Other than Mes. There real match of 2023 is the one that will be played in Europe from summit of heads of government of the next February 9-10: is here that Italy will be played growth opportunities of our economy. In summary: Yes to a common industrial policy among the 27 through a "Fund for Economic Sovereignty". No to state aid without precise constraints, a death trap for companies in countries which, like Italy or Spain, do not have the most solid economies behind them.
In short, after so many skirmishes, the post-global world. A great opportunity to be seized, but also the risk of acting as an earthenware vase in a confrontation with the USA (and China) which promises to take very few prisoners.
Macron: state aid is needed, favoring "Buy Europe"
This is the concern of Emmanuel Macron which, in one letter sent to EU partners on 9 January ha invoked a shock that facilitates them state aid within Europe, favoring however the “Buy Europe" in public orders. And, just to underline the importance of the theme, the thrust of the president coincides with the mission around Europe by the French Thierry Breton, the EU commissioner for the single market who has already visited Poland, Belgium and Spain to launch thefund idea to support theEuropean industry. What size? “The American IRA – says Macron – is worth 2 percent of US GDP. We must respond with a similar initiative”.
The example of the US law (IRA): since the beginning of the year, 370 billion dollars have already been allocated for industry
Yes, everything comes fromlira, which stands for “Inflation Reduction Act”, US law in force since the beginning of 2023 which allocates 370 billion dollars in favor of US industry. The declared objective is to promote the green industry, but in fact it is above all a tremendous state aid to some sectors: 200 billion dollars are earmarked to support the purchase of electric cars ($7,600 per vehicle) provided produced on American soil with a precise percentage of materials made in the USA. The same attitude held on the front of chips. Biden convinced the giants of Taiwan to transfer a large part of future investments to American soil.
For European groups the conditions in the USA are more attractive
Meanwhile the American Intel asked Germany to increase aid already planned for a factory in Saxony threatening to return home given the incentives provided by the USA. "Not a day goes by now without a European industrial group announcing its intention to grow in the USA". So denounced an editorial in Le Monde in December, citing as an example the choices of Volkswagen need bmw but also of the Belgian Solvay or the French Saint Gobain rather than of Iberdrola. Since then the list has been extended also because of the weight of US incentives (including the semiconductor investment aid plan) should be added the energy cost, the true Achilles heel of European industry moreover forced to face environmental rules and constraints stricter than competitors.
Von den Leyen: we are preparing a plan to increase EU funding
It is in this framework that the thrust of the French president matured, convinced that the European initiatives to soften the American positions are destined to obtain modest results. There replica of Ursula Von den Leyen, who has personally followed the negotiations with the US, arrived yesterday at Davos. Of course, for now the results are not there. “Some elements of the Inflation Reduction Act raise various concerns for targeted incentives for companies – he admitted – But for this we are working with the USA to find a solution, for example by making the European companies and European electric cars can also benefit” from the 369 billion dollar aid programme.
In short, for now it is not a declaration of war. But the president herself had to go one step further than the state aid doctrine: the EU must “make the transition towards zero emissions without creating new dependencies” and to do that “we have a plan. A Industrial plan for the Green Deal”. In essence, “the state aid they would be one limited solution": For avoid fragmentation of the Single Market “we must increase EU funding” and “for the medium term we will prepare a European sovereign wealth fund in the mid-term review of our financial statements in 2023”. On the regulatory level, “we will propose a new 'NetZero Industry Act” along the lines of the Chips Act.
State aid is no longer a taboo, not even in Germany
A step in the direction indicated by Macron, which he has picked up in recent days unexpected consents. A few days ago, for the first time, a document from the SPD, the party of German Chancellor Olav Scholz, declared itself in favor and now we're changing: a document from German Social Democracy, the party of Chancellor Olav Scholz, he pronounced in favor of tools that they offer to European subsidy companies to be used to finance the "green" conversion of their production processes, so as to put themselves in a position to hold up the competition with rival US firms. And even the competition commissioner Margrete Vestager, always hostile to expanding the boundaries of state aid, spoke of the possibility of introducing new forms of "common financing".
But the opposition to the common debt remains
La but the road remains uphill. When we pass from indications of principle to more concrete actions, the real problems arise, first of all the financial ones. Despite the SPD document in favor of joint funding, Olaf's government Scholz remains against further common debt. For Berlin, there is still plenty of money available through the Recovery Fund, RePowerEu and the European Investment Bank. Von der Leyen herself did not provide details on how to finance the Common Fund. You will talk about it later, after overcoming, among other things, the hostility of the Northern countries, starting with the Swedish presidency of the EU, which is against the common debt and skeptical about state aid. “We need to discuss how to attract businesses on the basis of our long-term merits and not on the basis of long-term state aid,” Prime Minister Kristersson warned.
The differences between EU countries
As always happens in Europe the debate promises to be long and articulated. But times are short. Not only due to the pressing of companies overseas, but also because the problems of EU industries are likely to coincide with the times of the dreaded recession. The Fund for Economic Sovereignty could help avert the risk of a monetary crisis. It is no coincidence that the news of the yes to the Social Democrats Fund coincided a few days ago with the decrease in the spread between the Btp and the Bund.
On the other hand, the siding for a European fund are obviously the Mediterranean countriesfinancially weakest. In the absence of a common plan, in fact, the Spanish industries and those of our country would be damaged twice: in addition to the confrontation with the excessive power of the USA, also that with Germany tempted, as in the case of gas, to assert the best financial health with respect to the other partners. In this regard, the precedent of state aid granted to react to the effects of the conflict in Ukraine is valid. So far the Commission approved 170 national measures for a value of 540,2 billion euros. There Germany takes the lion's share: the Berlin government notified 49,33 percent of all aid approved by the Commission. There France it is in second place with 29,92 percent. On the third there is Italy, but with an impressive gap if we consider that it is the third largest economy in the EU: 4,73 percent of all approved aid. The ranking continues with Denmark (4,48 percent), Finland (3,24 percent) and Spain (1,86 percent). Germany, an economy that accounts for 25 percent of EU GDP, has granted half of the state aid that has been in place since February 24.
To avoid these distortions, the main commitment must concern the EU as a whole. An unlikely undertaking, but necessary because, as Verstagen herself said, there is a "risk of fragmentation of the single market". This is the EU's great dilemma: breaking the dam on state aid means giving an advantage to the countries that can afford it to the detriment of the companies of the member states without fiscal space. Can we avoid it? Probably yes, but from now on it's forbidden to miss a single move. Especially in the name of a somewhat ragged sovereignty that in the games that count only serves to cause damage.
