EU summit: row over subsidy plans?
Anticipating the dangers that the US’s Inflation Reduction Act could pose to Europe’s economy, the EU Commission reacted last week by presenting the Green Deal Industrial Plan. Commentators discuss the threats but also examine why the plan has not met with approval in all member states and is likely to be the subject of fierce debate at the EU summit on Thursday and Friday.
Threat of an economic downturn
US protectionism poses a threat to the EU’s economic policy, warns Der Standard:
“The danger of a widespread exodus of companies from Europe may not be quite as great as German industry, in particular, claims. But behind it lies a deeper change of direction in US policy, one which is undermining the principle of open world markets — one of the pillars on which European prosperity rests. With globalisation in retreat, the world also faces an economic downturn. ... Instead of loosening the reins on state aid, the new subsidies should come from a common EU pot. Otherwise an expensive race will begin, also within the bloc, which will put the poorer states at a serious disadvantage.”
Spectre of a two-speed EU returns
Revista 22 also sees the danger of a rift running through the EU:
“If a compromise is not reached now, there is the danger of a two-speed EU emerging. The lack of a common monetary fund for all EU states means that investments will be made by the large states that have room for budgetary manoeuvres, primarily Germany and France. For this reason Finland, the Czech Republic, Denmark, Estonia, Ireland, Austria and Slovakia have written to the EU Commission and warned of the danger of creating harmful competition between EU member states.”
The West must not be divided over green energy
The West must not let itself be fragmented, NRC Handelsblad warns:
“This is an alarming development. But equally alarming is the growing influence of subsidies, cheap credit and other forms of industrial policy that are now emerging, especially in the process of making the economy greener. ... There is no simple solution, but there is a first response: consultation, especially between the US and the EU. The West is increasingly becoming a bastion of personal, political and economic freedom. It would be intolerable if the threat of geopolitical and economic fragmentation were to damage this precious unity. And completely unnecessary.”