What happened to the EU sovereignty fund for green industry announced by Brussels?
The proposed EU long-term budget review does not contain any sovereignty fund for green industry, promised by von der Leyen. In its place, the Step platform has sprung up, a 10 billion surrogate
In the proposed revision of the long-term budget (2021-2027) of the European Union there is no new sovereignty fund for the green industry, the one linked to technologies for the ecological transition and carbon neutrality.
EUROPEAN AMBITIONS FOR GREEN INDUSTRY
Last March, the European Commission presented a plan to stimulate domestic manufacturing of batteries, photovoltaic panels, wind turbines, hydrogen electrolysers and other clean energy devices: the Net-Zero Industry Act – this is the name – wants be the response to both Chinese and US subsidies of the Inflation Reduction Act.
Brussels, therefore, would like to reduce the competitiveness disadvantage of European companies compared to foreign competition and protect its economic importance also in the low-carbon future that awaits us. But of the Sovereignty Fund, i.e. the instrument that should allow the concrete realization of these intentions, "there is no trace" in the proposed revision of the 2021-2027 budget, as eunews wrote.
WHAT IS THE STEP PLATFORM FOR?
Rather, the Commission proposed the creation of a Strategic Technologies for Europe Platform (STEP, from Strategic Technologies for Europe Platform : it was announced in September 2022). STEP will be used to raise a sum of 10 billion euros from member countries which will go to boost the economic endowments of various existing programs for innovation and technological sovereignty such as InvestEU (3 billion), Horizon Europe (0.5 billion) and Innovation Fund (5 billion).
According to the president of the Commission, Ursula von der Leyen, "we have efficient funds in our European budget for projects" in clean technologies ( clean tech ), biotechnology and deep technologies ( deep tech ). The STEP platform will then apply a "seal of sovereignty", a sort of quality mark that will help projects deemed strategic to attract private and public funding.
A DOWNWARD COMPROMISE?
No sovereignty fund, however, which will be created in the future and of which STEP – by admission of von der Leyen herself – is a precursor and, in a certain sense, a surrogate. As explained by the Commission, in fact there was a need for an immediately available solution, which bypassed the complicated internal negotiations for a sovereignty fund and at the same time allocated a discreet sum.
INTERNAL CLASHES
The problem with the sovereignty fund for green industry is that – as Politico writes – no one knows where the money will come from. At the moment the member countries of the European Union have other priorities, such as the mitigation of inflation, and they do not welcome the idea of depriving themselves of economic resources to allocate them to a Community scheme, or of accumulating other common debt.
At the same time, however, national governments are generally convinced of the need to respond strongly and quickly to the cleantech industrial policies of China and the United States. “It is clear that there is a need for investment in clean technologies, but the fact that this is not technically a crisis will reduce the appetite of member states,” a commission official told Politico .
The divisions are the usual. The Nordic countries – defined as "frugal" – do not want the European Union to make another common debt, which would be difficult to repay given the high interest rates. Countries with a greater manufacturing vocation, such as France, instead ask the Commission to define new tools to stimulate industrial progress.
Within the Commission, von der Leyen is supported by Commissioners Thierry Breton (French, Internal Market) and Paolo Gentiloni (Italian, Economic Affairs). Those who have more reservations about the sovereignty fund are instead Valdis Dombrovskis (Latvian, in Commerce) and Margrethe Vestager (Danish, in Competition).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/commissione-europea-step-industria-verde/ on Wed, 21 Jun 2023 11:59:10 +0000.