Belgium, (Brussels Morning Newspaper) A group of seven EU member states has sent a letter to the EC opposing its new borrowing plan to subsidize the green sector.
The Commission proposed additional borrowing in response to the US Inflation Reduction Act (IRA), which it warned would lure investors away from the bloc, according to a Reuters report on Friday.
In the letter sent to Commissioner for Trade Valdis Dombrovskis, the group of seven bloc members including Austria, Denmark, Estonia, Finland, Ireland, Slovakia, and the Czech Republic pointed out that the EC should use the money that has already been approved rather than seeking more money.
While they did not sign the letter, Belgium, Germany, and the Netherlands previously opposed the Commission’s plan, increasing the number of bloc members that will likely vote against the proposal in early February.
According to the EC, more joint borrowing is needed to make sure that all bloc members can support their green sectors and prevent migration to the US.
EC officials pointed out that the US offers subsidies worth some USD 369 billion to the green sector under the IRA, stressing that the move will attract companies and turn them away from the EU.
Additional pressures
Soaring energy prices in the bloc make it more difficult to keep industrial producers, as are bureaucratic obstacles to the implementation of green investments.
Last week, EC President Ursula von der Leyen announced plans to draw up new rules for the green sector and set up a fund to subsidize it. She stressed that the EC wants to provide more funding to the sector as a “bringing solution.”
However, the seven bloc members pointed out in the letter that “we have to ensure that the economy can better absorb the already agreed EU funding… so far, only around 100 billion euro of the total of 390 billion of the [Recovery and Resilience Facility] RRF grants have been used.””Further, there is still an unused loan capacity available in the RRF… any additional measures should be based on a thorough analysis by the Commission of the remaining financing gap, and no new funding should be introduced,” the countries concluded.
