EU Employment Commissioner Vladimír Špidla said: "Malta is a small country where a relatively limited number of redundancies can have a big impact. I am confident that the EGF will help take the edge off the job losses by assisting the Maltese authorities in getting these workers back into the labour market".
The application came after two Maltese textiles manufacturing companies – VF and Bortex –unexpectedly closed all or part of their operations in Malta. VF, part of the multinational VF Corporation, closed its factory in Malta in July 2007 with 562 redundancies, while Bortex decided to close down part of its Maltese operation in September, resulting in 113 job losses.
With its small labour market, the redundancies represent 0.4 % of Malta's active population. Despite trends in the EU clothing industry towards delocalisation to lower cost countries such as China, India and Turkey, the redundancies were nevertheless unexpected as both companies had recently invested in their Maltese production sites and human resources. The total estimated cost of the package of assistance is EUR 1.3 million, of which the European Commission has been asked to co-fund EUR 681,207.
This is the fifth successful application under the Fund since its launch in January 2007. The four previous cases concerned redundancies in the automotive sector in France (suppliers to Peugeot-Citroen and to Renault) and in the mobile phone manufacturing and accessories sectors in Germany and Finland (BenQ and Perlos). A further five EGF applications from Italy (three applications), Portugal and Spain are currently being analysed by the European Commission.
The EGF may give a financial contribution in cases where more than 1,000 workers in an enterprise or a regional sector are made redundant due to major structural changes in world trade patterns leading to substantially increased imports into the EU or a rapid decline in EU market share. Where an application is based on the circumstances of a "small labour market" (as with this Maltese case) a contribution from the EGF may be considered where the number of redundancies does not reach the 1,000 redundancy 'trigger'.
The EGF was established by the European Parliament and the Council at the end of 2006 to provide help for people who have lost their jobs due to the impact of globalisation. European Commission President José Manuel Barroso proposed the idea in 2005 at the Hampton Court Summit, with the aim of creating an instrument of solidarity to help workers affected by redundancies resulting from changes in world trade patterns find their way back to work.
EGF website: http://ec.europa.eu/egf