EU leaders urge to shield European industry against the US

The massive stimulus plan designed by the United States to fight inflation and favor green investments and companies established in its territory, endowed with some 370,000 million dollars, continues to generate deep concern among the heads of State and Government of the EU who still They differ on how to shield the industry to prevent the doping of US subsidies from sinking the competitiveness of the European continent. An issue that could end up opening an internal subsidy war and a trade battle with the United States . To avoid this, the leaders of the EU have commissioned this Thursday to theEuropean Commission to present before the end of January proposals to “mobilize all national and European instruments” and “improve the investment framework in the EU”. On the other hand, the Twenty-seven have finally agreed on the ninth package of sanctions against Russia , which includes new export controls and restrictions, a ban on selling drone engines to Russia and any third country that can supply them such as Iran and sanctions on another 200 individuals and entities close to the Kremlin.

The situation is extremely urgent, given the soaring energy prices and the fact that more and more companies are raising the threat of relocations . “There is a risk that the Inflation Reduction Act (IRA) will cause unfair competition and discriminate against European companies,” admitted this week the president of the Commission, Ursula von der Leyen , in a letter addressed to the leaders Europeans to frame the summit debate. Her plan is to strengthen coordination with Washington, including the creation of a “raw materials club” to guarantee supplies and prevent China ‘s monopoly, for the deployment of renewables and for accelerating investments in transition energies. In the short term, through the Repower program and in the medium term through a “European sovereign fund” to decarbonize the industry that could be used to finance projects of common European interest, he explained after the meeting.

Another vital point is the relaxation of the rules on state aid for renewable energy and clean technologies that allow the EU to compete with US subsidies and prevent companies from fleeing Europe and crossing the Atlantic in search of more favorable conditions. “The important thing is not to fall into a situation in which investments are made in the United States and not in Europe,” explained von der Leyen, who hopes to extract specific exceptions from the US Administration, such as those of Canada or Mexico. European leaders expect Brussels to prepare the new action plan by the end of January, which they could validate at an extraordinary summit that will take place on February 9 and 10 to discuss immigration and competitiveness.

“You have to go faster, simplify the rules, have a macroeconomic response that, at the level of European and national aid, allows you to respond in an equivalent way to what the Americans do,” warned the president of France, Emmanuel MacronSpainHe breathes along the same lines and shares the need to step on the accelerator because the American capacity for action is very fast. “We have already been saying that we do not like the IRA. It is evident. It is something that can affect European investments, including Spanish ones. We have a very powerful automobile industry, we have a renewable energy industry, hydrogen. Therefore, there is a point of clear protectionism that Spain does not like. Spain is in favor of negotiating so that there are exceptions for Europe and from there Europe has to react and take measures to improve its industrial competitiveness, be more agile and reflect on State aid”, sources from Moncloa maintain that Spain’s problem is not money but “how to spend it”.

Touch to berlin

For other Member States, the problem is not only to achieve a more flexible public aid framework, but also to ensure that countries with greater fiscal capacity, such as Germany , do not take advantage of it to the detriment of other European partners. “It is important to show our solidarity and guarantee the proper functioning of the single market , which is in everyone’s interest”, recalled the President of the European Council, Charles Michel . “There is a risk of de-industrialization of the EU. It seems that European countries are playing a little game of every man for himself, to see who has the deepest pockets,” said Belgian Alexander de Croo.. “Some countries may think they have deep pockets but in a few months we will all reach the end of reserves,” she added.

According to European sources, the solution involves finding a balance between maintaining strategic investments on the European continent and a level playing field among the Twenty-seven. “Germany is putting money from all sides and not everyone has the same capacity. We must look for formulas such as a more powerful Repower (program),” estimate Spanish government sources who support the idea launched by Von der Leyen to create a sovereign wealth fund . although they want more details. The richest countries, on the other hand, reject the idea of ​​creating new plans and consider that the recovery plan has sufficient resources. “We still have enough undistributed funds that can be mobilized,” German Chancellor Olaf Scholz has said .

More sanctions on Russia

In the margins of the meeting, the ambassadors of the Twenty-seven have also reached an agreement on the ninth package of sanctions against Russia for the war in Ukraine. If no one raises objections by this Friday at noon, the sanctions will be formally adopted. The objective, as Von der Leyen explained this week, is to “make Moscow pay” for “its cruelty”, after the wave of attacks against civilian infrastructure “trying to paralyze” Ukraine at the beginning of winter. The package will be formalized through a written procedure this Friday. Among the main novelties of the new measures are drones, with the aim of “cutting off Russia’s access to all kinds of drones and unmanned aerial vehicles.”

European leaders have also returned to talk about the energy crisis and the cap on the price of gas . The attempt last Tuesday ended in failure and the Heads of State and Government have summoned their energy ministers to close a definitive agreement on Monday, December 19 . “The mandate of the conclusions is that on the 19th we need to come out with results”, the president of the government, Pedro Sanchez , has assessed at the end of the summit. It is what they call on in some conclusions of the European Council in which they also demand that Brussels present a proposal and an impact analysis on the structural reform of the electricity market at the beginning of 2023 , including the effect on gas prices. 

The meeting, marked by the corruption scandal that has plagued the European Parliament, was attended as usual by its president, Roberta Metsola , who has promised the European leaders that there will be no impunity and that she will promote a reform of the internal rules next year. The meeting has also allowed the Twenty-seven to endorse the status of EU candidate country for Bosnia and Herzegovina .

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