Lately, the situation globally seemed stormy as ever, which has exacerbated for many reasons, risking undermining further the last decades’ fragile international equilibrium.
Economy is known to be a leading element in the topic and the inflation crisis, one of the aspects mentioned above, plays a key role in governments and economic institutions’ choices.
About this, recent months have seen a clear opposition between the US and the European partners, following the definition and adoption of the Inflation Reduction Act (IRA), the monumental public investment plan particularly on strategic and green domains.
This last aspect is also weighted by the introduction of absolutely abundant incentives to convince consumers to buy “made in the US” products[1].
This operation made Europeans disapprove, worried about the range of the initiative, believed unfair on a competition level – especially when promoted by a strategic ally.
Bad mood increased month after month to the point that French President Macron resolved to a State visit to Washington on the first days of December[2], then a second, around two weeks ago, when Economy Ministers of France and Germany, Bruno Le Maire e Robert Habeck, went to the US to discuss the measures[3].
Although the visit was labelled as “European”, the topic is quite complex and national interests seem to prevail on supranational, as the German position show: its status seems highly undercut by political and economic choices of last months. On one side, there are worries about the protectionist turn that IRA could cause. The US is now Germany’s strongest export partner (156 millions last year). On the other side, geopolitics risks undermining the relationship with import-export most relevant partner: China.
An event that Germany, and France, want to avoid, trying to meet an agreement that reconciles parts.
It is clear, though, that mediating is not enough to unblock an extremely complex situation and that some choices need to be done.
On this point there is no consensus. On a European level, besides Economy Minister Le Maire not agreeing, thanks to French thrust, the Commission finally delivered the Green Deal Industrial Plan, the column on which the European green transition leans: European Green Deal.
“The plan’s starting point – highlights the note – is the need to massively increase technological development, manufacture production and installation of zero-emission products.”
The plan will be coupled with the European Sovereignty Fund, which aims at providing a mainly financial approach to support green investments in the following years[4].
The plan is quite articulated and will need intensive negotiations to be signed, as divergences in views show, first of all Germany; but also inside governments themselves, as is the case for France.
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[1] https://www.ilsole24ore.com/radiocor/nRC_12.08.2022_15.06_28310283
[2] https://it.euronews.com/2022/12/01/amici-ma-le-perplessita-del-presidente-francese-macron-a-washington
[3] https://www.ilsole24ore.com/art/francia-e-germania-missione-usa-proteggere-imprese-ue-protezionismo-AEUw8miC
[4] https://www.ilsole24ore.com/art/ue-presenta-piano-industriale-aiuti-stato-e-fondo-sovrano-AEq9RIfC
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Tiziano Sini
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USA EuropeanUnion InflactionReductionAct France Germany Biden GreenDealIndustrialPlan Economia Internazionale economia estera Relazioni Internazionali International Relations concorrenza