The EU must “simplify and adapt” its rules on state aid in response to the new US $ 369 billion climate package, which has deteriorated transatlantic ties and raised fears of a trade war between Brussels and Washington, said the President of the European Commission Ursula von der Leyen. Sunday.
Europe should “adjust our own rules to facilitate public investment,” von der Leyen said, in his first round of proposals to respond to a chorus of demands from EU states to counter the US subsidy program.
“The new assertive industrial policy of our competitors requires a structural response,” she said in a speech on Sunday.
US President Joe Biden has hailed the Inflation Reduction Act (IRA) as the “most aggressive action” the US has taken to address the climate crisis.
But European allies have complained about measures such as tax credits and subsidies for products such as electric vehicles, wind turbines and green hydrogen that they say would give US-based companies an advantage. unfair and encourage European industries to relocate.
In response, von der Leyen said the EU needed to revise its public investment regulations, reassess whether “new and additional funding at EU level” was needed, and continue to push the US to adjust. the IRA to resolve contentious issues.
“There is a risk that the IRA will lead to unfair competition, close markets and fragment. . . critical supply chains,” von der Leyen said. In response, the EU should “take steps to level the playing field. . [and] improve our state aid frameworks”.
“We are very careful to avoid distortions in our single market. It is very important. But we also need to be responsive to growing global competition on clean technologies,” von der Leyen added. “If we see investments in strategic sectors fleeing the European Union, that would only undermine the single market. And that is why we are now thinking about how to simplify and adapt our state aid rules.”
Von der Leyen’s remarks come three days after Biden, while hosting French President Emmanuel Macron in Washington, said he was open to addressing EU concerns and that the US had no no intention of hurting their allies.
“There are adjustments we can make that can fundamentally make it easier for European countries to participate or become autonomous, but that still needs to be ironed out,” Biden said.