BRUSSELS, Belgium (Reuters):

The European Union gave the green light on Tuesday for a new fund to retrain workers who lose their jobs as European companies increasingly invest in countries with lower production costs.

Fund launch

The European Globalisation Adjustment Fund, due to be launched early next year, will make annual grants worth 500 million euros ($658 million), the EU's Finnish presidency said after ministers from around the bloc approved its creation.

Grants will be issued to help in the provision of career guidance, training and support for job seekers moving around the EU to find work, it said in a statement.

Clear connection

"In cases where assistance is made available, the job losses must have a clear connection to structural changes in world trade and a significant negative effect on the regional or local economy," it said.

Commission officials have hailed the fund as a way to help European workers who have lost their jobs in production as manufacturers shift out of the 25-nation bloc, often to China or elsewhere in Asia.