Europe he wants to prevent a race of trade imbalances from being established with his greatest ally. Stop the “Build it in America!” of the green legislation launched by Joe Biden. With its operation, the Inflation Reduction Laweither GONNAfor its acronym in English, the European government fears that the North American administration will achieve that this ‘mega package’ of investment of 370,000 million dollars in the promotion of the “green” industry will end up damaging the continent.
The first joint visit of Europe’s top finance men to Washington I had that goal. He Economy Minister German, robert habeckand his French counterpart, Bruno Le Mairethey brought the commitment of a true transparency in aid from the US State to its green industry.
For the Biden administration this law is designed to rival the regime of Xi Jinping. However, his unwanted effects harm Europe, something raised by the French president Emmanuel Macron in December, when he traveled on an official visit to the United States.
Determined, the community bloc wants to limit the Collateral damage. In fact, the granting of loans for storage, the electric car or the wind turbine is linked to the fact that they are produced totally or partially on North American soil. This would put companies that want to export fully assembled cars or wind turbines to the United States at a disadvantage, not only a barrier for Chinese companies, but also for European ones.
After his meeting with the Treasury Secretary, Janet Yellenand the Commerce secretary, Gina RaimondoBoth US officials, the two European ministers acknowledged tepid progress. “We have agreed to full transparency” on the subsidies and tax credits granted by the US law on the reduction of inflation, specified robert habeck.
The enforcement of the law GONNA has provoked an immediate reaction from Brussels, berlin, Parisin addition to other capitals of the group of Twenty-seven, to launch with the European Comission a package of European aid. Even when some ministers of the bloc, as is the case of Robert Habeck, consider Joe Biden’s stimulus plan good, despite the indirect consequences.
Betting on the development of a green industry in the United States must happen without harming the European allies, especially in times of war. This was made clear by Le Maire and Habeck, after the meetings where they raised the inequities. Janet Yellen and the EU competition commissioner, Margrethe Vestager highlighted through a statement “the need to stimulate the development and deployment of technology on both sides of the Atlantic to accelerate the transition to green energy and achieve our collective climate goals”
Despite bringing some promises back, President Joe Biden’s State of the Union address once again makes Europeans uncomfortable. The boss of the White House he took it upon himself to say that he “will not apologize for trusting American products.” Biden, by contrast, announced the next program America First which promises that the construction of American infrastructure would be done with financing to make them with construction materials of national origin.
Copper, aluminum, fiber optic cable, wood or plasterboard ‘made in USA’. “Under my watch, American highways, bridges and highways are built with American products,” Biden said during his speech to Congress.
The Europeans want, nevertheless, to trust the advances. The promise of “full transparency” will allow the European Commission to operate a control of matching clauses. The initiative seeks to balance public aid, an option that could be granted to a member country if it finds itself vulnerable to US law. In addition to this full transparency agreement, the parties would be in “constant communication at the ministerial level, particularly regarding strategic investments” in the field of green industries.
The common point is to limit the dependence on some sensitive Chinese products. For this reason, the Europeans and Americans laid the foundations to create a common club with new supplying countries -particularly semiconductors- that share the standards of the two blocs.
“If we agree on the same or comparable measures, we will create a common market for critical minerals. If this club works, products made from these critical minerals will be produced under the same conditions. This could lead to a common market. That is the idea”, commented the German, Habeck. As a result, coordinated work would be done to avoid unnecessary competition for minerals linked to the dependency with China.
While these negotiations materialize in measures, the EU commission and the member states are also drawing up a reform of their own subsidy rules, especially aimed at promoting the conversion to an environmentally neutral economy.
The Twenty-seven, if a homogeneous view in Brussels prospers, could find regulations that support companies not only with subsidies as in the United States, but also with tax benefits, tax exemptions, but also raise bureaucratic barriers for approval processes sometimes very strict on the block.
A major obstacle, especially after the aid packages with exceptions after the Covid pandemic and the economic burdens as a result of the invasion of Ukraine, is the volume of financing that would be available to the European Union. The command of the two crises has exhausted the coffers of the European Central Bank, which also has to deal with inflation that is still uncontrolled. To all this, the high indebtedness of some Member States.
Source-www.infobae.com