How will the European Union act in the face of the Inflation Reduction Act (IRA) deployed by the Biden administration? Remember that this law, perceived by the EU as a new American “protectionism”, provides in particular for a shower of subsidies for companies established in the country in the electric vehicle or renewable energy sector.
For France, the answer must be “strong” and “equivalent” and it seems that the Commission is on the same wavelength.
Good Evening Business guest at BFM Business this Friday, Paolo Gentiloni, the European Commissioner for the Economy explains: “I share the idea that a response is necessary and not only to the American Inflation Reduction Act. The issue, c “is taking care of our competitiveness, this issue is not new and is amplified by energy prices”.
Solar support, electric vehicle.
“Prices are down a lot from where they were last summer, but they are still two to three times higher than in the United States or in other major economic areas. This lag needs to be addressed. In itself, the initiative of the Americans is good , because they make the green transition a priority, but their objective is also to attract avant-garde and cutting-edge companies from all over the world, and especially from Europe, to their territory, and for this reason our response will be to support these industries, a new common European fund and a simplification of the rules”, he explains.
With what tools? Should we “copy and paste” the IRA in Europe?
Unsurprisingly, the solar and electric vehicle sectors need to be coddled. “We have shown in some areas, such as wind power, that Europe can be a world leader. But now we have to do it in several other sectors, bearing in mind that the European scale is very important. For car electricity, for example, there are many subsidies in each of the countries, but none on a sufficient scale. It is absolutely necessary to join forces if we want to be truly competitive.”
“The principle is a fund dedicated to cutting-edge projects, which can only be successful on a European scale,” he repeats.
A range of 300 to 750 billion euros
The question of financing remains. When the US puts $369 billion on the table, how far will the EU be willing to go?
“If we look at this sum coldly, we can say that it is not that impressive. It is equivalent to the subsidies of the European recovery plan NextGenerationEU. And now we have many other devices. Are they enough? My answer is no. We need to make other efforts. They are common interests, common projects, which must be financed at the European level”, underlines Paolo Gentiloni, who confirms the range of 300 to 750 billion euros mentioned by the European Commissioner for the Internal Market, Thierry Breton.
Finally, the Commission intends at the same time to obtain exemptions from the Americans. “There is a working group between the European Union and the United States, which is looking especially at electric vehicles. Europe is asking to benefit from the same advantages as countries that have a trade agreement with the United States, such as Mexico or Canada.” I think between allied partners and good friends, it’s normal for there to be exceptions, particularly for electric cars.”
Source: BFM TV
