EU: European Commission president José Manuel Barroso yesterday unveiled plans for a €500 million fund to help people who lose their job due to globalisation.
The fund will be targeted at workers made redundant through events that are caused by changes in global trade patterns.
The money can be used to provide aid to finance job search assistance, retraining and assistance to people wanting to become self-employed.
Complementary wage allowances for workers over the age of 50 are also possible under the guidelines for the fund, which the commission estimates will help up to 50,000 workers every year from January 1st, 2007.
Mr Barroso said the fund would show that the EU cares about workers.
"We are for globalisation, but we accept there may be losers and some people will be affected," he said. "[ We want to] express the union's solidarity toward those severely and personally affected by trade-adjustment redundancies."
The establishment of the globalisation fund was agreed by heads of state at the European Council meeting last December. However, the rules for drawing down the cash that were proposed yesterday by the commission are likely to prove controversial.
For example, under the commission's guidelines there must be a minimum of 1,000 redundancies in a given company or sector to enable member states to apply to the commission for aid.
This stipulation is likely to make it difficult for small member states such as Malta and Ireland to access funds as there are few firms employing 1,000 or more people.
To access the funds, member states will have to show that there is a link between job losses and significant structural changes in global trade patterns.
This could take the form of a firm relocating to a third country, a massive increase in imports or a given sector experiencing a progressive decline of its EU market share.
No aid will be given to workers of a factory that is relocated to another site within the EU.
Under the commission proposal, once redundancies are announced a member state must demonstrate to the commission that its claims are eligible under the rules of the fund. The commission will then process the application though the Council of Ministers and the European Parliament, which will decide whether and how much money to allocate to the member state.
The €500 million in the globalisation fund will be raised from cash that is not spent every year out of the EU budget.
The commission proposal must be accepted by states before the fund can be set up.