EU proposes globalisation 'shock absorber' fund

BRUSSELS (AFP) - The European Commission called for the EU to set up a half-billion-euro globalisation "shock absorber" fund to cushion the impact of painful restructuring efforts in Europe.

The fund would aim to help laid-off workers find a new job primarily by helping pay for training, relocation of workers and outplacement.

The pot, which would be financed by unused leftovers from the EU's annual budget, would be relatively modest in size, estimated to be about 500 million euros (600 million dollars) per year.

EU member states could also only tap into it on the approval of the European Parliament and other EU countries.

The idea for such an EU fund has long been mooted in Brussels, although member states, who would have to cough up the money for it, have so far shown little interest in making it become real.

The commission has come under fire recently for not doing enough to ease the pain caused by big restructurings as companies shift labour to countries outside of Europe with cheaper employees.

French President Jacques Chirac accused the commission being indifferent toward a big restructuring of the European operations of US computer maker Hewlett Packard, which has hit France particularly hard.

The commission has responded by noting its authority to intervene in the matter is legally limited.

The rejection of the EU's proposed constitution earlier this year by French and Dutch voters has also been partially attributed to public disillusionment -- particularly in France -- with the European Commission's efforts to counter harmful effects of globalisation.

Commission head Jose Manuel Barroso charged that it was unfair to accuse the commission of being indifferent to social matters when member states had not granted it the means to deal with such issues.

"I insist that it is important to have at the European level ... active mechanisms of social solidarity and of social justice," he told the European Parliament.