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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.
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  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.

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    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

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