KEY STEPS TO PRESERVE THE EU SINGLE MARKET AND COMPETITIVENESS

The American Inflation Reduction Act (IRA) is a large-scale investment and subsidy program to reduce emissions and reindustrialize the United States. This law keeps the European Union and its member states in a state of tension at a time when it is more important than ever for transatlantic partners to work together in a spirit of trust. Trade liberalization and the fight against protectionist trade practices are in the EU’s prime interest. Therefore, we should carefully consider the response to avoid escalating into an outright trade war.

This fact, as well as, for example, the Industrial Plan of the Green Agreement, or the Sovereignty Fund, were the topics of the first debate, which was organized as part of the project Representation of the European Commission in the Czech Republic and the Information Office of the European Parliament in the Czech Republic by the Brussels office of CEBRE – Czech Business Representation to the EU.

The Czech Republic is one of the EU countries for which it would be a big blow if the EU tried to trump the American IRA by further loosening state aid rules. This is the opinion of MEP Dita Charanzová, Dagmar Kuchtová, Director General of the Confederation of Industry of the Czech Republic, and Martin Hrozna, Director of the Department of Economic Analysis at the Ministry of Industry and Trade. According to Dita Charanzová, Europe must find a recipe for being as attractive as possible for companies as this is the only way to ensure that the latest technologies are created “at home”.

Companies see the most crucial step as reducing regulatory burdens, such as speeding up various permitting processes, says Dagmar Kuchtová, adding: “Europe is generally perceived as an over-regulated market, even if it is often with benevolent intentions.” Daniel Braun, head of the cabinet of Věra Jourová, Vice-President of European Commission assured those present that the Commission believes that the loosening of state aid should be limited in time and apply only to specific industrial sectors. However, he acknowledged that negotiations on setting new rules are very heated and that countries will need time to agree on an acceptable compromise. However, Europe will have to invest massively to compete in the world. To this end, the European Commission has proposed the creation of a sovereignty fund to encourage investment in strategic areas, particularly in environmental issues. The Czech position is still being prepared, but it can be expected that the Czech Republic will not agree to the creation of this new fund. However, according to Dita Charanzová, the Sovereignty Fund is likely to be implemented despite the opposition of some countries. “We are not going to take it off the table, so the industry should look at it in a more positive light,” the MEP said, adding that the government and companies should create a common position, which the Czech Republic will then use to negotiate at the European level. Dagmar Kuchtová concluded the debate by saying that the problem is not primarily financial aid but regulations.

A few weeks ago, Director General of BusinessEurope, Marcus J. Beyrer, also highlighted the regulation problems, saying: “We have high energy prices, heavy regulatory burden, and also lengthy, slow and burdensome procedures – these are the push factors. And on top of this comes the IRA as a pull factor. It will be important to simultaneously address all the push factors, but also the pull factor to develop an answer, and also to become better on our side of the Atlantic become and remain competitive.”

Source: EURACTIV.cz, BusinessEurope.eu