Germany wants the EU to react to U.S. inflation act

According to a German economy ministry document made public on Friday, Germany seeks a coordinated European response to the U.S. Inflation Reduction Act that would include streamlining regulations on public support and increasing funding options.

To overcome financial constraints, the European Union could create a programme to promote green technology by combining different funding sources. For instance, the Innovation Fund could increase support for large-scale clean technology projects, or the European Investment Bank (EIB) could take on more risk by providing guarantees, it suggested.

The ministry document also suggests that member states could strengthen the national level anchoring of sustainability criteria in public procurements as well as the extension or expansion of traditional subsidy programmes, but it issues a warning against local content requirements that favour domestic industry.

According to the study, they would not only likely be against WTO law, but also contribute to a further deterioration of the world trading system.

While the European Union countries support Washington’s investment push for green technology, they assert that US subsidies connected to domestically generated content worth 200 billion euros ($207 billion) could violate WTO regulations by favouring US enterprises over their competitors.

A joint task force between the EU and Washington has been established in an effort to settle the disagreement over the $430 billion measure.