Industrial downturn frightens trade unions as much as corporates, BusinessEurope chief warns

Trade unions are increasingly siding with the corporate world in calling for better business conditions, the head of Europe’s largest corporate lobby group told Euractiv in an interview on Wednesday (3 March), as manufacturing job losses spread across Europe.

“We really have a problem,” Markus Beyrer, Director General of BusinessEurope, the umbrella organisation of national business federations, said.

“Europe as an economic and industrial location is under real pressure for several reasons,” he added, citing high energy prices and a “regulatory tsunami” of numerous new directives from Brussels over the last few years.

In recent years, Europe has been growing much slower than key competitors such as the US, which has seen higher rates of investments in new factories. In 2023, for example EU GDP grew by only 0.5%, while the US economy leapt by 2.5%, according to data from the International Monetary Fund (IMF).

“The main point is that we have grown much more slowly than the US – for seven years out of the last ten years. So this is not just a snapshot,” said Beyrer.

This was also the reason why the European Trade Union Confederation (ETUC), he said, “is increasingly coming on board with us” in emphasising the urgency of shoring up Europe’s industrial and business environment, “simply because we are now also seeing losses of industrial or manufacturing jobs.” 

Between 2019 and 2023, the 27-member states bloc saw 850,000 manufacturing jobs disappear, most of which were concentrated in Poland, Romania, and Germany, according to an ETUC analysis based on Eurostat data.

However, unemployment remains at record-low levels across the EU, while severe shortages of skilled labour continue to cause headaches for businesses.

Regulatory ‘tsunami’

Meanwhile, adding to persisting burdens on businesses, Beyrer complained that reporting demands drastically increased over the last few years despite promises by European Commission President Ursula von der Leyen to cut red tape.

“There will have to be very credible steps to reduce the regulatory burden,” said Beyrer, citing von der Leyen’s recent vows to reduce reporting obligations for European companies by 25%.

The pledge, first communicated to the Parliament in March 2023, was reiterated in von der Leyen’s State of the Union speech in September and followed up by more detailed commitments in the 2024 Commission work programme.

The EU executive said it was putting forward measures to rationalise administrative requirements and “streamline reporting requirements that are of limited use, for example, by consolidating overlapping obligations, reducing the number of businesses concerned and increasing digitalisation.”

Among the legislative files that were seen to benefit from revisions and deadline deferrals, the Commission cited the Corporate Sustainability Reporting Directive, the Accounting Directive and the Benchmark Regulation.

However, Beyrer said the recently adopted EU Corporate Sustainability Due Diligence Directive (CSDDD), which requires large companies to ensure social and environmental standards across their value chain, had set out additional “unworkable reporting requirements,” Beyrer lamented.

“It seems that not everyone has fully understood how serious the situation is,” he warned.

This echoed concerns raised by other business groups, such as the German Chamber of Industry and Commerce (DIHK).

They complained that the CSDDD would result in a narrower selection “of customers and suppliers,” which would in turn undermine the aim of diversifying markets and securing raw materials for the energy transition. 

European businesses would increasingly have to lecture external suppliers or customers on European rules, asking them to fill out questionnaires while they “have long since chosen a completely different customer or a completely different supplier who, in case of doubt, does not come from Europe,” DIHK director Martin Wansleben said at a Berlin event in March.

Hopes on Letta and Draghi

Meanwhile, Beyrer also cast his hopes on the upcoming high-level reports on the EU single market and competitiveness by former Italian prime ministers Enrico Letta and Mario Draghi.

“It needs a mix of a political story, where things are definitely daring, and then hopefully, [that] will also act as a launch vehicle for the hard technical work, which nobody apart from specialists is interested in right now but for which we are making a lot of proposals,” said Beyrer.

Letta will present his report on improving the EU single market at a special meeting of European leaders on 17 and 18 April.

Meanwhile, Draghi’s report on European competitiveness is expected to be published after the European Elections in June.

[Edited by Rajnish Singh/Anna Brunetti]

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