US subsidy spat overshadows transatlantic talks

Hello and welcome to Europe Express.

It’s been a busy week on the foreign policy front, with the head of the EU’s diplomatic service visiting the United States at a delicate moment in transatlantic relations. We’ll examine how the recent row over green subsidies risks poisoning the well, in addition to Europe’s failure to agree on a price cap for Russian oil shipments – a cap that was pushed by Washington for months and is expected to go into effect next week.

If it is not resolved by tomorrow, US Secretary of State Antony Blinken could meet with his European counterparts on the sidelines of a meeting of NATO foreign ministers in Bucharest.

Later in the week, EU Council chief Charles Michel travels to Beijing for his first one-on-one summit with Chinese President Xi Jinping, whose zero-Covid policies sparked protests this weekend.

And in regulatory news, we’ll see why the European Parliament is siding with farmers in their call to cull wolves and other large predators.

A good time to catch up

The EU foreign service secretary general is in Washington this week for a series of regular meetings aimed at streamlining cooperation between Europe and the United States. There are 369 billion reasons why this trip will be a little less comfortable than normal, writes Henry Foy in Brussels.

Stefano Sannino arrives in the United States amid a simmering row over Washington’s new Inflation Reduction Act (IRA), a $369 billion dumping ground for green tech subsidies which, according to Brussels, will unfairly encourage its companies to relocate to the United States, in violation of World Trade Organization rules.

The disagreement is rapidly turning into the worst row between the EU and the United States since the nadir of the Trump presidency, with European officials crying foul or demanding that the EU be granted special exceptions to soften the blow.

Sannino and his host, Under Secretary of State Wendy Sherman, are not economic and trade officials. Close friends and regular interlocutors, they prefer to talk about foreign policy goals such as closer coordination on the war in Ukraine, an aligned approach to China, and the future of US-US defense cooperation. European.

But senior EU officials admit that even if they stick to their ways, the IRA will lurk like a bad smell.

“Are [the US] take decisions without considering all the consequences for Europe? Yes,” said one.

“There is a risk that [the IRA] will impact decisions we have made in the past and may make in the future,” regarding cooperation with the United States, they added. “There’s a lot of nervousness from that point of view on both sides of the Atlantic.”

The IRA spat comes at a particularly delicate time. The United States has played a monumental role in supporting Ukraine while bolstering military deployments in Eastern Europe to bolster NATO defenses.

As such, he is particularly frustrated with what he sees as the EU dragging its feet on financial aid to Kyiv and the reluctance of some EU members to take a tougher line on China.

At the same time, some EU capitals are increasingly vocal about how Western sanctions have hurt Europe more than the US, noting that energy prices in Europe are much higher than in the United States (which also exports lucrative LNG to Europe to fill the gap left by Russian supplies).

“On the economic plan, [EU-US relations] have always been based on competition,” the senior EU official said. “It’s not like we’re now discovering something that we didn’t know existed before.”

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Kill wolves

The EU is desperately trying to revive its natural flora and fauna as part of its green goals, even proposing a ‘nature restoration law’. But it seems some animals are less welcome than others, writes Andy Bounds in Brussels.

The European Parliament voted Thursday in favor of changing the protection status of wolves, bears and other large carnivores under the Habitats Directive. This could allow farmers to slaughter them to save their sheep. In France, more than 10,000 sheep are killed by wolves each year, while in Romania bears kill a handful of humans each year.

The non-binding resolution was passed by 306 votes to 225. The charge against the wolves was led by the European People’s Party, the main centre-right group.

“Growing populations of top predators threaten the traditional way of farming in several European countries, not just in mountainous regions where pastoralism is an important part of agriculture. They also have a wider effect on rural communities and on tourism,” said Herbert Dorfmann, spokesperson for the EPP group in the Parliament’s agriculture committee, which defended the proposal.

“When populations change, their conservation status must follow.”

The EPP is the party of commission chair Ursula von der Leyen, whose beloved pony was killed by a wolf in September.

Presumably, this will not affect the decision of his officials whether or not to propose the parliamentary resolution as policy.

“We share the call to make full and better use of the instruments available within the current legal and policy framework, with the aim of resolving conflicts between protected wildlife species and pastoralists,” the commission said. The committee will now assess parliament’s recommendations and consider “where further action would be needed”, she said.

What to watch today

1. European Central Bank President Christine Lagarde answers questions in the European Parliament

2. EU foreign ministers meet in Brussels for development council

. . . and later this week

1. NATO foreign ministers meet tomorrow for a two-day meeting in Bucharest

2. EU Council President Charles Michel meets Chinese President Xi Jinping in Beijing on Thursday

Remarkable, Quotable

If you’re over-hashing resources, if you’re not supporting big transformational projects, you’re unlikely to achieve permanent impact

• Recovery skepticism: In an interview with the Financial Times, Natàlia Mas, the top economics official in the Catalan regional government, warns of the risk of Madrid wasting billions of euros in EU recovery funds by focusing too much on small projects.

• Drone test: Norway’s ban on Russians flying drones faces its most significant test as a trial opens tomorrow against Andrey Yakunin, the son of a former close associate of President Vladimir Putin. Yakunine spoke to the FT from a prison in Norway, claiming his innocence.