Ursula von der Leyen’s “plan” to win the industrial battle

While China and the United States have launched hostilities to win the battle for green technologies, the European Union (EU) is preparing its response. “We Europeans have a plan”affirmed Ursula von der Leyen, in Davos, Tuesday January 17 and it will allow the Old Continent to “position in the lead” in this race for innovation that will reshape the industry of tomorrow.

In her speech, Ursula von der Leyen denounced “aggressive attempts” aimed at attracting European industrialists, particularly those working in clean energies, “to China and elsewhere”. She also mentioned the “worries” caused by the Inflation Reduction Act (IRA) of the United States, this investment plan for the climate of 369 billion dollars (342 billion euros) which provides for large aid for companies established in the United States. “We will not hesitate to open investigations if we believe that our markets (…) are distorted by such subsidies”promised Ursula von der Leyen.

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The community executive has engaged in discussions with Washington, hoping to bring the United States to adjust the IRA, but no one imagines, in Brussels or in the capitals, that they will substantially change the situation. “The reaction from other countries shouldn’t be, ‘Oh my God, you shouldn’t be doing this, it puts us in an unfair position.’ Do it too. Everyone needs to do the same to speed up this process even more”also judged, in Davos, the American special envoy for the climate, John Kerry.

Grant Race

Certainly, but the EU now fears that its manufacturers will give in to the sirens of Washington or Beijing and abandon the Old Continent. It is true that it combines the weaknesses. First of all, its green industry is very dependent on China, India or the United States. “For rare earths, essential for the manufacture of key technologies [énergie éolienne, stockage de l’hydrogène ou batteries]Europe is now 98% dependent” of China, recalled Ursula von der Leyen. “To produce green electricity in 2050, Europeans will have to spend 450 billion euros per year. This money should not be used to buy non-European products and export our jobs”summarizes Thierry Breton, Commissioner for the Internal Market.

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Moreover, the EU is very slow when it comes to authorizing certain State aids on which strategic projects may depend: industrial alliances generally take two years to see the light of day. Finally, the Twenty-Seven do not have the same means and a race for subsidies between them to attract investment would be devastating for the internal market. It has, to tell the truth, already begun: over the next ten years, Germany plans to help its companies to the tune of 100 billion euros to make their climate transition, the Netherlands around 40 billion and France some 50 billion.

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