The EU Commission has written a blank cheque to corporate CEOs

The EU Commission has written a blank cheque to corporate CEOs
Опубликовано: Friday, 10 March 2023 05:06
The EU Commission has already adopted a ‘one-in, one-out’ rule for regulations — following a similar policy by Donald Trump during his term as US president (Photo: Gage Skidmore)

We in Europe have become accustomed to progressives in the United States looking to us for inspiration.

Higher standards of workers’ rights and lower levels of inequality are what is meant to mark our social market economy out from what often seems like Wild West capitalism pursued across the Atlantic.

But, in recent months, these roles have been dramatically reversed.

While president Joe Biden has made the creation of "good-paying, union jobs" a priority, the European Union is pursuing deregulatory policies more akin to those of his predecessor, Donald Trump.

The divergence began in August last year with the Biden administration’s announcement of the Inflation Reduction Act, a $400bn [€379bn] programme of investment in clean technology.

The first responsibility of EU leaders was to mirror that investment to ensure European industry wasn’t disadvantaged or even lured to the US by this huge package of subsidies.

To her credit, EU Commission president Ursula von der Leyen quickly announced the EU’s own clean-tech investment programme, the Green Deal Industrial Plan.

That protected the jobs and livelihoods of millions of people working in European industry.

However, the EU is being left behind by the US when it comes to measures that could raise the working conditions and living standards of those workers, and create more high quality jobs.

As well as its much-publicised protectionist measures, the Inflation Reduction Act also includes policies like tax credits for companies which pay fair wages, taxes on corporate stock buybacks to encourage businesses to reinvest profits instead of enriching CEOs and incentives to establish clean energy projects in communities previously reliant on extractive industries.

And that isn’t a one-off either. The Biden administration has also made social conditions, including a requirement to provide childcare provision, a central part of its Chips Act.

These are the kind of social policies that we in Europe like to think we are world leaders in.

The text of the Green Deal Industrial Plan indeed states: "Greater competitiveness must go hand in hand with well-paid quality jobs."

So far though, the EU has failed to include any social conditions in the plan to maintain or create those well-paid quality jobs.

The European Commission has in effect written a blank cheque to corporate CEOs.

It would mean billions of euros in public money could find its way in to the hands of union-hating bosses putting downward pressure on wages and working standards.

That would be a total contradiction of the measures to support collective bargaining and end union busting included in the EU directive on adequate minimum wages adopted in October.

Worse still, the commission’s recent discussion on "competitiveness in the context of the Green Deal Industrial Plan" suggests it could actually go further and cut social standards through a fresh deregulation drive.

Trump’s ‘one-in, one-out’

The commission has already adopted a ‘one-in, one-out’ rule for regulations, which followed the adoption of a similar policy by Donald Trump during his term as US president.

It has also introduced an arbitrary ‘competitiveness check’ and further ‘regulatory simplification’ is on its way as part of the Green Deal Industrial Plan.

We’ve seen recently where these policies end: the number of workers being injured by machinery increased after the EU scrapped mandatory third-party safety checks as part of its ‘Better Regulation’ policy. The checks have now been reintroduced.

Without social conditions, there is a clear danger that that the Green Deal Industrial Plan will put further downward pressure on wages and working conditions in Europe at the same time as they are being raised in the United States.

The EU should take inspiration from the Inflation Reduction Act and ensure any public funding, whether European or national, must be made conditional on quality jobs and working conditions, access to training, respect for collective bargaining and a ban on extraordinary dividends for companies in receipt of public aid.

Europe needs an industrial policy to support industry underpinned by great green jobs.

By doing so, Europe could join the United States in grasping a once in a generation opportunity to raise living standards at the same time as cutting greenhouse gas emissions.

Let’s make Europe social again.