Brussels, 25 June 2014
Employment: Commission proposes €6 million from Globalisation Fund to support jobs following bakery closure in Greece
The European Commission has proposed to provide Greece with €6 million from the European Globalisation Adjustment Fund (EGF) to help 508 former workers of the bakery manufacturer Nutriart and its providers and downstream producers to find new jobs, as well as 505 young people not in employment, education or training (NEETs). This is the first application for EGF assistance presented under the new EGF Regulation, which offers the possibility of providing NEETs with EGF support up to a number equal to the number of redundant workers supported. 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: "I am happy the Commission has responded positively to Greece's request for EGF support to provide occupational guidance, counselling, training, and further support to the redundant workers, along with young people not in employment, education or training". He added: "Today's decision will help to prepare over 1,000 people for new jobs and first job opportunities".
Greece applied for support from the EGF following the redundancies of 484 workers in Nutriart S.A. and AR. ZIGAS & SIA, and the cessation of activity of 24 self-employed persons whose activity was directly linked to Nutriart. These job losses were the result of the continuation 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 occupational guidance, vocational training, specific counselling services towards entrepreneurship, contributions to business start-up and a variety of allowances.
The total estimated cost of the package is €10 million, of which the EGF would provide €6 million.
Nutriart S.A. was a manufacturer of bakery products and pastry for final consumers, and frozen and preserved dough for catering enterprises.
Due to the drop of purchasing power of Greek households following the decline of the Greek economy since the beginning of the crisis, demand for products other than basic staples has plummeted. In particular the demand for sweet bread products and pastry declined by 41 % in 2013 compared to 2008. This decline in demand had a direct impact on the turnover of Nutriart, which dropped by 74.5 % in the period 2010-2012.
This trend, combined with late payments of most of Nutriart’s clients and the drastic reduction of loans to enterprises and individuals due to the lack of cash in Greek banks, made it impossible for Nutriart to find a solution and resulted in the enterprise filing for bankruptcy on 21 June 2013.
The territories concerned by the redundancies are the regions of Central Macedonia and Attica. In the last quarter of 2013, the unemployment rate in Attica was 28.2 % whilst in Central Macedonia it was 30.3 %. Furthermore, there are few job vacancies in both territories compared to the high number of job seekers. As a result, more than 70 % of the unemployed have been unemployed for more than 12 months. In Central Macedonia the situation of young job-seekers is particularly dramatic, since the youth unemployment rate there is 60.4 %.
Under the EGF Regulation for the 2014-2020 period, Member States can apply for EGF co-funding to provide measures for young people not in employment, education or training (NEETs) who reside in regions eligible under the Youth Employment Initiative (YEI). In the case of this application, Greece requested that personalised services be also provided to up to 505 NEETs under the age of 30, given that Central Macedonia and Attica are both eligible under the YEI.
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. Since the start of its operations in 2007, the EGF has received 124 applications. Some €500 million has been requested to help more than 108,000 workers. EGF applications are being presented to help in a growing number of sectors, and by an increasing number of Member States. In 2013 alone, it provided more than €53.5 million.
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 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 in regions of high youth unemployment.
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