The European Commission has proposed to provide Belgium with €911,934 from the European Globalisation Adjustment Fund (EGF) to help 752 former workers of steel producer Carsid S.A. to find new jobs. The redundant workers are mostly in the area of Charleroi in the Walloon Region. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "The European steel sector has suffered a serious decline in demand, in particular as a result of the EU's rapidly declining share of the global steel market. Many workers in the EU's steel industry are experiencing hardship and it is important that the EU demonstrates solidarity to help them to upgrade their skills and find new career opportunities. The €911,934 we have proposed would help the redundant Carsid workers to find a new job."
Belgium applied for support from the EGF following the dismissal of 939 workers at Carsid S.A. These redundancies were the result of a rapid decline of the EU’s share of the global market for continuously-cast crude steel and a decrease in demand for steel from the EU's automotive and construction sectors as a consequence of the economic crisis, combined with a relative increase in production costs.
The measures co-financed by the EGF would help the 752 workers facing the greatest difficulties in finding new jobs by providing them with job-search assistance, active career guidance and a variety of retraining and vocational training schemes.
The total estimated cost of the package is €1.8 million, of which the EGF would provide half.
The EU's share of the global steel market has been shrinking in recent years, despite the general upward trend of the sector. In particular, the EU’s share in worldwide production of continuously-cast crude steel has declined rapidly. From 2006 to 2011, EU production of continuously-cast crude steel decreased from 197.1 to 170.8 million tonnes (-13.4%; -2.8% annual growth), whereas worldwide production increased from 1,149.6 to 1,438.3 million tonnes (+25.1%; +4.6% annual growth). This has led to a decrease of the EU-27’s share of worldwide production of continuously-cast crude steel from 17.1% in 2006 to 11.9% in 2011 (-30.7%; -7.1% annual growth). By comparison, during the same period, China’s market share increased from 35.5% to 46.8 % (+32.0%; +5.7% annual growth), whereas the market shares of the five other largest producers (which together account for around 25% to 30% of worldwide production) either decreased, although to a lesser extent than for the EU-27 (Japan, US, Russia), or increased moderately (South Korea, India).
Other factors such as a decrease in demand for steel in the EU's automotive and construction sectors as a result of the economic crisis and a relative increase of production costs (e.g. raw materials, energy, environmental constraints) have harmed the EU steel industry's competitiveness and led to significant job losses in the steel sector in recent years due to plant closures and restructuring. The number of persons employed in the EU's metallurgical industry decreased by 19.4% from 2008 to 2013.
The redundancies at Carsid primarily affect the area of Charleroi in the Walloon Region, a former coal-mining and steelmaking area where employment is strongly dependant on traditional heavy industries. The Carsid redundancies are expected to significantly worsen unemployment in the Charleroi area, which stood at 21.6% in 2012, compared to 15.8% on average in the Walloon Region and 11.2% at national level.
More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost jobs, particularly in vulnerable sectors and among lower-skilled workers. This is why Commission President Barroso first proposed setting up a fund to help those adjusting to the consequences of globalisation. Since starting operations in 2007, the EGF has received 128 applications. Some €523 million has been requested to help more than 111,000 workers. In 2013 alone, it provided more than €53.5 million in support.
The Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope includes workers made redundant because of the economic crisis, as well as fixed-term workers, the self-employed, and, by way of derogation until the end of 2017, young people not in employment, education or training in regions of high youth unemployment.