Brussels is preparing a three-pronged response to the US protectionist plan (IRA).

Europe’s answer is coming. During an economic meeting in Madrid this Tuesday, European Internal Market Commissioner Thierry Breton assured that Joe Biden’s climate plan is “working” on “comparable” measures with massive American subsidies to protect industry. The European Union faced the risk of “distorting” competition. ” We must react, we cannot stand still (…) It is not too late. We need to send a strong message to our industry “he said.

The commissioner clarified: try hard to find something comparable At the American level. He emphasized that these proposals “will be presented very soon”. The plan includes, among other things, reforms and subsidies that favor companies established in the United States, particularly in the electric vehicle or renewable energy sectors.

Europeans are against itInflation Reduction Act

At the start of these actions within the European Commission, Europeans have been concerned for months about the effects of the Inflation Reduction Act (IRA), the $420 billion climate plan announced by the US President this summer. Joe Biden. The European Union is calling for more “coordination” and fears its companies will flee across the Atlantic. ” They tell me examples every day Thierry Breton admitted on Tuesday that there are “companies that have given up investing in Europe”.

According to him, one of the main points of tension is the subsidy of up to $7,500 for the purchase of an electric car manufactured in the United States, Canada or Mexico. A subsidy that effectively excludes European manufacturers who may be too disadvantaged to sell their cars in the American market. ” It will create an obstacle “commercial” is unacceptable and vice versa “World Trade Organization rules “, judging Thierry Breton, reminded that discussions were held with Washington on this issue. It is in our mutual interest to quickly find a common language “, while Europe and the United States” Cooperate in Russia’s war against Ukraine During the presentation of the joint document on the IRA on December 19, the Ministers of Economy of France and Germany, Bruno Le Maire and Robert Habek, also made the same assessment. The topic of national subsidies was also discussed during Emmanuel Macron’s state visit in early December, and the French delegation was optimistic about the possible extension of aid to cars produced in Europe.

Finally, on December 30, facing retaliation from European countries, the American Treasury Department announced in a release that it had delayed announcing the final terms of the IRA to give European companies time to organize. The loss of competitiveness they will suffer across the Atlantic. ” The conditions published today confirm once again that European companies can benefit In a statement issued after the announcement of the US postponement, the European Commission ruled on the number of grants under the IRA. A statement that welcomes these conditions, the fruit of a constructive relationship on both sides of the Atlantic.

Europe’s response to the IRA has three parts

In detail, the Commission’s response to the IRA will consist of “three parts”, the European commissioner said on Tuesday. A regulatory component designed to accelerate the development of Europe’s “green technology” (green economy); a financial component so that all Member States have access to the resources needed to support the sector; and the creation of a “sovereign fund” that could invest in European industrial projects. The first two sections will be presented on February 9, and the third section will be presented at the Council of Europe more can be determined during the second semester “, according to Thierry Breton.

European Commission President Ursula von der Leyen estimated in early December that the EU should take “rebalancing” measures to eliminate the “distortions” of competition created by the American plan. However, Europeans are divided on the response to the IRA, with Paris calling for common European funding, for example, and Berlin favoring more dialogue with Washington.

(via AFP)