EU economy ministers meet today to discuss EU industrial policy. Brussels rightly fears that European companies will move their production to the US due to Biden’s new subsidy schemes. The EU is working on a similar grant package to preserve European industry. ‘It could very well be that there will be a draft of a Buy European Act in the coming weeks,’ says Europe correspondent Stefan de Vries.
France and Germany are walking hand in hand as Europe looks with some trepidation at the US Inflation Reduction Act due to take effect in January, which subsidizes US companies and will hit European industry hard. Brussels fears that European industries will be attracted by US subsidies and move to the other side of the Atlantic. And China is also actively supporting its business community, so something needs to be done in a European context.
Ache
‘The biggest sore point’, says De Vries, ‘is that Germany and the Netherlands are always the biggest defenders of the free market, while the French are not against state aid. But now Europe, as the world’s largest economic bloc, is sandwiched between the United States and China, which are becoming even more protectionist.”
Today in Brussels there is talk of simpler European rules on state aid and preferential treatment for European parties in key industries. ‘Similar to a Buy American Act; own product first.’
Super aggressive
French President Emmanuel Macron is currently on a state visit to the United States, but according to De Vries he will not be able to change Joe Biden’s mind. “Macron immediately intervened upon arrival, defining the US president’s anti-inflation plan ‘protectionist’ and ‘super-aggressive’ and warning of the risk of fragmentation of the West”.
European stage
There is no doubt that the law will go into effect on January 1st. According to De Vries, Macron’s mission was not so much to change Biden’s mind, but rather to send a message to his European colleagues that new European regulation is really needed to help companies in Europe become more competitive with American rivals and Chinese. “It could very well be that in the coming weeks there will be a draft of a Buy European Act, a major threat to the open global economy.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
