The EU Competitiveness Compass, which will be the EU’s economic doctrine for the coming five years, was presented on 29 January. The Competitiveness Compass for the EU is the European Commission’s answer to the Draghi report on the Future of EU Competitiveness, but it has left workers out in the cold.
In an open market economy, like the EU, competitiveness matters. This is especially true for the many industrial sectors that are exposed to fierce competition on domestic and global markets. But competitiveness is a broad, theoretical concept that can inspire a wide range of policies. A narrow or misdirected concept can be detrimental to workers’ rights and the EU’s major political objectives, such as social and regional cohesion, technological sovereignty, or the need for a just, green transition.
Therefore, it is vital that the discussion is framed by strong safeguards to ensure that competitiveness does not come at the expense of Europe’s core societal values and political goals, including Social Europe.
In a context of multiple crises, when tens of thousands of jobs are at risk, trade union expectations for the Competitiveness Compass ran high. The Draghi report assessed that 800 bn EUR of additional yearly investments were needed, and that the EU competitiveness policy should preserve social inclusion. From that perspective, the end result is disappointing.
While EU industry is struggling with a multidimensional, existential challenge in a highly unstable geopolitical context, where competitors implement aggressive industrial policies with massive funding attached, the Compass recycles many old recipes. It fails to set out a genuine investment agenda for Europe and a competitiveness policy in concert with – and not in conflict with – the European social model.
Instead, the Competitiveness Compass will propose:
- A de-regulation push based on simplistic quantitative objectives, without clear safeguards or methodology, or an “Omnibus on simplification”, that will first target legislation related to sustainability and due diligence.
- Rhetorical calls to boost innovation and foster a knowledge-based economy in a context in which European multinational companies are relocating knowledge-intensive activities, such as R&D centers outside of Europe, and where education systems are too often targeted by fiscal consolidation efforts.
- Single Market completion, including for strategic sectors, like energy, where it is far from obvious that the EU market-driven approach is fit for today’s challenges.
Social dimension hides a bitter pill
Judith Kirton-Darling, General Secretary of industriAll Europe, says: “When you look at how the social dimension is included, you could reach the conclusion that this time, the Commission got it: it talks about workers and labour, but that misses the point. Many of the non-legislative proposals will be toothless without substantial funding, especially if the next EU budget is refocused solely on competitiveness and security. Moreover, the promising proposals, such as the Quality Jobs Roadmap, will be just nice words if a 28th legal regime severely threatens workers’ rights by creating a highway to bypass existing legislation.”
Furthermore, Isabelle Barthès, industriAll Europe’s Deputy General Secretary, says: “The Compass dramatically overlooks social dialogue, collective bargaining and good industrial relations to anticipate and manage structural change in a negotiated way and as a key pillar of the European model of competitiveness. Failing to attach social conditionalities to the EU de-risking investment strategy and notably the EU Competitiveness Fund risks another blank cheque for big business.”
The EU needs another tool to guide its future economic policies. IndustriAll Europe expects the EU to come up with a clearer industrial strategy, that delivers on investment needs and is equipped with a powerful social compass.