Germany's Scholz-Commission Plans To Counter US IRA 'On Right Track'

German Chancellor Olaf Scholz has stated that the European Commission's Green Deal Industrial Plan (GDIP) outlined earlier today by Commission President Ursula von der Leyen and intended to counter the US Inflation Reduction Act is 'on the right track.'

• The response of Germany to the GDIP will likely prove crucial to the plan's eventual passage, amendment, or defeat.
• Germany is seen as keen on relaxing rules around state aid in order to allow the gov't to provide subsidies for green tech firms and other manufacturers coming under the auspices of the GDIP. For Berlin, this is seen as crucial in competing with US firms that will be receiving significant subsidies from the US gov't.
• There remain concerns in the EU's south that richer northern nations could use the looser rules to bolster their domestic industries not to compete with US firms, but instead to un-even the level playing field between EU member states.
• The German gov't has, however, been more circumspect on another area of the GDIP, the European Sovereignty Fund, which would see the EU issue its own debt to pay for projects. Germany instead has advocated for using existing funds to finance the projects.