Irish Regions Office Website

January 18, 2010

Globalisation Fund an option for Irish construction sector?

On the same basis that it was pressed into action to help alleviate the effects of the mass redundancies announced last year by DELL, SR Technics and Waterford Crystal, the European Commission is now recommending that the Globalisation Adjustment Fund (EGF) be used in relation to the Lithuanian building construction industry. As with Ireland, construction activity in the Baltic country collapsed during 2009 with small or medium-sized enterprises being hardest hit. Now, subject to approval from the European Parliament, the fund is expected to approve an EU contribution to cover 65% of the costs associated with active labour market measures at individual level to benefit over 800 affected workers. These will include retraining initiatives, self-employment assistance and incentives, and career guidance.

Although details of the application are not yet publically available, this would seem to represent an interesting precedent for EGF in that the proposed intervention would appear to be more in response to the effects of the general economic downturn within national borders than to those of global trade patterns and jobs being relocated to cheaper economies. The application is also on a sector-wide as opposed to single firm (plus suppliers/downstream producers) basis and the threshold for deploying the EGF in this manner in Ireland's case would be 500 redundancies nationally within a single sector, particularly in SMEs, over a period of nine months.

Sectors relating to building construction which would theoretically be similarly eligible for attention on these terms include ''specialised construction activities'', ''civil engineering'', ''architectural and engineering activities'', ''services to buildings and landscape activities'', and ''real estate activities''. Aside from the property market, other hard-hit industries for which an application might be put together by Ireland include ''accommodation'' (hotels etc.), ''retail trade'', ''trade and repair of motor vehicles'', and ''public administration''. In this vein, Lithuania is awaiting a judgement on an application on behalf of its furniture manufacturing sector. EUR500 million is being made available each year to finance such interventions.

EGF

Posted by iroronan at January 18, 2010 03:45 PM