EU seeks to offset Biden’s green plans by providing its own subsidies

BRUSSELS (AP) — From Paris to Stockholm and Brussels, European Union leaders and member nations were putting forward moves Monday to ensure the 27-nation bloc would not be left behind by the United States In the green industry race.

Talk of large subsidies for domestic businesses and concerns about a race to bottom that allows domestic production or outstripping competition are likely to dominate the EU’s political agenda, right up until a special economic summit on February 9-10.

The tipping point was reached when $369 billion U.S. Inflation Reduction Act Last summer, the EU leaders approved it. This was seen as an attempt by European companies to be cut out of lucrative American markets for clean energy technology. electric vehicles and excessively favors a “made-in-America” approach that discriminates against European multinationals.

EU countries are determined to combat it, becoming more powerful.

“We need to send a strong message that we will act to safeguard our industrial base. It is crucial that the EU remains an attractive place to invest, innovate and produce,” EU Council President Charles Michel said Monday in Stockholm.

It was then that Bruno Le Maire, the French Finance Minister, made his way into Brussels’s EU Headquarters.

“We need a shock,” he said, to simplify the EU’s subsidy approval rules. He said that they make it difficult for companies to navigate the complex state aid regulations in order to get the investment required for cutting-edge breakthroughs.

France wants new industrial projects With a common EU basis, you can get approval in half a year. France wants speed but also bigger subsidies.

“We want state aid that can be much more massive for certain sectors that we clearly identify — hydrogen, electric batteries, solar panels, semiconductors,” Le Maire said. “There is not a moment to lose.”

There is a sense that Berlin and Paris are on the same page in Paris. Robert Habeck and Le Maire, their German counterpart, will travel together to Washington next month. They will be discussing EU requests to have exemptions from IRA which would allow European companies. remain competitive in the U.S.

Due to the COVID-19 pandemic that began in 2020 Russia’s war in Ukraine The EU has temporarily eased subsidy regulations for industries in order to help them survive since February. Germany and France — the two largest European economies — have been the major beneficiaries.

53% of 672 billion euros ($727.5 million) in EU assistance approved to help member states deal with the consequences of war in Ukraine were for Germany while 24% were for France.

Since the approval of the IRA, the EU has sought to soften its most vexing measures, particularly the enticements offered by the EU for the production and use of electric vehicles on U.S. soil.

U.S. Trade Representative Katherine Tai will visit EU headquarters on Tuesday to discuss legal issues with EU Trade Commissioner Valdis Dimbrovskis. Both will travel to Davos in Switzerland to address panels at the Davos Economic Summit. World Economic Forum’s annual gathering Corporate executives and world leaders

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Sylvie Cobert in Paris and Sam Petrequin (Brussel) were Associated Press reporters.