The US government wants to advance climate protection. This should also strengthen the domestic economy – and could disadvantage European companies. Economics Minister Habeck and his French counterpart are in Washington.
According to Federal Economics Minister Robert Habeck (Greens) and his French counterpart Bruno Le Maire, the USA wants to provide the EU countries with comprehensive information on the extent of state support for the economy under the new investment program.
“It is not our intention and it was never our intention to change American law,” said Le Maire in Washington after meeting US colleagues with Habeck. But you want to create complete transparency, because that is the basis for fair competition. Concrete concessions, in turn, would have to be negotiated by the EU Commission. The two ministers only saw each other in a supporting capacity.
The so-called Inflation Reduction Act (IRA) provides for investments in climate protection worth billions, but ties many subsidies and tax credits to companies using US products or producing them themselves in the USA – which triggers concerns in Europe about competitive disadvantages.
No subsidy race
Habeck said the talks with US politicians were characterized by mutual trust. It was agreed that one should not run the risk of getting into a subsidy race. “My understanding and my interpretation of the talks is that there is a great willingness to find forms of cooperation without reopening the IRA,” Habeck said. Working together means bringing the two markets together.
He announced that a joint working group under the umbrella of the European-American Trade and Technology Council should try to reduce joint dependence on important raw materials from other regions of the world. The council with top representatives from the USA and the EU is looking for solutions in dealing with the IRA.
In the USA, the application rules for the IRA are now being drawn up, Habeck had previously emphasized. “So we still have a few months to come to a solution.” In the areas of the automotive industry and batteries, this work is practically complete, but not yet in the case of regulations for hydrogen as an energy source and for important raw materials, Habeck said at the start of his trip.
Habeck: Economic strength for mutual benefit
Both sides could benefit from market access, said Habeck: “The European Union, Germany, is interested in America making decisive and clear progress when it comes to building a green industry.” According to Habeck, the American side should be interested “and I think is interested in Europe also being economically strong so that we can support and help each other”.
In times when states used economic policy as an instrument of power, the USA understandably wanted to protect themselves – but could benefit from a large common market with friendly Europe. “The market would get bigger, we would support each other in our security efforts,” said Habeck.
EU Commission President Ursula von der Leyen recently presented a new green industry program that is intended as a response to the IRA, but also to Chinese subsidy policy. In it, she reported a need for investments of hundreds of billions of euros in climate-friendly technologies. To this end, the authority wants to expand and accelerate access to funding and give the EU states more freedom for targeted subsidies.
Le Maire called the proposals an “excellent basis”. He emphasized: “Now it is time to decide and to accelerate. This is also one of the conclusions that we should draw from our visit to Washington.” The proposals are to be discussed at the EU summit this week.
Source: Stern
