The jobs squeeze facing Europe

Summary

Brussels Playbook Podcast — The Jobs Squeeze Facing Europe

Date: June 3, 2026
Host: Zoya Sheftalovich (A), with Ian Wishart (B, Senior Politics Editor at POLITICO)
Duration: ~15 minutes

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Episode Overview

This episode, hosted by Zoya Sheftalovich and joined by Ian Wishart, dives into the European Commission’s warning of over a million jobs at risk across the EU, with a particular focus on the groundbreaking labor market recommendations in the latest European Semester spring packet. The hosts also discuss the highly anticipated tech sovereignty package, Europe’s ongoing dependence on foreign technology, and lighter fare including the perils of hotel stays in Strasbourg. The discussion is a blend of sharp analysis and candid, conversational insight about the policy decisions and political friction shaping Brussels—and by extension, Europe’s future.

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Key Discussion Points & Insights

1. The European Semester Spring Packet and the Labor Market Crisis

[01:24–07:17]

• Commission Leak and Focus Shift:
  Zoya reveals advance details from a leaked Commission report focusing for the first time on the EU-wide labor market, moving beyond its usual analysis of national GDP and debt.
  • "We've had a sneak peek at the Commission's report...This is the report that essentially looks at how all of the EU countries are doing with their economy...But there's a big difference with the one that they're presenting today...they're really focusing in on the labor market."
    —Zoya [01:29]
• Jobs at Risk Due to Energy Crisis and Green Transition:
  • The Commission forecasts 560,000 jobs at risk through 2026 from the energy crisis alone (dragging on due to the Iran war and high prices), affecting multiple industries.
  • When accounting for sectors impacted by the green transition (notably transport, automotive, solar energy, and batteries), the total jobs at risk rise to 1.3 million across the Eurozone.
    • "What the Commission says is in danger throughout the Eurozone. Exactly. So around about 1.3 million."
      —Zoya [03:13]
• Economic Outlook:
  • Despite job losses, no recession is forecast; modest growth is projected: 1.1% for 2026 and 1.4% for 2027.
    • "They are still saying that there's probably going to be economic growth in the EU in 2026."
      —Zoya [03:48]
• Disproportionate Impact on Key Countries & Sectors:
  • The automotive sector is particularly affected—potentially 600,000 jobs at risk, which could severely hit countries like Germany.
• Commission’s Response: Reskilling and Education:
  • Recommendations focus on adult education, upskilling in STEM fields, and bridging gaps between overqualified workers and skill shortages.
    • "The issue is that too many people are working in jobs that are below their qualification level. So Europe is wasting skills."
      —Zoya, quoting Skills Commissioner Roxana Menzato [04:56]
  • Specific countries mentioned for urgent action: Italy, Malta, Greece, Cyprus, among others.
• Underlying Political Dynamics:
  • The hosts acknowledge that the recommendations risk being seen by some as inadequate or superficial, especially in a climate of rising populism and political finger-pointing about jobs and economic malaise.
    • "You can see why the commission wants to do it, but a lot of people would say it was too little, too late, wouldn't they?"
      —Ian [06:38]
  • Zoya counters that the Commission is aiming for a "holistic approach"—not purely subsidizing or deregulating, but improving workforce fitness for future challenges.

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2. Europe’s Bid for Tech Sovereignty

[07:17–11:27]

• Introduction to the Tech Sovereignty Package:
  • Designed to reduce Europe’s reliance on American and Chinese technology in critical areas: cloud services, semiconductors (“chips”), AI infrastructure, payment systems, and government software.
    • "This is about Europe not being reliant on basically American tech and on Chinese tech..."
      —Ian [07:27]
• Major Highlights of the Package:
  • Cloud and AI Development Act:
    • Targets sovereignty risks in cloud services, especially in sectors like health, justice, energy, and banking; concerns about US tech firms' compliance under changing US political leadership.
      • "They want to look at the sovereignty risks of those, whether providers can be trusted, particularly because there has been a shift in those big tech firms towards the Trump administration."
        —Zoya [10:16]
  • Chips Act 2.0:
    • Europe manufactures only 10% of the world’s semiconductors, with advanced chip design/production concentrated in the US, Taiwan, and South Korea.
      • "Europe only makes around 10% of the world's semiconductors. And most of the really advanced chips are designed in the US and produced in Taiwan and South Korea."
        —Zoya [10:40]
  • Open Source Strategy:
    • Recognizes that 70–90% of the digital economy depends on open source software; the new strategy aims to leverage this for greater independence.
      • "It's about the fact that open source Software underpins basically 70 to 90% of the digital economy. And they want to leverage that."
        —Zoya [11:03]
  • Infrastructure focus:
    • Highlights the importance of data centers, grid resilience, and digital infrastructure for true sovereignty.
• Strategic Dependence Concerns:
  • Ian and Zoya recount real-world “wake-up calls,” including US retaliation against international bodies by restricting access to US tech services, and geopolitical risks around rare earth minerals from China or tariff escalation from the US.
    • "If you're going to pay for a great welfare state, then you need to have an economy that goes with it."
      —Ian [09:33]
• Underlying Question:
  • Both hosts repeatedly come back to the fundamental challenge:
    • "Why can't Europe just be better?...They've been talking about this for decades. What is it going to take for Europe to get out of this malaise?"
      —Ian [08:33]

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3. Strasbourg’s Hotel Nightmares

[11:29–13:00]

• Unfortunate Incident:
  • A European Parliament MEP required medical help after staying in an unsanitary hotel in Strasbourg.
    • "This MEP got so, so unwell that they had to seek medical assistance."
      —Zoya [11:54]
• Infrastructure Problem:
  • The monthly migration to Strasbourg for parliamentary sessions strains local accommodation—hotels are filled to capacity only four days per month, prompting questionable maintenance and quality standards.
    • "These hotels are at full capacity four days a month and the rest of the month not."
      —Zoya [12:26]
• Audience Engagement:
  • The hosts invite listeners to share their own Strasbourg or business-hotel horror stories via WhatsApp.

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4. Listener Mail & Banter

[13:00–14:01]

• Listener Feedback:
  • Chris from Ukraine writes in, praising the dynamic between Zoya and Ian:
    • "I miss the banter between you and Ian. You two seem to be hosting on different days. The world needs more Ian and Zoya."
      —Chris [13:36]
  • Zoya promises to pass on future show merch to their letter writers.

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Notable Quotes & Memorable Moments

• On job losses:
  • "So around about 1.3 million [jobs at risk] ... in sectors like things that are affected by the green transition."
    —Zoya [03:13]
• On reskilling and wasted potential:
  • "Too many people are working in jobs that are below their qualification level. So Europe is wasting skills. Lots of people are overqualified and then there are other people who aren't qualified enough." —Zoya, paraphrasing the EU Skills Commissioner [04:56]
• On Europe’s long-running tech dependency:
  • "They've been talking about this for decades...What is it going to take for Europe to get out of this malaise?"
    —Ian [08:33]
• On sovereignty and economic realism:
  • "If you're going to pay for a great welfare state, then you need to have an economy that goes with it."
    —Ian [09:33]
• On the persistent Strasbourg travel problem:
  • "These hotels are at full capacity four days a month and the rest of the month not."
    —Zoya [12:26]

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Important Timestamps

• 01:24 – Commission’s new focus on labor market recommendations
• 02:53 – Energy crisis-linked job losses
• 03:13 – Green transition job loss estimate (1.3 million)
• 04:56 – Skills Commissioner quote on Europe’s wastage of talent
• 07:17 – Transition to tech sovereignty topic
• 10:16 – Cloud and AI Development Act details
• 10:40 – Chips Act 2.0 explanation
• 11:03 – Open source digital economy stat
• 11:29 – Strasbourg hotel incident details
• 13:00 – Listener mail, Chris from Ukraine

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Tone & Style

• Conversational, lightly irreverent: Banter between Zoya and Ian (“I win every time,” jokes about collapsed beds/KitKats).
• Reportorial rigor: Breaking news, cited leaks, direct quotes from policymakers.
• Political savvy: Nuanced discussion of policy, populism, geopolitics.

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Summary Takeaway

This episode lays bare the anxiety coursing through Brussels over the coming labor market turbulence, as the EU grapples with both the green transition and external shocks to its energy and tech sovereignty. The Commission’s proposed solutions—focused on reskilling, workforce alignment, and strategic innovation—might be a case of too little, too late for some, but underscore an urgent pivot to safeguarding Europe’s competitiveness and autonomy in a world where economic security is anything but guaranteed. All this, delivered with the wry camaraderie and granular knowledge that followers of Brussels Playbook have come to expect.

Transcript

[A]

Good morning. It's Wednesday, June 3rd, and this is the Brussels Playbook podcast. The Vibe in Brussels today is worried as the EU warns that over a million jobs are at risk across the block. Also on the pod, today's tech sovereignty package will attempt to do something about the fact that most of the tech we use in Europe isn't European. And an MEP had to seek medical assistance after sleeping in an unsanitary hotel in Strasbourg. I'm Zoya Shastralovich and with me today, finally back, is Ian Wishart, our senior politics editor. Hey.

[B]

Hello, Zoya. Nice to see you.

[A]

Nice to see you too, Ian. Hey, you know, the last time I stayed in a Strasbourg hotel for plenary, I sat down on the bed and it literally collapsed beneath me and poured me onto the ground.

[B]

That sounds like I was gonna say something very rude and managed to stop myself.

[A]

I assure you it wasn't because I'd had too many KitKats earlier in the day. It just collapsed because it had the integrity of a terrible, terrible quality one star hotel anyway. Have you ever been in a terrible hotel, Ian?

[B]

I've stayed in one that was burnt down in Paris and it was kind of half of it was still smouldering.

[A]

Yeah, well, that sounds about right.

[B]

Yeah.

[A]

Listen, let's not faff about. Let's get straight to the European Semester spring packet.

[B]

You've done well because you've managed to get a leak of the document, haven't you, which is usually very kept very tightly.

[A]

Well, I didn't want to toot my own horn, but yes, I can do that for you. Yeah. We've had a sneak peek at the Commission's report. So this is the report that essentially looks at how all of the EU countries are doing with their economy. And it makes various recommendations for policies that they need to take and for economic stuff they need to do to get back on track if they're fallen by the wayside.

[B]

This is something that came in during the Eurozone crisis. The Commission wanted to take over much more heavily policing of national economies and making sure they were track and not spending too much, not running up too much debt and that kind of thing. And so every, every so often, they come out with these reports on how the economy is doing.

[A]

Yeah, exactly. And they go country by country and there's always stuff like GDP and debt and so stuff like that. Forecasts. Exactly. But there's a big difference with the one that they're presenting today, actually. And they're doing something they've never done before, which is they're really focusing in on the labor market and making recommendations for countries in how to address issues in their labor market.

[B]

It's a sign of the times, isn't it?

[A]

Yeah, it really is. All of these things are linked. We've been banging on about it on this podcast. It's about competitiveness, how to make sure that the EU stays competitive, that its economies grow and that they don't wilt in the face of the challenge from China, the US and elsewhere.

[B]

And I think in this document that you got your hands on, there's a particular focus on the number of jobs that could be lost because of the energy crisis.

[A]

That's right. So the forecast that the Commission has is basically through 2026, up to 560,000 jobs are at risk as a direct result of that. So that' pretty significant number. And that's just looking at this year because the Iran war is dragging on, prices are high and that's affecting all sorts of industries.

[B]

And have I seen a 1.3 million figure at some point?

[A]

Yeah. So that was, you know, me doing some very calculated back of the envelope maths, totaling up all of the jobs that the Commission says are at risk. And they're in sectors like things that are affected by the green transition. So it's transport, automotive sector energy, solar energy, battery stuff. That's all totaled up together. What the Commission says is in danger throughout the Eurozone. Exactly. So around about 1.3 million.

[B]

Playing devil's advocate, though, that is what, 50,000 on average in each member state? That's not a huge amount, is it, when compared to other times when we've seen recessions and things like that.

[A]

Yeah, that's right. The Commission is not forecasting a recession or anything like it. They are still saying that there's probably going to be economic growth in the EU in 2026. They reckon that's going to be around about 1.1% and in 2027, 1.4%. So they reckon the growth is still happening. But you've got to remember that when we're looking at the automotive sector, for instance, and the fact that 600,000 jobs could be lost, that really disproportionately hits certain countries. And, you know, clang, clang, clang, Germany,

[B]

you know, the European Commission says this all the time and has been saying it for months and has been saying it for years. What are they actually going to do about it?

[A]

Well, what they're actually going to do is tell countries that they need to fix some of the issues in their workforce. So they're saying that countries need to improve education and educational training for adults particularly. They need to focus on STEM skills, on reskilling, on the people, Science, isn't it? Science and technology and so forth. Of course, the flip side of that is that those are also the skills that we're now seeing automated a lot of the time by AI. So I think that's part of the tension here. And Roxana Menzato, who's the skills commissioner, she sent through some statements to me and she said, look, the issue is that too many people are working in jobs that are below their qualification level. So Europe is wasting skills. Lots people are overqualified and then there are other people who aren't qualified enough. Europe's strength will depend more and more on how well we are able to invest in our people. So better skills and quality jobs are both, I think, essential for Europe's future and for Europe's relevance in the global competition.

[B]

Does that mean that Europe does not have enough skilled jobs to go around?

[A]

It means that the wrong people are in the wrong jobs and people who don't have the skills are kind of laying by the wayside. They're not reskilling. So say your automotive job disappears. Say you're 50, you're not getting the training. You might be able to stay another 20 years in the workforce, but you're not getting the training to be able to transition to a new job. So the commission is really honing in on it and it's made some recommendations specifically for a few countries that it's singled out as needing to make these changes. And among them are Italy and Malta and Greece and Cyprus and a few others.

[B]

This obviously plays into politics and high level geopolitics at the moment and populism growing around Europe. And, you know, you see it in France and you see it in Germany, the two biggest economies of Europe. And they'll say this is just tinkering around the edges. They'll say, you know, if people are losing jobs, it's perhaps because of immigration or it's because we're regulating too much, it's because of Brussels. This doesn't seem to address those concerns. You can see why the commission wants to do it, but a lot of people would say it was too little, too late, wouldn't they? And you can see politics, politicians, populist politicians making that kind of argument.

[A]

Definitely. But I think what the commission is trying to do is take a more holistic approach here because they've been doing a lot of red tape slashing They've got all of these omnibuses. I think they're addressing things from multiple angles. And on this one, basically the point that they're trying to make is you can't just subsidize your way to competitiveness. You can't slash red tape to competitiveness, because ultimately that's going to be a race to the bottom. And what they're trying to focus on is that more positive growth and how we can get more people in the right jobs for them and ensure that if they lo their jobs that they're not just kind of becoming disaffected and not able to find something else. So that's the role of this.

[B]

Okay, great. Well, should we go on to our second story, which isn't necessarily completely unconnected, is it?

[A]

It is not. It's the tech sovereignty package, which has been long awaited in Europe and is

[B]

also being presented today. This is about Europe not being reliant on basically American tech and on Chinese tech and Chinese tech.

[A]

Yeah, absolutely. So there are a bunch of things in this package. So we've got the cloud services stuff, we've got chips. It's going to address AI infrastructure, payment systems, government software. There's all sorts of stuff that's going to be affected here. And the goal is, look, a lot of it is to do with American companies that have kind of a big monopoly when it comes to things like

[B]

the cloud services is like Google, Microsoft, Amazon.

[A]

Amazon, exactly, yeah. Whereas the other side of it is also chips, which is like manufacturing the physical things that power all of these things. And on both those fronts, you've got China, which is taking a large scale share of like the technical side of things. And you've got the US that's doing the services sector. And Europe is trying to figure out what do we do here? Do we try to compete with these countries that are so far ahead of us in these ways, or are we going to try to figure out where in that melange we can sort of sneak in and have the competitive advantage?

[B]

You know, there's one answer. Go on, listen to this podcast on Spotify. Why can't Europe just be better? It's a serious question with our previous story as well. What is it going to take for Europe to get out of this malaise? They've been talking about this for decades. Because when I first came to Brussels in 2010, people were aware of this situation and they could see this coming. They could see that the European economy was becoming more and more reliant on overseas technology and overseas companies at that Time, they kind of said, yeah, it is kind of a problem. But actually, look at our great welfare state, look at the European way of life. We don't actually need to do this because we've got other things.

[A]

And that was when they thought they could rely on China and the US

[B]

to continue providing, and they could rely on those companies to continue providing. And also they could say, we can still pay for it. But I think what they're showing now is those two things aren't unconnected. And actually, if you're going to pay for a great welfare state, then you need to have an economy that goes with it.

[A]

Exactly. And you need to be prepared for the moment when China says, actually, you can't have rare earth minerals, because I'm

[B]

pissed at you, because that's where the disruption comes.

[A]

Exactly. Or when Donald Trump decides, well, I'm going to put huge tariffs on everything and anything and you're just going to have to lump it.

[B]

Couldn't believe this story. I wasn't aware of this at the time, that when the ICC issued an arrest warrant for Netanyahu, the US sanctioned those officials in that court and cut off their ability to use Amazon and Airbnb and those American companies. Visa, MasterCard. Is that true?

[A]

Yeah. And it was a bit of a wake up call for Europe. I mean, there were others as well. Trump's threats over Greenland in particular, really sharpened some minds.

[B]

Zoya, just before we move on, do you just want to run through what's in this tech sovereignty package that they're going to announce?

[A]

Yeah, go on, then. Well, we've got the Cloud and AI Development act, which is all about, you know, cloud services for health, justice, energy, banking, etc. And they want to look at the sovereignty risks of those, whether providers can be trusted, particularly because there has been a shift in those big tech firms towards the Trump administration. We've got the Chips Act 2.0, not about Fritz.

[B]

Ian, carry on.

[A]

That's the second time I've made that joke. I did not get the response I wanted. All right, we've got the Chips Act 2.0. Basically, it's trying to deal with the fact that Europe only makes around 10% of the world's semiconductors. And most of the really advanced chips are designed in the US and produced in Taiwan and South Korea.

[B]

Gonna make a cloud joke now because of the weather.

[A]

I can't think of one. Bugger. Well, there's an open source strategy. Ian, do you know what that's about?

[B]

No.

[A]

It's about the fact that open source Software underpins basically 70 to 90% of the digital economy. And they want to leverage that.

[B]

Right.

[A]

Yeah. And there's also stuff on infrastructure, because tech sovereignty is also about, like, data centers, cloud infrastructure, electricity, the grids.

[B]

But, I mean, the big question after all of this is, will it work? Is this enough? And I suppose that's what people are going to be arguing about for weeks and months to come.

[A]

Yeah. Can't wait.

[B]

Can't wait for the op eds. All right, should we talk about this unfortunate incident in Strasbourg?

[A]

Yep. Well, our colleague Max Guerra has found out that there was an MEP who was so sick because of the poor standards of a particular hotel that we shall not name because we don't know it. Yeah. All right.

[B]

We're not keeping things from our listeners. We just don't know it.

[A]

Yeah, true story. Well, this MEP got so, so unwell that they had to seek medical assistance.

[B]

Yeah. They were down in Strasbourg. We seem to have gathered for the full parliament session in France. And he got sick.

[A]

Yeah. On an official mission.

[B]

It does raise the question, you know, we're not going to go over this debate whether they should be going down to Strasbourg every month. But it's a huge. No, we're definitely not sick to death of it. But it does raise. I mean, this is a huge logistical exercise, and there has to be all this infrastructure in Strasbourg to cope with all these MEPs and all these.

[A]

Yeah. And unfortunately, the thing is, those MEPs only go down there like, what, four days a month, Basically, these hotels are at full capacity four days a month and the rest of the month not.

[B]

So you're going to ask people to WhatsApp us with their worst hotels in Strasbourg. That would be good, wouldn't it?

[A]

Yeah. Or their worst hotel stories. When you've been on a business trip, found yourself in trouble. Tell us, tell us on the WhatsApp

[B]

line, the one we stayed in in Copenhagen for the summit last year was particularly bad, I have to say.

[A]

Oh, what happened?

[B]

Nothing happened, Z. But it was just a very bad route.

[A]

Ian, let's look at the mailbox. I've been rifling through it because now I get physical mail. Ian, that's what you've been missing? Yeah, yeah. Two letters and counting. And, folks, I know I promised those people merch. We don't have much yet, but maybe it's coming, and if it does, you'll be the first to get it. Anyway, we've had a note in from Chris from Ukraine, who's written in, and Chris said, hey, Zoya, I've resisted writing into you from Kiev. When you called for anecdotes, I didn't write in. Despite the many Ukrainian food related anecdotes,

[B]

has been a few well noticed, Chris.

[A]

Yep, yep. Exactly. When the Halloumi gate arose, I stayed silent. Even though it was clear that the cheese is only rubbery if you don't barbecue it and unlock its dense flavor. Chris knows where it's at. Now I have to write in. I miss the banter between you and Ian. You two seem to be hosting on different days. The world needs more Ian and Zoya.

[B]

I don't miss a banter at all.

[A]

It's because I win every time. All right, Ian, that's about it from us today. Are you going to be back tomorrow? Yeah.

[B]

Be nice to see your face again.

[A]

Yeah. Good news for Chris from Ukraine. All right, folks, rate us. Review us. Speak to you soon.

[B]

Bye.