Brussels to propose €700,000 grant to Malta

The European Commission is today expected to approve an application by Malta to tap the European Globalisation Fund following last June's redundancies in the textile industry.

Commission sources confirmed yesterday that the Commission will today agree to propose a €700,000 grant to Malta to be used for retraining and other initiatives aimed at the almost 700 workers who were made redundant by VF and Bortex last summer. The funds will be used to re-integrate these workers into the labour market in line with an action plan submitted to Brussels.

"The Commission has evaluated Malta's action plan and it seems there are good reasons why we should help Malta reintegrate these people into the labour mainstream. We will be granting Malta 50 per cent of the costs of the action plan," the sources said.

The Commission's proposal will be assessed and given the green light by the European Parliament and the EU Council, a procedure the sources described as just a technicality.

Sources close to the Employment and Training Corporation, that will administer the finds, told The Times that the actual action plan costs €1.4 million with half of the funds coming from the government's coffers. The action plan includes active labour market measures, such as job-search assistance, occupational guidance and tailor-made training and retraining including in ICT skills.

This is the first time Malta has submitted an application to tap EU money from the new Globalisation Fund.

The funds will be used exclusively by the redundant workers, 570 who used to work for VF and 113 for Bortex. Many of those laid off have already found a new job but, if they wish, they will still be eligible for training and other salient aspects of the schemes that will be supported through the EU funding.

Both companies had cited lack of competitiveness from emerging markets like Asia as the main reason for their redundancy decisions.

The EGF was formally set up last December following talks at various EU levels with a budget of €500 million annually.

Malta had fought tooth and nail to make sure its economy, although small, still qualifies for funding as original proposals submitted by the Commission had excluded help for redundancies of less than 1,000 in one sector, thus excluding Malta. Following technical and political submissions by Malta, the EU agreed to remove the threshold for small member states, enabling Malta to benefit from the fund, should the case arise.

So far, only France, Germany and Finland have benefitted from this fund in the wake of redundancies affecting particularly the car manufacturing sector.