Malta applies for EU redundancy funds

Malta has formally applied to tap the Globalisation Fund (EGF) created by the EU last year to help member states hit by substantial redundancies due to the shifts in the global economy.

A European Commission source yesterday told The Times that Malta's application was submitted on September 7.

"We can confirm that we have received Malta's application. Maltese government officials have been in contact with the Commission services since the redundancies in the Maltese textile industry were announced last June.

"The submission of a proper application entails specific studies and a detailed action plan to be drawn up by the member states. This obviously takes time," the source said.

A recommendation by the Commission is expected to be announced by the end of next month.

The decision will have to be adopted by all the EU member states through the EU Council.

Textile factories VF and Bortex announced substantial redundancies in June. VF pulled out of the island laying off 570 workers while Bortex announced it was moving to China, sacking 113 workers.

Both companies cited a lack of competitiveness in the face of emerging markets like Asia as the main reason for their decision.

Malta is asking the EU for funds through its EGF in order to provide intensive retraining for redundant workers to help them find new jobs.

If the application is approved, the EU will fork out 50 per cent of the cost of the training programmes.

These funds are granted to the authorities for training and related schemes.

The EGF was set up last December with a budget of €500 million annually.

Malta had fought tooth and nail to make sure that its economy, although small, would qualify for this fund, after the original proposals had excluded help for redundancies of less than a 1,000 people in one sector - automatically excluding Malta.

Following technical and political submissions by Malta, the EU agreed to remove the threshold for small member states, making it possible for the island to benefit from this fund should the case arise.

So far, only France has been granted such funding following redundancies in its car manufacturing sector.