Germany - help for former Karmann workers

Between December 2008 and March 2009 2,476 workers lost their jobs at the Karmann car manufacturing group (Wilhelm Karman GmbH and Karmann-Rheine GmbH & Co.KG). Of these, 1,793 would be eligible for help from the European Globalisation Adjustment Fund (EGF).

The German authorities argue that the redundancies are a consequence of structural changes in world trade patterns, combined with a rapid decline in worldwide demand for motor vehicles caused by the global financial and economic crisis. The EU's market share (in numbers of cars produced) declined from 32.1% in 2000 to 25.8% in 2008. Over the same period, the market share of Brazil, Russia, India and China rose from 8.9% to 21.2%.

 Karmann lost work on small production runs of “niche” models for major manufacturers, such as the Audi A4 cabriolet, Chrysler Crossfire and Mercedes SLK for Mercedes, when they responded to the crisis by bringing it back in house.. The Chrysler/Daimler break-up in 2007 also meant that the Chrysler Crossfire was phased out earlier than originally planned.

 The planned help for unemployed car workers includes short-time allowance, basic, individual and group qualifications, workshops, counselling on how to set up a business, international job applications, job research and aftercare should none of these measures work.

The total cost of this help is estimated at €9,537,449 of which EU aid would cover €6,199,341.

Lithuania - former construction workers

A total of 1,612 people lost their jobs at 128 building firms in Lithuania between October 2008 and July 2009. Of these, 806 would be eligible for EU help.

The Lithuanian authorities say these job losses are due to a steep slowdown in the construction sector as a result of the economic crisis. This slowdown was unforeseen, as the building industry was doing well before the onset of the economic crisis.

Lithuania has one of the highest rates of unemployment in the EU and alternative employment opportunities are few and far between.

If endorsed by Parliament in plenary and the Council, the aid would help cover the costs of job-search assistance, developing personalised employment plans, training and re-training, outplacement assistance, promoting entrepreneurship, job-search allowances and training allowances. The total cost is expected to be €1,721,374, of which the globalisation adjustment fund would cover €1,118,893.

Lithuania - former Snaigė workers

A total of 651 people lost their jobs at refrigerator manufacturer AB Snaigė and two of its suppliers, UAB Jugos kabeliai and UAB Hoda. between December 2008 and May 2009. Of these, 480 would be eligible for help.

The Lithuanian authorities argue that the redundancies are a consequence of a steep decline in refrigerator sales due to the economic crisis and that Snaigė's closure was unexpected as the company was doing well before the economic crisis. The city of Alytus, where Snaigė is based, has also been badly hit by the closure of textile producer Alytaus Tekstilė, so new jobs are especially hard to find.

The proposed measures include job-search assistance, developing personalised employment plans, training and re-training, outplacement assistance, promoting entrepreneurship, job-search allowances and training allowances. These measures are expected to cost €397,175, of which Lithuania has applied for €258,163 from the EU fund.

Rules

The German application is based on the Article 2(a) of the European Globalisation Adjustment Fund regulation: at least 500 redundancies over four months in an enterprise in a Member State, including workers made redundant in its suppliers or downstream producers.

The Lithuanian application for construction workers is based on the Article 2(b): at least 500 redundancies over nine months, particularly in small or medium-sized enterprises, in the same industry sector in one region or two contiguous regions.

The second Lithuanian application, regarding the company Snaigė, is for aid under exceptional circumstances, as foreseen in Article 2 (c) of the EGF regulation.

“A contribution from the EGF may be considered admissible even if the conditions laid down in subparagraphs (a) and (b) are not entirely met, when redundancies have a serious impact on employment and the local economy”. The exceptional circumstances are the particularly difficult economic and labour market situation in Alytus, where Snaigė is based and the fact that the redundancies occurred at a time when the unemployment rate of Lithuania increased within 12 months from 6.4% to 16.7%.

The three applications approved by the Budgets Committee are the first to be dealt with in 2010. To finance the EGF support, money will be transferred from the European Social Fund's budget. Transferring money from other budget lines is the normal way of funding payments through the European Globalisation Adjustment Fund.

Parliament's and Council's endorsement is required to mobilise the funds. The plenary vote is scheduled for 8-11 March.