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The European Commission today approved an application from Denmark for assistance under the European Globalisation adjustment Fund (EGF).

The funding will help 951 workers in the marine manufacturing sector back into employment. The application – for a total of €7.5 million – concerns workers made redundant in 45 businesses in the Danish region of Nordjylland. The Commission will now make a proposal to the European Parliament and the Council to mobilise the budgetary resources.

"The global financial crisis has changed the conditions and expectations for the future of shipbuilding. We now anticipate that this industry will move to low cost areas, mainly in Asia, whose market share has been growing spectacularly in the years leading up to the crisis" said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. He added: "It is unlikely that the companies concerned by this application could potentially return to normal production at the end of the crisis. The Globalisation Fund can help cushion this dramatic change, preparing workers for new job opportunities."

The Danish application relates to 1,122 redundancies in 45 enterprises mostly involved in producing machinery and equipment for the shipbuilding sector and located in Nordjylland, in the north of Denmark. The fall in demand from shipbuilders is at the origin of the dismissals. The shipbuilding sector has seen demand plummet due to a combination of factors, including the financial and economic crisis, which brought about reduced shipbuilding requirements. By the end of 2008 / beginning of 2009, the placement of new orders had come to an almost complete halt and several of the ships on order had their delivery dates postponed.

The Nordjylland region with almost 600 000 inhabitants is the smallest region in Denmark and also has the lowest population density. In terms of employment levels and income, it is lagging behind the rest of Denmark. The region is particularly dependent upon the industrial sector, and has been hard hit by the current crisis. The redundancies in the Nordjylland application are all the more serious to the region as it is anticipated that, even after the end of the crisis, the sector will not revive, with most of the new orders going to the far East, where costs are lower.

The package of EGF assistance for the former workers of the machinery and equipment manufacturing industry will help 951 of the most disadvantaged back into employment by offering them promotion of entrepreneurship; courses on location with companies; supplementary general education; and supplementary industrial education in the maritime field, in renewable energy and energy optimising. The total estimated cost of the package is almost €11.5 million, of which the European Union has been asked to provide EGF assistance of €7.5 million.