French President Emmanuel Macron said the European Union should quickly deploy new tools to overcome a stand-off with the US over industrial subsidies, adding that the issuance of more joint debt is “not a taboo.”
(Bloomberg) — French President Emmanuel Macron said the European Union should quickly deploy new tools to overcome a stand-off with the US over industrial subsidies, adding that the issuance of more joint debt is “not a taboo.”
Macron and Spanish Prime Minister Pedro Sanchez agreed Thursday to support a joint EU instrument to respond to US President Joe Biden’s $370 billion green-investment plan, known as the Inflation Reduction Act.
“We will need to rally as many people as possible to obtain simple and fast tools — as much as US tax credit mechanisms — to bring the same level of budget response and not fragment the EU as a result,” Macron told reporters in Barcelona.
The US legislation is aimed at subsidizing the energies of the future, from hydrogen to batteries, wind and solar, building manufacturing self-reliance and ensuring the country isn’t dependent on China or other nations. European leaders say the new law gives an unfair advantage to American companies and doesn’t comply with World Trade Organization rules.
The bloc’s leaders will meet next month to chart a response to the US subsidies, with member states weighing more support on the national level as well as EU-wide options such as common funds. German Chancellor Olaf Scholz and his Social Democrats are open to exploring joint financing instruments to help EU countries, Bloomberg reported earlier this month.
Defense Cooperation
“Through their cooperation, the countries will promote an ambitious European industrial policy, aimed to reinforce the strategic autonomy and resilience of the European Union,” according to a treaty they signed.
The two leaders also agreed to deepen cooperation in defense by acquiring equipment “of common interest” to develop a joint European industry, according to the pact. France has signed similar treaties with Italy and Germany.
The Barcelona meeting comes just ahead of a bilateral event between Macron and Scholz on Jan. 22 and of the EU summit on Feb. 9-10, when member states will discuss the bloc’s response to the US aid.
France and Spain are also already aligning their position on the EU’s reform of electricity market pricing. Both countries have outlined similar proposals aimed at delinking the price of natural gas from electricity and by increasing the weight of longer-term contracts to reduce volatility, a change that would allow to lower the cost faced by consumers.
–With assistance from Alonso Soto.
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