How should the EU react in competition for promising industries with countries like the US and China? European Commission President Ursula von der Leyen will present proposals on this issue on Wednesday. Since the Washington government has decided to provide huge economic aid, it is feared in the EU that companies could establish new locations in other regions of the world and reallocate jobs there if they are not also subsidized here.
Specifically, the requirements for state aid in the EU are expected to be further relaxed in the future, as can be seen in the draft available to the German news agency dpa. So they should be awarded for more technologies, be higher than before, and awarded for a longer period of time. At the same time, the EU Commission wants to strengthen green energy production in Europe with the initiative. EU Commissioner Margrethe Vestager, who is responsible for competition, also wants to come out with more details on Wednesday.
Fear of disproportionate benefits
German Economy Minister Robert Habeck (Greens) said on Tuesday that decisive improvements must be made, particularly with regard to state aid rules. Other EU countries, on the other hand, are concerned about the rules being relaxed too much. They fear that big countries like Germany could invest significantly more tax money and thus create disproportionate advantages for themselves and their companies.
The finance ministers of Ireland, Austria, the Czech Republic, Denmark, Estonia, Finland and Slovakia have recently warned that European competitiveness is not based on permanent or excessive and untargeted state aid. This can lead to states trying to outdo each other, which is not acceptable for individual member states.
Proposal against the “deterioration of competitiveness
The EU Commission’s draft also emphasizes that China has announced investments in clean technologies of more than 280 billion US dollars (about 258 billion euros). With the so-called Reduction of Inflation Act, the US is mobilizing more than 360 billion dollars for similar projects. “I see this as an incentive for Europe to do more now and become faster and better at promoting green technologies,” said Habeck.
“The EU Commission has finally recognized the urgency to do something about Europe’s deteriorating competitiveness,” said Fredrik Persson of the Business Europe interest group. According to the lobbyist, von der Leyen is showing leadership with his proposal. (apa, dpa)