THE STATE OF THE EUROPEAN UNION Towards a new legislative term

THE STATE OF THE EUROPEAN UNION 100 However, in order to be able to compete with other big players, synergies have to be used and joint produc- tion lines have to be set up. In the market, size does matter, and here the Chinese and the Americans have an advantage. Accordingly, common goals and stronger coordination are necessary. Otherwise, there is a risk of further fragmentation of the internal market. It’s about jobs, stupid Another part of the IRA has also been somewhat over- looked in the European debate: the implications for workers and jobs. The IRA is among other things a re- sponse to the accusation that the Democrats no longer represent their former core support base. This is where the Biden administration wants to pull the plug on the populists. For a long time, the possible loss of jobs was at the forefront of public debate when it came to the ecological transition. But now it is about new, high- quality jobs in industries that represent the future. The US government, for instance, provides tax credits for companies that pay decent wages and hire apprentices through the IRA. They also want to tax share buybacks so that companies invest instead of making boards rich. Additionally, they are providing extra tax credits for clean energy projects in communities previously de- pendent on extractive industries. Europe should follow their example. This is the only way to achieve environ- mental and social parity. Through the European Pillar of Social Rights, launched in 2017, the EU is actually starting from a much higher level than the US. In October 2022, the EU Directive on Adequate Minimum Wages was adopted, requiring collective bargaining and strengthening trade unions. The Green Industrial Plan now devotes an entire chapter to the development of skills. However, it is silent on the quality of jobs and the question of how collec- tive bargaining could be strengthened through state aid or public procurement. That is a mistake. In times of a shortage of skilled workers, it will also be crucial for companies to be attractive to qualified employees. The shortage of skilled workers affects the entire re- gion. It leads to bottlenecks and backlogs in the econ- omy and for some countries, such as Germany, it casts doubt over the prospect for long-term economic de- velopment and competitiveness. At the same time, the tense current situation makes it difficult for trade unions and companies to forecast future needs and necessary re-training. The demands from both camps for a stable legal framework are correspondingly strong. Deep pockets Fierce debates continue on the question of financing the green industrial plan. For the time being, the funds for EU industrial policy are supposed to primarily come from the Member States. The Commission therefore wants to temporarily ease the rules for state aid, which normally limit national subsidies. They are to include more tech- nologies, be higher than before and also be granted over a longer period of time. Although, the Commission initially also sought to rely on Europe-wide solutions, this was not successful with the Member States. An EU Sovereignty Fund was supposed to be the main source of funding for the industrial strategy but that is off the table for the time being. The climate- neutral restructuring of the European economy is still needed, but there will be no fresh ‘European’ money for it: the Member States are not playing along. Only an ad- ditional 10 billion euros will now be raised. Otherwise, existing programmes and funds are to be bundled and thus made more accessible under the title STEP - Stra- tegic Technologies for Europe Platform. STEP includes not only clean technology but also deep tech and bio- tech. However, the Commission still hopes to reach 160 billion by reallocating from other sources, primarily the structural funds. It is questionable whether this will be enough to compete with the USA and Asia as originally planned and to secure European sovereignty as envisaged. Doubts have already been raised. Firstly, the whole thing was announced with a completely different scope and depth: STEP now looks very modest in comparison. And secondly, there are warnings of a danger to the inter- nal market if the climate-neutral transformation largely remains a matter for Member States. The capacities of the EU countries to grant state aid are very different (Germany and France have significantly greater capaci-