‘Very worrying’: Trade unions alarmed by EU’s industrial collapse

Europe’s major trade union organisations have expressed deep concern about the scale of the EU’s industrial decline, as structurally high energy prices continue to lay waste to a crucial pillar of the bloc’s economy, notes ‘The Euractiv’.

Fears were compounded after a Eurostat study published on Monday (15 January) found that month-on-month industrial production in the EU fell by 0.2% in November last year, the third consecutive monthly decrease. Year-on-year industrial output was also down 5.8% in November after declining by 5.4% in October.

“We are facing a very worrying situation,” European Trade Union Confederation Confederal Secretary Ludovic Voet told Euractiv.

Month-on-month production of capital goods such as buildings, machinery, and equipment fell by 0.8% across the bloc in November after dropping by 0.7% in October. Capital goods production was also 8.7% lower in November compared to the same month in 2022.

“The lack of investment we are seeing today is already having dramatic implications for working communities,” Voet warned.

“Factories are closing and jobs are being cut in the very sectors that lifted Europe to where it is today.” These especially include energy-intensive sectors such as the aluminium, fertiliser, and chemicals industries.

Judith Kirton-Darling, the acting joint general secretary of industriALL Europe, similarly told Euractiv that her organisation, which represents some seven million European workers, “has been raising the alarm about industrial decline and the threat of deindustrialisation in Europe for some time”.

She stressed that current EU policies, including the controversially stringent fiscal rules recently agreed by EU finance ministers, will only exacerbate the bloc’s industrial malaise.

“Alarmingly, fiscal austerity and a return to austerity policies are further hampering industrial development, potentially undermining Europe’s competitive position in the global market,” Kirton-Darling said.

Voet further warned that the EU’s failure to arrest its industrial decline is causing “bitterness and disillusionment” among European workers, which in turn is being “preyed on by the populist far-right, who only drive further division and chaos”.

Experts contacted by Euractiv were similarly alarmed by the current state of Europe’s industrial sector.

“Deindustrialisation is a clear and present danger, especially for energy-intensive sectors vital to downstream ecosystems,” said Tobias Gehrke, a Senior Policy Fellow at the European Council on Foreign Relations.

Gehrke attributed the EU’s industrial decline largely to the energy crisis. He also suggested that the bloc’s industrial woes “are exacerbated by ongoing challenges like the lack of skilled labour and insufficient infrastructure”, as well as “lavish industrial policies” in China and the US.

Ben McWilliams, an energy policy analyst at Bruegel think tank, agreed that high energy prices bear most responsibility for Europe’s industrial decline.

“[Energy] prices are less volatile but remain two-to-three times above pre-crisis levels,” McWilliams said. “These continue to be passed along value chains, and ultimately reduce the economic incentives for heavy industrial production in the EU.”

Like Kirton-Darling and Voet, McWilliams noted that Europe’s long-term industrial prospects will depend upon current and future national government policies.

Gehrke agreed: “Without intervention, Europe’s deindustrialisation will only accelerate.”

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