17 October 2024 – A clear reaction and response to EUROFER’s open letter to the 27 Heads of State and Government of the Member States of the European Union entitled: ‘Call for urgent action to save the European steel industry and the livelihood of our workers’. And the tax plans of German Chancellor Olaf Scholz SPD are damaging the economic engine of German SMEs!
- Are half-truths actually lies? We think so, what do you think?
- An urgently needed response to a blatant letter full of half-truths
- Nothing works for EU steel producers without taxpayers' money
- The worst crisis since 2009? More like the biggest explosion in turnover since 2008!
- Decline in EU steel production has been expected for years
- Turnover explosion of over 67% per tonne of crude steel
- EUROFER spreads false job figures again
- 11.5 million EU manufacturing workers are being deprived of competitiveness
- Strategic autonomy? Overcapacity? Self-sufficient?
- Proposal for massive CO2 savings
- GFSEC leaves important economic area completely unconsidered
- EUROFER's claims must be rejected in their entirety!
- German Chancellor calls for more taxes for SMEs
Are half-truths actually lies? We think so, what do you think?
Reaction to EUROFER’s open letter to the 27 Heads of State and Government of the Member States of the European Union
Sometimes we just sit stunned in front of the news that flickers across our screens every day. Sometimes we get angry at the brazenness with which political lobbying is carried out in Europe.
Take, for example, the open letter from the European steel producers’ association EUROFER to the 27 Heads of State and Government of the Member States of the European Union dated 14 October 2024 entitled: “Call for urgent action to save the European steel industry and the livelihood of our workers”.
An urgently needed response to a blatant letter full of half-truths
An open letter that can hardly be surpassed in impertinence and seems to have been written far removed from reality. EU steel producers propaganda in its purest form. And where you may ask the question from our headline: Are half-truths actually lies? We think so, what do you think?
EUROFER claim:
Nothing works for EU steel producers without taxpayers’ money
Since the introduction of the EU Emissions Trading Scheme (ETS), the domestic steel industry has made no significant contribution to reducing CO2 emissions. The decline in CO2 emissions is almost exclusively due to lower crude steel production. And steel producers are only willing to make a commitment and a contribution to achieving the EU climate protection targets if this is paid for by the taxpayer and protected by trade policies and legislation.
EUROFER claim:
The worst crisis since 2009? More like the biggest explosion in turnover since 2008!
The EU steel industry is in its worst state since the financial and economic crisis from 2007 to 2009?
According to figures from the EU statistics authority EUROSTAT, domestic steel producers achieved their highest turnover in 2021 and 2022 since 2008. At more than 238 billion euros, turnover in 2022 is even likely to have been the highest in the history of European steel production. Based on EUROSTAT data and EUROFER publications, turnover for 2023 was once again more than €218 billion.
In comparison, turnover in the period from 2012 to 2019 averaged just €133 billion. An industry in crisis looks different with turnover growth of almost 79% and this drastic increase can NOT be explained by inflationary price increases.
EUROFER claim:
Decline in EU steel production has been expected for years
The decline in EU steel production has been known for years and was also expected by steel producers. There is nothing surprising about this and it has already been discussed in detail as a possible scenario by the European Steel Technology Platform (ESTEP) in the Green Steel for Europe – Decarbonisation Pathways 2030 and 2050.
Turnover explosion of over 67% per tonne of crude steel
What is even more important, however, is the growth in turnover per tonne of crude steel. While turnover per tonne of crude steel has averaged EUR 1,040 for years, it has shot up to more than EUR 1,700 since 2022 – with production costs falling significantly. Turnover per tonne of crude steel are therefore 20% higher than the figure that can be explained purely by inflation in Europe since 2008.
EUROFER spreads false job figures again
We had already pointed out to EUROFER some time ago in an article that its job figures were incorrect. In fact, they even changed this in a subsequent publication. Now, however, the figure of 100,000 jobs lost in the last 15 years is being bandied about again. Compared to 2008, it was only around 82,000 jobs that were ‘lost’.
Do you actually think no one is aware of your numbers game? We can do that too: According to EUROSTAT data, EU steel manufacturers have actually added around 6,000 jobs since 2016.
11.5 million EU manufacturing workers are being deprived of competitiveness
The EU steel industry currently employs 303,000 people – which at first glance seems like a lot, but compared to the more than 11.5 million workers in the steel-consuming sectors of the domestic economy, this figure is negligible. These 11.5 million workers are being forced to pay these exorbitantly high prices for steel by the EU steel producers, with the active support of EU policy-makers. This is causing immense economic damage to small and medium-sized enterprises, which is costing the EU economy its competitiveness.
It could rather be argued that EU steel manufacturers are hoarding labour and thus additionally blocking growth and recovery.
EUROFER claim:
Strategic autonomy? Overcapacity? Self-sufficient?
Moreover, nothing about European steel production is sustainable. For years, it has been more than 70% dependent on raw material imports. A self-sufficient steel industry or strategic autonomy can never exist due to these framework conditions and this should be clear to everyone by now. On average, 100 million tonnes of iron ore alone have to be imported into the EU every year to satisfy the hunger of CO2-intensive blast furnaces for raw materials.
Source: Iron ore and the European steel industry – THE FACTS, EUROFER, 2013
Proposal for massive CO2 savings
In order to avoid CO2 in several ways, it would be sufficient to reduce crude steel capacities in the EU, to quickly and easily place the freed-up workers in jobs in an economy crying out for skilled labour, and to simply import the steel in future. CO2 savings through fewer emissions from blast furnaces in the EU and savings through a reduction in CO2 emissions from sea freight transport for more than 100 million tons of raw materials per year. This will enable us to achieve the European climate targets in record time.
GFSEC leaves important economic area completely unconsidered
And we have already explained that GFSEC completely ignored the structural overcapacity in Europe due to its membership structure in its latest report.
Important economic area missing from GFSEC report
A glance at the GFSEC report ‘Steel exports, trade remedy actions and sources of excess capacity’ from May 2024 to realise that the GFSEC never tires of pointing the finger accusingly at Asian countries such as China and India, but completely ignores one economic area – the European Union!
Why is the GFSEC report silent on EU excess capacities?
The average steel excess capacity exported by EU steel producers in the period 2020 – 2024 was around 18.06 million MT per year, with an average crude steel production of 136.89 million MT per year. While, for example, Indian exports in the same period were only 14.8 million MT per year with an average crude steel production of 121.15 million MT. (Sources: GFSEC, worldsteel, EUROFER)
EU steel producers have thus exported an average of 13.2% of their excess capacity, while India has only exported 12.2%.
It is hardly surprising that the EU, which largely dominates the GFSEC, is not mentioned in this report or in the press releases as an exporter or its own excess steel capacity.
Source: Global Forum on Steel Excess Capacity: EUROFER again calls for more market protection, Stainless Espresso, steelnews.biz
EUROFER’s claims must be rejected in their entirety!
EUROFER’s claims against the EU Leaders in the open letter are therefore completely refuted and must be rejected in their entirety. Giving in only means increasing damage to the European economy, especially for the millions of small and medium-sized companies and their employees, to the benefit of a few oligopolists.
German Chancellor calls for more taxes for SMEs
No matter how you look at it, German Chancellor Olaf Scholz’s call for higher taxes for small and medium-sized enterprises is a bombshell. Now small and medium-sized enterprises are to pay for the mistakes made in German politics in recent years and decades, thus finally stifling the engine of German economic performance.
SPD: taxes up, opportunities down
With the SPD’s plan for the upcoming election campaign to further burden the top 1% with taxes instead of creating opportunities and incentives for the business location, Olaf Scholz’s party may have finally put itself on the sidelines.
Friedrich Merz harshly criticises SPD tax plans
Harsh criticism also came from the CDU and its candidate for chancellor Friedrich Merz. And he also specified who this would affect: ‘These are often small and medium-sized businesses, these are craft businesses.’
It is clear where the money will end up – with the large corporations and their noisy trade unions. In any case, it will not benefit the entrepreneurial middle class.
We normally hold back with election recommendations. But the SPD’s propaganda against those who are fighting for jobs and companies is no longer acceptable. We cannot vote in favour of more government, more debt, more bureaucracy, higher taxes and a socialist planned economy. It would surely be better spent elsewhere.
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