EU Should Improve Own Competitiveness Against US Inflation Reduction Act - Von Der Leyen

MOSCOW (Pakistan Point News / Sputnik - 04th December, 2022) The European Union should take domestic action to rebalance the playing field and mitigate the distortions caused by the controversial US Inflation Reduction Act (IRA), European Commission President Ursula von der Leyen said on Sunday.

The EU boss gave a keynote speech at the College of Europe in Brugge, Belgium, mainly devoted to the union's competitiveness on the global market.

The top official acknowledged that the IRA is "raising concerns" in Europe and could lead to unfair competition and fragmented supply chains. However, Europe is in a good position to compete on global markets and may improve its standing even further.

"The first (way) is to adjust our own rules to facilitate public investment into the (green) transition. The second - we have to reassess the need for further European funding of this transition. And thirdly, we have to work with the United States to adjust some of the most concerning aspects of their law," von der Leyen said.

The IRA will unlock $369 billion in tax credits and subsidies for US consumers and companies making green tech products in the country starting in January. Several EU companies have already said they would invest in the US rather than the EU, with rising energy prices at home a crucial factor to consider, the Financial Times reported.

Concerns are rising in Europe that the US tax credit plan could kick off a subsidy race between the transatlantic allies at a time when they need to show unity in the face of the Ukrainian conflict.