Brussels, 3 October 2014
Employment: Commission proposes €1.5 million from Globalisation Fund to support jobs following closure of jewellery firm in Ireland
The European Commission has proposed to provide Ireland with €1.5 million from the European Globalisation Adjustment Fund (EGF) to help 138 former workers of the jewellery firm Andersen Ireland Limited to find new jobs. The money would also help 138 young people not in employment, education or training (NEETs) to find job opportunities, a possibility offered by the new EGF Regulation. 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 fashion jewellery in the EU has suffered from increased competition from countries outside the EU, particularly China. Today’s proposal would help to prepare 138 redundant workers in this sector for new jobs, and an equal number of young people for finding their way into the labour market”.
Ireland applied for support from the EGF following the dismissal of 171 workers in Andersen Ireland Limited, as a result of increased competition from fashion jewellery manufacturers elsewhere in the world.
The measures co-financed by the EGF would help the 138 workers facing the greatest difficulties and an equal number of NEETs to find jobs. They will receive occupational guidance and career planning assistance, enterprise and self-employment supports, training, second and third level education programmes, training grants and income supports.
The total estimated cost of the package is €2.5 million, of which the EGF would provide €1.5 million.
In terms of both volume and value, imports from outside the EU have come to dominate the EU fashion jewellery market for the past five years or more. The main non-EU producing countries are China, India, Thailand, Turkey, Azerbaijan, Kazakhstan, Vietnam, Indonesia, Saudi Arabia, Tunisia, Mexico, Philippines, Brazil, Malaysia and South Africa. These countries began to rapidly increase their production during the pre-crisis years (2003-2007), with China predominant among the newer producers, accounting for some 83% of the total volume imported into the EU in 2007, ahead of India and Thailand.
In 2008, EU and non-EU producers sold almost the same volume of product in the EU, around 56,000 tonnes. Both experienced drops in the following years, which could be due to the aftermath of the 2008/2009 global economic and financial crisis. However, in only four years, EU production was outstripped four-fold by imports (10,600 tonnes of EU product sold in the EU market in 2012 compared to 45,700 tonnes of non-EU imports). 95% of non-EU product came from Asian countries such as China, India, Thailand, and the Philippines, where several companies based in the EU had moved their production facilities.
This situation has been further exacerbated by a shift from a traditional marketing model involving thousands of sales personnel across the European market to a virtual, global model of online sales. This has boosted the advantages already enjoyed by non-EU manufacturers and finally led to the redundancy of the 171 workforce in Rathkeale, as well as reductions in the European sales personnel of the company.
The redundancies in the Rathkeale area, in the South-Western Irish County of Limerick, have a significant adverse impact on the local and regional economy. Andersen Ireland was a major employer in this mainly rural area, where it had been active for 37 years. According to the latest census (2011), the unemployment rate for the Rathkeale area (39.3%) was more than double the national average (19%).
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 130 applications. Some €536 million have already been requested to help more than 116,000 workers. EGF applications are being presented to help workers 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 support.
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 eligible under the Youth Employment Initiative (YEI), which is the case of Ireland.
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