Can it be fair? –

Along with climate change and digitization, the Russian invasion is forcing the European economy to change rapidly on many levels. This puts many companies and employees in a precarious position.

The task facing European decision-makers is difficult. Because the upcoming shock to the European economy presents them with enormous challenges.

The EU itself created the so-called “Just Transition Mechanism” to make this transition as smooth as possible. It includes a range of financial instruments that provide grants or loans to businesses, workers and public authorities to help them adapt to climate change.

Overall, the EU will invest just over € 20 billion in this mechanism over the period 2021-2027. This corresponds to around EUR 3 billion per year, or EUR 6 to EUR 7 per person per year.

However, the sums are insufficient to ensure that neither company is left behind. Therefore, experts warn that further approaches are needed to meet the challenges of many crises.

Regional competences

Ulrich Hilpert, professor of comparative government studies at the University of Jena, says many companies will have to reinvent themselves in the future if they are to survive in the market. This would work primarily through the development of new possibilities to apply existing competences.

“You don’t have to think about your product, you have to think about your skills and how to use them in new circumstances,” Hilpert told EURACTIV. He gave the example of a group of embroidery companies that moved away from textile production in order to use their embroidery skills in construction and medical equipment.

Following the recently announced ban on internal combustion engines, he advised companies in the large cluster around the European car industry not to define themselves as car manufacturers, but to focus on their expertise in mechanical engineering.

However, not every company operating in the environment of internal combustion engines will survive, and some employees will lose their jobs along the way.

Qualifications and industrial policy

For this reason, there is a lot of talk about qualifications at EU level. ‘Upskilling’ and ‘retraining’ are buzzwords in Brussels. In 2020, EU heads of state and government set a target of 60% all adults in the EU participate in further education every year.

“More than ever, people need to develop their skills throughout their working lives to meet the demands of a rapidly changing labor market,” said Social Affairs Commissioner Nicolas Schmit.

But focusing on skills isn’t necessarily appropriate, says Stephanie Albrecht-Suliak, head of political and international affairs at IGBCE, the German chemical, mining and energy trade union.

“Skills only really become relevant when we know exactly how the transformation will change,” said EURACTIV.

“Before that, politicians must define the goals of the transformation and the path to it,” she added.

“We need investments in technologies and industries of the future and concrete plans,” said Albrecht-Suliak, calling for a much tougher industrial policy.

The role of trade unions

However, it also sees an important role for employee representatives in the future, for example when companies develop their own transformation management strategies. In large German companies, on board level there are employee representatives who can support the company in managing change while ensuring that their voices are heard.

At European level, the phenomenon is less developed, but there are still around 1,200 “European Works Councils” where workers can discuss such matters with management.

The European trade union industriAll recently published a manifesto stating that “an inclusive and just transition can only be achieved if workers and their representatives have a say.”

However, greater workers’ influence does not guarantee that they will engage in ecological structural change, especially if they work directly in the fossil fuel sector.

“It is not always obvious to employees why the transformation must happen so quickly and why it should apply to their company,” Albrecht-Suliak told EURACTIV, citing the example of coal workers.

In her opinion, the task of the unions is to attract these workers to the green transition, while politics must ensure good jobs in the same region.

Geopolitics overshadows transformation and its problems

The example of the oil refinery in Schwedt in eastern Germany shows how difficult this is. People in this region have had a bad experience with structural change since the fall of the Iron Curtain. Therefore, they are much more suspicious of further structural changes, says Albrecht-Suliak.

The refinery, which is currently powered by Russian oil, must be decommissioned very quickly because of the war, which is putting more than a thousand jobs at risk.

“There is very little understanding between the workers,” Albrecht-Suliak told EURACTIV, explaining that in this case intense negotiations are needed between the unions and the government to offer workers perspective.

The example of an oil refinery shows how difficult a truly fair transition becomes when, in addition to decarbonisation, supply chains are rapidly restructured due to geopolitical tensions that have increased significantly in recent years.

[Bearbeitet von Alice Taylor]

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