Brussels, 5 March 2014
Employment: Commission proposes € 3 million from Globalisation Fund to help 1,146 redundant workers in TV manufacturing industry in Italy
The European Commission has proposed to provide Italy with €3 million from the European Globalisation Adjustment Fund (EGF) to help 1,146 former workers of TV manufacturer VDC Technologies SpA and its subsidiary Cervino Technologies Srl to find new jobs. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "The manufacture of computer, electronic and optical products, and of electrical equipment in the EU, has been seriously disrupted due to intensified competition from countries outside the EU particularly China. Today's proposal would help to prepare over 1,000 redundant workers in this sector for new job opportunities".
Italy applied for support from the EGF following the dismissal of 1,218 workers in VDC Technologies and 54 in Cervino Technologies. The dismissals were the result of increased competition from telecommunications and sound-recording and reproducing equipment manufacturers elsewhere in the world.
The measures co-financed by the EGF would help the 1,146 workers facing the greatest difficulties in finding new jobs by providing them with career guidance and skills assessment, training, support to entrepreneurship and a variety of allowances.
The total estimated cost of the package is €6.02 million, of which the EGF would provide half.
Between 2008 and 2011, imports of telecommunications and sound-recording and reproducing equipment from China into the EU-27 increased by 18.7%. During the same period, China’s share of imports into the EU-27 of such products increased from 44% to 52.2%. This had a significant impact on employment levels, as around 121 000 jobs have been lost in the computer, electronic and optical products manufacturing sector in the EU during the period 2008-2011, which represents a 7% decrease.
VDC Technologies had been one of the largest producers of TV sets in the EU. However, at the end of 2009, the company permanently closed its plant in Frosinone, due, among other factors, to a fall in demand for plasma screen TVs and a drop in market prices for TVs. Despite actions taken to revive the company and negotiations in view of a takeover, no agreement was reached with its creditors and the company was declared bankrupt in June 2012.
The redundancies concern the province of Frosinone in the Lazio region. In 2011, Lazio's GDP shrank by 0.3% and the first half of 2012 saw a decline in exports for the region’s main industrial sectors. Total employment in Lazio fell by 0.2 % in 2011 and by 0.7 % in the first quarter of 2012. The unemployment rate in Lazio increased from 8.5% in 2009 to 10.8% in 2012.
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's President Barroso first proposed setting up a fund to help those adjusting to the consequences of globalisation. Since the start of its operations in 2007, the EGF has received 118 applications. Some €500 million has been requested to help more than 106,000 workers. EGF applications are being presented to help in a growing number of sectors, and by an increasing number of Member States. Last year alone, it provided more than €73.5 million (IP/13/1076).
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 the crisis criterion applied to all applications received from 1 May 2009 to 30 December 2011.
Building on this experience and the value added by the EGF for the assisted workers and affected regions, the Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope has been expanded to include again workers made redundant because of economic crisis, as well as fixed-term workers, the self-employed, and young people not in employment, education or training in regions of high youth unemployment.
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