There “grant race” is “contrary to all rules of international trade“and American subsidies call for a response”coordinated, united and strongof Europeans, said French Economy Minister Bruno Le Maire in an interview.
“Some large foreign companies that wanted to set up in Europe are now hesitating between European sites and American sites“, declared Bruno Le Maire in an interview with the four European newspapers The echoes, Handelsblatt, El Mundo and Corriere della Seraposted Sunday evening.
“In some cases, the amount of grants the Biden administration is offering is four to ten times the maximum amount allowed by the European Commission.“, he said. “In France, our first estimates indicate that 10 billion in investments and thousands of industrial jobs are at stake.“, he added. “Our industry is already suffering from a competitiveness deficit linked to the differences in energy prices between the United States and Europe“, he lamented. “Massive subsidies under the US Inflation Reduction Act (IRA) and equally heavily subsidized Chinese competition are likely to widen this gap further“.
The American Inflation Reduction Act, so named for current events but which is in reality an environmental and social reform program, is a multi-hundred billion dollar investment plan. Bruno Le Maire called for a “coordinated, united and strong response from the European Union vis-à-vis our American allies. Only firmness will allow us to obtain results“. He says waitfrom the European Commission firm and proportionate proposals“, notably “a stricter affirmation of our environmental interests», «European preference schemes or the acceleration of the use of reciprocity instruments“.
He also pointed out that arestrictive monetary policy is not compatible with an expansionary fiscal policy“, which should not be “support without limit the request“, but “move towards more targeted aid“. Finally, he believes that,coming out of this energy crisis, we will have a level of inflation probably higher than what we have known for the last decades», «because the relocation of our production (…) and the decarbonization of the economy will structurally increase the cost of certain products“.