EP Budgets Committee clears €700,000 grant for textile redundancies

The application that Malta submitted last year to tap EU funds for redundant textile workers was yesterday cleared by the Budgets Committee of the European Parliament.

The decision to grant €681,207 (Lm292,442) through the newly established European Globalisation Adjustment Fund is now expected to be reconfirmed by the European Parliament Plenary next week and be followed by a rubber stamp from the EU Council a few days later.

Last year, Malta had applied for assistance to reintegrate into the labour market 675 textile workers who lost their jobs following the unexpected closure of two companies, VF Ltd. and Bortex Clothing. The application was accepted by the European Commission the following December.

During a meeting in Brussels yesterday, the Budgets Committee voted in favour of a report submitted by the Committee's chairman, German EPP-ED MEP Ramier Boge, to grant Malta funds for an assistance plan.

The total cost of the plan is put at €1.3 million (Lm560,000) by the Maltese authorities and will be administered by the Employment and Training Corporation (ETC).

This is the first time EGAF money has been used for one of the countries that joined the EU since 2004. It is also the first time that a special clause in the regulation governing the fund, relating to smaller markets, has been used.

The Budgets Committee said that the 675 redundancies accounted for 0.4 per cent of Malta's working population. Originally, when the fund was being discussed in 2005, Malta was going to be excluded from eligibility as the Commission had proposed that only redundancies of more than one thousand jobs in one company could qualify. Following Malta's insistence, the rules were amended so that the circumstances of small economies like Malta's were also taken into account. This proved to be very beneficial to Malta.

During a preliminary debate on Malta's request in the budgets and employment committees on March 10, some MEPs, particularly from the Green group, expressed reservations about the scale of the administrative costs included in the Maltese plan, which represented 10 per cent of the total sum requested by the Maltese authorities.

In the end, however, the Budgets Committee decided that the use of the EGAF was justified and recommended a positive decision in favour of the island.

VF, part of the multinational VF Corporation, closed its factory last July laying off all its 562 employees, while Bortex decided to close down part of its Maltese operation in September, resulting in 113 job losses.

After a thorough examination of the Maltese application, the European Commission recommended a decision in favour of Malta's application as "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."