EU aims for a just transition in industry, but hurdles remain

The industrial sector will see many changes in the transition to a greener and more digitalised economy. Stakeholders across the board argue that it is crucial to not leave these industrial regions behind. [EPA-EFE | Sandor Ujvari]

Against the backdrop of the pandemic, the green and digital transitions are underway, transforming the lives of workers across Europe, particularly those in manufacturing. The EU has set targets for a just transition that leaves no one behind, but inadequate funding and underrepresenting important perspectives could hamper progress.

At a recent EURACTIV event, Diederik Samson, Commissioner Frans Timmermans’ chief of staff, acknowledged, “by far the biggest challenge [to the transition to a green economy] is to create a just transition.”

To this end, the Commission has established the European Pillar for Social Rights and the Just Transition Fund, and it’s not the only EU body preoccupied with this topic. In the European Parliament, a draft report with a roadmap to create a just transition awaits a vote in the plenary. Additionally, the European Economic and Social Committee (EESC) recently adopted a report specifically on a just industrial transition. 

Supporting these industrial regions is particularly important, the EESC argues, as they face “challenges in modernising their industrial base, upgrading the skills of the workforce, compensating for job losses in key sectors and raising the low productivity that limits income growth.” 

However, if not done properly, the transition into a green and digital economy threatens to leave behind whole regions and large swathes of the population, particularly vulnerable groups like those with disabilities, migrants, and the elderly, the report emphasises.

One of the core issues that could hamper an equitable transition is the size of the Just Transition Fund. While the Commission originally proposed €40 billion, the EU leaders reduced its size to €17.5 billion in July. 

Worker representatives are pessimistic about the outcome if there is inadequate funding. “If we put peanuts on the table, the just transition will not happen,” General Secretary of IndustriAll Europe Luc Triangle said at an EESC hearing in mid-November. 

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Bringing in diverse perspectives

Consulting diverse groups and interests prior to creating these policies, referred to as ‘stakeholder engagement’ or ‘social dialogue,’  are key to “managing transitions in a forward-looking way,” the EESC report states. 

To that end, on issues impacting the transition to the digital and green economy, the EU wants to involve both management and worker representatives, as we as policymakers from different levels and civil society. 

In the sectors that will be disproportionately impacted, it’s crucial to consider workers’ perspectives, argued MP and co-rapporteur on the Parliament’s report on just transitions Agnes Jongerius (S&D). It is of the “utmost importance that workers in these sectors and their unions have a say in how the changes should take place. The time of top-down management by spreadsheet must be over,” she told EURACTIV.

However, diverse consultation is not happening in all member states, IndustriAll Europe’s Deputy Secretary-General Judith Kirton-Darling said in an interview with EURACTIV. 

“In some member states, neither unions nor employers have been involved in defining the national priorities for spending the money [from the EU recovery fund]. It’s an incredible situation,” she said. This could mean “that money won’t be spent where it can have a big impact in terms of job maintenance and creation.” 

Additionally, Kirton-Darling argues that treating all stakeholders equally in social dialogue undermines the efficacy of the policy created.

“Trade unions and employers have specific legal responsibilities in terms of … managing the transition,” she explained. “If you don’t recognise those specific responsibilities, then you can have a beautiful policy on paper in Brussels, but it won’t actually benefit our industries concretely where they are across Europe.” 

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If EU leaders agree on the EU’s seven-year budget and the recovery fund on Friday (17 July), this could facilitate the transition to a more modern and greener Europe. But labour representatives also want to ensure that workers have a say in the entire policymaking process. 

Combatting regional inequalities

There are also concerns around facilitating this just transition in all parts of Europe. Regions that rely on heavy industry will be particularly impacted. While lawmakers have consistently repeated the mantra “no region left behind,” stakeholders across the board recognise that this is easier said than done. 

In spite of this disproportionate impact on certain regions, policies at the EU and member state level are frequently created in capitals with little input from the local level, Jongerius highlights. In determining where to use Just Transition funding, it “would be very helpful to get local expertise from workers and their unions, small business and policy makers,” she added. 

The stakes for combatting these regional inequalities are high, and if policy proves ineffective, the transition could further fuel extremism, Kirton-Darling emphasises. 

“It is really underestimated how easily populists feed on the concerns of people in regions, which are subject to this massive economic change,” she said, adding “it’s extremely difficult to counter that populism if you let it take root.”

[Edited by Benjamin Fox]

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