Florian Marin: We cannot talk about achievements when we talk about just transition in Romania

Vladimir Mitev

Florian Marin is a Romanian economist, expert in management, social policy and labor market. He holds a PhD in economics and is a member of the European Economic and Social Committee, where he is Vice-Chairman of Group II – Employees.

Florian Marin explains why the miners in the Jiu Valley do not see the just transition as an opportunity, as it should be, but as a penalty imposed by Brussels. He describes a worrying situation when it comes to just transition and the future of Romania’s coal regions. Among other things, Marin adds that it is hard to explain to people how Romania has energy resources – natural gas, coal, but pays some of the highest energy prices in the EU.

Mr Marin, first of all, officially just transition has been going on for some time. But how would you describe the degree of achievement and successes of just transition in Romania so far?

The Just Transition Mechanism is an instrument that can be considered as a step forward, but it is not enough to solve problems as complex as Just Transition. Reorienting whole areas economically and socially is a process which, first of all, takes a long time and requires, among other things, societal will and political will.

First of all, from the point of view of the absorption of funds made available to Romania through the Just Transition mechanism, Romania’s performance is mediocre to poor. Why am I telling you this?

There is a capacity problem in ensuring the proper management of these resources. There is also a vision problem with regard to the future of the mining areas or areas which are eligible under the just transition mechanism and, in addition to this, we are seeing structural deficiencies which are more to do with the relationship with the workers.

First of all, there is no coherence or timing linking the exit from certain sectors that harm the environment and the integration of workers into other sectors considered to be more environmentally friendly. Let me be very clear and specific. It is hard to believe that a miner will get a job as a barber or a confectioner after the Just Transition Mechanism has financed some business.

Why am I telling you this? We are saying that the mechanism should create jobs when they are needed because it is useless to fire a miner and provide him with a job after 2 years when the European funds will generate some concrete results in the economic environment. No one in Romania has thought to correlate these things.

Another element that is a big barrier to the success of the just transition concerns the wage gap. Because it is hard to believe that an individual who has worked for 4000-5000 lei per month will get a job for 2000 lei per month. There is no correlation between the level of income that this individual had while working in a sector that was not friendly to an environment and in correlation with future jobs implicitly with the future income that these workers could possibly earn.

These structural deficiencies, not only are they barriers, they are serious management problems at the level of the Just Transition mechanism. At least from the worker’s perspective, I see these elements as important.

If we are talking about just transition as a European policy, and here I am referring to the Green Deal and other policies that are adjacent to the Green Deal, the trade union area also needs to understand better what this transition means, and it needs to be explained better, more coherently. After researching the collective agreements in force in companies in various economic sectors, we found that there are no chapters or clauses in these collective agreements that deal with just transition.

We are not talking about fair or unfair transition, but about transition itself. Because one of the fears that the trade union area has with regard to transition is that transition means a lot of investment. Either there’s the need for investment felt by companies to be able to operate in an environmentally friendly way risks affecting wage costs or a potential increase in revenue.

Because a company will come and say I don’t have the financial resources to increase your wages, because I need to invest in more environmentally friendly technologies, because it’s kicking us all out. And so, from that perspective, it is not very clear to me what protection mechanisms, in the end, the Romanian state is delivering to the labor force, so that the correlation between the wage level and the standard of living is real and fair in the context of just transition. We cannot find an answer to this question at the moment.

Another element that is again important for the trade union area, which is not addressed at all in Romania, at least on the public agenda, concerns the need to reduce poverty in order to support the climate agenda. Because the transition, be it green or digital, cannot succeed in the context of growing poverty.

And I’ll give you a concrete and very childish example, but it’s clear to understand. If I don’t have the money to heat my home, I’m going to cut down a tree in the forest. For the simple reason that the price of electricity is very high and then I won’t be able to afford it. Or the price of food, the price of clothes, because these also have a significant impact on the environment.

So the problem of poverty is an unresolved one in Romania, but also at European level, and this has a significant impact on the discussions on supporting the transition. At European level, we always mention that there is no green deal without a social deal. Europe has delivered a green deal, but it has not delivered a social deal. And if you look at the way this mandate of the European Commission regulates, you will see that the social pact still does not exist. Competitiveness is back on the European agenda. Of course, motivated by the geopolitical dynamics of recent times. However, in the end, all these discussions at European level also directly affect the situation in Romania.

Dimitar Sabev: Bulgaria’s green transition is not transformative. It simply replaces Big Coal with Big Solar

I understand some considerations or problems in the way the just transition is taking place in Romania, perhaps also at European level. But what role do Romanian trade unions play in this just transition? How do they relate not only in rhetoric but also in action?

Because in Bulgaria, for example, the KNSB, I suppose you know, even though there was some resistance from them as well, actually embraced just transition thinking that the money that is being given to certain segments of the just transition fund could be used for the benefit of the workers. And, for example, worker skills mapping is happening, as far as I know, because KNSB has embraced that process and, in fact, is actually managing it.

I understand our question and thank you for it. Now, when we are talking about transition management or transition governance, because that is what you are directing the question towards – the trade unions in Romania have a role in the sense that the mechanism for just transition. Romania has a monitoring committee and the monitoring committee includes trade union representatives.

We have the National Tripartite Council, where elements relating to just transition are also addressed, and the trade unions are also part of that. But trade unions have a natural role in supporting just transition. Why am I telling you this?

If you look at the guiding principles of this mechanism, the leaving no one behind part, the unity part, the investing in environmentally friendly technologies, in skills, in competences, the balance part, but also the poverty reduction part, all of these are trade union concerns. In Romania too, trade unions are concerned in this respect. I give you the example of the National Trade Union Bloc.

The National Trade Union Bloc directly addresses this element, this transition, through training courses, through research, through technical assistance in dealing with green clauses in collective employment contracts, but also through monitoring collective employment contracts. At the same time, trade unions are part of several structures that target several operational programs at the level of cohesion policy or the National Recovery and Resilience Plan, both of them bringing the achievement of just transition, because just transition is not only the mechanism for just transition but practically all European funds target this approach through the thematic focus that the European Commission draws the Member State. From this perspective, trade unions are highly integrated, and here I am referring to the National Trade Union Bloc, the confederation where I work.

Like Bulgaria. But I come back, this is the situation all over Europe, for the simple reason that what Just Transition wants falls within the primary sphere of activity of any trade union organization. Even state aid schemes that specifically target certain companies or certain areas related to ensuring the transition are sometimes carried out with the support of trade union organizations.

In Romania, several state aid schemes have been operationalized aimed at providing the necessary funding to make certain companies more environmentally friendly. So trade unions have an active role to play, on the one hand, in relations with the government, with employers, but also at company level through collective agreements.

Dimitar Sabev: The heterogeneity of political and economic interests in Maritsa East carbon region creates obstacles to the just transition process

At this stage, what stage has the just transition reached? I know that, for example, this small and medium enterprise segment has already been rolled out. I know that Romania is on its way to grant some money for micro-enterprises related to this aspect of just transition, but nevertheless, what is the stage of transition more concretely? What has been achieved so far in terms of realization? Or can we even speak of certain achievements?

We cannot talk about certain achievements. From my point of view, the achievements delivered so far are insignificant in relation to the scale and the needs of society. We cannot speak of a concrete achievement when we put nothing in place.

In other words, the people in question do not have a clear perspective on the future of their jobs, the future of the city or region where they work. From my point of view, the situation is quite worrying, as we do not see some concrete achievements, and people’s confidence in this mechanism and in this transition is decreasing. And it is also decreasing, on the one hand, against the background of the increasingly prominent Eastern propaganda.

We see that the US has, for example, pulled out of the Paris agreement. Of course, in this context, in addition to the geopolitical aspect of this situation, we can see that we are still dependent on gas and we are still dependent on coal to support, in the end, economic production at European level, but also in Romania. So we are not talking about compliant achievements which would strengthen confidence in this mechanism.

Rostislav Rashev: Politicians should listen to engineers and experts when deciding on a just transition

If we take a closer look at the situation in the Valea Jiului, from the point of view of the workers and the trade union aspect, but also economically, what is happening there as a process? Including the just transition, what kind of transformation is happening there?

Frankly, other than some compensation payments that will be delivered to those workers that are deserved after all, from a certain point of view, we don’t see a clear vision. I don’t know what the Ji Valley will look like in 10 years or 15 years. Neither the County Council or County Councils, but neither the Romanian Government, apart from some strategies that sound good on paper, we have not seen a new factory built, we have not seen some new high quality jobs created.

All these things, of course, raise some question marks about the success of these funds in ensuring the economic and social transition of these regions. I think that rather, if I look at the workers in the Ji Valley, they are fighting to keep the mines open so that they keep the current economic situation and not necessarily fighting for transition. And that says a lot socially.

I mean they see their transition not as an opportunity, as it should be, but rather as a penalty that Brussels is delivering to these regions. So, from my point of view, I would answer your question more concretely, but apart from some compensatory payments and some redundancy programs, I have not seen any other notable things worth addressing in the Jiu Valley.

Ognyan Atanasov: Bulgaria lacks political will to drive the just transition, but it has no alternative and is a chance for the affected regions

Energy Minister Sebastian Burduja, immediately after Donald Trump became US president, took an anti- or skeptical line at addressing the green transition. What can we expect from this turn in Romanian state policy? That is, what concrete forms will this distancing, renegotiation or redefinition of the green transition and just transition take?

I have followed his statements on this element. It is exactly what I was telling you earlier. It is politically difficult and he has a responsibility to do this, to explain to a population that has access to energy resources that it is paying the highest price for energy. Also, if you look at the skepticism about the climate transition, it is growing at European level.

Especially in a context where both the Draghi report and other documents, for example the Leta report, talk a lot about the competitiveness area. Since several countries have publicly expressed this dissatisfaction, Romania has chosen a part in which it wants to renegotiate certain elements of the climate transition. In fact, this is the turn which I think the Minister is taking, namely that I do not know whether we can afford at the moment to abandon the climate transition, but rather we want to have a softer approach in terms of climate targets.

And here I am referring in particular to the 2030 targets and the European Commission’s ambition to become a climate neutral economy by 2050. So I think that this is the framework in which the Minister made his statement, certainly also motivated by the fact that Europe is currently losing competitiveness and you need energy to develop. The Draghi report has also mentioned this, and there are some clear specifications in that report regarding the price that a European pays for energy and the price that an American, for example, or other people from other countries, pays.

Within this whole framework, the need to have cheap energy, or to have energy that benefits from more efficient production processes, and here I am referring specifically to gas, at least in the case of Romania, and coal, of course, after all, these are the areas that we know about, there are resources and we would like to use them to make up for the competitiveness deficit in relation to China and the United States, because, yes, the climate transition is affecting energy prices, at least in the short term, and implicitly it is also affecting a certain capacity to deliver economies of scale.

And then, from that context, the Minister’s reaction was rather, I interpret it as a political one. But the climate transition should not be abandoned, because it, as a principle and as a way of development, is right in many respects.

Corina Murafa: So far the just transition is a missed opportunity in Romania

You also have many contacts at European level, in Brussels, and in general in trade union circles and so on in Europe’s social and economic institutions. What kind of change can we expect in the Trump era on green transition and just transition? I mean I suspect what you’re talking about, that a kind of wave of renegotiation-seeking is influencing your policies, but how in the name is it influencing you? What concretely have you changed?

The situation is not a clear-cut one, in the sense that the United States has no direction either, or at the very least has not provided the predictability of a strengthened relationship with Russia at the expense of Europe or with Europe at the expense of Russia, for example. And then I could not answer. However, the fact that the United States is out of the Paris Agreement, the fact that the United States benefits from important energy resources, and here I am referring in particular to liquefied gas, but not only, gives it a privileged position in the global context.

At the same time, it must be borne in mind that the United States has for decades stockpiled oil in order to have energy resources in critical situations. At the moment, at least globally, we can categorize this situation as critical, first of all, because the demand for electricity will increase greatly.

So global competitiveness depends on access to energy resources and the ability to sustain high energy consumption. At the same time, if we look at China’s energy needs to maintain its economic growth trajectory, China needs significant energy resources. So, again, this energy need of China, but also the competition, at least economically, if we look at the tariffs or the tariff barriers that are imposed, we see that the geopolitical situation is one that is not yet clear, but the war, at least at the moment, seems to be an economic one, leaving aside the situation in Ukraine.

And in this context, Minister Burduja mentioned the fact that when you need energy and you have energy at your disposal, especially in Romania, not to use it seems rather like shooting ourselves in the foot. I understood that this was also the expression he mentioned. So I think that, at least in the short term, the discussions on the energy and climate transition are not being abandoned, but they are, somehow, being put in a different place in the hierarchy, much lower down than they were in the past.

And our statement is also based on global progress at the COP. But when we look at the concrete progress delivered by these global conferences on climate transition finance, we will see that progress is still limited. So while the principle is correct, there is not enough political will and not enough global concern to make this transition a reality.

Not to be misunderstood, it is a mistake, at least strategically, for future generations who will really suffer if we fail to act. And trade union organizations, in this perspective, must support the energy transition and the climate transition, because, after all, access to resources is also becoming an important issue, and I am not only talking about energy, we can easily add water.

I can give you even more examples, because resources are dwindling. Hence the battle, if you see, they are having the clearest possible discussions about mineral resources, access to rare metals, discussions about Greenland or other areas that have not been exploited so far. The battle over resources is becoming more and more prominent.

And the climate transition, in this context, is losing ground because it has so far failed to deliver on immediate expectations. But it needs to be understood that transition is essentially not a policy or development framework that delivers immediate results. We cannot expect energy transition to deliver results in 5 years, for example. It is a process that requires, after all, a social synergy, a social contract that is oriented towards this area. We have not worked on these approaches. And the trade union area, although it could have played an important role so far, although it has been involved, cannot resolve this issue on its own. I was telling you that the National Trade Union Bloc has implemented concrete measures visibly of this transition. Unfortunately, it is just one confederation among many.

Petar Vitanov: In Bulgaria, green and just transition issues have been swept below the floor for a long time. Now, they explode

As you mentioned, there is a fight for resources, but Romania, from several rankings, has a better degree of energy sovereignty. In other words, Romania has energy resources. Also, in the current context, Romania also has ambitions in the energy space, to be the largest producer of natural gas in Europe, to build more nuclear power blocks, to build more wind power stations and so on.

And here I would like to ask you, because there is usually a division between capital and labor, when the balances in the economy evolve, to what extent does this high degree or relatively high degree of energy sovereignty, of energy resources benefit, that is, benefit the Romanian population, citizens, workers, energy consumers and so on? And to what extent do they benefit corporations?

Very good question! From my perspective, I think that the population benefits far too little, and the workers benefit far too little from the advantages that Romania enjoys in terms of energy resources. Look at the price we pay.

And corporations benefit significantly more. Because, unfortunately, we have seen a political class which has protected the area of capital rather than the worker. This approach is also justified by Romania’s economic model, which, unfortunately, has been the same for 30 years and needs a fundamental change.

I therefore believe that companies benefit more from Romania’s energy resources. I will give you an example: if we want to compare the way in which Norway, a poor country before it discovered oil, managed their energy resources with the way in which Romania managed their energy resources, we will see that, in Norway, we can say that the benefits of these resources were also directed towards the citizens. Unfortunately, we do not see this in Romania.

We can see that the main companies are foreign and the state, of course, collects some dividends, but it also collects money from excise duties. And if we look at Neptune Deep, we also see that there is a joint venture with other companies. And in this context it is also important to note that there is not a lack of transparency about how these resources are being used.

Let me give you a concrete example. It concerns gas deposits in Romania. In other words, if the minister assured us before the holidays that we had gas deposits to get us through the winter, there is currently an inquiry into how these stored gas resources have been used because they have been falling very quickly.

So clearly we don’t have the transparency and we don’t have a concern as a society to direct these resources in a framework where we convert them into benefits for the citizens primarily.

Atanas Pekanov: There is no political will for a just transition, but the European Commission should be more flexible too

You mentioned that Romania’s economic model has not changed for 30 years and now I can’t avoid asking you what will happen if a sovereignist president is elected, to what extent is there an alternative vision for Romania’s economic development and to what extent can the problems that you mentioned be addressed by a rather sovereignist kind of government or president?

If he knows what he has to do with Romania, Romania is a rather complex country in terms of resources. I would remind you that Romania currently has the greatest biodiversity in the European Union, in the sense that we have mountains, we have the sea, we have plains, we have a fair amount of water. It is one of the richest countries in terms of water resources, energy resources and so on. Why am I telling you this? Because you can afford a development model internally, in the sense that it has a great diversity of resources that can support a reduction in imports. Romania is not in a similar situation to other countries that have only plains or only mountains.

This is not the case here. I think this creates an advantage. However, the resources, not only energy resources, the resources which Romania benefits from, are not necessarily exploited in the interests of Romanian citizens.

I think that, from this perspective, Romania has some advantages. And now, any president, after all, sovereignist or non-sovereignist, must certainly exploit these elements. The economic model in Romania has rather favored foreign capital and has been based on low wages and well-paid labor.

In the context of foreign capital taking those resources out of the country, in one form or another. I don’t know if we can afford such a model any more, given that 5 million people are working in other countries and we no longer have that well-trained and cheap labor force. Globalism essentially has some ideological problems and we see it shrinking easily.

Yes, let’s say you’ve answered that. Because if there is an alternative model, it probably needs to be articulated and discussed in society and perhaps trade unions should have a role in preparing that model. But I also assume from your answer that this has not happened.

Whether we are talking about a sovereignist or a non-sovereignist president, so far there has been no economic development vision delivered that coherently manages all the challenges facing Romania. This is why I believe that it is necessary, and the trade unions want or need to be part of this process of establishing a long-term development vision.

But what I can tell you is that after 1990 the market economy was largely supported by workers or by the factor of production in labor. And now we are reorienting the economic model which can be supported or should be supported by the capital factor of production, or we see that this is not happening. Because the economic model has been based more on an extractive principle. That is to take resources, extract them, take them to other countries.

But even all this sovereignist propaganda is based on the fact that the resources are not exploited in the Romanians’ interest and that the comfort of others is based on the Romanians’ poverty. Precisely because we had an economic model that rather favored this rhetoric. This is surely a mistake both of the unions and of the political fact. But in principle of the political fact.

We are in a region which, from Poland to Bulgaria, the whole area of Central and South-Eastern Europe, has had a relatively similar experience relatively at the same time it joined NATO and the European Union. It was previously part of the Eastern bloc. Now the challenges are still similar with just transition including and green transition and the problems you are talking about with foreign capital and local capital and the dependence of our area on foreign capital.

I would like to ask you what kind of collaboration, exchange of experience, joint action there is in trade union circles in our area when it comes to subjects such as just transition or other subjects of this kind related to transformation, modernization?

There are quite a lot of tools in this respect and they are being used. I am actually one of the experts who are recommended by the European Commission, in that platform of experts who can provide technical assistance to regions that want to access European funds for just transition. There is the European Commission which also provides technical assistance.

At the same time, the trade union movement is organized in a way that not only enables, but also achieves transfer of best practices including on just transition. We have the European confederation, we have the international confederation, under these institutions meetings, debates, technical discussions are held on the transfer of good practices.

We have regions which were dependent on the mining sector and which are now not so dependent on the mining sector. We are looking at regions in Poland, which are reorienting the economic model used in certain regions and ensuring a shift to a service-based economy so that the mining sector is no longer so prominent.

This interview has been prepared with the support of Journalismfund, within the scope of a broader project concerning just transition in Bulgaria, Romania, Poland and Czechia in a comparative perspective.

Photo: Florian Marin (source: Florian Marin)

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