Generally speaking, the opening of economies to international competition is positive. Globalisation boosts competitiveness and opens up new opportunities for growth and employment. This is extremely beneficial to the consumer, who finds more choice, better prices and higher quality products on the market.
Nonetheless, the exposure to world trade must be treated with care and caution. The intensification of trade flows does in fact mean that local, national and regional socio-economic systems face greater competition, which inevitably affects the less competitive sectors where the adjustment costs, such as retraining of the workforce and conversion of production structures, are high. The failure of companies to adjust can sometimes lead to massive job losses.
According to estimates drawn up by economic experts, if no corrective measures are taken in 2009 the European economy will see zero or negative growth rates, resulting in millions of job losses.
In addition to the Structural Funds or the European Strategy for Growth and Jobs which already offer a general response in terms of managing and anticipating the challenges of globalisation, the creation of the European Globalisation Adjustment Fund is essential in order to avert the threats that economic woes can have on the employee.
The purpose of the European Globalisation Adjustment Fund, which I negotiated on behalf of the European People’s Party, is to provide effective support for workers made redundant as a result of globalisation. It was set up in December 2006 and is due to run until 2013. During a plenary session in the European Parliament last week, it was agreed that the Fund’s maximum annual budget would increase from e500 million to e1 billion, all of which shall be utilised to actively support labour market measures. These include assistance for people seeking work or in the form of further training grants and mobility allowances.
The fund’s main problem has been that its stringent intervention criteria has prevented its full potential from being exploited. The fund used to cater for enterprises which were forced to dismiss 1,000 employees or more at one go. Commission studies have shown that up until mid-2008, a total of 73 enterprises had dismissed fewer than 1,000 workers, but more that 500 employees in total. It was therefore extremely positive that Parliament voted in favour of lowering the Fund’s threshold from companies dismissing 1,000 employees to a total of 500 workers.
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In the light of the current international financial and economic crisis, the Committee on Employment and Social Affairs, which I form part of, called for a temporary increase, until 2010, in the co-financing rate to 75 per cent of the total costs, so that employees made redundant are not denied support because of a lack of State resources in the region or country concerned, and for provision to be made for the reference period during which the 500 redundancies must take place so that the Community is not prevented from showing solidarity with workers who have lost their jobs.
The objective of the European Globalisation Fund is to provide individual support to workers who are “severely and personally affected by trade-adjustment redundancies”. In the longer term, the measures contained in the fund aim to help redundant employees to find and hold on to a new job.
The fund will supplement, and not replace, similar actions conducted by the member states at national, regional and local level and by companies by virtue of national law or collective agreements. Therefore, member states are also strongly encouraged to assist the workers made redundant on a national level alongside the European Union’s initiatives.
The European Globalisation Fund is a solidarity fund and not a rapid reaction fund intended to respond to an emergency or crisis situation. Moreover, this Fund forms part of the general reflection on the concept of flexibility and security or “flexicurity”, which seeks to reconcile economic flexibility with job security for workers. The Commission is also actively examining ways in which the Fund could be modified, within the present budgetary limits, so as to improve its performance, with a view to reinforcing its impact on job creation, training and opportunities for Europe’s workers.
Whilst taking note of the positive impact of the European Globalisation Fund in its first year of operation, I have done my utmost to ensure that the newly updated Fund serves the interest of workers in all Member States, not least in the case of Maltese employees. I pledge to carry on my efforts in ensuring the best standards and working conditions for our labour force, which is the foundation of a strong and dynamic Europe.
David Casa is a Nationalist MEP
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