Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

New year, new crisis — same old EU money

New year, new crisis — same old EU money

There’s another new use for the post-pandemic cash pot. This time to boost European competitiveness.

The European Union is at it again: Recycling existing cash to fit whatever new crisis pops up.

"We can’t use the same money for 25 different [goals]," EU Economy Commissioner Paolo Gentiloni said at an event in Berlin on Monday in a rare candid moment. “We label the same basket of money with one word, then we change the word but it’s always the same money.”

Yet that’s exactly what the European Commission is about to do.

In guidance to be issued on Wednesday, it will nudge member countries to use post-pandemic EU cash to boost industrial competitiveness as a way of responding to the United States' green subsidy push.

It's the third crisis for which the EU has used the same pot of money — as much as anything because some countries, Germany and the Netherlands in particular, oppose more common debt and especially since a large part of the original fund has yet to be spent.

“We’re very reluctant when it comes to [repeating] something similar to NextGenerationEU or SURE,” said German Finance Minister Christian Lindner on Monday, referencing the bloc’s debt-based response to the COVID pandemic. It's not worth even having a debate about it, he added.


Recycling cash


The latest discussion stems from 2020, when all 27 EU countries agreed to jointly issue €800 billion in EU grants and loans to counter the economic impacts of lockdowns and public health measures. It was considered a turning point because member countries had never pooled debt before.

Money from the so-called recovery fund had barely started flowing when a second crisis, Russia’s invasion of Ukraine, propelled the bloc into finding a way to decouple itself from its dependency on Russian fossil fuels.

The EU's solution was to repurpose unsolicited loans under the recovery fund — around €220 billion— and top it up with €20 billion of fresh grants to accelerate the deployment of renewables and alternative energy sources. It's been branded the REPowerEU plan and it's about to be rubber-stamped by the European Parliament.

And then came the U.S. Inflation Reduction Act, a $369 billion green subsidy plan to decarbonize its industry and encourage consumers to “buy American.”

France called on the bloc to craft its own “made in Europe” industrial strategy.

That’s what the Commission is laying out on Wednesday, in an approach that will serve as the basis for discussions at the EU leaders’ level, scheduled for February 9 and 10.

The EU executive will suggest countries “adjust the [national recovery] plans to the current context" characterized by inflation, jammed supply chains and high energy prices, and insert “simple and effective measures to provide immediate support to companies and boost their competitiveness,” such as tax breaks for clean technology, according to a draft seen by POLITICO.


Candy, later


That language reflects widespread disagreement between governments on the best course of action.

The plan includes a relaxation of state aid rules, advocated for by France and Germany, to allow countries to boost their key industrial players. But that's anathema to another group of countries, who fear it will lead to a subsidy race within the bloc, inevitably won by the richest countries.

"If anything, this is about certain member states not wasting a good crisis, and using it to argue for more EU money and protectionist measures, as they have for the better part of 30 years now," said an EU diplomat.

Conscious of that, the Commission pledged to present a European Sovereignty Fund, which is meant to “give a structural answer to the investment needs” of all EU countries.

But while changes to state aid rules are set to be adopted in the coming weeks, there are no details or a timeline for the sovereignty fund, which one EU diplomat described as "candy, but it’s far away.”


Let's go further


Some within the Commission and the Council think that repurposing existing cash isn't enough, and argue in favor of new common tools.

“If we think of a common response to the competitiveness challenge, do we think that the common response is only regulatory? I don’t think that this is the right answer,” Gentiloni said on Monday.

But that’s not the majority view. So for now, the bloc has to work with what’s already in its coffers.

“They’re dangling the same carrot,” said an EU official.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
US and Saudi Arabia Sign Landmark Agreements Across Multiple Sectors
Why Saudi Arabia Rolled Out a Purple Carpet for Donald Trump Instead of Red
Flip flop: UK Introduces New Immigration Policy to Reduce Net Migration
Poland Tightens Immigration Policy with New Plan to Suspend Asylum Law
Trump says it would be 'stupid' not to accept gift of Qatari plane
8-Year-Old Orders 70,000 Lollipops Using Mother’s Phone, Prompting $4,200 Amazon Bill and Viral Facebook Plea
Quantum Computing Threatens Bitcoin Security
American citizens account for 70% of worldwide pharmaceutical sales despite comprising only 4% of global population
Michael Jordan to Serve as Analyst for NBA Games
New Details Emerge on Syrian Attacker's Motives in German Festival Stabbing
US and China Agree to Reduce Tariffs by 115% in Bilateral Trade Deal
Zelenskyy Seeks Ceasefire as Putin Proposes Direct Talks in Turkiye
Arsenal Stages Comeback to Draw 2-2 Against Liverpool in Premier League Clash
Cardinal Robert Prevost Elected as Pope Leo XIV, Marking a Historic Papacy
India-Pakistan conflict may be first test for Chinese military tech
Bill Gates Announces Plan to Wind Down Philanthropic Foundation and Disperse Wealth
Historic Papal Conclave Set to Commence in Rome
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
EU Hits TikTok with €530 Million Fine Over China Data Transfers
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
U.S. and Ukraine Poised to Sign Strategic Critical Minerals Deal Amid Geopolitical Shifts
Spain Restores Power After Unprecedented Nationwide Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
How do you fix this culture?
Corrupted from Within: How Deep State Power and Unelected Judges Hijacked Democracy Against the Will of the People
President Trump and Ukrainian President Zelensky just held an impromptu discussion on the sidelines of Pope Francis' funeral in Rome.
World Leaders Gather in Rome for Pope Francis's Funeral
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Peter Navarro: The Man Behind Trump’s Tariff Madness
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Pope Francis: head of the Catholic church who pushed for social and economic justice
China do not pay these tariffs - you pay it. This is new 145% tax you pay to the US government.
Cultural Battles in the Vatican: The Candidates in the Battle for the Holy See and Pope Francis's Testament
Global Leaders Pay Tribute to Pope Francis Following His Death
Wild Chimpanzees Observed Bonding Over Alcoholic Fruit
Greek Christians Celebrate Easter in Thessaloníki
US Federal Reserve Chair Issues Warning on Tariff Impact
China, China, China!
×