How the EU’s competitiveness agenda ignores Europe’s true strength

Last year was the hottest year on record. In fact, every year for the past 10 years has been a record-breaking year, a not-so-subtle reminder to all of us that climate change is by no means under control.

The vast majority of Europeans agree that environmental issues have a direct effect on their daily life and their health. Yet, the urgency needed to address this worsening crisis was noticeably lacking in the new European Commission’s 2025 Work Programme, an omission that could have serious consequences not just for the environment but for society at large.

The shift in priorities is unmisteakable. While the commitments to advance the EU’s sustainability agenda as set out in the European Green Deal still stand, they are no longer the end goal. The path to achieving sustainable, fair societies is now firmly intertwined with the new mandate’s real focus: boosting competitiveness, growth and productivity. 

The race to “safeguard Europe’s future as an economic powerhouse” might not immediately sound alarming, as economic stability is necessary to protect and finance the EU’s social and environmental objectives. However, the Commission’s guiding vision outlined in the Competitiveness Compass reveals a concerning reality – the wellbeing of people and planet is at risk of being undermined for economic gains. 

Missing the mark

The publication of several new Commission proposals on 26 February solidified this concern. The Clean Industrial Deal, the Affordable Energy Action Plan and the Omnibus package all contain measures that look to benefit businesses and industry, relying on the flawed assumption that competitiveness gains for companies will automatically trickle down into benefits for all people. 

Unless proactively addressed, the deep socio-economic inequalities in our societies only stand to get worse. Transitioning to a greener Europe, for example, will likely have a disproportionate impact on marginalised or disadvantaged groups less able to adapt quickly to new policies, or absorb the economic impact of the move towards net-zero greenhouse emissions. For a just transition to a sustainable, fair future, it is therefore vital that climate and social policy go hand-in-hand. 

Unfortunately, the Commission’s legislative proposals largely miss the mark.

Flawed assumptions

As the Commission’s new strategy to align competitiveness with decarbonisation, the Clean Industrial Deal does take some positive steps to acknowledge the need for fair workforce transitions, quality jobs, and skills development. Given that an estimated 40% of workers in the EU are in occupations that will be directly impacted by the green transition (as reported by Eurofound), initiatives like the Union of Skills and the forthcoming Quality Jobs Roadmap reflect the needs of workers in the industrial transition. 

The bottom line is that Europe can only be competitive if it invests in its greatest strength; socially fair, green and resilient societies.

However, the Clean Industrial Deal’s emphasis on skills development and workforce transitions assumes that all displaced workers will be able to retrain and re-enter the labour market. The reality faced by many workers, particularly older workers, those in precarious employment, and those in sectors where alternative opportunities are limited is that reskilling alone is not enough. Access to social protection, adequate social safety nets and essential services is also necessary for those who struggle to find new employment.

The Affordable Energy Action Plan also aims to support competitiveness and decarbonisation in the EU by lowering energy prices. As energy poverty affects over 46 million people in Europe, targeted support to ensure affordable energy for groups in vulnerable situations will be an important lifeline. However, for the Affordable Energy Action Plan to truly deliver on the promise of a just transition, it must be embedded within a broader EU Just Transition Policy Framework. A comprehensive approach would ensure that social protection, housing renovations, and community-led energy initiatives receive the same level of attention and investment as industrial competitiveness. 

Finally, the Omnibus package, presented as a means to cut red tape and enhance competitiveness, seems to completely contradict other just transition commitments. If the Clean Industrial Deal claims it will protect the rights of workers, the blatant deregulation attempts of the Omnibus will only weaken these rights. While there is need to ensure that regulatory requirements do not disproportionately burden small businesses, the proposed measures risk significantly weakening corporate accountability and transparency.

The bottom line is that Europe can only be competitive if it invests in its greatest strength; socially fair, green and resilient societies.

The European Parliament and the Council of the EU now have a responsibility to ensure that the EU balances its ambitions between reducing administrative burdens and upholding its commitment to a just transition. To ensure that competitiveness is not achieved through a social race to the bottom, we call on Member States and MEPs to work across political divides to ensure climate, environmental, economic and social policies are consistently and meaningfully aligned.