Great reconciliation and petit fours, this 1er December, at the White House, where a sumptuous gala dinner was held in honor of Emmanuel Macron to celebrate Franco-American friendship. The French president leaves Washington with the hope of having advanced the great economic file of the moment: the consequences for Europe of the American law on the reduction of inflation (Inflation Reduction Act).
This vast economic and social plan, totaling 738 billion dollars (700 billion euros) provides for 391 billion in public spending in the sole field of energy and the fight against global warming, an amount that looks like rooseveltians. In particular, it provides for massive subsidies for renewable energies ($128 billion), nuclear power ($30 billion) and the purchase of electric vehicles ($13 billion), as well as aid for energy efficiency in housing and decarbonization. Of the industry.
Beyond that, its ambition is also industrial. Hence the concern of Europeans. Bonuses for the purchase of an electric car, for example, will only be granted for vehicles and batteries produced in the United States. Ditto for aid for renewables. Something to make European industrialists think.
Hidden Dilemma
“This plan changes the dynamic for suppliers. The electric car value chain is now looking at North America rather than Europe”, says, on Bloomberg, Jesper Wigardt, the spokesperson for the Swedish battery manufacturer Northvolt. He indicated that as a result his group would invest in an American factory as a priority, and delay the one planned in Germany in cooperation with Volkswagen. Pure lobbying? In any case, the Europeans feel the wind of the cannonball. Especially since energy prices in Europe are making the continent less and less competitive.
In Washington, Presidents Biden and Macron promised each other to “synchronize their approaches”. Europeans could be granted derogations to sell their products. But that does not change their fundamental problem: they too dream of taking advantage of the climate transition to reindustrialise Europe. This is somewhat the ambition of the Green Deal launched by Brussels. But this does not introduce any industrial preference in aid. For that, it would be necessary to break the free trade dogma, which they are the last among the developed countries to still support. The Germans, in particular, do not want to touch it, because they fear for their exports.
You have 19.69% of this article left to read. The following is for subscribers only.