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EUR 1.8m EU aid to help redundant Belgian workers

05 May 2016, 21:22 CET
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(BRUSSELS) - The EU Commission is proposing to provide Belgium with EUR 1.8 million to help 488 workers made redundant by several manufacturers of construction machinery in Belgium's Wallonia region.

The money, to be made available from the European Globalisation Adjustment Fund (EGF), is to help the former workers find new jobs. 300 young people not in employment, education or training (NEETs) will also be included in the actions planned. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.

The manufacturing machinery and equipment sector in Belgium has been hit hard by globalisation and the economic and financial crisis. Belgium applied for support from the EGF following redundancies in Caterpillar Belgium, Carwall S.A. (a principal supplier of cabs for Caterpillar Belgium) and Doosan S.A. The job losses were the result of major structural changes in world trade patterns due to globalisation, which has led to a decline in competitiveness and the delocalisation of substantial production capacity to non-EU countries.

The measures co-financed by the EGF would help the workers and the NEETs find new jobs by providing them with active career guidance, job-search support, vocational training and retraining, promotion of entrepreneurship and contributions to collective projects. Job-search and training allowances will also be made available.

The total estimated cost of the package is €3 million, of which the EGF would provide €1.8 million.

Background

In 2013, Caterpillar Belgium announced that it was entering into a collective redundancy procedure for its production plant located in Gosselies, a town in the Walloon province of Hainaut (Belgium). The majority of the 1,399 workers concerned were covered by a first EGF application from 2014. The current proposal includes the 169 workers remaining at the site.

Carwall S.A., a principal supplier of cabs for Caterpillar Belgium S.A., witnessed a falling demand for its products, mainly due to fewer orders coming from Caterpillar, and was forced to scale down production accordingly.

The third enterprise concerned by this proposal, Doosan S.A., produces excavators. Falling demand for its products in Europe led to the decision to close a production plant located in Frameries, also located in Hainaut, and in future to supply the European market from its production sites in South Korea.

The impact of these redundancies on the local and regional economy and employment is expected to be significant. The whole manufacturing sector has been downscaling production in Wallonia, with 1,236 job losses in 2013 and 1,878 job losses in 2014. Hainaut has been facing a difficult labour market situation with an employment rate lower than the national average.

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) up to a number equal to the number of redundant workers supported. In the case of this application, Belgium requested that personalised services also be provided to up to 300 NEETs under the age of 25, given that the redundancies occurred in a region which is 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 jobs, particularly in vulnerable sectors and among lower-skilled workers. To help those adjusting to the consequences of globalisation, the EGF was set up. Since starting operations in 2007, the EGF has received 144 applications. Some €576 million has been requested to help more than 133,150 workers and 3,944 NEETs.

Further information

EGF website


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