22nd Jan 2022

Car plant lay-offs in Belgium spark calls for EU help

The European Commission has said the Belgian authorities cannot make use of the EU's new "globalisation fund" to help around 4,000 workers set to be fired due to Volkswagen's restructuring plans - but has suggested Belgium to use other available EU funds.

Earlier this week, VW announced its plans to stop making the Golf cars at its plant in Vorst (Brussels) and transfer the production to Germany, as part of a major restructuring operation which will also see 20,000 jobs go in Germany.

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  • Brussels is willing to help sacked workers to re-qualify or set up their own business (Photo: European Commission)

But as wage costs are higher in Germany, the shift of the plant to two German sites -Mosel and Wolfsburg - sparked anger among workers and Belgian politicians, with prime minister Guy Verhofstadt saying he was "shocked" that the company made such a step due to "national interests."

The incident has also re-ignited debate over what the EU can do to help the affected region and workers, with a new instrument, agreed last year and dubbed the "Globalisation Adjustment Fund", being mooted as a solution.

The fund is worth around €500 million per year and is earmarked for workers laid off as a result of changes caused by globalisation pressures.

Despite several EU member states seeing the fund as a protectionist scheme during last year's talks on EU's 2007-2013 budget, the scheme was finally accepted as a signal to countries such as France that EU is ready to assist citizens in difficult situation.

However, in the case of the Volkswagen redundancies, Belgium will have to opt for other tools the EU has at its disposal - both because the globalisation fund will only start running next year and also due to different conditions under which it can be used.

According to the European Commission, the fund is seen as a 'last resort' to deal with problems caused directly by globalisation rather than by restructuring within Europe.

Instead, Belgium has been urged to use the existing European Social Fund from which the country had received €1.1 billion over the last six years, mainly for retraining of workers who become unemployed or help them to set up their own businesses.

Meanwhile, European trade unions argue that "the debacle" at Volkswagen's Brussels plant proves that the EU's labour laws are not sufficient protection for workers, attacking Brussels' competitiveness agenda as promoting "two tier labour markets" rather than exerting "more influence on company decisions on employment security."

The commission on Wednesday (22 November) launched a public debate on how the bloc should possibly modernise the existing labour legislature or introduce new laws to reflect the current globalisation pressure.

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