Seven EU Nations Warn Trade Commissioner Against Subsidy Race With US - Reports

Seven EU Nations Warn Trade Commissioner Against Subsidy Race With US - Reports

Seven northern and eastern European Union nations wrote to EU Trade Commissioner Valdis Dombrovskis last week to warn him against blundering into a "subsidy race" with the United States, media reported on Tuesday

MOSCOW (Pakistan Point News / Sputnik - 31st January, 2023) Seven northern and eastern European Union nations wrote to EU Trade Commissioner Valdis Dombrovskis last week to warn him against blundering into a "subsidy race" with the United States, media reported on Tuesday.

Finance ministers from Estonia, Finland, Austria, Ireland, Denmark, Slovakia and the Czech Republic said in a letter, obtained by the Spiegel magazine, that far-reaching financial support that is "not justified by clear market failures" was dangerous for the smallest EU economies.

A tug-of-war with the United States over green energy incentives announced by US President Joe Biden last summer would be "unsustainable for some member states and damaging for the EU as a whole," the letter read.

The European Commission is expected to propose the relaxation of EU rules on state subsidies as early as this week in a bid to prevent capital flight to the US after it offered businesses $360 billion in tax credits and rebates as part of the Inflation Reduction Act.

Instead of trying to outspend the US, the EU should deal with overregulation, slow approval processes and excessive bureaucracy that makes the European green industry less attractive for private investment and innovation, the seven ministers suggested.