MEPs on the Committee on International Trade (INTA) expressed their concerns about the US Inflation Reduction Act (IRA) to European Commissioners Margrethe Vestager and Valdis Dombrovskis on Thursday 8 December. The Commissioners reported to the MEPs on the third meeting of the EU-US Trade and Technology Council (TTC) which took place on 5 December.
The EU expects to hear from the IRA task force (see EUROPE 13051/26), potentially next week, but certainly by the end of the month, before the IRA enters into force, said Valdis Dombrovskis.
In the meantime, “we need to do our homework here”, warned Margrethe Vestager. “We are aiming for targeted adaptations of our State aid rules to further simplify public investment in the transition. This should serve as a bridge to a real European solution in the long term”, she said.
However, we should not fall into a race for public subsidies, she warned repeatedly, as did her colleague Valdis Dombrovskis. This would be “inefficient and expensive”, they both said.
Danuta Hübner (EPP, Polish) said she feared this very subsidy race after the speech of European Commission President Ursula von der Leyen on 4 December (see EUROPE 13077/10). “I think we will not be able to compete with the US. Our State aid rules don’t allow it and we have budget constraints”, she insisted.
MEPs are also curious about the possible US response in order not to harm European producers affected by the IRA. Mr Dombrovskis tried to reassure the elected MEPs: the US “acknowledge than within the margins of implementation, there was willingness to address our concerns but they explained to us that this was unlikely to lead to changes in the law”. He recalled that the Secretary of State, Antony Blinken, had given hope that a solution could be found at their meeting.
Also interviewed by EUROPE on 8 December, US Deputy Secretary of State Wendy Sherman expressed confidence in the outcome of the talks. “Both the US and Europe are strong economic partners, and I have no doubt that we can talk and find ways to work together to harmonise our economic and trade approaches”, she said.
By the end of the year, the EU will have to review the situation and see to what extent Washington has met its expectations, Mr Dombrovskis said. He concluded: “We’ll need to take stock to see what our options are. We’re not taking any option off the table”. (Original version in French by Léa Marchal and Camille-Cerise Gessant)