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ECONOMY

France urges ‘EU industrial policy’ to counter US subsidy

French Finance Minister Bruno Le Maire called on Monday for a new European policy to protect the EU's industrial base in the face of massive US subsidies.

France urges 'EU industrial policy' to counter US subsidy
French Finance Minister Bruno Le Maire (C) addresses the press at the EU headquarters in Brussels on January 16, 2023. (Photo by Kenzo TRIBOUILLARD / AFP)

Last year, Washington passed the landmark Inflation Reduction Act (IRA) that contains around $370 billion in subsidies for green energy, as well as tax cuts for US-made electric cars and batteries, to speed up the transition to a low-carbon economy.

EU countries have however poured criticism on the IRA, seeing the “Buy American” domestic production requirement as a threat to European jobs, especially in the energy and auto sectors.

But the bloc’s members are divided over how to respond, with some, including France, calling for Europe to bring in its own substantial subsidy scheme. 

“There is no time to lose in establishing a new European industrial policy to support green industry and encourage industries to relocate to European territory,” Le Maire said before talks between the bloc’s finance ministers.

He called for a “simplification shock” to the state aid framework in Europe as well as larger subsidies for sectors including hydrogen, electric batteries, solar panels and semiconductors.

EU nations hope to agree on a way forward before a summit next month to avoid European businesses rushing to invest in the United States.

But some members fear a hardline response by the EU to the IRA could provoke a trade war, while others worry a subsidy race within the bloc would benefit wealthier nations.

“I think it’s important we respect the single market in all aspects,” Irish Finance Minister Michael McGrath told reporters. “The state aid rules… are there to ensure that there is a level playing field.”

European Commission President Ursula von der Leyen has previously proposed a new EU fund to support Europe’s green transition.

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2024 EUROPEAN ELECTIONS

From Swexit to Frexit: How Europe’s far-right parties have ditched plans to leave EU

Far-right parties, set to make soaring gains in the European Parliament elections in June, have one by one abandoned plans to get their countries to leave the European Union.

From Swexit to Frexit: How Europe's far-right parties have ditched plans to leave EU

Whereas plans to leave the bloc took centre stage at the last European polls in 2019, far-right parties have shifted their focus to issues such as immigration as they seek mainstream votes.

“Quickly a lot of far-right parties abandoned their firing positions and their radical discourse aimed at leaving the European Union, even if these parties remain eurosceptic,” Thierry Chopin, a visiting professor at the College of Europe in Bruges told AFP.

Britain, which formally left the EU in early 2020 following the 2016 Brexit referendum, remains the only country to have left so far.

Here is a snapshot:

No Nexit 

The Dutch Freedom Party (PVV) led by Geert Wilders won a stunning victory in Dutch national elections last November and polls indicate it will likely top the European vote in the Netherlands.

While the manifesto for the November election stated clearly: “the PVV wants a binding referendum on Nexit” – the Netherlands leaving the EU – such a pledge is absent from the European manifesto.

For more coverage of the 2024 European Elections click here.

The European manifesto is still fiercely eurosceptic, stressing: “No European superstate for us… we will work hard to change the Union from within.”

The PVV, which failed to win a single seat in 2019 European Parliament elections, called for an end to the “expansion of unelected eurocrats in Brussels” and took aim at a “veritable tsunami” of EU environmental regulations.

No Frexit either

Leaders of France’s National Rally (RN) which is also leading the polls in a challenge to President Emmanuel Macron, have also explicitly dismissed talk they could ape Britain’s departure when unveiling the party manifesto in March.

“Our Macronist opponents accuse us… of being in favour of a Frexit, of wanting to take power so as to leave the EU,” party leader Jordan Bardella said.

But citing EU nations where the RN’s ideological stablemates are scoring political wins or in power, he added: “You don’t leave the table when you’re about to win the game.”

READ ALSO: What’s at stake in the 2024 European parliament elections?

Bardella, 28, who took over the party leadership from Marine Le Pen in 2021, is one of France’s most popular politicians.

The June poll is seen as a key milestone ahead of France’s next presidential election in 2027, when Le Pen, who lead’s RN’s MPs, is expected to mount a fourth bid for the top job.

Dexit, maybe later

The co-leader of the far-right Alternative for Germany (AfD) party, Alice Weidel, said in January 2024 that the United Kingdom’s Brexit referendum was an example to follow for the EU’s most populous country.

Weidel said the party, currently Germany’s second most popular, wanted to reform EU institutions to curb the power of the European Commission and address what she saw as a democratic deficit.

But if the changes sought by the AfD could not be realised, “we could have a referendum on ‘Dexit’ – a German exit from the EU”, she said.

The AfD which has recently seen a significant drop in support as it contends with various controversies, had previously downgraded a “Dexit” scenario to a “last resort”.

READ ALSO: ‘Wake-up call’: Far-right parties set to make huge gains in 2024 EU elections

Fixit, Swexit, Polexit…

Elsewhere the eurosceptic Finns Party, which appeals overwhelmingly to male voters, sees “Fixit” as a long-term goal.

The Sweden Democrats (SD) leader Jimmie Åkesson and leading MEP Charlie Weimers said in February in a press op ed that “Sweden is prepared to leave as a last resort”.

Once in favour of a “Swexit”, the party, which props up the government of Prime Minister Ulf Kristersson, in 2019 abandoned the idea of leaving the EU due to a lack of public support.

In November 2023 thousands of far-right supporters in the Polish capital Warsaw called for a “Polexit”.

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