Make industrial policy a priority, EU leaders tell Commission

European leaders have today called on the Commission to urgently deliver an industrial strategy for quality jobs as part Europe’s competitiveness push.

At a meeting in Budapest, heads of EU governments agreed a declaration for a ‘New European Competitiveness Deal’ which states: “We invite the Commission to present, as a priority, a comprehensive industrial strategy for competitive industries and quality jobs.”

The declaration provides an important clarification in the EU’s position on an industrial strategy following the ambiguous message agreed by the Eurogroup earlier this week. It comes after the ETUC wrote to Council President Charles Michel to call for the importance of quality jobs to competitiveness to be recognised in the declaration.

Labour shortages

However, the positive development risks being undermined by deregulation measures in the declaration, such as the arbitrary 25% cut to reporting measures. Business representatives have cited the gender pay transparency directive as an example of a ‘reporting burden’. No initiative on better regulation must lead to lowering employment rights or standards.

That is particularly concerning as labour shortages have been a major setback to Europe’s competitiveness in recent times and research shows that the sectors offering the lowest quality jobs have the greatest difficulty finding staff. The lack of regulation, for example to ensure the respect for the right to disconnect, is costing workers millions in unpaid work.

The ETUC now calls on the Commission to support increased investment in our industries, which should come with strong social conditions to protect and create quality jobs. Public funding for companies should be made conditional on respect for collective bargaining and the reinvestment of a fairer share of profits to raise productivity.

Commenting on the Budapest declaration, ETUC General Secretary Esther Lynch said:

“The Draghi report made clear that Europe’s economy is suffering chronic underinvestment, which was created through a combinator of austerity policies and a corporate culture which has seen private investment fall as profits increased.

“The lack of public investment means Europe does not have the basic infrastructure that companies require and the lack of private investment is dragging down our productivity.

“It is clear that we need a coherent and powerful industrial policy for the whole of Europe backed by increased investment through SURE-style borrowing. Crucially that money must come with a strong labour focus that is needed to protect and create quality jobs. In the absence of a credible industrial plan agreed by trade unions, a moratorium on closures and forced redundancies is necessary.

“High quality jobs created through collective bargaining are central to the most powerful economies in Europe. It means companies attract and retain the workforce they need, that workers receive the training they need, and that companies are more likely to reinvest a fairer share of profits in new technology needed to raise productivity.

“Conversely, research shows how our competitiveness has been badly damaged by low quality jobs that have created labour shortages and increasingly irresponsible corporate culture that has seen rising profits siphoned off in dividends and bonuses rather than being reinvested.”

Judith Kirton-Darling, indsutriAll Europe’s general secretary says:

“We are at a crossroads in Europe. Deindustrialisation is no longer a threat – it is happening. Happening as a result of a lack of industrial policy at national as well as European level, bad corporate decisions and lagging investment. We demand massive investment, with social and fiscal conditionalities attached, to ensure innovation, quality jobs and modern infrastructure. A real industrial plan for the transformation of our industry.

While it has become fashionable to talk about an industrial strategy, talk is cheap. The crisis in our car industry shows we need to see real action now.
Commission President Ursula von der Leyen needs to show she’s on the side of industrial workers”