Europe is moving to protect the industries of the future
Posted January 5, 2023, 5:25 pm
Europeans have just two months left to try to influence America’s position on the terms of the Inflation Reduction Act (IRA), whose impact could punish European industry.
“We will continue to demand better consideration of European interests in the implementation of the American Anti-Inflation Act,” French Finance Minister Bruno Le Maire said on Thursday, reminding economic actors of their wishes.
“We will go to Washington in February to speak with German Economy Minister Robert Habeck in this sense,” he said. In this regard, Europeans would like their industry to be able to take advantage of, for example, the $7,500 tax credit on the purchase of electric vehicles. “We want to go as far as possible,” we say in Bersi.
The fears are not limited to the auto industry. The IRA provides generous subsidies to certain strategic industrial sectors. “This is very good news for aviation,” Guillaume Faury, president of the French Group of Aeronautics and Space Industries (Gifas), said at the presentation ceremony of the organization’s aspirations that day. Large energy subsidies will accelerate decarbonisation and create an “imbalance in favor of the US and against Europe”.
We are at a historic turning point in globalization. Industrial independence and sovereignty are the new leitmotifs of world politics.
The risk is nothing more than witnessing the transfer of activities from Europe to the US. The challenge is “relocating the industry,” Bruno Le Maire struck again. “We are at a historical turning point in globalization. Industrial independence and sovereignty are the new leitmotifs of world politics,” he added. “France and Europe do not have a moment to lose,” the minister said.
? LIVE | the wishes of @BrunoLeMaire to economic actors. ? https://t.co/S7x9ajhGHt
– Ministry of Economy and Finance (@Economie_Gouv) January 5, 2023
It is our independence from China and the United States that is at stake in the most strategic goods, such as medicines, electric batteries, semiconductors, energy and even digital data.
It remains to be seen how cooperative and open the United States will be in this global competition. Recognizing the future risks to their industries, France and Germany are working on another front.
Paris and Berlin in one place
In mid-December, Bruno Le Maire and Robert Habeck sent a “Franco-German contribution” to the European Commission to request a relaxation of state aid to companies as well as “targeted subsidies and tax credits” for strategic sectors. “We must lead European efforts to secure Europe’s industrial base, especially critical green industries,” the two ministers said. “At the European level, we will continue to plead with my colleague Robert Habeck for a European IRA, which simplifies the Important Projects of Common European Interest (IPCEI), speeds up aid procedures, promotes green industrial production, a ‘carbon tax at the borders’,” Bruno said on Thursday. Le Maire promised. It remains to convince all Europeans of the projects defended by Paris and Berlin.
Sweden has just started its six-month presidency of the European Union. He wants to restore international trade agreements with several countries and regions, and therefore may oppose the Franco-German pairing.
Stockholm will have to manage the tension between the Twenty-sevens in terms of response and aggressiveness.
In response to the American projects, Sébastien Maillard, director of the Jacques Delors Institute, told AFP at the end of December, “The Swedish presidency will certainly contradict the Franco-German steps that are being prepared.” “Stockholm will have to manage the tensions between the twenty-sevens over the degree of EU response and aggressiveness at the Franco-German Council of Ministers scheduled for January 22 in Paris,” he said. Send a strong signal on this file. Big maneuvers will intensify and time is running out.