European Parliament approves over €1m in support for laid off workers in Northeastern Estonia ({{commentsTotal}})

VKG Kiviter plants.
VKG Kiviter plants. Source: (VKG)

Following a green light from its Committee on Budgets on Monday, the European Parliament approved the allocation of 1.1 million euros from the European Globalization Adjustment Fund on Wednesday in order to help hundreds of workers laid off in petroleum and chemical product manufacturing in Northeastern Estonia find new jobs.

The motion was endorsed by the plenary with 580 to 81 votes and 26 abstentions on Wednesday.

The measure must still be approved by the Council of the EU.

Estonia submitted an application for the funds on May 11 following a wave of layoffs in the petroleum and chemical sectors in the country's northeast.

In July 2015, Nitrofert, a company producing synthetic ammonia and urea, shut down its production plant. State-owned Eesti Energia, the largest company in the world to work with oil shale, decided to reduce shale oil production due to dramatically fallen profits caused by lower oil prices. The third enterprise subject to the application was Viru Keemia Grupp (VKG), another shale oil producer in Ida-Viru County facing similar problems caused by the drop in oil prices.

The personalized services to be provided to laid off workers would consist of support for formal training, training cost reimbursement for employers, labor market training, Estonian language training as well as work practice and psychological counseling.

In order to establish the link between the layoffs and major structural changes in world trade patterns due to globalization, Estonia argued that the country is a small open economy with high reliance on exports of goods and services, which account for nearly 80 percent of the national GDP in 2015, compared to 43.5 in the EU28.

The Estonian economy took a major hit following recent turbulence in the global oil market and a general decrease in Europe's international trade position. Ida-Viru County, located in Northeastern Estonia, was hit particularly hard not only due to its geopolitically remote position at the Russian border but also due to the high concentration of industries dependent on oil and gas prices in the region.

Editor: Editor: Aili Vahtla

Source: BNS