RT.com
24 Nov 2022, 13:43 GMT+10
European industry may lose to American firms that receive state aid, the news outlet reports
The EU is developing a major subsidy push to prevent European companies from being wiped out by US rivals that are receiving government aid, Politico reported on Tuesday, citing sources.
Two senior EU officials told the news website that the dispute concerns the so-called Inflation Reduction Act, a $369 billion industrial subsidy scheme, rolled out by US President Joe Biden to support green industries.
According to the report, EU officials fear that businesses will now face almost irresistible pressure to shift new investments to the US rather, away from Europe.
"Europe is facing a double hammer blow from the US," Politico reported, noting that the European Commission and member states "have realized they need to act quickly if they want to prevent the Continent from turning into an industrial wasteland."
The sources said Brussels is currently working on an emergency scheme to funnel money into key high-tech industries. This would be a 'European Sovereignty Fund,' to help businesses invest in Europe and meet ambitious green standards, they explained.
The EU reportedly had to act "extremely quickly" as companies are already making decisions on where to build their future factories, for everything from batteries and electric cars to wind turbines and microchips.
The unnamed officials gave another reason for Brussels to respond rapidly - to avoid individual EU countries going it alone in splashing out emergency cash.
Meanwhile on Monday, EU industry chief Thierry Breton warned that Biden's new subsidy package poses an "existential challenge" to the European economy, stressing it was now a matter of utmost urgency to "revert the deindustrialization process taking place."
The Inflation Reduction Act could particularly hurt EU's car making nations, such as France and Germany, as it encourages consumers to "Buy American" when it comes to electric vehicles.
"With a diplomatic solution seeming unlikely and Brussels wanting to avoid an all-out trade war, a subsidy race now looks increasingly likely as a contentious Plan B," the report said.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Greek Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Greek Herald.
More InformationBEIJING/WELLINGTON: New Zealand's Prime Minister Christopher Luxon commenced his visit to China on June 17, seeking to strengthen trade...
PARIS, France: The Paris Airshow kicked off on June 16, attracting attention with expected aircraft orders, but overshadowed by the...
NEW DELHI, India: Amid mounting U.S.-China trade tensions, Apple has sharply increased iPhone shipments from India to the United States,...
WASHINGTON, D.C.: The U.S. government estimates that Huawei will only be able to manufacture up to 200,000 advanced AI chips next year—well...
A downturn is not inevitable and would depend on policy decisions, Economic Development Minister Maksim Reshetnikov has said Russia's...
Leeds [UK], June 20 (ANI): On the opening day of the first Test of the five-match series at Headingley for the Anderson-Tendulkar Trophy,...
PARIS, France: The Paris Airshow kicked off on June 16, attracting attention with expected aircraft orders, but overshadowed by the...
New Delhi [India], June 20 (ANI): According to the Commerce Ministry sources, the Commerce Secretary held a meeting with stakeholders...
New Delhi [India], June 20 (ANI): Emphasising the importance of private sector involvement in the defence aviation industry, Defence...
Niger cited what it called irresponsible, illegal, and unfair behavior by Orano as grounds for its action Niger's military government...
Spain has rejected the target as unreasonable ahead of the blocs upcoming summit in The Hague Spanish Prime Minister Pedro Sanchez...
Spain has rejected the target as unreasonable ahead of the bloc's upcoming summit in The Hague ...