€1.2 million from European Globalisation Adjustment Fund to support 300 dismissed workers in Spain

This article is brought to you in association with the European Commission.

Today, the European Commission proposed to support 303 workers dismissed by aluminium producer Alu Ibérica in the region of Galicia in Spain with €1.2 million from the European Globalisation Adjustment Fund for Displaced Workers (EGF). The funding will help them find new jobs through tailored guidance and advice, vocational training and job-matching.

Spain applied for EGF funding support to help the workers dismissed by Alu Ibérica LC S.L., which declared bankruptcy. Alu Ibérica produced primary aluminium from mined ore. Due to increased energy and raw material prices the company had to shut down.

The EU-funded support to the dismissed workers includes advisory services, job search assistance and job-matching, as well as tailored vocational upskilling and reskilling. The workers also receive training in key skills and knowledge they need to find a new job, including basic IT skills, warehouse operations and logistics, and new welding techniques, as well as support in getting their skills and prior working and learning experience formally recognised. In addition, participants are eligible for an incentive of €200 per month, for a period of six months, if they return to the job market quickly.

Furthermore, the EU funding covers a variety of allowances, for instance financial incentives to participate in job-search and training activities, a contribution to commuting expenses, and expenses for carers of dependent persons, so that the people with care responsibilities can participate in the measures.

The total estimated cost of these measures is about €1.5 million, of which the EGF will cover 85% (€1.2 million). The Galicia Region in Spain will finance the remaining 15% (€225,000). Support to the eligible workers started after the company dismissed the workers in May 2022, and additional measures to be supported from the EGF in March 2023.

The Commission’s proposal requires approval by the European Parliament and the Council.

Background

The primary aluminium industry is an energy-intensive industry, which is therefore highly dependent on competitive and stable electricity prices. The rise in inflation, in particular the increase in prices of raw materials and energy, also due to Russia’s unjustified invasion of Ukraine, has impacted this and other industries. Some smelters had to reduce aluminium production, while others stopped production temporarily or indefinitely (like Alu Ibérica).

The redundancies are in the Spanish region of Galicia and in particular the town of A Coruña. The closure of Alu Ibérica has a significant impact on the labour market and the economy of A Coruña, due to its size (more than 250 employees and a turnover of more than €130 million), in a territory where 93% of businesses have five or less employees. The unemployment rate in Galicia stood at 10.6% in Q4 2022, which is 4.5 percentage points higher than the EU average (6.1%) in the same period. In January 2023, the unemployment rate in A Coruña was 13.1%.

The redundancies at Alu Ibérica have a particular impact on workers aged 45 years and older, whose chances to find work tend to be low in the local labour market. Also considering the economic situation impacted by the current geopolitical context, Alu Ibérica former workers will need additional and targeted support to increase their chances of finding new jobs.

Under the EGF regulation 2021-2027, the Fund supports displaced workers and self-employed people who have lost their activity. EGF support is more easily available for people affected by restructuring: all types of unexpected major restructuring events can be eligible for support, including the economic effects of the COVID-19 pandemic and Russia’s unjustified invasion of Ukraine, as well as larger economic trends like decarbonisation and automation. Member States can apply for EU funding when at least 200 workers lose their jobs within a specific reference period.

Overall, since 2007, the EGF has made available €690 million in 176 cases, offering help to more than 168,000 people in 20 Member States. EGF-supported measures add to national active labour market measures.