Written by 9:14 pm Europe Economy

Italy urges EU to work towards more economic independence from US

Italy’s Prime Minister Giorgia Meloni

Italy urges the European Union to try to become further economically independent from the United States in retaliation against Washington’s passage of a law that has come to undermine economic competitiveness between the European bloc and the US.

Italian Prime Minister Giorgia Meloni made the remarks during her yearend press briefing in Rome, Bloomberg reported on Thursday.

US President Joe Biden signed off on the law in August.

Dubbed the US Inflation Reduction Act (IRA), the law injects $360 billion into American companies that work in the field of alternative energy, besides providing them with tax breaks and other incentives. The law also increased subsidies for domestic producers of electric cars and the vehicles’ batteries.

Meloni said the EU had to protect its key industries in the face of the law that, she said, puts the bloc’s manufacturers at a competitive disadvantage.

The EU, the premier added, had to do so by building its own supply chains for key industries — including alternative energy, computer chips, and automakers — and increasing state support for manufacturers.

Earlier this month, Italy’s Economy Minister Giancarlo Giorgetti warned that the incentives that the United States was providing for its domestic manufacturers have prompted some European countries to move to the US. Giorgetti denounced the trend as “a disaster.”

Other European leaders have also protested the American law.

French President Emmanuel Macron has warned that the legislation could “fragment the West.”

European Commission President Ursula von der Leyen has also suggested that the EU had to counter the US law by boosting funding to the bloc’s companies and facilitate investment in the continent’s own manufacturers.

Source link