Finally the mountain gave birth to a mouse. After a month of discussions, yesterday the EU Commission launched the European response to the Inflation Reduction Act, a maxi US plan of green subsidies worth 370 billion dollars: a new, much more permissive regime on state aid. No Recovery Fund or a sovereign wealth fund powered by common resources, therefore. The Green Deal for industry, this is the name of the package of measures, will allow member countries with greater budgetary space, such as the Germaniato finance their own companies that are active in the semiconductor, battery and all the technologies necessary for the ecological transition.
MONEY FOR THOSE WHO CAN
All the states which, on the other hand, cannot afford to massively subsidize their companies, starting with Italy, will find themselves dealing with distorted competition within the European market, with the concrete risk of a loss of international competitiveness . The new aid rules will remain in force until the end of 2025, while the current provisions of the Temporary Crisis Framework, adopted in March 2022, will be applicable until 31 December this year. In September 2022, the German government allocated (off-budget funds) 200 billion euros against expensive energy. Furthermore, the deadline of 31 December 2025 only concerns the moment of granting state aid and not the actual disbursement of the loans, which may also be disbursed after the 2025 deadline.
The novelty of the plan is represented by the new “matching aids” tool, which allows member countries to allocate, under certain conditions, the same amount of subsidies offered by a third country for the same economic sector. Thresholds for the granting of public aid are then widened, with the limits decreasing as the region’s level of wealth increases. Finally, with the aim of facilitating investments for the ecological and digital transition, the States will be exempt from the obligation of prior notification (and consequent approval) of support to the EU Commission. In short, not exactly a system capable of guaranteeing “equal conditions in the single market” as claimed by the Commissioner for Competition, Margrethe Vestager. The changes introduced to the state aid regulations, you explained, offer “the member countries the possibility of giving support in a rapid, clear and predictable way”, adding that these rules “are proportionate, targeted and temporary”.
IMPACT
The impression is that Brussels has decided, once again, to meet the wishes of Berlin, where there is strong concern about the repercussions of US subsidies on its economy. The latest case concerns the story of the American giant Intel, which had plans to build a chip factory in Saxony. The 6.8 billion in incentives that the German government has put on the table are not enough: according to Bloomberg, the company would have asked for another 5 to start the work. With the rules approved yesterday by the Commission, the way to finance the operation it would all be downhill.