The European Commission today approved two applications from Denmark for assistance from the EU Globalisation Adjustment Fund (EGF).
The European Commission today approved two applications from Denmark for assistance from the EU Globalisation Adjustment Fund (EGF). The € 10,106,844 requested by the Danish authorities will help 1,149 redundant workers back into employment. The workers lost their jobs in the engineering sector after the economic slowdown exacerbated an already difficult situation for Linak A/S and the Danfoss Group. The applications will now go to the European Parliament and EU Ministers for agreement.
“The impact of the recession has meant companies in the engineering sector have been hit hard by the sudden drop in demand for mechanical and electronic machinery” said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. He added: “The redundant workers are finding it hard to find new opportunities with many having to move to other sectors. I am confident that the support and training the EGF can provide to the Danish workers will make the transition to a new job easier”.
The two Danish applications relate to 1,641 redundancies in total, of which 1,443 were in three companies in the Danfoss Group and 198 in Linak A/S. The dismissals were a consequence of the rapid decline in demand for mechanical and electronic machinery and financial pressures that left some companies with no alternative but to let workers go and transfer production to places with lower costs.
All the companies affected are located in Sønderborg, a municipality in a relatively isolated part of Denmark where the iron and metal industry represents around 25% of all employment and where the engineering sector was the largest single sector. The impact of these redundancies at local level is huge and will push up the unemployment rate in an area where it is already higher than the national average.
The package of EGF assistance for the former workers of Danfoss Group and Linak A/S will help 1,149 of the most disadvantaged of these dismissed workers back into employment. It includes training in tourism and energy technology, education and training in business management and remedial education; employment incentives (such as incentives for people who wish to change careers) and also several incentives for business start-ups. The total estimated cost of the package of is €15.5 million, of which the European Union has been asked to provide EGF assistance of €10.1 million.
Background
There have been 64 applications to the EGF since the start of its operations in January 2007, for a total amount of about €365.3 million, helping more than 68,500 workers. EGF applications relate to the following sectors: automotive (France, Spain, Portugal, Austria, Germany, Sweden); textiles (Italy, Malta, Lithuania, Portugal, Spain and Belgium); mobile phones (Finland and Germany); domestic appliances (Italy); computers and electronic products (Ireland and Portugal); mechanical/electronic (Denmark); repair and maintenance of aircraft and spacecraft (Ireland); crystal glass (Ireland); ceramics and natural stone (Spain); construction (Netherlands, Ireland and Lithuania); carpentry and joinery (Spain); electrical equipment (Lithuania) publishing and printing industry (Netherlands and Germany), furniture (Lithuania), retail trade (Czech Republic and Spain) and wholesale trade (Netherlands). Final reports from the earlier cases supported by the EGF show strong results in helping workers stay in the labour market and find new jobs.
The EGF, an initiative first proposed by President Barroso to provide help for people who lose their jobs due to the impact of globalisation, was established by the European Parliament and the Council at the end of 2006. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument. It forms part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and applies to all applications received from 1 May 2009 onwards.