Von der Leyen promises a “calibrated” response from the European Union to the US anti-inflation law.

The President of the European Commission, Ursula von der Leyenpromised this Sunday an “appropriate and well calibrated” response from the EU to mitigate the “distortions” of the United States Inflation Reduction Act, which worries the bloc about the subsidy policy it deploys.

In particular, Von der Leyen stressed that the European response will be based on three pillars: the easing of public aid rules, the search for new sources of Community financing for a common industrial policy and cooperation with the US authorities on key issues to the green transition, as in the field of critical raw materials.

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In a speech delivered at the College of Europe in Bruges (Belgium), the German has been in favor of the “cooperation instead of confrontation” with Washington, while guaranteeing that Brussels will continue to talk with the administration of Joe Biden to get him to modify the issues that most worry about said law on this side of the Atlantic.

”Europe will always do what is right for Europe. The EU will respond in an appropriate and well calibrated way to the Inflation Reduction Act. But does that mean we will enter into a costly trade war with the United States in the middle of the war? It doesn’t interest us and neither do the Americans.” emphasized.

In his opinion, there is a “amazing symmetry” between this US law and the European Green Pact, because both are “simultaneously” climate strategies that assume that “the two largest and most advanced economies in the world are now moving in the same direction.”

However, he warned that “There are risks that it could result in unfair competition, it could close markets and fragment the same supply chains that have already been tested by the covid.”

The EU sees, in particular, three aspects that are “particularly worrisome”: the ‘Buy American’ logic underlying part of US law, tax benefits that “could lead to discrimination” and production subsidies.

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“Competition is good” snapped the head of the Community Executive, who, however, later pointed out in her speech that the competition between the EU and the United States should be “a race to the top of the industries on both sides of the Atlantic” and not “down”.

Thus, the first pillar of European action will be to continue cooperating with Washington because “The US and the EU have a huge common interest in preserving their industrial leadership”. This will require “significant” public and private investment and also collaboration to establish common regulatory “standards”, for example for electric vehicle chargers.

Also to search for aalternative” to the “monopoly” from China in terms of critical raw materials that are essential for the production of such electric cars. “Europe and the US can build an alternative to this monopoly by creating a club for critical raw materials,” offered von der Leyen.

But also, the president of the European Commission put “homework” to the EU for “try to compensate for competitive disadvantages” that the bloc would suffer with the implementation of the United States Inflation Reduction Act.

”It should make us reflect on how we can improve our State aid frameworks to adapt them to the new global environment. We have to study how we can make our frameworks more predictable and simpler.” said.

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In second place, Von der Leyen He emphasized the need to advance in a true European industrial policy nourished with common financing both in the short and medium term. In the first case, the German recalled that Brussels is analyzing how to increase the firepower of its Repower EU plan.

And for the medium term, the head of the community Executive recalled her idea of ​​creating a Fund for European Sovereignty with resources to promote research, innovation and strategic projects at the community level, which means at the same time “additional EU funding” Y “higher level of coordination at the community level”.

Source: Elcomercio

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I am Jack Morton and I work in 24 News Recorder. I mostly cover world news and I have also authored 24 news recorder. I find this work highly interesting and it allows me to keep up with current events happening around the world.