The European Commission has proposed to provide Greece with €6.4 million from the European Globalisation Adjustment Fund (EGF) to help 600 former workers of the Fokas department stores to find new jobs, and to extend its support to 500 young people not in employment, education or training (NEETs). Most of the redundancies happened in the regions of Attica, Central Macedonia and Thessaly. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, commented: "Many sectors and industries in Europe are going through major structural changes, as a consequence of globalisation. The European Globalisation Fund is a concrete expression of European solidarity. It will continue to help Member States to re-integrate people who have lost their job into the labour market and support them to adapt their skills. Through this fund, we are accompanying workers who experience hardship in the difficult transition to new jobs and I have the intention to maximize its performance during the coming years."
Greece applied for support from the EGF following the dismissal of 600 workers in Odyssefs Fokas S.A. These job losses were the result of the global financial and economic crisis which has deeply affected the Greek economy.
The measures co-financed by the EGF would help the workers and the NEETs find new jobs by providing them with active career guidance, vocational training, specific advice towards entrepreneurship, contributions to business start-up and the relevant allowances.
The total estimated cost of the package is €10.7 million, of which the EGF would provide €6.4 million.
Odyssefs Fokas was a dynamic enterprise which operated in the wholesale business. In the 1980s it already owned the third largest department store in Greece. The enterprise further expanded its business by undertaking the representation in the domestic market of well-known foreign apparel firms and the first shops-in-shop make their appearance in Greece through their department stores. In the 1990s the group Fokas increased its exclusivity agreements with international apparel firms and opened franchise stores of various international brands. Over the years 1999-2008 the expansion of Fokas continued. Two department stores were opened in the most important shopping districts of Athens along with various showrooms, franchise shops and point-of-sales in agreement with international brands.
This success came to an abrupt end with the outbreak of the economic and financial crisis in 2008. Due to the drop in purchasing power of Greek households since the beginning of the crisis, demand for products other than basic staples has plummeted and, as a result, the turnover of the company started declining.
Another consequence of the recession of the Greek economy was the cash flow shortage. To remedy it Fokas sought financial help from banks, unsuccessfully. The reduction in turnover which resulted from the drop in consumption, together with the tightening of credit, made the attempts of group Fokas to find a solution fruitless and led the enterprise to bankruptcy.
Most of the redundancies are concentrated in Attica and Central Macedonia while about 10 % occurred in Thessaly. In the last quarter of 2013, the unemployment rate in Attica was 28.2 % and in Central Macedonia was 30.3 %, both above the national average (27.5 %). The employment situation in Thessaly is slightly better than the national average, but even so, the unemployment rate is 26 %. Furthermore, there is a lack of job offers in all three regions compared with the high number of job seekers.
More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost jobs, particularly in vulnerable sectors and among lower-skilled workers. This is why the Commission first proposed setting up a fund to help those adjusting to the consequences of globalisation. Since starting operations in 2007, the EGF has received 130 applications. Some €536 million has been requested to help more than 116,000 workers. In 2013 alone, it provided more than €53.5 million in support.
The Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope includes workers made redundant because of the economic crisis, as well as fixed-term workers, the self-employed, and, by way of derogation until the end of 2017, young people not in employment, education or training (NEETs) residing in regions eligible under the Youth Employment Initiative (YEI) up to a number equal to the redundant workers supported.
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