The European leaders took positions this Thursday in one of the most far-reaching economic debates of the moment, how to respond to the competitiveness problems created or aggravated by factors such as the war in Ukraine, the plan to subsidize green technologies adopted by the United States or the Chinese competition.
The prospect of approving a historic relaxation of the rules on State aid, as the European Commission has proposed at the request of Germany and France, in addition to authorizing tax credits for companies, has opened a deep gap between the Twenty-seven. Counterparts are demanded for countries with less fiscal margin to support their companies and, above all, that the European response be much more limited and concentrate on the green technology sectors that are really threatened by the United States, which has opted for policies against climate change to stimulate the economy.
"We are not facing a confrontation between the north and the south," stress European diplomatic sources. During the European Council held this Thursday in Brussels, it became clear that Germany and France have practically all the other EU countries against them. On the opposite side are countries little given to economic alliances such as Spain, Italy, Poland, Greece, Sweden, the Netherlands, Ireland, Belgium, Denmark, Greece or the Czech Republic. Large or small, from a liberal or interventionist tradition, they are all united in their fear of not being able to compete with the tax doping of their companies by Germany and France.
Also within the European Commission there are divisions on the initiative. A recent letter from the vice president and head of the Competition portfolio, Margrethe Vestager, to the Twenty-seven to probe their positions included a graph with a statistic that is cited in all debates: since the approval of the latest relaxation of the aid rules of State to allow governments to cushion the blow of the war, 77% of the public subsidies granted in the EU came from Paris or Berlin.
The problem of the bloc opposed to the Franco-German initiative is that, although they agree on the diagnosis of the problem, each country proposes different solutions. The idea of the president of the community executive, Ursula von der Leyen, to offset the possible adverse effects of this decision, the creation of a European Sovereignty Fund that allows all countries to invest in the green transition, does not enjoy the support of all either. countries, which are wary of the idea of increasing community spending or launching another pooled debt issue to finance it.
Spain, for its part, asks above all for greater flexibility to be able to execute aid from the EU Recovery and Resilience Fund more quickly, in addition to giving top priority to the reform of the electricity market: "The price of electricity will fall and the competitiveness of European companies will increase”, argue diplomatic sources. Italy has asked for a one-year extension of the deadline for spending the money, theoretically 2026. Greece, on the other hand, has no problem absorbing the funds.
“Faced with the new geopolitical reality, the European Union will act decisively to guarantee its long-term competitiveness, its prosperity and its role on the global scene. The EU will strengthen its strategic sovereignty and adapt its technological and industrial base to the green and digital transitions”, affirms the draft conclusions that European leaders discussed last night in Brussels.
“Regarding State aid, there is a very specific proposal on the table. Above all else, only vagueness and promises”, diplomatic sources complain. After hearing the positions of the different countries, dominated by the request that the relaxation of the rules on state aid be temporary and limited to key sectors, the European Commission will specify this and other proposals, which will be debated in March. The idea of creating the Sovereignty Fund proposed by Brussels, on which there is still no consensus, will be discussed in the second half of the year, under the Spanish presidency of the Council of the EU.
