The President of the European Commission announced far-reaching measures to revamp EU energy markets in her State of the European Union speech last week. This was made in response to the energy crisis, intensified by the war in Ukraine - the major theme of this year’s address. The speech was instantly followed by proposals for an emergency intervention to address high energy prices, including proposals to lower electricity demand, recover ‘excess revenues’ from energy companies and channel these windfall profits to consumers, as well as intervention in electricity price setting.
IndustriAll Europe had called for such urgent intervention in the energy markets. It is now crucial that EU governments agree on these emergency measures at the next EU Energy Council on 30 September and in the European Council. There is no time to lose!
The proposed crisis measures are vital. But they can only be part of a much broader contingency plan designed to prevent a social and industrial emergency whilst maintaining existential climate ambitions.
Europe is facing a social disaster – workers need relief
With energy and consumer prices skyrocketing across the continent, over half of European households say they struggle to make ends meet. Europe’s lowest paid workers have seen the value of their wages fall by up to 19 % this year, representing the biggest fall in real minimum wages of this century. Middle-class living standards are quickly deteriorating too.
We are staring disaster in the face. Workers urgently need relief from inflation, painful energy bills and the soaring costs of necessities. Workers need a pay rise, and most companies can afford it. Only this will stabilise purchasing power and improve the economic outlook and social stability. And the overwhelming majority of companies are currently doing rather well: both in terms of orders and profits. On top of that, there is evidence that dividend pay-outs are growing faster than inflation. Workers are demanding nothing less than their fair share!
Workers also need measures to protect jobs and to prevent company closures. And they must be informed and consulted on every decision that impacts them. At a time when MEPs are discussing the urgent need to improve European works councils’ rights and workers’ rights along the supply chains, we recall that nothing can be decided about us, without us. SURE, the EU fund that supported national short-term work schemes during the pandemic, must be extended. We need a SURE 2.0! In cases where companies have to be bailed out, strong social conditionality must be applied. It should be self-evident that companies receiving public aid must avoid redundancies and deterioration of working conditions. It is also morally indefensible that public support is channelled to dividend payments!
The danger of social unrest caused by the cost of living crisis is real. We can prevent this.
There is also an industrial emergency that requires rapid and extensive action
Energy-intensive industries and their workforce of almost 8 million workers in the EU are battling the energy crisis at the frontline. Some companies in sectors like basic metals (steel, aluminium), chemicals and basic materials (glass, ceramics, paper, cement, etc.) are being hit hard, having to reduce or suspend production, switch to night-time production, or having to close sites. This also has knock-on effects on downstream supply chains, on sectors such as food and agriculture, health and construction.
Not acting now puts Europe at risk of deindustrialisation, with irreparable damage for our economy, for companies, for employment and for Europe’s strategic autonomy. Short-term measures, like the proposed electricity price intervention and caps on the price of gas, must therefore be urgently implemented. A joint gas purchase mechanism, supported by the EU budget, should be explored – because greater solidarity is now called for.
Beyond the short term, we need to revise our energy policy instruments to ensure stable supplies of affordable decarbonised electricity for a sustainable future. In the uncertain world we live in, we cannot leave our energy in the hands of market forces alone. We need to bring back public hands to ensure that energy policy delivers clean and affordable energy for all.
We must not undermine our efforts to tackle the climate emergency.
Securing energy supply in the short term has led some Member States to backtrack on decisions taken previously to decarbonise economies, such as decommissioning coal-fired power stations. In the current situation, this must be considered as a matter of national security and should not be questioned.
But climate change is a reality we must not ignore. We must look up.
We continue to believe that a Just Transition towards climate neutrality in 2050 must be our common goal. We are convinced that the 2030 emission reduction targets are crucial milestones to reach that objective.
Massive investment in decarbonised energy and energy efficiency are the right answers for the climate and for ensuring independence in future energy supply. But we need an industrial strategy to make this possible and to strengthen European industries producing the technologies needed to reach climate neutrality. In our collective efforts to cope with the current energy crisis, we should not waste resources in building new infrastructures that are not in line with our climate objectives.
The scale and urgency of the current crisis do not seem to have been grasped by policy makers. European industrial workers repeat their call to the EU and its Member States: rise to the challenge immediately, find genuine European solutions, and practice solidarity! No single Member State can address this crisis alone.
Published in EURACTIV