BRUSSELS (Realist English). The European Commission forecasts that more than 1 million jobs in the European Union could be at risk of disappearing in 2026 due to the economic consequences of the war in Iran, high energy prices, and intensifying global competition. Against the backdrop of economic stagnation, the EU has raised its unemployment forecast to 6% for this year and next.
How the EU Is Losing Jobs
According to a European Commission analysis seen by Bloomberg, about 560,000 jobs could be cut due to high energy prices. Another approximately 600,000 jobs are under pressure in the automotive industry.
In addition to the 1.16 million jobs at risk in 2026, the European Commission previously warned of a loss of 27,000 jobs per month in manufacturing over the past two years. In the chemical industry alone — one of the EU’s strategic sectors — up to 200,000 jobs are at risk, with mass layoffs already affecting about 30,000 people.
Nearly All Sectors at Risk
The sectors hardest hit by the energy crisis are construction, metallurgy, chemicals, and transport. According to an analysis presented by IndustriALL Europe, of the 18 flagship sectors of European industry, only aerospace and defence remain globally competitive.
The rest are struggling with stagnant investment, restructuring, and growing uncertainty, which is accelerating deindustrialisation and threatening the loss of “millions of good industrial jobs”.
- Automotive industry: In addition to the 600,000 workers whose jobs are at risk, about 100,000 jobs have already been lost in this sector since 2025. Automakers are facing the transition to electric vehicles and stiff competition from China.
- High-tech sectors: About 85,000 jobs in electric vehicle battery production and nearly 60,000 in solar panel manufacturing could be lost due to competition and the transition to “green” energy.
Middle East Crisis and “Green Transition”: Root Causes
The rise in energy prices was triggered by the closure of the Strait of Hormuz following the US and Israeli war in Iran. European companies have been bearing additional energy costs for several years after giving up Russian energy imports.
The difficult situation in industry is further explained by the “green transition”, which increases production costs and requires investment in decarbonisation.
The problem is compounded by systemic processes. Previously, the European economy rested on three pillars: cheap Russian energy, free access to the Chinese market, and a reliable US security “umbrella”. Now all three pillars have collapsed. The European Commission warns that to restore the economy, it is necessary to focus on retraining workers and investing in human capital.
Trade Unions and the European Commission
European trade unions are sounding the alarm. They insist that fiscal discipline cannot be more important than investment in industry and jobs, demanding that governments increase spending to support businesses, invest in retraining and upskilling programmes, and impose “strong social conditions” when providing state aid.
Roxana Mînzatu, Executive Vice-President of the European Commission for Skills, stated: “Europe’s competitiveness will be built not only on technology, capital or financial regulation. It will be built on people, on the skills they develop, and on the opportunities we create for them to contribute fully to our economy and society.”
The European Union is at a critical point. A combination of external shocks, internal structural problems, and growing competition from the US and China threatens to accelerate deindustrialisation and rising unemployment. Delay in taking active measures could have serious social and economic consequences for the entire region.