“Get into an electric car produced in a new factory in Detroit and go south. You arrive in Ohio where the factories where your car batteries are produced are located alongside the semiconductor plants intended for private industry but also for the Pentagon. Stop and fill up with the energy arriving from the new nuclear power plant just inaugurated in West Virginia, then begin your journey in the heart of the USA. You'll pass first the endless wind farms of Kansas, then the expanse of solar panels of Oklahoma. Finally, make a U-turn towards the Gulf: your journey ends in the waters, admiring the brand new plant that will produce green hydrogen, the clean energy for the new America”.
Thus theEconomist who dedicates the cover to the Washington New Deal imagine the new America as well as it could emerge from the plans of the President Biden.
The American Green Revolution
Not in a century but in 2033, in just ten years. The challenge, however, has already begun.
And it concerns us too, because, in order to attract the necessary capital and skills to start the environmental revolution America has set in motion a formidable battery of financial support, tax relief and measures in favor of the new ones investments: $2 trillion in total, up from $376 billion inWrath (Inflation Reduction Act) to relaunch infrastructure, the chip industry and measures for the green economy.
Una big bet is Biden he launched because, writes the weekly, "he actually had no alternatives". Only then can Democrats hope to attract the support of the environmental left, the working class fascinated by Trump, the defense industry as well as high technology.
Therefore it is very difficult for the president to back down by giving in to European pressure.
A threat to Europe
Thus was born a real war machine that closely threatens the economy of the Old Continent, inter alia held back by rules that make an answer difficult. The Financial Times, in this regard, cites the witness of the Ceo of the Belgian chemical industry Solvay. "L'Wrath – says the manager Ilham Kadri - distributes props through easy tax breaks to get, that Brussels it doesn't have the power to grant, because taxes are a competence of individual member countries”.
The result? “The company has already received US funds after a few months. Not only. The State of Georgia has also committed $27 million in state and local tax incentives. During the same period, the request for grants in France resulted in "a long and difficult journey with a lot of bureaucracy and then receiving almost nothing". Even more severe Vaitea Cowan, co-founder of enapter, a start-up that has patented a technology to produce green hydrogen, "I would need - he says - four full-time people just to understand what the EU has to offer in terms of funding and how to access support".
EU splits on state aid
It's not just a matter of bureaucracy, but also of money and political will. the Community budget is too small for large-scale interventions: And the member states, starting with the richest, are reluctant to finance a common intervention. While waiting for the longed-for Brussels Sovereign Fund, the money on the table remains the same, left over from other support programs. And so, in the absence of real fresh money, the bulk of the aids will be delegated to individual countries thanks to the exemption on state aid. With the predictable replica of what happened with the pandemic: Germany alone disbursed 53% of European subsidies, seven times as much as Italy. In short, the risk is that Italian companies will have to suffer both the effects of US protectionism and the splitting up of the single market, a consequence of unfair competition from partners.
The unknown also weighs on rates
The US offensive thus once again lays bare the difficulties of European construction. And the limits of recovery. It is unlikely that theidea Of the president Macron, supported by Italy and Spain, by a common investment in the order of 2% of GDP, enough to respond to the US. And there will be no effects on monetary policy. “The level of neutral rates when central banks are neither expansionary nor restrictive is rising for long-term structural reasons,” he wrote. Sylvain Broyer of S&P. “The shocks to global trade after the pandemic and the need to green our economies imply a reorientation of supply chains. This process will necessarily require more investments, a new balance of savings and therefore higher rates”.
The end of the squeeze, therefore, could be much more distant than what the financial markets believe.
