Employment: Commission proposes €1.4 million from Globalisation Fund for former shipbuilding workers in Finland
European Commission
Press release
Brussels, 14 October 2014
Employment: Commission proposes €1.4 million from Globalisation Fund for former shipbuilding workers in Finland
The European Commission has proposed to provide Finland with €1.4 million from the European Globalisation Adjustment Fund (EGF) to help 565 former workers of the shipyards STX Finland Oy 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 crisis has accelerated the transformation of the shipbuilding sector, with much of this industry moving to Asia. This proposal for 1.4 million euros from Europe's Globalisation Fund would help prepare the dismissed workers for new job opportunities in other promising sectors".
Finland applied for support from the EGF following the dismissal of 634 workers in STX Finland Oy in Rauma and Turku. The dismissals were the result of increased competition from Asian shipyards.
The measures co-financed by the EGF would help the 565 workers facing the greatest difficulties in finding new jobs by providing them with coaching and other preparatory measures, training and re-training, entrepreneurship promotion, as well as pay subsidies and various allowances.
The total estimated cost of the package is €2.3 million, of which the EGF would provide €1.4 million.
Background
The redundancies are caused by the closure of the STX shipyard in Rauma, with some ensuing job losses at the bigger STX shipyard in Turku.
Following a dramatic increase in demand for ships before the global economic and financial crisis, new shipyards were built, most of them in Asia. However, the crisis halved the demand between 2007 and 2013. Thus, the sector is currently suffering from a global overcapacity leading to severe competition. The EU share of the global shipbuilding market has plummeted from 13% in 2007 to 5% in the first three quarters of 2013 (measured by production volume), while the combined share of China, South Korea and Japan has increased from 77 to 86% in the same period.
The Korean STX Group, which owned the shipyards in Turku and Rauma, experienced difficulties in early 2013. In May, the group put all its European shipyards on the market, including the one in Rauma, but no potential buyers could be found. In September of the same year, STX Finland announced that it would stop its operations at the Rauma shipyard and would concentrate them in Turku.
The areas affected by the redundancies are Rauma and, to a lesser extent, the region of Turku in Southwest Finland. The closure of the shipyard is expected to increase the unemployment rate in the Rauma region by more than 2 percentage points.
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. 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.
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 (NEETs) in regions eligible under the Youth Employment Initiative (YEI) up to a number equal to the redundant workers supported.
For more information
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Contacts :
Jonathan Todd (+32 2 299 41 07)
Cécile Dubois (+32 2 295 18 83)