In an editorial published in the Italian newspaper Il Foglio, Antonio Gozzi, industrialist and president of Italian steel producers association Federacciai, provided a critical analysis of Europe’s current economic and industrial decline.
The decline of Europe
The document opens with the observation that, while the world has changed radically, Europe is failing to keep pace. To describe the decline of the last 20 years, Mr. Gozzi cites data on the decline in European GDP since 2005, the presence of only one European company in the ranking of the 25 most valuable companies in the world, and the seemingly irrecoverable technological gap with the US and China in key sectors such as AI, biotechnology, and space.
According to Gozzi, this failure has occurred despite a history of favorable conditions (a rich market, modest interest rates and cheap energy), due to a “guardian technocracy” that has imposed a mainstream environmentalist and anti-industrial agenda and excessive regulations that discourage investment and increase bureaucracy.
A critique of the ETS system
An entire section of the editorial focuses on the Emissions Trading System (ETS) and the need for its radical overhaul. “The time has come for an objective, in-depth, non-propagandistic assessment of the real long-term effects of this system, which is based exclusively on regulations and penalties rather than incentive mechanisms.” The data indicate that Europe produces only six percent of global emissions: even if it closed all its factories, the global impact would be zero, as emissions from China, India and the US continue to grow.
The president of Federacciai commented, “20 years after the entry into force of the system regulating carbon emissions in European industry, there is no official study telling us what this mechanism has achieved in terms of technological progress and the progressive decarbonization of production processes.” In this regard, Gozzi cited a document by Bruegel, the international political-economic think tank, which mentions the existence of “a large body of empirical evidence [that] shows that the ETS has reduced overall EU emissions by 14-16 percent.” However, this evidence does not include the drastic decline in steel production and foundries and the relocation or closure of plants operating in this sector, which Gozzi considers “the main reason why emissions have been reduced”.
The pillars for recovery
At the end of the document, the president of Federacciai lists the priorities necessary to ensure strategic autonomy and European competitiveness:
- Technological neutrality: an energy mix that includes renewables, gas (with CO2 capture), and new-generation nuclear power.
- Resources and defense: launch of mining activities in Europe and strengthening of the defense industry.
- Market protection: customs barriers against unfair competition from countries that subsidize their own companies and strengthening of “golden power”.
- Elimination of European hyper-regulation: drastic revision of regulations such as CBAM, deforestation regulations and sustainability directives (CSRD/CSDD).
The document concludes by emphasizing that Italy, thanks to the strength of its industry and the credibility of its accounts, must lead this change to prevent the ecological transition from turning into “industrial desertification”, as defined by Italian prime minister Giorgia Meloni at the last annual meeting of Federacciai.