Germany, France Push to Fast-Track Green Subsidies after US Row 

France and Germany are calling for the European Union to allow them to fast-track subsidies for Europe’s green industries. The bid aims to counter financial aid that the U.S. has put in place for American manufacturers. 

It comes after a row over the massive U.S. green support package. The United States has put big financial incentives and aid in place for American manufacturers. 

The European Union has warned of a possible trans-Atlantic trade war over the U.S. Inflation Reduction Act, a $369 billion plan that favors American-made products and the EU claims unfairly discriminates against its firms.

France’s Economy and Finance Minister Bruno Le Maire and Germany’s Economy Minister Robert Habeck said in a joint statement that they wanted “targeted subsidies and tax credits” for industry via umbrella state aid programs that wouldn’t require lengthy checks from the European Commission.

The two ministers are set to travel to Washington, D.C. in early January with officials from the European Commission to discuss the consequences of the U.S. Inflation Reduction Act. 

This marks the latest pressure from France and Germany against EU subsidy rules they say are too restrictive, especially considering how companies are being hit hard by soaring energy costs. 

European industry has complained that U.S. subsidies were the last straw in making European-made goods less competitive with global rivals.

The French and German statement calls for criteria on what aid could be approved in advance and for “general national support” programs. The Commission currently operates by requiring governments to ask permission before granting most aid to companies.

The two economy ministers also urged the EU to negotiate with Washington for European manufacturers to get the same exemptions the U.S. grants to Mexico and Canada, which are free-trade partners.

Many of the ideas coming from France and Germany echo proposals by European Commission President Ursula von der Leyen, who wrote to European leaders last week saying the bloc should adjust its rules on state aid to achieve the “unprecedented transformation” from fossil fuels to green power.

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