EC proposes EUR 3.6 M to help workers in Romanian steel industry

The European Commission has proposed to provide Romania with EUR 3.6 million from the European Globalisation Adjustment Fund (EGF) to help 1,000 former workers of the steel products manufacturer SC Mechel Campia Turzii SA and the downstream producer SC Mechel Reparatii Targoviste SRL to find new jobs, according to a press release of the Comission released on Wednesday.
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 Laszlo Andor commented: “The manufacture of finished and semi-finished steel products in the EU has been seriously disrupted due to intensified competition from countries outside the EU, particularly China. Today’s proposal would help to prepare some 1 000 former steelworkers from the Cluj region in Romania for new job opportunities or to set up their own businesses”.
Romania applied for support from the EGF following the dismissal of more than 1 500 workers in Mechel Campia Turzii and in Mechel Reparatii Targoviste in the Cluj region of Romania. The dismissals were the result of increased competition from steel products manufacturers elsewhere in the world.
The measures co-financed by the EGF would help 1,000 workers in finding new jobs by providing them with career guidance and skills assessment, training, support to entrepreneurship and a variety of allowances. One of the flagship measures will be to help 250 of the workers to set up a cooperative enterprise that will manufacture sports equipment.
The total estimated cost of the package is EUR 7.14 million, of which the EGF would provide half.
The EU has recorded a substantial increase of imports of finished and semi-finished steel products in recent years, as well as a relative decline of exports of such products, all of which has put the competiveness of the EU steel industry under pressure at international level and jobs have been lost due to restructuring in the steel sector in Europe, the press release reveals.
Both affected companies belonged to Mechel, a Russian steelmaking group. At the end of 2011, Mechel’s operations in Romania started to experience financial difficulties due to losses incurred because of unfavourable prices in European steel markets, linked to rising ferrous scrap prices and weak demand for finished products. Mechel Campia Turzii put in place a number of measures to reduce staff costs. However, these measures did not remedy the financial difficulties of the enterprise, which decided to initiate collective redundancies.

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