EU risks losing more than one million jobs over global pressures

[BRUSSELS] The EU is at risk of losing more than one million jobs this year over the Iran war’s economic fallout and rising global competition, the bloc’s executive warned.

According to a European Commission analysis shared with Bloomberg News, around 560,000 jobs could be cut this year due to the energy costs, while around 600,000 jobs are under pressure in the automotive industry.

The sectors most affected by the energy price spike are likely to be construction, metals, chemicals and transport. 

The figures are a dramatic illustration of the EU’s mounting economic woes. While leaders are trying to accelerate plans to boost the continent’s competitiveness, the bloc is still falling behind the US and China at an increasing rate.

European firms have been paying extra energy costs for years after the bloc cut its reliance on Russian oil and gas following Moscow’s full-scale invasion of Ukraine in 2022. The situation only grew worse this year after Iran closed the Strait of Hormuz, a vital route for global fuel shipments. 

On top of that, European companies are struggling to compete with American and Chinese rivals on digital and green technologies, such as electric vehicles, solar panels and artificial intelligence. The EU is working on various initiatives to try and protect its local industries from such pressures.

The commission said that around 85,000 jobs related to battery production, a key component for electric vehicles, are at risk. Additionally, nearly 60,000 jobs related to solar panel manufacturing could be hit. 

The commission did not immediately reply to a request for comment. Politico reported on the job loss estimates earlier on Wednesday. 

On Wednesday, the EU executive is expected to release its assessments of how governments are handling their commitments to reduce deficits. It will also issue recommendations for how countries should improve their economies and labour markets.  

SEE ALSO

EU weighs temporary freeze on Russia oil price cap over Iran

The commission is expected to emphasise the importance of national anti-poverty strategies, as around one in five workers in low-wage jobs are in sectors with limited productivity growth. BLOOMBERG