The Dutch Prime Minister has said he will oppose any further EU fundraising to fund Europe’s response to Joe Biden’s Inflation Reduction Act (IRA), saying the he union already had enough money to support its green transition.
Mark Rutte said he saw no need for the bloc to raise new debt to provide grants or loans to countries seeking to invest public funds in green technologies, urging member states to fully tap into existing funds of the EU instead.
Recent increases in the cost of borrowing by the European Commission have added to the arguments for capitals to do their own fundraising rather than look to Brussels, he added.
“I don’t believe we need new money here – I mean no grants but not even loans,” Rutte said in an interview during a visit to Brussels. “There’s so much money in the system right now. . . I really think there is merit in trying to combine what already exists.
The US $369bn Inflation Cut Act has sparked a rush by EU member states to match proposed subsidies as they try to stop businesses from being lured into the United States. While the United States and the EU are in talks aimed at easing some of the effects of the legislation, European officials expect any adjustment to solve only part of the problems they have with the legislation.
Ursula von der Leyen, chair of the committee, proposed a series of additional measures to mitigate the impact, including a temporary relaxation of state aid rules limiting the ability of member states to subsidize their own green industries.
This has raised concerns that financially strained member states will not be able to offer public support in competition with stronger economies such as Germany.
As a result, the committee is also looking at ways to make it easier for capital that has strained public finances to tap into EU money pots and funnel the funds into their green industries.
This could involve accelerating payments from existing funds or creating new schemes where the commission borrows from the markets and lends money to capitals.
EU leaders expect to discuss the ideas at a special summit in early February, but Rutte has made it clear that he will not support new rounds of borrowing by the commission.
He pointed out, for example, that member states had yet to fully tap into the loans available under the €800 billion NextGenerationEU recovery fund in the age of the pandemic. At least 37% of each country’s spending from this fund must be dedicated to the green transition.
The Netherlands is one of the most fiscally conservative states and tends to be skeptical of calls for new borrowing at the EU level.
It is also positioning itself as one of the EU member states that comes out in favor of free markets and Rutte warned he was ‘not very happy’ with the idea of relaxing rules on trade. state aid.
European leaders are due to discuss the response to the IRA at a summit on February 9-10.
“I can accept some changes as long as they are limited,” Rutte said. “But others have to convince me that these changes will be useful and helpful.” He added: “Make sure you don’t throw the baby out with the bathwater.”
