7 EU member states against the ‘new fund for green industry’
The trade ministers of the Czech Republic, Denmark, Finland, Austria, Ireland, Estonia and Slovakia sent a jointly signed letter to Valdis Dombrovskis, Vice President of the European Union (EU) Commission.
The letter noted that permanent or non-targeted subsidies should not be provided across the EU in response to US green subsidies under the disinflation law.
Emphasizing the importance of not confronting the US on supporting green industry, the letter claimed that the EU could resolve the problems related to the disinflation law by negotiating with the US.
MAY PROVIDE A COMPETITIVE RACE ON SUBSIDY
In the letter, it was indicated that the measure to be prepared by the EU Commission against this situation should be based on a comprehensive analysis aimed at determining the funding gap, and that funding should not be provided by establishing a new fund.
It was noted that over-reliance on subsidies jeopardizes competition and financial sustainability on a level playing field in the EU internal market, noting that this could lead to a competitive race for subsidies.
In the letter, it is stated that only €100 billion of a €390 billion fund has been used within the scope of the EU’s COVID-19 recovery programme, and that existing EU funds can earmarked to support the green industry.
TRANSFER AVAILABLE FUNDS TO THE GREEN INDUSTRY
Although it did not sign the letter in question, Germany, the Netherlands and Belgium are also against the EU establishing a new fund through joint loans.
10 countries think that existing EU funds should be transferred to the green industry area and a new funding mechanism should not be established. The leaders of the 27 EU member states will hold a summit in Brussels on February 9 and 10, where this issue will also be discussed.
LAW TO REDUCE INFLATION
The law, which includes comprehensive health, weather and tax regulations aimed at reducing inflation in the US and supporting various investments, is a topic of debate in Europe.
The law includes plans to invest approximately $400 billion in clean energy and strategic sectors in the United States. The law, which also provides incentives for the purchase of electric cars with tax rebates, includes regulations such as tax rebates of up to $7,500 for electric vehicles that use batteries produced in North America and that contain minerals from mines in this region.
The EU is concerned that the new regulation, which makes tax cuts contingent on US-produced content, will disadvantage European car companies and manufacturers in the green economy, including batteries and equipment of renewable energy.
Canada and Mexico are exempt from the law in the United States. The EU also requires the exemption of the US for its own companies under this law. On this issue, the EU and US parties continue negotiations. (AA)