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Brussels prepares for green subsidies.

 

The EU must «simplify and adapt» its rules on state aid to counteract the competitive effects of the new $369bn climate package in the US, European Commission president Ursula von der Leyen said yesterday. Europe should «adjust our own rules to make it easier for public investments», von der Leyen said in her first response to Washington’s green energy subsidy scheme, which EU leaders say risks fracturing transatlantic unity by luring European companies to relocate. The measures have soured ties between Washington and Brussels and triggered a chorus of demands from EU states for a competitive response, fuelling fears of a trade war. «The new assertive industrial policy of our competitors requires a structural answer,» von der Leyen said.

The potentially far-reaching proposals from the head of the EU’s executive underscore the scale of concern in Brussels over the US Inflation Reduction Act. Von der Leyen said that in response, the EU must overhaul its public investment regulations and reassess whether «new and additional funding at the EU level» was required. In addition, Brussels should go on demanding the US adjusts the IRA to resolve contentious issues, she said. « critical supply chains,» von der Leyen said.

In recent years the EU has taken steps to ease state aid rules, including in response to the Covid-19 pandemic and the energy crisis. Other key EU figures have also called for a collective response to the US moves. European Council president Charles Michel, who represents the leaders of the EU’s 27 member states, told the Financial Times there should be a renewed debate on joint financing. 

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  1. Clara5 December 2022 at 16:36

    Joint financing should have already been debated. I don't understand why these things are taking so long. They knew about the plans of the US and still nothing.

    ReplyDelete
  2. Anonymous5 December 2022 at 17:52

    Politicians are usually very slow to react even in such situations when it's obvious that many European companies will flee to the US. The EU needs to make sure companies want to stay inside its borders.

    ReplyDelete

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