EU Commission to help redundant textile workers in Spain

EU Commission to help redundant Spanish textile workers

The EU Commission has proposed to provide Spain with EUR 840000 from the EGF European Globalisation Adjustment Fund to help 300 workers made redundant in the textile sector in the community Valencia (E) to find new jobs

The funds, requested by the Spanish authorities, would help former workers from 198 SME’s businesses.

Lázló Andor, EU Commissioner for Employment, and Social Affairs commented: “Workers in the Spanish textile industry have been hard hit by rising global competition and the economic crisis. The Spanish labour market is particularly challenging, but I am convinced that the proposed support from EGF would help the workers who lost their jobs to find new opportunities.”

Spain applied for the support following the dismissal of 560 workers in 198 SME textile enterprises in the region of Valencia. The dismissals were the result of increased competition from textiles manufactured elsewhere in the world, compounded by the economic crisis. China increasingly dominates the world textile market, while other Far Eastern countries continue to increase their production.

The measures co-financed by the EGF would help the 300 workers facing the greatest difficulties in finding new jobs by providing them with one-to-one counselling and guidance, skills assessment and outplacement, general training and re-training, individual vocational training, entrepreneurship promotion and support, outplacement incentives, job-search allowance and a contribution to commuting expenses. The total estimated cost of the Package is EUR 1.68 million, of which the EGF would provide half.

Since the closure of WTO World Trade Organisation’s ten year transitional ATC Agreement on Textiles and Clothing at the end of 2004, the European Union market for textiles has been open to far more global competition, particularly from China and other Far Eastern countries.

Over the period 2004 – 20012, the EU trade balance in textiles deteriorated substantially. There was a 17 % increase in imports of textiles into the EU, whilst the export of textiles from the EU to the rest of the world decreased by 3 %.  The EU trade balance for textiles decreased from a surplus of EUR 1107 million in 2004 to a deficit of EUR 3067 million in 2012. Furthermore, whilst the share in world exports of textiles of the EU decreased from 10 % to 8 % over the period 2000 – 2011, the share in world exports of textiles of China increased from 10 % to 32 %.

The Spanish textile industry has undergone extensive restructuring and modernisation in response to increased competition that followed the expiry of the WTO’s MFA Multifibre Arrangement and the Agreement on Textiles and Clothing which succeeded it. However, redundancies linked to the restructuring of the textile industry have been compounded by the overall negative effect of the economic crisis on employment. The unemployment rate in the region increased rapidly, rising from 9.61 % in the first quarter of 2008 to 29.19 % in the same quarter of 2013.

In 2013 the EU Commission also proposed to mobilise EGF resources to help redundant workers in the manufacture of building materials in the region.

The 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 effecting lower skilled worker.  This is why EU President Barroso first proposed to set-up a fund to help those adjusting to the consequences of globalisation. Since the start of its operations in 2007, the EGF has received 117 applications. Some EUR 500 million has been requested to help more than 105000 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 EUR 73.5 million.

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