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EU presents new industrial plan to counter American green subsidies

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EU presents new industrial plan to counter American green subsidies

Fearing a devastating enterprise exodus throughout the Atlantic Ocean, the European Fee on Wednesday unveiled new plans to spice up the European Union’s homegrown inexperienced business and counter the beneficiant tax credit and rebates of Joe Biden’s $369-billion Inflation Discount Act.

The plans are an intricate mixture of less complicated guidelines for subsidies, re-purposed EU funds, sooner allowing for renewable tasks, widespread manufacturing targets, commerce offers and upskilling which, put collectively, are supposed to strengthen the bloc’s attractiveness for funding and manufacturing.

The last word objective is to maintain European firms in Europe and stop the continent’s main inexperienced innovators from fleeing overseas searching for larger business prospects.

“Within the struggle in opposition to local weather change, what’s most necessary is the net-zero business. We need to seize this second,” mentioned European Fee President Ursula von der Leyen, whereas presenting the technique on Wednesday afternoon.

“We’re aggressive. We’d like competitors.”

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‘Keep right here and prosper right here’

Dubbed the “Inexperienced Deal Industrial Plan,” the technique is an preliminary pitch that will likely be mentioned by EU leaders at subsequent week’s summit, the place it’s poised to face sturdy resistance from a variety of nations that fear the loosening of state assist will spark an unchecked and dear subsidies race throughout the bloc and undermine honest competitors.

Such fears elevated final month after the European Fee revealed that, since tweaking the state assist guidelines in March 2022 to assist member states deal with the fallout from the Ukraine warfare, Germany and France have amassed virtually 80% of the €672 billion in authorised help.

Germany alone accounted for 53% of all extraordinary assist authorised by the Fee – or about €356 billion.

The brand new modification to state assist guidelines – the third in three years – will final till the tip of 2025 and embody six foremost areas within the renewable vitality sector: batteries, photo voltaic panels, wind generators, warmth pumps, electrolysers to provide hydrogen, carbon seize expertise and important uncooked supplies.

The six areas are virtually copy-pasted from the Inflation Discount Act.

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“We wish this business to remain right here and to prosper right here,” von der Leyen mentioned, noting member states that can’t afford subsidies can provide tax breaks in its place.

Regardless of rising hypothesis, Brussels didn’t suggest new sources of funding, one thing that may require a unanimous settlement between the 27 member states to difficulty contemporary EU debt.

As a substitute, the chief intends to re-purpose funds already earmarked to different portfolios, together with the €225 billion of low-interest loans left unused within the €750-billion coronavirus restoration package deal.

“We’d like this primary step of funding now, so we can’t wait too lengthy,” von der Leyen mentioned. “We’d like a bridging resolution to future different financing devices.”

In the long term, the European Fee will discover the opportunity of establishing a so-called “European Sovereignty Fund” to collectively finance tasks on crucial and rising applied sciences.

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Von der Leyen mentioned the sovereignty fund, which in the meanwhile stays obscure in scope and dimension, will present a “structural reply” to the costly endeavor of paying for the inexperienced transition.

Her plans, nonetheless, admit public money won’t be sufficient to “shut the investment-gap wants” and the good a part of the accountability will fall onto the non-public sector.

State assist is ‘not harmless’

Though von der Leyen was cautious sufficient to name-check different worldwide rivals like Japan, India, the UK and Canada, a darkish shadow loomed over Wednesday’s presentation: the Inflation Discount Act (IRA) promoted by US President Joe Biden.

Over the following ten years, the IRA will dole out as much as $369 billion in tax credit and direct rebates to assist firms scale up the manufacturing of inexperienced, cutting-edge expertise – however provided that these merchandise are predominantly manufactured in North America.

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The EU considers this provision as discriminatory, unfair and unlawful, and has requested Washington to broaden the regulation’s interpretation with a view to make European firms eligible for the advantages.

However the concessions have been very restricted, pushing policymakers right into a rushed effort to design a forceful response to compete in opposition to the IRA earlier than the expertise drain kicks in.

The bloc’s ongoing vitality disaster, which has put factories below immense monetary stress, has additional fuelled fears of an irreparable lack of competitiveness.

This ominous surroundings explains why the specter of relocation is on the very centre of the European Fee’s industrial plan.

In what’s arguably essentially the most notable change, the chief proposes a provision to permit governments to match the state assist provided by bidders from non-EU nations.

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For instance, if a German firm is obtainable $1 billion to construct a battery plant in New York, Germany will likely be allowed to match this provide with public cash to maintain the funding contained in the bloc.

Though this “matching assist” provision will include strings connected, it however represents a “far-reaching” tweak that poses a “severe threat” to the integrity of the only market, mentioned Margrethe Vestager, the European Fee’s Government Vice President in control of competitors coverage.

“These dangers usually are not non permanent. As a result of not all nations have the identical capability to match assist,” Vestager mentioned, referring to the Franco-German dominance of state assist.

“Utilizing state assist to ascertain mass manufacturing and to match international subsidies is one thing new. And it isn’t harmless.”

“On the finish of the day,” she went on, “state assist is a switch of cash from taxpayers to shareholders. And it solely is sensible if the society as a complete advantages from the help granted.”

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The plans are nonetheless not ultimate: the European Fee will use the suggestions it receives from member states to construct a ultimate model of the economic technique, together with the brand new state assist framework.

Nations like Italy, Finland, Denmark, Sweden, the Netherlands, Austria, the Czech Republic and Poland have already cautioned in opposition to additional enjoyable the foundations that govern subsidies, that are the unique competence of the European Fee.

Each von der Leyen and Vestager insisted the modifications will likely be “focused” and “time-limited,” concluding in December 2025, even when earlier state assist frameworks had been prolonged a number of instances previously.

However fears of a subsidy race stay in place, mentioned Niclas Poitiers, a analysis fellow on the Bruegel assume tank, as a result of the European Fee did not suggest new sources of widespread funding that smaller and poorer member states may use to offset the state assist injections from greater rivals.

“Bigger and richer EU nations will likely be way more in a position to make use of such new leeway, to the drawback of the poorer ones,” Poitiers mentioned in an announcement.

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“By constructing its technique on nationwide subsidy schemes, this proposal fails to create a extra coordinated European industrial technique and threat pitching nationwide governments in opposition to one another.”

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US sanctions 21 more Maduro allies accused of post-election repression in Venezuela

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US sanctions 21 more Maduro allies accused of post-election repression in Venezuela
  • The U.S. has imposed sanctions on 21 more allies of Venezuelan President Nicolás Maduro for repressing Venezuelans following the country’s disputed presidential election.
  • Maduro declared victory in the election, but he and his government have refused to show vote tallies backing his claim.
  • The Biden administration last week recognized Venezuelan opposition candidate Edmundo González as Venezuela’s “president-elect.”

The United States has imposed sanctions on an additional 21 allies of President Nicolás Maduro, accusing them on Wednesday of perpetrating some of the repression with which officials in Venezuela responded to July’s disputed presidential election.

The security and cabinet-level officials sanctioned by the Department of the Treasury include the head of the nation’s corrections agency, the director of an intelligence service and the minister of Maduro’s Office of the President. They joined a list of dozens of sanctioned Venezuelans that includes the head of the country’s high court, ministers and prosecutors.

BIDEN URGED TO CRACK DOWN ON OIL COMPANIES DOING BUSINESS WITH VENEZUELA AFTER MADURO’S REFUSAL TO CEDE POWER

The Biden administration last week recognized Venezuelan opposition candidate Edmundo González as that nation’s “president-elect.” The U.S. also on Wednesday placed visa restrictions on additional individuals it accused of repressing Venezuelans after the July 28 election.

Venezuelan President Nicolás Maduro speaks during a press conference after testifying before the electoral chamber at the main headquarters of the Supreme Court of Justice on August 2, 2024, at the Miraflores presidential palace in Caracas, Venezuela. ( Jesus Vargas/Getty Images)

While Maduro declared victory in the election, he and his government have refused to show vote tallies backing his claim.

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González left Venezuela in September for exile in Spain after a warrant was issued for his arrest in connection with an investigation into the publishing of vote tallies. The former diplomat, who represented the main opposition parties, claimed to have won the presidential election by a wide margin.

In September, the U.S. government imposed sanctions against 16 allies of Maduro, accusing them of obstructing the vote and carrying out human rights abuses.

The effect of the individual sanctions and visa restrictions announced Wednesday is unclear. Previously punished Maduro loyalists still hold power in Venezuela’s government.

Venezuelan lawmakers on Tuesday continued the debate over a bill that would catalogue economic sanctions as a crime against humanity and allow the prosecution of anyone who expresses support for the measures.

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Biden OKs $680m Israel arms sale despite new Gaza ceasefire push: Reports

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Biden OKs 0m Israel arms sale despite new Gaza ceasefire push: Reports

The administration of United States President Joe Biden is reported to have provisionally approved a $680m arms package to Israel, even as it asserts that it is pushing for peace in the Middle East.

Reports of the arms deal on Wednesday come a day after Biden announced a ceasefire between Israel and Hezbollah and promised to renew efforts to reach a similar agreement between Israel and Hamas in Gaza – one he has repeatedly promised but failed to deliver.

The arms package had been in the works for months and had been previewed by congressional committees in September and submitted for wider review in October, an unnamed US official told the Reuters news agency, which confirmed an earlier report by the Financial Times on Biden’s provisional approval.

The latest delivery will include hundreds of small-diameter bombs and thousands of joint direct attack munition kits (JDAMs), both news organisations reported. JDAMs convert “dumb” bombs into precision-guided weapons.

The Biden administration has not confirmed the reports, the timing of which highlights the juxtaposition of the US position on the Middle East conflict – on the one hand facilitating ceasefire negotiations while on the other hand selling billions of dollars of munitions to Israel as it kills tens of thousands of Palestinians and Lebanese.

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On Tuesday, Biden – who has consistently supported Israel and portrays US arms sales to Israel as essential support for an ally – held an address at the White House announcing that a US-brokered ceasefire that would see Israel withdraw from Lebanon within 60 days had been reached. That deal went into effect early on Wednesday.

During the address, Biden promised to again seek an end to the fighting that has raged in Gaza since October 7, 2023.

For months, previous attempts by Washington to broker a deal have come up short with critics accusing Washington of failing to exert its most meaningful leverage – withholding some of the billions of dollars in arms it provides to Israel.

To date, Israel has killed at least 44,282 Palestinians in Gaza since the war began when a Hamas-led attack on southern Israel killed at least 1,139 people. Israeli forces have killed more than 3,800 people in Lebanon in the past 13 months.

“Over the coming days, the United States will make another push with Turkey, Egypt, Qatar, Israel and others to achieve a ceasefire in Gaza with the hostages released and the end to the war without Hamas in power – that it becomes possible,” Biden said.

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Questions over weapons

The latest weapons package would have been blocked as part of legislation introduced by several Democratic senators to stop about $20bn in arms sales to Israel, the Financial Times reported. However the effort, led by Senator Bernie Sanders, fell short of votes this month.

For their part, US officials have repeatedly denied that delays in some arms transfers have been related to Israel’s actions beyond a pause this year of a shipment of 900kg (2,000lb) bombs in a fruitless effort to prevent Israel from launching a major ground operation in Rafah.

Speaking to reporters after Biden’s speech, a US official denied that either withholding or promising more weapons to Israel was part of negotiations that eventually led to the Israel-Hezbollah agreement.

The official said: “No part of this negotiation involved weapons on either side.”

However, Israeli Prime Minister Benjamin Netanyahu on Tuesday appeared to offer a contradictory account, saying the ceasefire with Hezbollah was needed to “replenish stocks”, among other reasons.

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“And I say it openly: It is no secret that there have been big delays in weapons and munitions deliveries. These delays will be resolved soon,” Netanyahu said during a national address without specifically naming the US.

“We will receive supplies of advanced weaponry that will keep our soldiers safe and give us more strike force to complete our mission.”

Continued support before Trump’s return

Advocates said the latest approval from the Biden administration indicates there will be little change in the president’s policy before President-elect Donald Trump takes office on January 20.

In a post on X, the Institute for Middle East Understanding Policy Project said the move shows “President Biden is spending the final days of his presidency going against the will of most Americans, US law, and international law.”

It noted that the small-diameter bombs and JDAMs reportedly provided in the package have been linked to Israeli attacks on civilians in Gaza.

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The Biden administration has also been one of the most vocal critics of the International Criminal Court’s (ICC’s) decision last week to issue arrest warrants for Netanyahu and former Defence Minister Yoav Gallant for alleged war crimes committed in Gaza. The ICC also issued a warrant for Hamas leader Mohammed Deif, who Israel said it has killed.

In a statement, Biden called the warrants against the Israeli officials “outrageous” and promised to “always stand with Israel against threats to its security”. Netanyahu’s office on Tuesday said it would appeal the court’s ruling.

Trump is expected to take a more provocative stance against the ICC – and in his overall support for Israel – after he takes office with his Republican Party in control of both the US House of Representatives and Senate after the November 5 elections.

Trump’s pick for national security adviser, Representative Mike Walz, has already promised a “strong response” to the ICC and the United Nations “come January”.

Republican Senator Lindsey Graham went further, promising during a trip to Israel on Wednesday to introduce legislation that “would sanction any country that tried to enforce the arrest warrant against Israel”.

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“You could be a close ally – Canada, Britain, France, you name it – [but] if you buy into this arrest warrant as legitimate, then you’re going to meet stiff, bipartisan resistance in America,” Graham said. “So, to the world, if you empower this folly at the ICC, then you will have a hard time doing business in America and coming to America.”

Netanyahu’s office confirmed that Graham had met with the Israeli leader during the trip.

The prime minister’s office said Graham “updated him on the efforts that he is advancing in the US Congress against the ICC and countries that have cooperated with it”.

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U.S. Housing Affordability to Worsen Even as Price Rises Slow: Reuters Poll

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U.S. Housing Affordability to Worsen Even as Price Rises Slow: Reuters Poll
By Sarupya Ganguly BENGALURU (Reuters) – Purchasing affordability for first-time U.S. homebuyers will worsen over the coming year on tight supply and just a few more Federal Reserve interest rate cuts, even as average home price rises slow, according to a Reuters poll of property experts. Without …
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