Controversy over US inflation law
Paris and Berlin are calling for a special clause for the EU
12/19/2022, 5:20 p.m
Washington wants to fight inflation by helping domestic industry. Europe fears being excluded from the billions in subsidies. France and Germany present a plan to prevent this.
Germany and France are insisting that European products be better off in the controversial US anti-inflation law. A corresponding concept by Federal Minister of Economics Robert Habeck and his French colleague Bruno Le Maire was published in the afternoon. In it, they also outline ideas for a European response to the American anti-inflation law.
This US law provides for billions in investments in climate protection. Subsidies and tax credits are linked to companies using US products or producing them themselves in the US. There is a lot of criticism of this in Europe, where there are fears of disadvantages for domestic companies. US President Joe Biden had defended the law but recently said there were minor flaws that could be discussed and resolved. Habeck and Le Maire are now insisting that the exceptions provided for in the law should also apply to the EU, among other things. Tax breaks intended for American products should also be open to European products.
Economic partnership in green technology
In addition, both sides should regularly inform themselves about government support granted for green technologies. For the future, the two ministers can imagine an economic partnership with the USA in the development of common standards and the mutual recognition of standards for green technologies. It is in the common interest to come to an agreement quickly “in a time of trusting cooperation” against the Russian war in Ukraine.
In order to achieve the climate goals, the European economy must move away from fossil raw materials, but a “strong industrial base” with well-paid jobs and a wide range of companies must also be maintained. For example, Habeck and Le Maire demand that the EU rules for state aid for green – i.e. environmentally and climate-friendly – technologies should be made more flexible. The time for the approval process should also be halved. EU funds would have to flow more specifically into these areas. At the national level, Habeck and Le Maire want to examine whether criteria to ensure Europe’s independence from third parties can play a greater role in public tenders and subsidies for green technologies. Approval procedures are to be accelerated and plans for the expansion of hydrogen infrastructure are to be implemented quickly.