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EU Votes to Protect Consumers, Employees in Bankruptcy Cases

Stronger and better consumer and employee protection in cases of corporate failure is the focus of a European Parliament resolution passed on Thursday, aiming to address issues created by the collapse of Thomas Cook.

MEPs are calling on EU governments to use the European Social Fund and Globalization Adjustment Fund to help businesses and affected employees, and is urging the Commission to identify EU instruments that could compensate for the damage to the sector as well as assess the need for new measures to prevent future crises, particularly in view of the fact that 32 airlines have gone bankrupt since 2017.

The Commission and EU governments should ensure that workers impacted by insolvency are guaranteed their earned wages and retirement benefits, MEPS said.

They are also expecting the Commission to table a proposal on employee rights to receive information and be involved in consultation.

Photo Source: Thomas Cook Group

Thomas Cook’s bankruptcy last month left over 600,000 stranded, led to thousands of job losses, and difficulties for SMEs, taking a significant toll on tourism sector.

The resolution calls for stronger consumer protection in cases of business failure, suggesting airline guarantee funds or insurance contracts be included in EU passenger rights rules.

These regulations are currently under revision and awaiting member states to conclude their position.

Referring to the tourism sector’s substantial contribution to the economy – generating more than 10 percent of total EU GDP and driving growth in other sectors – MEPs are also urging the Commission to include it as a priority and allocate funds for the sector out of the next EU budget.

The European Travel Agents’ and Tour Operators’ Association (ECTAA) welcomed Thursday’s resolution, saying that parliament’s request for protection against airline insolvency is in line with travel agents’ demands, and adding that a stronger recognition of the sector at an EU level was also necessary.

Thomas Cook’s ruin is estimated at costing the Greek hospitality sector an estimated 315 million euros with losses reaching as much as 500 million euros overall for the Greek tourism industry.

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