As EU leaders prioritise military spending, millions of industrial workers face austerity and job losses amid Europe’s growing polycrisis.
External strength can never be achieved through internal fragmentation. This principle holds true not only in physics but equally in geopolitics. Europe’s ability to project strength externally hinges entirely on internal unity, economic security and social stability. Achieving this demands ambitious investment beyond military budgets, focusing on Europe’s critical social, environmental, and digital objectives. Yet, the European Commission’s recent proposals addressing the ongoing polycrisis fall short of this urgent need. Worse, increasing military expenditure while cutting public services and weakening worker protections risks fuelling internal social conflict precisely when cohesion is most needed. European leaders must urgently reconsider their priorities.
Across Europe, workers in industrial sectors grapple daily with harsh realities: restructuring, factory closures, delayed investment, and reduced demand driven by austerity measures and the cost-of-living crisis. The Commission’s Clean Industrial Deal acknowledges these issues—declining demand, stalled investment, reduced industrial capacity, and soaring energy costs—which have resulted in tens of thousands of job losses. Nevertheless, the proposed measures lack both urgency and the necessary funding.
This inadequacy is all the more striking compared to last week’s “Rearm Europe” initiative, which proposes unlocking €800 billion and, crucially, activating the EU’s national escape clause to exempt military expenditure from the revised fiscal rules. In stark contrast, the Industrial Action Plan for the automotive sector, presented on 5 March, offers scant relief to automotive workers and supply chains, who face severe restructuring, with 90,000 job cuts announced since June 2024. In the 9 IPCEIs covering the automotive sector have been allocated €91bn. Alternatively the EU grids action plan is clear that €580bn is needed to upgrade Europe’s power networks. It is provocative to relax fiscal constraints exclusively for defence spending while neglecting other strategically vital industries.
The EU’s escape clause is intended for use under exceptional circumstances, but the European Commission’s definition of “exceptional” appears arbitrary. By any standard, Europe’s industrial base is experiencing extraordinary pressures: strategic dependencies, heightened tensions across the Atlantic, and the demands of a massive economic transformation. The Draghi report explicitly outlined these challenges, but the geopolitical climate is swiftly exacerbating them. According to Eurostat, up to 4.3 million jobs are now at risk unless immediate action is taken.
Given this unprecedented scenario, there is a compelling case to extend the escape clause to allow member states to invest in achieving Europe’s social, environmental, and digital objectives, thereby addressing the €800 billion investment gap highlighted by the Draghi report. Trade unions have consistently called for a “golden rule” exemption since the revision of the fiscal rules last year. At national levels, unions have actively opposed governments that simultaneously impose austerity, cut social protections, and implement unfair pension reforms, all while extending tax benefits to wealthy individuals and powerful corporations.
Following the European Council’s decision on 6 March to relax fiscal constraints for defence spending, it is clear that the existing economic governance framework is inadequate. Rightly, the European Trade Union Confederation has called for a full suspension and thorough reassessment of these fiscal rules.
Security is more than just military spending. True security demands a broader understanding, encompassing robust economic foundations, resilient infrastructure, reliable healthcare systems, and effective public services. Europe’s collective strength depends fundamentally on unity, economic resilience, and social stability. This necessitates a comprehensive European industrial policy designed to stimulate demand, upgrade infrastructure, deliver affordable and clean energy, and attach strict social, environmental, and taxation conditions to public funding. The Clean Industrial Deal rightly emphasises social conditionalities to ensure quality employment and measurable returns on public investments and contracts. Such conditionalities must urgently become standard practice for all publicly funded initiatives, particularly public procurement.
IndustriAll Europe demands urgent EU action: emergency measures, targeted investments, and strategic interventions to safeguard European industry and protect high-quality jobs. Europe needs an ambitious programme, similar to those implemented during the pandemic, including a moratorium on forced redundancies and industrial capacity losses, with negotiated solutions tailored to each worker and each site. Ending austerity is essential to fostering investment in clean industries.
Social conditionality in public procurement and investment funds must be leveraged to stimulate demand and create beneficial effects throughout European supply chains. Strengthening social dialogue and collective bargaining is vital for achieving a Just Transition that engages workers in decisions affecting their future and supports their purchasing power to stimulate internal demand. Industrial resilience on the global stage requires decisive action to address overcapacity, unfair trade practices, and market dumping.
There is no time to lose—Europe is already deep into this crisis.
Judith Kirton-Darling is general secretary of industriAll European Trade Union. She was a British member of the European Parliament between 2014 and 2020 and confederal secretary of the European Trade Union Confederation.