Italy: European Globalisation Adjustment Fund for employmentFebruary 20, 2013
Funding Scheme: 2013-02-20
European Commission decided to grant a financial help of five million euro to Italy under the European Globalisation Adjustment Fund.This decision which will be treated by European Parliament and the EU’s Council of Ministers will permit to Italy to resolve its employment problem in a context of economic and financial crisis.
Italy applied for support from the EGF for 1,517 workers made redundant by Antonio Merloni S.p.A., an Italian manufacturer of domestic appliances. All redundant workers are expected to participate in the measures. The package will help the workers by offering them careers advice, special guidance for those over 50, job-search assistance, vocational training, skills upgrade and entrepreneurship promotion. These measures will be complemented with hiring benefits, a job-search allowance, a contribution to commuting expenses and to expenses for moving their residence.
The total estimated cost of the package is approximately €7.7 million, of which the EGF would provide five million euro.
To maintain its market share against competition from low labour cost countries such as China and Turkey, Antonio Merloni SpA, the fifth largest manufacturer of appliances in the EU in 2002, changed its sales strategy and in 2006 started selling its products directly through its own brands. With the outbreak of the global financial and economic crisis, the company experienced financial difficulties, which were further exacerbated by the sudden tightening of conditions for access to financial credit. In 2007, with a turnover of almost 900 million €, Antonio Merloni faced debts and liabilities of about 500 million €. The downturn in production, which had been following the downward trend at European level, combined with the financial constraints, resulted in a request submitted to the Ministry of Economic Development for admission to the administration proceedings for large firms in crisis and finally in the cessation of the business activities of Antonio Merloni SpA. A total of 2 217 workers were made redundant, of whom 700 were taken over by company QS Group SpA. This application therefore covers the 1 517 workers left jobless through the closure of Antonio Merloni SpA.
The territories concerned by the redundancies are the regions of Marche and Umbria and in particular the provinces of Ancona and Perugia, where the production plants of Antonio Merloni SpA were located. There have been 105 applications to the EGF since the start of its operations in 2007. Some €454 million has been requested to help about 94,500 workers. EGF applications are being presented to help redundant workers in 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 from 1 May 2009 to 31 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.
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