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Controversial economic aid: This is how von der Leyen wants to react to US subsidies


US President Biden is fighting inflation with aid worth billions. In response, the President of the EU Commission has now presented a package of measures that gives priority to green technologies.

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Ursula von der Leyen: "That's good news"

Photo: Frederick Florin / AFP

With a package of measures, the EU Commission wants to strengthen Europe in competition against China and the USA - among other things as a production location for electric cars.

To this end, the rules for state aid are to be relaxed, unused funds from the Corona aid pool used, eco-projects approved more quickly and trade agreements to secure scarce raw materials pushed ahead.

The measures are also Europe's answer to large subsidy packages in China and the USA.

In Brussels, Commission President Ursula von der Leyen referred to similar projects in Canada, Japan, India and Great Britain.

"We welcome that. That's good news." But Europe must now take a similar step.

The United States, for example, also wants to use its $370 billion Inflation Reduction Act to provide incentives to shift production of certain goods to North America, which has alarmed European leaders and business leaders.

"I see it as an incentive for Europe to do its utmost now and become faster and better at promoting green technologies," said Federal Minister of Economics Robert Habeck.

The review of state aid in Brussels is fine.

'But it mustn't take two or three years.

This has to be done within six months – at the longest.«

The focus is primarily on manufacturers of wind turbines, solar cells, batteries, e-cars and from the hydrogen industry.

The International Energy Agency estimates that the global market for clean energy solutions will triple by 2030 to around $650 billion.

The number of jobs in this area should more than double.

Controversy over the »sovereignty fund«

The problem for the European Union is that not every country can spend as much money on this as Germany or France, for example.

Greater inequality could result, which von der Leyen wants to prevent at all costs.

In the short term, unused loans from the Corona aid fund should therefore be tapped and used differently.

This is a bridge.

It must first be worked with resources that are already available.

In the longer term, the Brussels authorities consider a "sovereignty fund" to be necessary, which Germany has so far categorically rejected.

Positive reactions also came from the SPD: the deputy leader of the parliamentary group in the Bundestag, Achim Post, spoke of a first step in the right direction.

Stronger incentives for future investments are needed, he told the Reuters news agency.

"We therefore support the EU Commission's proposal to reallocate existing EU funds and use them in a targeted manner to promote a competitive and sustainable industry."

"The EU Commission has finally recognized the urgency of doing something about Europe's deteriorating competitiveness," said Fredrik Persson from the Business Europe interest group.

According to the lobbyist, von der Leyen is showing leadership with her proposal.

On the other hand, the head of the left-wing faction in the EU Parliament, Martin Schirdewan, was critical: "It falls far short of the American plan."

The EU Commission is now hoping that the EU summit at the end of next week will have the backing of the 27 EU member states.

Concrete legislative packages are to be presented in the coming months.

The loose state aid should be limited until the end of 2025.


Source: spiegel

All business articles on 2023-02-01

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