Brussels (Belgium) (AFP) – How do you solve Europe’s lagging economic growth and reverse its industrial decline? That is the challenge the EU faces as the bloc comes under fierce pressure from US President Donald Trump’s tariffs and a rising China. Europe’s answer to bring its economy back to life is a battery of measures to be announced next week including boosting its clean tech sector and supporting energy-intensive industries by slashing red tape and costs.
There will be a drive to bring energy prices down for households and businesses, and pushing cheaper and cleaner alternatives to fossil fuels. European companies bemoan Europe’s “overregulation” — especially environmental rules pushed by von der Leyen during her first term — and high energy costs as impediments to competing with their American and Chinese rivals. European Union chief Ursula von der Leyen has made it clear she is listening and changed course early in her second term, focusing on making life easier for businesses.
With Trump pushing against his predecessor’s clean tech efforts, Brussels believes there is an opportunity for Europe to attract clean tech investment. The EU’s strategy — dubbed the “Clean Industrial Deal” — will be made up of six pillars to decarbonise the bloc’s industry including incentivising more investment. “At a time when a number of international players are calling the European model into question, the best response is first and foremost to strengthen our own model,” EU industry chief Stephane Sejourne said this week. Sejourne will unveil the measures on February 26 alongside competition commissioner Teresa Ribera.
– Protecting EU industry – Von der Leyen’s medley of measures include favouring European business and products and simplifying state aid rules but there is little information about funding. There will be a proposal to “make European preference criteria a structural feature” for public tenders in “strategic sectors,” the document said. And the EU will establish a centre dedicated to critical raw materials — key elements used in electronics and clean tech — for joint purchases by groups of European firms.
Facing Trump tariffs and growing protectionism, the EU will defend its industries by ensuring “fast and efficient use” of its trade defence instruments, the 22-page document said. “Energy-intensive industries… require urgent support to confront high energy costs, unfair global competition and complex regulations harming their competitiveness,” the commission said. The EU will also publish an “Action Plan for Affordable Energy” on February 26, a separate document in which Brussels lays out how it will cut energy costs. A draft document seen by AFP will tell states to lower taxes on electricity bills and pool demand for joint purchases of liquefied natural gas for EU companies.
It makes no reference to Trump or his looming tariffs, but von der Leyen has previously suggested replacing Russian LNG imports with US gas. Greg Van Elsen of Climate Action Network Europe welcomed the EU not backtracking on its pledge to cut emissions but pointed to gaps. “What’s disappointing is the draft falls short of having energy savings or resource use reduction as drivers for more resilient economies. And with the financing part still lacking detail and ambition, the big question remains: who will foot the bill?” he said.
– ‘Play to our strengths’ – EU lawmakers, however, welcomed the EU’s initiative. “It is the first EU instrument that puts industrial competitiveness at the centre of EU politics,” said Christian Ehler, a German MEP for the right-wing EPP parliamentary group. The backflip by “the Trump administration towards an old 20th-century carbon economy makes the US Inflation Reduction Act less attractive and could refocus global investment, especially concerning net-zero technologies, towards Europe,” he added.
Trump froze funding under a law by his predecessor, which pumped billions of dollars into clean energy projects across the United States and caused consternation in the EU. Dutch liberal MEP Gerben-Jan Gerbrandy said the commission’s proposals amount to a repudiation of the false narrative that decarbonisation is holding back the European economy. “In fact, it is the arena where we are a leader. Let’s play to our strengths,” he said.
© 2024 AFP
