Unions issue ‘urgent’ call for EU industrial policy to respect workers’ rights

Major European trade union organisations have issued an “urgent” appeal to EU policymakers to condition industrial companies’ receipt of public funds on the protection of workers’ rights.

In a letter addressed to the EU’s Competitiveness Council – which is holding an informal meeting in Genk on Thursday and Friday (8 and 9 February) – the European Trade Union Confederation (ETUC) and industriALL Europe called on ministers to ensure that government-funded businesses respect employees’ bargaining rights and avoid the further “deterioration” of Europeans’ working conditions.

The letter, unpublished but seen by Euractiv, also criticised the Council for omitting “any mention of the profound skills shortage” faced by industries across the EU from its agenda. 

“When we give vast amounts of taxpayers’ money to private industry, we should be ensuring they are creating quality jobs that make this collective investment worthwhile,” the letter reads.

The letter comes amid growing concerns about the competitiveness of the EU’s economy, with overall GDP growth stagnant and industrial production sharply declining.

It also comes at a time of growing economic despair among European workers. In a recent study, the European Commission noted that employees’ “rate of financial distress and material and social deprivation have increased sizeably” since the end of 2021.

‘This is fundamental’

The call for EU leaders to impose so-called “social conditionalities” on businesses was supported by independent experts.

“Yes, public funds allocated to support European industry should come with robust social conditionalities,” said Laura Rayner, a senior policy analyst in the Social Europe and Well-Being Programme at the European Policy Centre (EPC).

“These conditions should encompass various aspects of industrial and employment relations, ensuring that recipient companies comply with labour law, collective bargaining and provide decent wages, adequate working conditions and quality skills training,” she added. “This is not ‘nice-to-have’, this is fundamental.”

The ETUC and industriALL’s appeal for the EU to address the bloc’s skills shortage by conditioning public funding on the provision of apprenticeships and other skill-enhancing measures – as is done in the US’s flagship industrial initiative, the Inflation Reduction Act – was also supported by Philipp Lausberg, a competitiveness expert at the EPC.

“I think skills shortages are one of the main problems the European economy is facing, which poses some serious challenges for competitiveness,” he said. “And I think [investing in apprenticeship schemes] is a long-term investment that will also benefit companies and their competitiveness.”

Business agreement?

The need for EU leaders to address the bloc’s severe skill shortage has also been repeatedly emphasised by Europe’s business community.

“I really believe [that] if we are to face demographics and retain industrial activity, we have to be very inclusive in our approach to the labour market and make sure that we have the right policies to realise all the potential there,” said Tom Paemeleire, the CEO of Kebony, a Norwegian-based wood producer, at a recent event in Brussels.

However, business groups have expressed more cautious support for strengthening collective bargaining rights.

In a joint position paper published in October 2023, the Confederation of European Business (“BusinessEurope”) and other major employers’ groups stressed the “crucial” importance of preserving the right to collective bargaining in both the public and private sectors.

However, the paper also warned “social partners” to “engage responsibly in collective bargaining on wages and help ensure that temporary rises do not give rise to a wage-price spiral”.

It also cautioned that “any non-justified wage increases for specific group[s] of workers should be avoided as they distort the pay structure at the company level”.

‘No light at the end of the tunnel’

Further confirming the urgent need to reverse Europe’s industrial decline, the opening day of the Competitiveness Council meeting came on the same day that the European Steel Association (EUROFER) announced that Europe’s “bleak economic outlook” had contributed to a sharp decrease in steel consumption over the past year.

“The European steel industry cannot yet see the light at the end of the tunnel,” said Axel Eggert, EUROFER’s director general, adding that the steel industry “still lacks solutions for high energy prices”.

Philipp Lausberg, the EPC competitiveness expert, agreed that a solution to Europe’s energy crisis – which was triggered by Russia’s full-scale invasion of Ukraine in February 2022 – has not yet been found.

He also noted that the only plausible near-term solution to the problem is “massive subsidies, ” which could potentially exacerbate Europe’s fiscal malaise.

“I don’t think there’s a quick fix for that now unless you want to massively subsidise,” he added. “But that, of course, poses the question of how fiscally sustainable that is. And so you’re just shifting the problem from the companies to the state.”

[Edited by Alice Taylor]

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