The next decades will see the biggest industrial revolution of our time, estimates the president of the EU Commission Ursula von der Leyen.
He calculates that the European Union and the United States will invest a total of one thousand billion, or one trillion euros, in the green transition in the coming years.
This amount is reached when the funds from the EU corona recovery package NextGenerationEU and the funds from the US climate package Inflation Reduction Act (IRA) are added together.
Von der Leyen spoke about it on Tuesday at the World Economic Forum in Davos, Switzerland.
Von der Leyen stated that it is no secret that certain elements of the US IRA package raise concerns in the EU.
“That is why we have worked together with the USA to find solutions, for example, that electric cars made in Europe could also benefit from the IRA.”
In its package, the United States starts with the fact that purchase subsidies can be granted for electric cars that are manufactured in the United States, Canada or Mexico.
According to von der Leyen, the EU’s goal is to avoid disruptions in transatlantic trade and investment relations.
“We should work to ensure that the incentive programs on both sides are fair and mutually reinforcing.”
The sovereign fund will
Von der Leyen stated that the EU has a new plan, the Green Deal Industrial Plan. Its goal is to make Europe “the home of clean technology and industrial innovation”.
According to von der Leyen, the plan consists of four basic pillars: the development of the regulatory environment, financing, know-how and trade.
Von der Leyen said that the Commission is preparing the establishment of the European Sovereignty Fund. It would become part of the mid-term review of the EU budget later this year.
Von der Leyen did not specify how the sovereign fund would be financed. In practice, the alternatives would be increasing the EU budget, redirecting the funds of the current financial programs or some kind of new joint debt solution.
According to Von der Leyen, the sovereignty fund offers a structural solution for the EU to increase resources for e.g. research, innovation and industrial projects.
“But since this will take some time, we are developing a bridging solution to provide quick and targeted support where it is most needed.”
The Commission also plans to propose a temporary change to the EU’s state aid rules.
“Easier calculations, simpler procedures and accelerated approvals,” von der Leyen summed up.