We see that the energy crisis is inflicting serious damage to the EU economy, and this must be stopped!

As EU energy ministers are coming together on 9 September 2022 to discuss emergency measures to mitigate high energy prices, we feel compelled to express the concerns of industrial workers in the face of today’s cost of living crisis and the looming industrial and employment crisis that is becoming increasingly likely.

IndustriAll Europe, representing 7 million working men and women across Europe’s manufacturing, mining and energy sectors, is highly alarmed about the current situation. Gas and electricity prices have now reached all-time highs following the Russian invasion of Ukraine. Inflation is skyrocketing across Europe, fuelled by energy, food and essential goods prices, with disastrous consequences for workers. Workers are experiencing massive income squeezes and find their purchasing power eroded. European industry too is coming under increasing pressure. Companies in our sectors have started to succumb to high energy costs, many of them having to reduce, pause or stop production altogether.

Given the persisting geopolitical tensions, Russia’s recent gas stoppage to Europe, and the structural shortcomings of the European electricity market, the outlook is worrysome. IndustriAll Europe has previously commented on the electricity market crisis and called for a review of its price-setting mechanism and greater public intervention. Now, it has become plainly evident that the current system, which has gas as the marginal price-setting fuel, is failing every test to deliver enough affordable decarbonised electricity. Instead, the mechanism has led to massive windfall profits for energy producers and has fuelled inflation.

We see that the energy crisis is inflicting serious damage to the EU economy, and this must be stopped!

Industrial workers and their trade unions expect clear decisions and measures to protect industry and industrial jobs this week. Maintaining Europe’s industrial base is vital for high-quality employment and for ensuring Europe’s strategic independence. A stronger role for public intervention is thus urgently needed and more than justified.

In the short term, we need measures to protect jobs and to prevent company closures. SURE, the €100 billion fund that supported the national short-term work support schemes with cheap loans to EU countries, must be extended. It has proved its worth during the pandemic, helping 2.5 million businesses retain 31 million workers in 2020, according to a report issued last year. In cases where companies have to be bailed out, strong social conditionality must be applied. This implies that companies receiving public aid must avoid redundancies and deterioration of working conditions. It is also morally indefensible that public support is channeled to dividend payments!

Intervention is now urgently needed into Europe’s excessively liberal energy market. Energy price caps, profit caps and a decoupling of electricity prices from gas are key.

In the light of the crisis, Europe requires short-term measures, but not short-term thinking. The support measures that are now needed must align with the long-term objectives of the European Green Deal and gain more independence in future energy supply.

Finally, the EU and its Member States must once again rise to the challenge, find genuine European solutions, and practise solidarity. The unity that was formed after Russia’s appalling invasion of Ukraine must be preserved. No single Member State can address this crisis – European industrial workers demand that YOU rise to the challenge.

This article has been published in Euractiv.

Contact: Andrea Husen-Bradley (press and communication)