The European Commission has approved the application from Lithuania for assistance under the European Globalisation adjustment Fund (EGAF). The application will now be sent to the European Parliament and the Council for decision. The funding will help the 600 most affected of the redundant workers in the textiles sector back into employment. The application – for €298,994 – was submitted after 1,089 employees were made redundant from Alytaus Tekstilė in Alytus, in southern Lithuania.

The Lithuanian application concerns 1,089 dismissals in Alytaus Tekstilė. The textile manufacturer went bankrupt in July 2007 as a result of imports of cheap textiles from outside the EU. In this case, the ending of the Multi Fibre Arrangement has lead to a sharp increase in imports of textile products from low-wage economies, largely in Asia. Wages form a significant part of the cost of the products in this sector, and many firms are experiencing difficulties. The application focuses on the 600 workers still in need of assistance at the time of application.

What is the EGF

The EU Globalisation Fund (EGAF) gives financial contribution in cases where more than 1,000 workers in an enterprise or a regional sector are made redundant due to major structural changes in world trade patterns leading to substantially increased imports into the EU or a rapid decline in EU market shares.

The EGF was established by the European Commission, the European Parliament and the Council at the end of 2006 to provide help for people who have lost their jobs due to the impact of globalisation. Commission President José Manuel Barroso proposed the idea in 2005 to create an instrument of solidarity to help workers affected by redundancies resulting from changes in world trade patterns find their way back into work.

Other textil cases

This is the second application concerning the textiles sector, but a further four applications concerning this sector in Italy are currently being assessed by the Commission.