EU Must ‘Take Action’ Before US Green Subsidies Create ‘Unfair Competition’, Says von der Leyen

Coming just days after French President Macron warned Biden’s green subsidies could “fragment the West,” the EU Commission president’s remarks suggest a growing divide between Washington and Brussels.

European Commission President Ursula von der Leyen said Sunday that the European Union “must take action” in response to hundreds of billions in new US ‘green’ subsidies which she said “could lead to unfair competition.”

Von der Leyen called on the EU to demand the US to alter the Inflation Reduction Action, a $738 billion Democrat-led spending package which included $391 billion toward green energy projects, noting the “risk that the IRA could lead to unfair competition, could close markets and, thus, fragment critical supply chains.”

If they don’t, she suggested the EU would take matters into its own hands.

“The new assertive industrial policy of our competitors requires a structural answer,” von der Leyen said. “We must take action to rebalance the playing field, where the IRA and other measures create distortions.”

It’s unusual for an important EU functionary to use the word ‘competitors’ to describe the US, though von der Leyen claimed that “competition and co-operation can be two faces of the same coin”.

But while she said it was not in the interest of the EU – “nor in the interest of the Americans,” to “engage in a costly trade war with the United States,” the EU Commission President insisted that “Europe will always do what is right for Europe.”

“So yes, the European Union will respond in an adequate and well-calibrated manner to the Inflation Reduction Act," said von der Leyen.

It’s not the first time this week a high-ranking European official has publicly chastised the Biden administration for its controversial climate subsidies.

On Thursday, French President Emmanuel Macron reportedly complained to Biden at a closed-door lunch that the “super aggressive” IRA would benefit US companies at the direct expense of France’s, telling the US commander-in-chief point blank: “perhaps this law will solve your problems but it will make mine worse.”

In public, Macron wasn’t much more polite.

“The choices of the past few months, in particular the IRA, are choices that will fragment the west,” Macron said Wednesday at the French embassy in DC. “We need to co-ordinate and re-synchronise our policy agendas.”