© Reuters. FILE PHOTO: European Union flags flutter outdoors the EU Fee headquarters in Brussels, Belgium, September 28, 2022. REUTERS/Yves Herman/File Picture
By Jan Strupczewski
BRUSSELS (Reuters) – Plans by the European Fee to create new European Union funding for the inexperienced trade are dealing with mounting opposition within the 27-nation bloc, as seven EU international locations overtly rejected the thought in a letter to the EU govt.
The letter, seen by Reuters and dated Jan. 26, was signed by the Czech Republic, Denmark, Finland, Austria, Eire, Estonia and Slovakia and addressed to the European Fee vice chairman accountable for commerce, Valdis Dombrovskis.
Germany, the Netherlands and Belgium, whereas not signatories to the letter, additionally oppose any new joint EU borrowing, additional increasing the checklist of nations more likely to vote towards such plans when EU leaders meet to debate them on Feb. 9-10.
All 10 international locations say the EU needs to be utilizing funds already permitted as a substitute of in search of extra money.
The Fee, accountable for honest competitors within the 27-nation EU, believes new funds are wanted to even out the skills of poorer and richer international locations to assist their inexperienced industries towards competitors from China and the US.
EU officers are particularly fearful that the U.S. Inflation Discount Act, which provides $369 billion in subsidies to companies producing electrical automobiles, batteries, wind generators or hydrogen within the U.S., will lure away EU companies.
The combat to maintain Europe engaging for the inexperienced trade is made much more tough by vitality costs, that are a lot greater within the EU than within the U.S., and by the usually lengthy EU allowing processes for inexperienced funding.
European Fee President Ursula von der Leyen stated final week the EU would put together a regulation to make life simpler for its inexperienced trade and again it up with state help and a European Sovereignty Fund, in addition to a extra rapid funding “bridging resolution”, to maintain companies from shifting to the US.
However of their letter, the seven international locations stated the EU ought to first spend the cash it had already agreed to boost by way of the 800 billion euro post-pandemic restoration and resilience fund (RRF) of grants and low cost loans.
“We have now to make sure that the financial system can higher soak up the already agreed EU funding,” the seven international locations wrote. “To date, solely round 100 billion euros of the full of 390 billion euros of the RRF grants have been used.”
“Additional, there’s nonetheless an unused mortgage capability accessible within the RRF. Any extra measures needs to be based mostly on an intensive evaluation by the Fee of the remaining financing hole, and no new funding needs to be launched,” they stated.
Germany, the Netherlands and Belgium share that view, pointing to unused loans from the restoration fund that governments haven’t claimed as a result of they most well-liked grants.
The letter stated that as a substitute of in search of new cash, the EU ought to reduce purple tape for investments and make progress on its Capital Markets Union, a venture that has been dragging on since 2014.
A Capital Markets Union would enhance using personal capital throughout the EU.
($1 = 0.9179 euros)
