What Gentiloni is actually advocating is a European version of the American one Inflation Reduction Act (IRA), says FD reporter Ria Cats. ‘This is her vision and also that of Ursula von der Leyen. She says this extra support for European entrepreneurs is badly needed.’
According to the European Commissioner, the consequences of the war in Ukraine and the resulting energy crisis for European companies are particularly serious ‘because we are so close to Ukraine’. The US support package makes it even more difficult, which means a European sovereign wealth fund is needed, Cats says.
The question, however, is whether the EU countries agree with Gentiloni and Von der Leyen. The grant package will be discussed at a further EU summit in February. “The Netherlands and Germany don’t think it’s a good plan, they believe there are already enough grant funds that should be used first.”
An example of this is the €800 billion Corona Recovery Fund, set up more than two years ago. ‘That money hasn’t run out yet, and half of that money is going towards the greening and digitization of the industry. Those 400 billion are comparable to the 370 billion dollars America is allocating.’
However, Gentiloni is convinced that an additional subsidy is needed, in part because of Europe’s position close to Ukraine. He also fears that the companies will leave for the United States or other parts of the world. “He’s right,” Cats says. Europe is already lagging behind in a number of areas and sectors. Extra funds are needed to maintain the international competitive position and not fall behind. Otherwise we will lose companies and jobs.