Monitoring Desk
BRUSSELS: The European Union (EU) on Wednesday unveiled plans to counter the growing threat to European industry from the United States (US) green subsidies and unfair competition from China, with steps including a controversial expansion of state assistance.
The bloc is racing to compete with US and China to avoid businesses relocating to North America or Asia, where energy costs are cheaper, but there has been a division among European Union member states on how to respond.
President of the European Commission (EC), Ursula von der Leyen, outlined the EU’s proposals but said there would be no immediate new funding from the EU.
“At the moment, we must work with what we currently have. And focus it on the clean technology industry,” she said.
The majority of the bloc’s response involves repackaging the existing funds, a stop-gap measure that has widely been criticized.
EU plans draw criticism
German MEP Markus Ferber called the proposals “old wine in new bottles” and “disappointing.”
The European Commission President left the door open to a new EU sovereignty fund to be created in the future.
But that idea has already been strongly criticized by some member states, including Finland and Denmark, which oppose throwing money at the problem to resolve it.
“If you have state assistance, the other side has to be funding at the European Union level,” von der Leyen said.
The new measures give flexibility in providing aid to companies in the renewable and green energy sector and those involved in the decarbonization of industry.
Tax benefits will also be available for investments in production facilities in fixed, strategic net-zero sectors.
The steps are a response to a landmark spending bill of the US last year that funnels 370 billion dollars into subsidies for America’s energy transition — including tax reduction for US-made batteries and electric cars, which left European manufacturers dismayed.
