Saudi Press

Saudi Arabia and the world
Friday, Mar 29, 2024

Revealed: France’s massive ‘Made in Europe’ strategy

Revealed: France’s massive ‘Made in Europe’ strategy

The EU is reeling as it debates how to respond to a recent U.S. subsidy push.

The French government has pitched a complete overhaul of the European Union’s approach to boosting its industry, offering a sweeping “Made in Europe” strategy to counter a flood of U.S. subsidies, according to documents seen by POLITICO.

In a letter dated January 9, the French government calls on the EU to accelerate production targets, weaken state aid rules, establish an emergency sovereignty fund and mobilize trade defense instruments — all in reaction to a recent U.S. bill, the Inflation Reduction Act, which included $369 billion in climate-friendly subsidies.

The move follows a pledge earlier this month from French President Emmanuel Macron, in which he jockeyed for the bloc to make progress on a "Made in Europe" strategy. The campaign has become a point of friction within the EU — while numerous countries support France's endeavor in theory, there is little agreement over exactly how to accomplish it.

Production targets

In the letter, from France’s general secretariat for European affairs, the French say the EU should design new production targets “for reducing our dependencies” across sensitive sectors.

“Very concretely, the Union should set itself production targets to be achieved by 2030,” based on the model of the bloc’s draft Chips Act, the letter says. 

The Chips Act is part of the EU's broader effort to ensure Europe doesn't have to rely on countries like China for the technology that powers modern technology. The bloc is also rapidly reconsidering how it sources its energy in the wake of Russia's war in Ukraine.

The letter says the EU must embark on “reforms to simplify and accelerate the procedures for granting permits for the installation of new production sites” as well as a complete energy market reform, which could aid in companies' production and investment decisions.

State Aid

The European Commission is also currently in the process of revising its emergency state aid rules, which have gone through a series of iterations since the start of the pandemic and the war in Ukraine.

Traditionally, the EU has been reluctant to offer state aid in all but the most extreme circumstances. But in its letter, France says the EU should embark on “targeted support – via subsidies or tax credits – based on criteria defined upstream, in a limited number of sectors.” 

“These mechanisms could take the form of tax advantages (tax credits) or direct subsidies targeted at the strategic sectors,” the letter states. 

Those sectors — the French say — could include photovoltaics, batteries, hydrogen and critical materials. The letter also suggests only ending the relaxation of these state aid rules in 2030. They are currently due to expire at the end of this year.

It adds that certain small and medium enterprises should be exempted from state aid limits, particularly if they are involved as partners in the EU’s Important Projects of Common European Interest (IPCEI) program. And it argues that aid notification thresholds for environmental or decarbonization projects should be increased to €20 million per company and per project.


Commission President von der Leyen is due on February 1 to offer EU countries her thoughts on responding to the U.S. efforts

The Commission’s antitrust enforcers are due to circulate their latest draft of the bloc’s emergency state aid rules to EU nations on Friday.

Sovereignty Fund


France also suggests the establishment of an emergency fund, supported by money from the EU’s post-pandemic recovery pot, as well as from REPowerEU — the bloc’s financing framework for diversifying investments away from Russian fossil fuels. 

The letter recommends reallocating €365 billion “not yet disbursed as a priority to sectors that are strategic for European industry” and adds that of the €221 billion in loans that remain to be allocated, EU countries “should be able to give priority to strategic European industrial sectors.”

The emergency sovereignty fund should be operational before the end of 2023, the letter says. 

The French are cautious, however, to ensure that a new influx of state aid doesn't fracture the EU's vaunted single market. The fear is that loosening state aid rules could offer an advantage to deeper-pocketed countries within the EU. To counteract this, the letter suggests a repeat of SURE, a common debt instrument used at the onset of the pandemic that offered countries favorable loans.


Trade defense


In order to preserve the fairness of competition rules internationally, France’s letter concludes by saying that “the EU's trade strategy should be more articulated around the defense of the European single market.” To this end the Commission should make use of trade defense instruments as outlined in World Trade Organization rules, the letter notes. 

Commission President von der Leyen is due on February 1 to offer EU countries her thoughts on responding to the U.S. efforts. Her messaging will come just ahead of an EU leaders’ summit scheduled for February 9-10 in which the issue is due to take center stage.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×