EU Response to IRA: Reforms are better than a subsidy spree – Economy

The EU Commission wants to allow member states to attract factories with subsidies. This is in response to a US program, but it is extremely risky. The money can be invested more wisely.

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Bjorn FinkeBrussels

It’s about billions of euros in taxpayer money, it’s about fairness and the future of Europe’s industry. The EU Commission wants to make it easier for member states to pay subsidies to corporations that invest in green technologies. For example in a battery factory for electric cars or a plant for the production of hydrogen. With this move, Brussels is reacting to the massive aid package that the US President is offering Joe Biden promotes the green transformation of America’s economy: the Inflation Reduction Act (IRA). During her speech in Davos on Tuesday, Commission President Ursula von der Leyen dubbed Europe’s response to this US law the “Green Deal Industrial Plan”. That sounds nice, at least better than IRA, but it doesn’t change the fact that further relaxation of the subsidy rules is extremely dangerous.

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