 89 000 workers. EGF applications are being presented to help 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 from1 May 2009 to 30 December 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.

Source :  European Commission - Press release

More information  László Andor's website




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