European Union (EU) leaders agreed on Thursday upon their arrival at their summit in Brussels to call for a common response to the U.S. Inflation Reduction Act (IRA) with a package of $369 billion in subsidies to boost investment in the United States, something that both member states and Brussels consider detrimental to European industry.
In this regard, French President Emmanuel Macron stressed that the letter sent yesterday by the President of the European Commission, Ursula von der Leyen, «goes in the right direction» by proposing a «European sovereign wealth fund» to function as a Community financial instrument to counteract the effect of the U.S. rule.
«We need equal competition and to defend our green technology project,» said the French leader, who called for a response to «strengthen» European industry and keep it «competitive».
Along the same lines, the Belgian Prime Minister, Alexander De Croo, called for a «common response» from Europe to the issue of subsidies, instead of applying aid at the national level, warning that in this environment there is a risk that Europe will be deindustrialized. «It looks like a game of who has the biggest pocket, in the end we have pressure from the United States and we need a response that respects the single market, which is our greatest asset and we have to preserve it,» he stressed.
For his part, the German Chancellor, Olaf Scholz, welcomed «with satisfaction» the fact that the United States is transforming its economy to help stop man-made climate change and modernize, but warned that, at the same time, it must do so «in a way that does not affect Europe’s competitiveness». «No doubt we will talk about it often and repeatedly,» he advanced.
Meanwhile, his Lithuanian counterpart, Gitanas Nauseda, has urged to solve this issue in a united way and maintaining solidarity between the United States and Europe. «It is necessary to study case by case and there is a working group that will give orientations on January», he defended, insisting that in Lithuania inflation is above 20 percent and generates great concern.
For the Prime Minister of the Netherlands, Mark Rutte, the issue should be addressed by using the remainder of other funds and reviewing existing mechanisms to ensure that they are disbursed more quickly. «We are not big fans of using new money,» the Dutch liberal quipped.
«I have the impression that all member states are on the same page,» stressed European Council President Charles Michel, who advocated seeking «rebalancing» with the United States, as well as with China, and called on leaders to give a «signal» this Thursday that the EU stands united to protect the economic environment.
