Europe’s manufacturing workforce need a strong industrial plan urgently

Latest European industrial production figures show that there is still a major crisis in these foundation industries, which have been hit hard by high energy prices in particular over recent years. Unfortunately, the embrace of short-termism by corporations – reflected in their preference for dividends and share buybacks over reinvestment of profits – has further undermined the EU manufacturing sector’s dynamism and resilience.

Foundation industries are instrumental to reach the green deal objectives and are vital to our industrial fabric. We find them at the start of all industrial supply chains, such as the automotive industry, and Europe has developed strategic competences, skills and capabilities in these industries. They contribute to strategic autonomy and economic security and provide 8 million good industrial jobs across Europe.

With various plants mothballed and tens of thousands of workers on temporary unemployment, there are real fears that strategic industrial capacity will be lost through deindustrialisation rather than transformation. Over the last few months, industriAll Europe has been raising the alarm, notably in the steel sector where over half of Europe’s steelmaking capacity could be lost alongside tens of thousands of jobs. 

In the discussion, industriAll Europe reiterated the need for a proactive industrial policy with social conditionalities tied to public funding and public contracts (including procurement) to ensure lead markets for clean products, leveraging private investment and supporting good jobs.
The social dimension is also vital to deliver on future-proof energy intensive industries and quality industrial jobs, ensuring a Just Transition, promoting up-skilling and re-skilling and securing social dialogue at all levels.

The Green Deal’s investment demands are considerable. With electricity consumption projected to rise by around 60% by 2030, the European Commission estimates that €584 billion will be needed this decade to modernise our grid alone. This calls for a comprehensive EU-wide investment strategy that both sustains existing heavy industry and incentivises clean-tech innovation.

For nearly 20 years, the EU has favored market-based instruments and complex regulations whereas other have based their decarbonisation on industrial strategy and financial incentives. Europe has attempted to catch up with its green deal industrial plan and related initiatives. But these are partial measures. EU leaders must go much further, devising a broader industrial strategy that both addresses investment shortfalls and mitigates the risks associated with the production of more expensive net-zero goods in a fiercely competitive global market.

Unfortunately, the EU’s new fiscal rules – agreed by the European Parliament and Council in February – will undermine the bloc’s ability to invest in green technology and industrial upgrading, and deepen disparities among member states. According to research by the European Trade Union Confederation, only three countries (Denmark, Ireland and Sweden) can meet their social- and green-investment needs under the EU’s new fiscal rules.
“For industriAll Europe and its members, it is absolutely vital to keep these industries in Europe! We therefore call on policymakers to support them with a robust energy infrastructure and regulatory coherence and predictability. Most importantly, we need workable transition plans and a seat at the table for workers when these pathways and policies are designed and implemented. 

“Exceptional times demand innovative solutions, not more of the same, failed policies. Approaches like austerity, labour-market flexibilisation and privatisation will only exacerbate the problems we face. Similarly, short-sighted populism is no substitute for the holistic industrial strategy Europe needs to match those of its competitors – an approach that accounts for all dimensions of the challenges ahead”, stated Judith Kirton-Darling, industriAll Europe’s General Secretary.