MNI BRIEF: EU Leaders Likely To Discuss Green Fund In IRA Spat

European Commission President Ursula von der Leyen’s idea of a sovereign fund to promote green investments is likely to be on the agenda at next week’s EU summit, a Commission spokesman said, adding that the proposal is not intended to signal a subsidy war with the U.S. in response to Washington’s Inflation Reduction Act.

Von der Leyen’s proposal in a weekend speech have been supported by France’s EU Industry Commissioner Thierry Breton, although EU Executive Vice President Valdis Dombrovskis has been more sceptical. Some officials have questioned where money for such a fund would come from, given the reluctance of key states like Germany to support new joint borrowing, and limits to the extent to which resources remaining from the EUR750 billion NextGenerationEU facility can be repurposed.

An EU-U.S. taskforce is working on the dispute over the IRA, which excludes European businesses from competing for USD369 billion in green spending, with a deal needed before the legislation is enacted at the end of this year. (See MNI INTERVIEW: EU Needs Cheap U.S. LNG To Avert IRA Trade War)