Monitoring Desk
PARIS: French Minister for Economy Bruno Le Maire has called for transparency between the US and European countries over the controversial granting of green subsidies and tax breaks.
Bruno Le Maire and German Finance Minister Robert Habeck will travel to the US on Tuesday to meet Treasury Secretary Janet Yellen. They will discuss the landmark US spending bill with Europe on edge.
Meanwhile, the Inflation Reduction Act (IRA) funnels $370 billion into subsidies for America’s energy transition, including tax cuts for batteries and electric cars made by the US.
While the United States wants to reduce its dependence on imports from China, Europe is worried about the competition and the collateral damage if the companies were relocated outside the European Union.
“We must be realistic as the IRA is a game changer,” Le Maire said in an interview with AFP on Friday.
“The IRA offers competitive advantages that, coupled with meager energy prices in the US, pose a risk to our industries.”
US Climate Subsidies
The EU is pushing the US to make exemptions for European companies. However, a special joint task force established to address the concerns of Brussels has yielded fewer results.
Le Maire further said that the most important thing was that they cooperate with allies to have transparency about the volume of subsidies and tax credits that will be granted.
“If you know at what price green hydrogen will be offered in the US and at what price it will cost in Europe, this helps you to guarantee fair competition conditions.”
The minister said that the European Commission had proposed clauses aligning with the American subsidies, “however, for these alignment clauses to work, we still require to know how much the subsidies there will be.”
To set aside the threat to European industry, the EU on Wednesday issued proposals, such as the controversial relaxation of state aid rules, for a level playing field.
But, member states still do not agree on how to approach the issue.
Le Maire further said that the challenge was not to grab the competitive markets but that they needed to manage to move together, in the United States and Europe, with an efficient, competitive green industry that was the most innovative on the planet.
After their visit to Washington, European Union leaders will arrange a summit later in the week to begin crafting a response to the US measures.
