The European Commission has proposed to provide Greece with €6.4
million from the European Globalisation Adjustment Fund (EGF) to help
600 former workers of the Fokas department stores to find new jobs, and
to extend its support to 500 young people not in employment, education
or training (NEETs). Most of the redundancies happened in the regions of
Attica, Central Macedonia and Thessaly. The proposal now goes to the
European Parliament and the EU's Council of Ministers for approval.
Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, commented: "Many
sectors and industries in Europe are going through major structural
changes, as a consequence of globalisation. The European Globalisation
Fund is a concrete expression of European solidarity. It will continue
to help Member States to re-integrate people who have lost their job
into the labour market and support them to adapt their skills. Through
this fund, we are accompanying workers who experience hardship in the
difficult transition to new jobs and I have the intention to maximize
its performance during the coming years."
Greece applied for
support from the EGF following the dismissal of 600 workers in Odyssefs
Fokas S.A. These job losses were the result of the global financial and
economic crisis which has deeply affected the Greek economy.
The
measures co-financed by the EGF would help the workers and the NEETs
find new jobs by providing them with active career guidance, vocational
training, specific advice towards entrepreneurship, contributions to
business start-up and the relevant allowances.
The total estimated cost of the package is €10.7 million, of which the EGF would provide €6.4 million.
Background...
Odyssefs
Fokas was a dynamic enterprise which operated in the wholesale
business. In the 1980s it already owned the third largest department
store in Greece. The enterprise further expanded its business by
undertaking the representation in the domestic market of well-known
foreign apparel firms and the first shops-in-shop make their appearance
in Greece through their department stores. In the 1990s the group Fokas
increased its exclusivity agreements with international apparel firms
and opened franchise stores of various international brands. Over the
years 1999-2008 the expansion of Fokas continued. Two department stores
were opened in the most important shopping districts of Athens along
with various showrooms, franchise shops and point-of-sales in agreement
with international brands.
This success came to an abrupt end with
the outbreak of the economic and financial crisis in 2008. Due to the
drop in purchasing power of Greek households since the beginning of the
crisis, demand for products other than basic staples has plummeted and,
as a result, the turnover of the company started declining.
Another
consequence of the recession of the Greek economy was the cash flow
shortage. To remedy it Fokas sought financial help from banks,
unsuccessfully. The reduction in turnover which resulted from the drop
in consumption, together with the tightening of credit, made the
attempts of group Fokas to find a solution fruitless and led the
enterprise to bankruptcy.
Most of the redundancies are
concentrated in Attica and Central Macedonia while about 10 % occurred
in Thessaly. In the last quarter of 2013, the unemployment rate in
Attica was 28.2 % and in Central Macedonia was 30.3 %, both above the
national average (27.5 %). The employment situation in Thessaly is
slightly better than the national average, but even so, the unemployment
rate is 26 %. Furthermore, there is a lack of job offers in all three
regions compared with the high number of job seekers.
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 the Commission
first proposed setting up a fund to help those adjusting to the
consequences of globalisation. Since starting operations in 2007, the
EGF has received 130 applications. Some €536 million has been requested
to help more than 116,000 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 (NEETs) residing in regions eligible
under the Youth Employment Initiative (YEI) up to a number equal to the redundant workers supported.
