EU leaders seek proposals by end of January on preserving industry

BRUSSELS (Reuters) – EU leaders called on the European Commission on Thursday to present proposals by the end of January to preserve European industry that is under threat from higher energy prices and a new green subsidy law in the United States.

The EU leaders agreed at a summit that Europe needed an ambitious industrial policy to make its economy green and digitial and reduce its dependency on others, particularly in sensitive areas, while ensuring a level playing field.

They called on the Commission to look into “mobilising all relevant national and EU tools” as well as improving conditions for investment by speeding up administrative procedures.

They also said that, beyond such short-term measures, the Commission should present early in 2023 an EU strategy to boost competitiveness and productivity.

Commission President Ursula von der Leyen proposed to EU leaders on Wednesday a loosening of state aid rules in renewable energy and clean technology and said such changes could be implemented early in 2023.

The EU executive is already consulting EU members on this.

She has said the U.S. Inflation Reduction Act (IRA) risks “un-levelling” the playing field, a concern raised by many EU leaders.

The $430 billion IRA gives tax credits to consumers buying electric vehicles and other green products as long as they are made or processed in the United States or in countries with which it has free trade agreements.

Europe, already suffering from far higher energy prices, fears it could tempt businesses to relocate to the United States.

Von der Leyen’s plan also points to the need to increase deployment of renewable energy, including by speeding up the process of issuing permits.

Longer term, she has suggested common European financing through a European Sovereignty Fund of investments to ensure the bloc is a world leader in clean technology.

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