Written by 12:38 pm European Union

EU leaders tackle discord over support for industry, Russia sanctions

BRUSSELS, Dec 15 (Reuters) – European Union leaders met on Thursday to try and resolve some of their outstanding disagreements before the year ends, from ways to defend their industry against subsidy-fuelled U.S. competition to new sanctions against Russia and a gas price cap.

In a summit overshadowed by a corruption scandal that emerged in the EU parliament over the past week, leaders were also faced with Poland holding up a deal on minimum corporate tax and, by extension, an 18 billion euro loan to Ukraine.

After Belgian prosecutors charged Eva Kaili, a Greek member of the EU chamber, and three others for accepting bribes from World Cup host Qatar, European Parliament chief Roberta Metsola said the assembly “is not for sale”.

She said the house would have an in-depth review of how it deals with third countries and would reinforce whistleblower systems. Qatar and Kaili have denied any wrongdoing.

The EU leaders’ meeting in Brussels then turned to seeking a joint response to the U.S. Inflation Reduction Act (IRA) – $430 billion worth of tax breaks for green energy.

Poorer EU countries want a coordinated response and warned richer member states like Germany against supporting their industries without showing solidarity with the rest of the bloc.

“We are in Europe at a point when we risk being deindustrialised, and today our answer is not a common answer,” Belgian Prime Minister Alexander De Croo said.

“Today we see that too often countries are trying to install schemes on their own. It looks a bit like a game of the deepest pocket.”

No deal is expected on Thursday, but the leaders are set to ask the EU’s executive Commission to make proposals early next year to prop up the bloc’s industry.

Commission President Ursula von der Leyen has proposed loosening state aid restrictions in renewable energy and clean-tech because the IRA could lead to unfair U.S. competition.

“We need to give our answer, our European IRA,” she said.

Different approaches over how to defend industry come at the end of a year when the EU closed ranks to support Ukraine after Russia’s invasion, but often struggled to agree how much pressure to put on Moscow, including through economic sanctions.


While the EU’s response to IRA will be shelved for a later summit, leaders will make another push at agreeing on a ninth package of Russia sanctions.

Any decision requires unanimity and the EU’s Russia hawks Poland and Lithuania have warned proposed exceptions for food security might in fact benefit Russian oligarchs in the fertilizer business.

Lithuanian President Gitanas Nauseda said it was important to keep the sanctions as strong as possible. “We are a little bit concerned with attempts to weaken the sanctions under the cover of food security,” he said.

The leaders are not expected to hold in-depth talks on the EU’s struggle to agree a natural gas price cap, but rather ask their ministers to “urgently finalise” the work when they meet again on Monday, the draft of the summit conclusions said.

Separately, Poland was holding up the EU’s formal adoption of a minimum corporate tax for large companies and, by extension, also blocking a whole package of other deals, including financing for Ukraine in 2023.

Polish Prime Minister Mateusz Morawiecki said his country was subject to “blackmail” by its EU counterparts pushing to accept the package as a whole.

Warsaw strongly supports the aid to Ukraine but has said agreeing to the global minimal tax might leave EU countries at a competitive disadvantage against those that do not adopt it.

Additional reporting by Phil Blenkinsop, Gabriela Baczynska, Benoit Van Overstraeten, Kate Abnett, Tassilo Hummel, Michel Rose; Writing by John Chalmers and Ingrid Melander; Editing by Gabriela Baczynska, Alexandra Hudson

Our Standards: The Thomson Reuters Trust Principles.

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