Europe risks ‘mass unemployment’ without reform, warns ABB boss
Morten Wierod calls for urgent deregulation as energy shock from Iran war dents EU competitiveness
Europe must deregulate to boost competitiveness in the face of the Iran war energy shock or risk a “mass unemployment” crisis, the head of one of the bloc’s largest engineering groups has warned.
Morten Wierod, ABB chief executive, told the FT that European lawmakers have displayed “no sense of urgency” in pursuing deregulation even as rising gas prices in Europe dent the bloc’s competitiveness compared to the US.
He noted that the blueprint for reform commissioned by the European Commission and written by former Italian prime minister Mario Draghi was published almost two years ago but that little had been done about it.
Morten Wierod says the EU should remove legislation to drive more of a single market © ABB
“I hope that we don’t need to see a much bigger crisis that means mass unemployment. That should not be necessary to get that right sense of urgency,” said Wierod in an interview in New York.
“The single market or EU needs to remove more legislation and not just to simplify but to eliminate and to drive more of a single market, that will drive economic growth.”
ABB, which is based in Zurich, Switzerland, is one of Europe’s largest industrial engineering and technology companies with a market capitalisation of almost $200bn. It employs 52,400 people in Europe — almost double the number of staff that it employs in the US, which is the top revenue-generating region for the group.
Wierod said the plan announced by Brussels this week to introduce rules to reduce dependence on foreign technology could have “unintended consequences” and raise costs.
“We are in favour of open trade . . . we see that when you build this legislation around some of the ‘Made in Europe’ discussions going on now — there are always side effects.”
Wierod is the latest top business leader to urge Europe to slash red tape and implement reforms to boost the bloc’s competitiveness.
In October, the chief executives of TotalEnergies and Siemens wrote an open letter to French President Emmanuel Macron and German Chancellor Friedrich Merz, urging EU states to abolish a primary corporate sustainability law. EU lawmakers agreed reforms to scale back the law in March.
The Commission has launched a “simplification” drive to reduce red tape that it claims has already produced €15bn in annual savings for businesses and national authorities.
But progress on implementing the 2024 Draghi report, which highlighted a widening productivity gap between the US and Europe, has been slow. Just 10 per cent of his 383 proposals have been enacted, according to an online tracker.
Wierod said Europe had some great assets: its workforce, access to high-quality education and crisis-management experience.
“If you saw how Europe was able to deal with and change the dependency on Russian gas — that happened quickly, from 35 per cent to 10 per cent within a year. So, crisis management is there.”
But he said competitive pressures are rising in Europe due to the gas price inflation caused by disruption to supplies from the Middle East from the Iran war.
“I’m not worried that Europe will have gas. They will. But it will come at a higher price and that was what we saw in 2022 — and we know these [higher] gas prices will remain for 2026 and 2027,” Wierod said.
“So this, of course, will have an impact more again on European competitiveness than the United States, because you have your own gas.”
Up to 1.3mn jobs in the EU could be lost as a result of the higher prices, Roxana Mînzatu, European commissioner for jobs, said on Wednesday.
ABB is lobbying EU policymakers to accelerate electrification, industrial efficiency and decarbonisation, saying it is the fastest way to make the bloc more competitive.