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EU Globalization Fund

DW staff (jb)March 23, 2007

A new EU initiative to help victims of globalization has already got some worried at its fairness.

The fund will help some laid off workersImage: picture-alliance/dpa

In this case, bigger might be better. At least if you are a laid-off employee in the European Union, some say.

Since Jan. 1, the EU has created a fund to help companies to adapt to globalization. The fund will provide for laid-off employees, whose companies had to downsize because they have lost out to China or India, for example, to work for the army.

Also, the EU has made available 500 million euros for the fund to also help with retraining, education and other things that will help workers get back on their feet. It is expected that 50,000 employees will take advantage of the fund.

The money will be paid out to the EU members states from the European Commission.

EU solidarity

For Jose Manuel Barroso, president of the commission, the initiative shows the solidarity of the EU with the losers of the globalized economy. Still, before the first applications have even come in, a fight is already brewing.

The accusation is that the new initiative will only benefit those from big corporations such as Hewlett Packard or Peugot and not small or mid-size companies.

And recent statements by French Minister of Employment Gerard Larcher seems to confirm those worries -- he said publicly that he will fully support the use of the fund especially for the employees of the large French auto manufacturers Peugot, Citroen and Renault.

Lacking a lobby

Employees of small and medium-sized companies lack a lobby, says Dirk Vantyghem of Eurochambres, the Association of European Chambers of Commerce and Industry. It is also difficult for the small firms that are not direct suppliers of the big companies, to prove that they are hurt by cheap labor overseas.

It will still mean the employment agency for the laid off smaller firmsImage: AP

"It is certainly more difficult for smaller firms to show that they are entitled to help from the fund," said Vantyghem. "The bigger firms can prove it easier with their mass lay-offs. Therefore, they are the ones that are going to profit from the system."

In fact, in order for the money to begin flowing, at least 1,000 employees have to be let go within four months, or nine months if it concerns multiple branches of the company, according to the rule of the fund.

Unrealistic

Christian Socialist Union member, Alexander Radwan, a member of the European Parliament, believes that the initiative is not realistic. He also thinks it will lead big companies to lay off more workers.

"This fund leaves the small and medium-sized companies out in the cold but gives the large ones an excuse to shed employees," he said.

But not everyone sees it that way.

The fund will help with training and placementImage: dpa - Bildfunk

"That is totally crazy," said Katharina von Schnurbein, spokesperson for the EU employment commissioner, Vladimir Spidla. "Businesses are certainly not going to decide to shed staff because of the fund."

She discounts the fears of the smaller enterprises and says that the fund is trying to be equitable.

Meanwhile, many say they are waiting to see what happens when the first applications begin filing in.

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