The 2024–2029 European Commission has begun its mandate with a shift in priorities, placing competitiveness and reindustrialisation at the core of its agenda. However, successfully implementing an industrial strategy requires a solid foundation of skills, public services, and a qualified and healthy labour force.
Pursuing industrial transformation without strong social support risks undermining these efforts and investments. The second Action Plan for the European Pillar of Social Rights offers an opportunity to build a more resilient and equitable EU—one that is essential for a successful, decarbonised industrial transition.
The European pillar of social rights as an enabler of competitive sustainability
The European Commission is currently consulting the public to shape a second Action Plan for the European Pillar of Social Rights (EPSR). In a context of growing demand for security and strategic autonomy, the EU executive has positioned skills and quality jobs as the core social components supporting competitiveness and reindustrialisation—key to strengthening the EU’s resilience in the face of geopolitical instability.
As the European economy undergoes deep structural changes driven by ‘rapid technological change, […] sectoral transitions [and] a shrinking working age population’, the ability to manage distributional impacts and engage all regions fairly will be critical to maintaining political and economic stability. This is particularly important amid growing public scepticism about governments’ ability to deliver a just and inclusive transition.
Since 2017, the EPSR has defined the European social model that underpins the EU’s competitiveness and productivity. A successful industrial transition requires investment not just in industrial innovation, but also in skills, public services and territorial cohesion.
Yet so far, the lack of political commitment to the principles of the Social Pillar, strained public financing, a global pandemic, an energy crisis and rising political instability have led to a decline in wellbeing and growing income inequality across the EU, including rising levels of homelessness and energy poverty, as well as a lack of quality jobs and affordable housing. These widening gaps in the EU’s social fabric put the success of the EU competitiveness agenda and economic stability at risk. Yet the Commission has recently proposed reducing the already limited financial support devoted to tackling social and territorial inequalities in the transition, with no Just Transition Fund and a phasing out of the Social Climate Fund in the next long-term budget.
Towards an EPSR Action Plan 2.0 that delivers for people and prosperity
Ensuring social buy-in for the CID and improving its potential to make the EU more resilient and competitive, hinges on the EU’s ability to deliver benefits across Europe and among all communities. While the CID presented an opportunity to put wellbeing and better working conditions at the heart of industrial policy, this critical social dimension has so far been missing. The EPSR Action Plan 2.0 can make that link.
Developing synergies between the competitiveness agenda marked by strategies such as the CID, the Electrification Action Plan, the Citizens Energy Package, the Affordable Housing Plan and the Quality Jobs Roadmap, together with the Social Pillar Action Plan 2.0, can ensure a people-centred approach towards a competitive and resilient economy.
The following three principles of the EPSR could be mutually reinforced with the CID:
- Principle 20 – Access to essential services: delivering on services such as healthcare, utilities, and public transport are vital for citizens as well as industrial competitiveness. Investing in these will lead to better living conditions for workers and citizens, as well as increase productivity and job creation. Working with regional and local authorities to deliver these benefits can better address needs and ensure regional economic returns.
- Principle 19 – Housing and assistance for the homeless: High housing costs are a burden for citizens, the labour market and economic productivity. Providing an adequate supply of affordable, decarbonised and climate resilient housing will improve the quality of life for Europeans, as well as deliver economic efficiency through better labour availability and mobility.
- Principle 4 – Active support to employment: An analysis of the skill gaps in each region – undertaken in collaboration with regional governments, workers and trade unions – should underpin the reindustrialisation and economic revitalisation plans of each region. A better understanding of skills and jobs needs can identify necessary education or training and contribute to a managed and fair transition of sectors affected by a changing EU economy.
These are only three examples of the kind of eco-social synergies that can be achieved through the next Social Pillar Action Plan, and many more practical recommendations can be found in this report by the European Social Observatory. By treating the Action Plan as a chance to materialise the social agenda required to build a competitive and decarbonised economy, the European Commission can demonstrate that the benefits of reindustrialisation can be shared by all.
