In view of increasing geopolitical rivalries, concerns about economic security and a lack of competitiveness in digital technologies, industrial policy is regaining importance in European politics. While the discussion was initially motivated by the desire to promote the green transition and increase economic resilience, the focus has recently shifted to security policy issues, in particular high technologies and defence technology.

Progressive industrial policy: a topic that fills more than an evening

The Brussels launch of the cooperation between AK and ÖFSE on issues of progressive industrial policy took place on 23 May 2024 at a roundtable discussion with AK President Renate Anderl. There was a broad discussion on how the green and digital transformation can be shaped in the interests of workers. On 10 February 2025, Werner Raza (ÖFSE) presented the results of a research report that had been compiled in the meantime at a second roundtable discussion with experts from interest groups, NGOs, political think tanks, the EU Commission and Austrian ministries. The report was published shortly after the presentation of the Clean Industrial Deal.

The well-attended evening event on 15 September served to discuss the research results of the second round of the industrial policy cooperation project between AK and ÖFSE. The Social Europe Dossier is not the only outcome of this round. An academic edited volume with further analyses is also planned. The following day, a separate workshop was held to discuss the individual contributions in more detail.

Opening of the evening and presentation of the Social Europe dossier

In her welcoming address, Judith Vorbach (AK EUROPA) emphasised that the event had come at exactly the right time: in a highly dynamic environment and against a backdrop of increasing geopolitical tensions, difficult trade relations between the EU and the US, a tense situation within the EU itself and in the midst of the climate crisis. In her recent State of the Union address, EU Commission President von der Leyen focused on geopolitical issues, defence and competitiveness. Among other things, she announced a law to accelerate industrial development and further omnibus packages. The evening was therefore intended to take a critical look at the EU's industrial policy, analyse its shortcomings and develop a vision of how it can be shaped in the interests of social inclusion and workers.

Christa Schlager (AK Vienna) also referred to the changed global conditions. Although the discussion on how to shape the twin transformation fairly had only just begun, it had already shifted focus to tackling the energy crisis, the pandemic, the findings of the Draghi report, and the need to increase defence spending. This has a strong influence on political decision-making processes. The overlap of multiple crises has also led to a tense budgetary situation in the Member States. Against this backdrop, it is AK's mission to help shape the economic policy discourse in the interests of 4 million employees.

In his keynote speech, Werner Raza (ÖFSE) first explained the structure of the e-book and then took a critical look at the status quo of the implementation of the Green Deal: of the approximately 150 targets, only about 20 per cent are currently on track. There are major external dependencies in green and digital technologies, energy and critical raw materials. The relevant EU funding programmes are characterised by fragmented financing, complex structures and inconsistent implementation. There is a lack of a coherent strategic perspective, and overall, the industrial policy approach is too technocratic and top-down. Innovation and investment are not being adequately facilitated or promoted. These shortcomings must be addressed through broad social alliances and political narratives and visions of solidarity, as well as fair and balanced global partnerships.

Discussion with a high-profile panel

In view of current challenges such as the war in Ukraine and new trade conflicts, Outi Slotboom (European Commission) opened the panel discussion with the question of how the EU could continue its green ambitions, protect and expand its democratic and economic models, and return to a path of growth. To this end, it is crucial to maintain the EU's innovative strength, attract investment and strengthen the internal market. The EU must remain an open economy with high social and environmental standards. Key levers include adopting a more decisive approach to trade policy, the strategic use of public procurement, and integrating candidate countries into the internal market even before they become full members. The current omnibus laws are just as necessary as long-term planning for a just transition.

Sara Matthieu (Member of the European Parliament) emphasised that the green transition must always be accompanied by social measures. At the same time, the Green Deal is the best strategy for competitiveness, provided that companies are given the necessary investment security. It is therefore essential to stick to the targets. Deregulation or watering down the originally announced Industrial Decarbonisation Accelerator Act would be the wrong way to go. In order to make the transition fair, a Just Transition Directive is needed to ensure that employees can help shape the transition in their own interests. In international cooperation, it is important to build new, fairer relationships with the Global South and find a new approach to China in order to keep clean tech in Europe. In the interests of generating additional own resources, digital services could be taxed.

Isabelle Barthès (industriAll Europe) saw the greatest danger in the fact that workers in Europe have long been feeling the effects of the current problems first-hand. Austerity policies, shrinking demand in key industrial sectors and high living costs are all contributing to uncertainty. It is not only traditional sectors such as steel production that are affected, but also technologies that are expected to contribute significantly to the transformation, such as hydrogen. The measures taken so far under the Clean Industrial Deal are primarily aimed at deregulation and are therefore not in the interests of workers. This is also reflected in the strategic dialogues: corporations continue to prioritise profit above all else and threaten to relocate if necessary. However, measures for a just transition are urgently needed. Multinational corporations must also contribute to this with binding commitments. The current shortage of skilled workers poses a major challenge. The state must therefore do more to anticipate future skills requirements.

Rainer Kattel (University College London) noted that all participants in the discussion share a sense of urgency. In contrast, EU processes appear structurally sluggish and unable to respond well to urgency. The example of deep technology, much of which is concentrated in the security and defence industries, clearly shows that the EU is lagging behind in some areas. Defence technologies in particular have high multiplier effects. He called for more inclusive access to innovation, with broad public participation. The public sector in particular needs to think about innovation, as employees there are still far too little exposed to the topic. Precisely because the wider application of artificial intelligence will result in the loss of many jobs, public services should be seen not as costs but as investments that prepare people for this change.

Werner Raza concluded that the current EU strategy creates a false dichotomy between competitiveness and the welfare state, and that prioritising defence over the green transformation is problematic. The Draghi report clearly demonstrated that the EU has an innovation gap and emphasised the importance of investing in people. In the current global environment of increasing protectionism, the proportion of exports to GDP is expected to fall. It is therefore crucial to focus more strongly on the internal market, improve demand management and supplement industrial policy with distribution policy.

Further information:

Social Europe Dossier: Industrial Policy in the European Union: Towards a Progressive Agenda
ÖFSE: Towards a progressive industrial policy for the Twin Transformation in the European Union
Social Europe: Industrial Policy for the Twin Transformation – A Progressive Agenda is Needed Now!
AK EUROPA: The future of industry in Europe. In which direction should the compass point?
AK EUROPA: Industry, energy and automotive. New plans for the transformation
AK EUROPA: Employees' demands on EU industrial policy. Roundtable discussion with AK President Renate Anderl
AK EUROPA: A Compass for the EU's Competitiveness
AK EUROPA: Consultation on the Clean Industrial State Aid Framework (CISAF)
AK EUROPA: The Clean Industrial Deal
AK EUROPA: Industrial Action Plan for the European Automotive Sector