German Economy Ministry Urges EU to Collaborate in Response to U.S. Inflation Legislation

Germany’s Proposal for a European Response to U.S. Inflation Reduction Act

Germany is advocating for a unified European approach to the U.S. Inflation Reduction Act, aiming to streamline regulations on state aid and expand financial opportunities. According to a document from the German economy ministry viewed by Reuters, the European Union could establish a scheme to advance green technology by combining different funding components to sidestep budget limitations.

Enhancing Support for Clean Technologies

The Innovation Fund could amplify its backing for large clean technology initiatives, while the European Investment Bank (EIB) might undertake more risk by offering guarantees, the document suggested. Moreover, member states could reinforce sustainability standards in public procurement at the national level and prolong or boost conventional subsidy programs.

Caution Against Local Content Requirements

The ministry document cautioned against imposing local content requirements that favor domestic industries, as these measures could not only potentially violate World Trade Organization (WTO) regulations but also undermine the global trade system.

Concerns Over U.S. Subsidies

While EU nations support Washington’s push for green technology investments, they raise concerns about $200 billion euros ($207 billion) in U.S. subsidies linked to domestically manufactured goods that could infringe WTO rules by putting their companies at a disadvantage.

Collaborative Efforts to Resolve Disputes

To address the issue, the EU and the U.S. have formed a joint task force in the hopes of finding a resolution to the $430 billion act.

(This article has been corrected to clarify that the document originates from the economy ministry, not the finance ministry, and to specify in the title that the ministry is calling for, not outlining, a joint response.)

(Reported by Christian Kraemer and Markus Wacket; Written by Miranda Murray; Edited by Rachel More)

Read More of this Story at – 2024-05-25 00:47:00

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