ABB chief warns Europe risks mass unemployment without deregulation

Europe must accelerate deregulation efforts and strengthen the single market to remain competitive in the face of rising energy costs and mounting global economic pressures, the chief executive of engineering giant ABB has warned.

Morten Wierod, CEO of ABB, told Financial Times that European policymakers have shown “no sense of urgency” in implementing reforms aimed at boosting competitiveness, despite growing concerns over high energy prices and sluggish economic growth across the bloc.

Speaking in an interview in New York, Wierod argued that Europe risks facing a severe employment crisis if policymakers fail to act decisively.

“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.

He pointed to the reform blueprint prepared by former Italian Prime Minister Mario Draghi for the European Commission, noting that nearly two years after its publication, progress remains limited.

“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,” he said.

ABB, headquartered in Zurich, is among Europe’s largest industrial technology and engineering companies, with a market capitalization approaching $200 billion. The company employs more than 52,000 people across Europe, nearly twice the number of employees it has in the United States, its largest revenue-generating market.

Wierod also expressed concern over a new European Commission initiative aimed at reducing the bloc’s dependence on foreign technology, warning that the proposed measures could increase costs and create unintended market distortions.

“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,” he said.

His comments add to growing calls from European business leaders for regulatory reform and greater efforts to improve the bloc’s competitiveness. Corporate executives across a range of sectors have urged Brussels to cut administrative burdens, arguing that excessive regulation is hindering investment and innovation.

While the European Commission has launched a broad simplification agenda that it says has already generated significant annual savings for businesses and public authorities, implementation of the recommendations outlined in the Draghi report has been slow. According to an independent tracker, only a fraction of the report’s proposals have been enacted.

Wierod acknowledged that Europe retains important competitive advantages, including a highly skilled workforce, strong educational institutions and a proven ability to respond effectively during crises.

“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,” he said.

However, he warned that Europe faces renewed economic pressure from rising energy costs linked to disruptions in global supply chains and tensions in the Middle East. Higher natural gas prices, he argued, are likely to weigh more heavily on European industry than on competitors in the United States, where domestic energy production provides a significant advantage.

“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.”

His warning comes as European officials assess the economic consequences of elevated energy costs. Earlier this week, European Commissioner for Jobs Roxana Mînzatu said that as many as 1.3 million jobs across the European Union could be at risk as a result of persistently high energy prices.

ABB has been advocating for faster electrification, greater industrial efficiency and accelerated decarbonization efforts across Europe, arguing that these measures represent the most effective path toward strengthening the bloc’s long-term competitiveness and economic resilience.

By Vafa Guliyeva