IndustriAll Europe welcomes today’s publication of the long-awaited Industrial Accelerator Act (IAA). The IAA is the central piece of legislation within the Clean Industrial Deal designed to put forward a horizontal framework for Made in Europe criteria. The overall target is to ensure that the European Union manufacturing industry accounts for at least 20% of the EU’s GDP by 2035. We have consistently advocated for decisive EU initiative to stimulate European manufacturing and quality jobs through the creation of lead markets for low-carbon products. Today’s publication is the first ever EU industrial policy tool leveraging low carbon and local content criteria in public procurement. With public procurement amounting to 15% of EU GDP the leverage to support low carbon, made in Europe manufacturing and quality employment is significant. It is urgently needed to pull European industries out of the current crisis. 

Speaking after the publication, industriAll Europe’s General Secretary Judith Kirton-Darling stated, “At a time of geopolitical tension, volatile energy prices and accelerating industrial restructuring, Europe cannot afford hesitation. The Industrial Accelerator Act is a step in the right direction, and it is positive that, despite massive lobbying and months of delay, the Commission has brought forward a proposal to strengthen Made in Europe and support low-carbon industry. In particular, local content requirements for the automotive sector and its supply chain had been long overdue. But important gaps remain: social conditionalities are not leveraged through public procurement, the scope of Union origin is still unclear and strategic sectors like steel are not sufficiently supported. Member States and the European Parliament must now pick up the baton and strengthen the legislation so that Europe’s industrial policy delivers resilient supply chains, industrial decarbonisation and quality jobs across Europe.”

IndustriAll Europe and the European Trade Union Confederation (ETUC) have been campaigning in lockstep on the legislation and jointly call for social conditionalities to be extended across the IAA, as ETUC General Secretary Esther Lynch stressed, "A Made in Europe policy must mean more than changing the flag on a product’s packaging. Public money must come with some basic conditions to ensure it serves the public interest. Commissioner Séjourné said himself that European public money must contribute to creating quality jobs. Now this must become a reality. Trade unions will work with members of the European Parliament and national ministers to ensure that the Made in Europe policy delivers on the promises made to working people."

Made in Europe must reflect European supply chains and ensure strong labour standards

One of the most contentious issues for Commission services, Member States and industries has been the geographic scope of application of “Union origin” criteria. The IAA’s final provisions of Made in Europe are very broad, treating all countries with whom the EU has a Free Trade Agreement or customs area as equivalent to Union origin. This not only weakens the leverage of the internal market to promote EU low-carbon manufacturing, but creates loopholes which risk social dumping in third countries as no social conditionalities are applied.

IndustriAll Europe warns about the risks that this may entail and insists that a Made in Europe approach must reflect the realities of European supply chains and real equivalence in standards. For us that means that beyond EU Member States, the scope should also comprise EFTA countries, candidate countries and the UK, while we must ensure that strong requirements for labour standards are fulfilled across the board.

Social conditionalities are mandatory for Foreign Direct Investors but not EU producers?

We welcome the inclusion of mandatory social conditionalities in the provisions on Foreign Direct Investments (FDI) of the IAA. IndustriAll Europe has been advocating for strong and mandatory social conditionalities as a lever to ensure a qualified workforce and larger societal well-being.
Within the criteria established for granting access of Foreign Direct Investments to the EU market the requirement that at least 50% of the workforce employed in the context of the FDI are “made up of Union workers across all categories of the workforce” and that “such employment shall be accompanied by adequate training and capacity building measures” is mandatory. Making social conditionalities binding on Foreign Direct Investors in strategic sectors is a significant step forward which we welcome!

To our regret, the IAA fails to link binding social conditionalities to all facilitating tools proposed in the IAA, be it in public procurement provisions or designation of industrial accelerator areas. This is a missed opportunity to strengthen the union’s workforce potential and quality jobs in Europe. We expect the European Parliament to improve this in the upcoming negotiations.

Made in Europe criteria must also cover clean steel

The creation of lead markets for locally-made, low-carbon steel is essential to provide long-term demand certainty for the European steel sector. At a time when the steel sector is in deep crisis, the European Commission must ensure that support is consistent across different public policy tools from trade measures to public procurement and sectoral plans for key steel-consuming industries. New steel trade measures that will come into force in July will not be enough to save the sector. Instead, the European Commission must ensure that public financing for green steel strengthens domestic industrial capacity and workers, rather than inadvertently subsidising production outside the EU. This will remain a concern on which industriAll Europe will be vigilant and active.

The IAA is not a silver bullet for Europe’s industrial and social crisis

Public and private investments are urgently needed to reinforce Europe’s industrial and social fabric. Without the fiscal power many of the provisions remain empty and meaningless for many Member States if bound by current fiscal rules. The EU must revise its macroeconomic framework in order to enable Member States to undertake public investments at scale of the twin green and digital transition. Without addressing urgent investment needs in energy, digital and social infrastructure Member States will fail attract private investments and accelerate local manufacturing despite the enabling spirit of the IAA.

While the EU must address unfair competition and structural factors contributing to the crisis of European manufacturing industry, this cannot mean distributing blank cheques to companies. Companies must be held accountable too, through mandatory social conditionalities requiring them to invest parts of their profits in the modernisation of their manufacturing assets as well as in quality jobs and training.

Energy prices remain key barrier to industrial acceleration in Europe

In the wake of another energy price shock caused by the conflict in the Middle East Europe must come up with a more comprehensive approach on energy policy. Resolving the industrial crisis will require a deep rethinking of energy policies, overcoming fragmentation and revising the electricity market to make it fit for decarbonised industrial production made in Europe.

Judith Kirton-Darling concluded, “Workers across Europe in new and incumbent industries are extremely anxious. In moments of geopolitical turbulence, the imperative becomes unmistakable: Europe must build resilience at home and strengthen cooperation with trusted partners, starting with its neighbourhood, while working to rebuild global governance and stability. That requires decisive investment and a bold, strategic industrial policy — now more than ever.”