Thomas Cook Fallout: MEP’s Demand Stronger Consumer & Employee Protections

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Members of the European Parliament have called on EU member states to introduce new measures to protect consumers and employees from tourism sector failures.

A resolution was adopted on Thursday 24th October 2019 in which MEP’s expressed concern over the 600,000 people who were left stranded, the thousands of job losses, and the difficulties for SMEs and damage to the tourism sector after the collapse of Thomas Cook Group.

MEP’s came to the conclusion that member states should use the European Social Fund and Globalisation Adjustment Fund to help workers made redundant and companies damaged by the travel group’s collapse, and the Commission should identify EU instruments that could compensate for the harm caused to the sector.

MEP’s also said that The Commission and member states should ensure that workers affected by insolvency are guaranteed their earned wages and retirement benefits.

It was pointed out to the European Parliament that 32 airlines have gone bankrupt since 2017 and that it wants the Commission to assess if new measures are needed to prevent such situations arising in the future.

The protections in place for consumers and employees were characterised as “weak”.

MEP’s have also insisted that the reasons that led to Thomas Cook going bankrupt should be studied, pointing out that its financial situation was already known to the British authorities, and that potential rules changes could be made to better monitor the financial situation of airlines.

As a last resort, state aid could be considered to ease the negative economic impact, they added. State aid was used to keep an arm of Thomas Cook Group afloat in Germany, namely Condor Flugdienst. The British government however didn’t determine that state aid bailout for the whole of the Thomas Cook group was viable.

There is considerable confusion over the use of state aid and what state aid rules actually cover when it comes to state bailouts of private companies.

MEP’s finally stressed that the tourism sector, which suffered serious damage due to Thomas Cook’s collapse, generates more than 10 percent of total EU GDP and acts as a stimulus to other sectors.

It was determined that the sector should therefore be included in the Commission’s priorities and have a budget line in the next EU budget.