The European Union has to find a lot of money if it is to maintain its manufacturing industry. This is what the president Ingrid Thijssen of the VNO-NCW employers’ club argues in Sven op 1. Thijssen fears a transatlantic exodus of companies from the manufacturing industry to the United States. From January 1, that country will hand out grants to accelerate the sustainability of the sector.
On 1 January the Inflation Reduction Act (IRA), much feared in Brussels, will enter into force, a law according to which the US government allocates an amount of 369 billion dollars in subsidies for sustainability.
800 billion dollars
In total, the IRA includes approximately $800 billion and policies to lower prescription drug prices, increase Medicare benefits, encourage the development of renewable energy and mitigate the impacts of climate change. just under half of that budget goes to making the industry more sustainable.
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Distortion of competition
According to Thijssen, this is good for the climate, but will have a knock-on effect on European industries which find themselves increasingly constrained by increasingly stringent environmental measures. Thijssen calls Biden’s IRA “an entire protectionist bill that falls short of World Trade Organization rules by fifty percent.” According to Thijssen this is a distortion of competition on a large scale. “The deindustrialization of Europe is imminent”.
Sustainability
In late November, Thijssen warned ‘to pay close attention to what is happening in the United States’. ‘The Inflation Reduction Act lures industrial companies with substantial financial incentives to make their sustainability investments in the United States. Good for the climate, but we need to make sure this doesn’t come at the expense of greening our industry. It is therefore important to speed it up. There is a particular need to rapidly break down the barriers currently hampering the development of hydrogen.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
