The European Commission has approved an application from Portugal for assistance from the European Globalisation adjustment Fund (EGF). The application will now be sent to the European Parliament and Council for decision. If approved, the €832,800 requested will help 1,504 redundant workers in the textile sector back into employment as quickly as possible.

According to EU Employment Commissioner Vladimír Špidla, in the Portuguese textile sector, 97.8% of unemployment is concentrated in the Norte and Centro regions. Therefore, Portuguese authorities have chosen to apply for EGF funding, which will help to get these workers back onto the labour market as quickly as possible. The Portuguese application concerns workers made redundant in 49 small- and medium-sized enterprises in the two neighboring regions of Norte and Centro. The northern region of Portugal is the most specialized in the EU in the textile and clothing sector. In terms of employment in this region, the sector represents over 14% of the total labour force. In the Centro region, the textile and clothing industries represent 15% of industrial employment.

Following the end of the World Trade Organization Multi-Fibre Arrangement at the end of 2004, imports of textile and clothing articles into the EU from lower-cost countries almost doubled. EU producers, including those in Portugal, were faced with a very competitive market. In addition, much production has relocated from the EU to low-cost countries (China and India in particular).

The total estimated cost of the package of EGF assistance, which will include career guidance, vocational training, support for entrepreneurship and skills recognition and certification for the redundant workers is €1.6 million, of which the European Globalisation adjustment Fund has been asked to fund €832,800.