MNI BRIEF: EU Dombrovskis: Talks With US Not IRA Panacea
Ongoing EU-US negotiations are unlikely to solve all of the “problematic aspects” of the US Inflation Reduction Act, but delays in Washington finalizing the implementing guidelines provided more time to discuss the legislation, Commission Executive Vice President Valdis Dombrovskis said Tuesday, ahead of talks with USTR Katherine Tai.
EU finance ministers and senior Commission officials will have initial informal talks Tuesday on proposals from Commission Competition Tsar Margrethe Vestager to ease and streamline state aid rules without undermining them, as Brussels looks for a way to mitigate any fallout. While there has been significant backing for a streamlining of aid for key industry sectors impacted by the US IRA, such as clean energy and associated innovative technologies, there is less agreement on how to do this without hitting states with less fiscal space.
Economy Commissioner Paolo Gentiloni said the EU response would need a “European Scale” and others -- like Commission President Ursula von der Leyen and EUCO President Charles Michel -- have backed a European Sovereignty Fund which would use common Brussels funds to invest and promote key sectors. But a fund substantial enough to address single market concerns remains controversial, and likely to be opposed by fiscally frugal states.