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Macron urges EU to stand up to US as subsidy row rages

France's President Emmanuel Macron (R) speaks with the media as he arrives for an EU summit in Brussels on December 15, 2022. (Photo by AP)

The European Union is seeking ways to stand up to the United States over Washington’s new green technologies plan, which Brussels says unfairly discriminates against the EU member states.

Arriving at the EU summit in Brussels on Thursday, French President Emmanuel Macron said the EU leaders would discuss a response to President Joe Biden’s Inflation Reduction Act (IRA), which could harm European companies.

The French president said the EU would have to move more quickly to head off the threat to its industry from the planned US subsidies. “We have to react with strength now.”

Macron said a European response was needed “to maintain fair competition,” one which “allows us to match what the Americans are doing.”

Meanwhile, German Chancellor Olaf Scholz said he and his counterparts “will talk about the competitiveness and future viability of our economy” in light of the IRA.

Prime Minister Alexander De Croo of Belgium has said without an EU-wide plan, “we’d just be competing against one another, while the United States would be running away with everything.”

And European Council President Charles Michel says economic relations between the US and the EU were in a "delicate" phase.

The European Commission chief Ursula von der Leyen said in a pre-summit letter to the leaders that the measures were needed because of the IRA provisions that “risk un-levelling the playing field and discriminating against European companies.”

The IRA is a $369-billion investment plan that favors American-made climate technology through subsidies and tax credits.

The European Commission sees the plan as discriminatory against European car manufacturers, a breach of World Trade Organization rules, and a threat to investment in Europe.

EU officials fear that the “buy American” strategy might become a standard under the Biden administration and that disagreements over the IRA could lead to a trade war and weaken the united stance over the war in Ukraine.

The EU summit was also to study an internal dispute – between Austria and Bulgaria – over migrants. Austria is blocking Bulgaria's bid to join the border check-free Schengen zone encompassing most EU members and a couple of neighboring countries. Bulgaria's President Rumen Radev has said, “We request Bulgaria to be treated as a solid country.”


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