Skip to main content

EU drawn up plans to hit US inflation reduction act.

 Brus­sels has drawn up plans to hit back at the $369bn US Infla­tion Reduc­tion Act by unwind­ing state aid curbs to allow tax cred­its for green invest­ment.

EU

The EU is plan­ning to hit back at the US’s $369bn Infla­tion Reduc­tion Act by unwind­ing state aid restric­tions to allow a wave of tax cred­its for green invest­ment.
Under a draft plan seen by the Fin­an­cial Times, the European Com­mis­sion will fur­ther relax rules to sup­port state sup­port of new pro­duc­tion facil­it­ies in green sec­tors, includ­ing via the cre­ation of tax bene­fits. But the move strays into con­tro­ver­sial ter­rit­ory within the EU, as it will be far easier for deep-pock­eted coun­tries such as Ger­many to dole out fiscal incent­ives than their fisc­ally stretched coun­ter­parts in the south.
«What we are say­ing here is that if you want to give invest­ment aid, you can give that in the form of a tax credit if that is more accom­mod­at­ing for the busi­ness,» Mar­grethe Vestager, com­mis­sion vice-pres­id­ent, told the FT.
«State aid must become more agile, we have to make decisions more quickly. But we do not need any excess­ive exten­sion of sub­sidies in the EU».
A tem­por­ary frame­work would allow greater aid for mature tech­no­lo­gies and renew­able ener­gies, going bey­ond those already defined by the EU’s renew­able energy laws to include green hydro­gen and bio­fuels, the draft pro­posal said.
Labels:

Comments

  1. Grace31 January 2023 at 12:51

    "State aid must become more agile, we have to make decisions more quickly" - just do this and every economy in the EU will flourish within 2 years. The faster the state responds to this, the better.

    ReplyDelete
    Replies
    1. Allan31 January 2023 at 14:12

      But the EU also needs to allocate resources for the right projects and not just hand out money around to anyone. This money needs to be used for the right purposes not to be spent foolishly.

      Delete

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more

Tax cut

  Sterling tumbled against the dollar to below $1 . 09 ,  hitting its lowest point since 1985 ,  after UK chancellor Kwasi Kwarteng unveiled a £45bn debt-financed tax-cutting package that sparked a historic increase in borrowing costs .  Kwarteng’s political and economic gamble includes the biggest set of tax cuts for 50 years ,  with the end of the 45p additional rate for the highest earners as well as a sharp reduction in levies on dividends .  But concern over the amount of debt required to finance the tax cuts triggered a frenetic day of trading that raised doubts on whether Britain’s new economic approach was sustainable .  «Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time» . Kwarteng has staked the political fortunes of the Conservative party on the bet that the radical tax cuts and deregulation will raise Britain’s sluggish growth rate to 2 . 5 per cent .  «This is a new appr...
Post a Comment
Read more