The EU is preparing for a race for subsidies with the US and China in the ecological transition

The alarm sounded in Brussels this summer. The star plan of the Joseph Biden Administration to promote its energy transition in the United States contained protectionist measures based on public aid and with a high potential to attract investment that, in principle, could be located in Europe. With China, an economy intervened by the State to the core, the alert went off a long time ago. The European Union must respond if it does not want to be left behind in this green and digital revolution that threatens to make it lose competitiveness. How? The consensus ends here and, to start building it, European leaders want to study proposals quickly, in January. They have entrusted it to the European Commission, at the same time that they promise that next Monday their energy ministers will reach an agreement on the cap on gas prices, according to the draft conclusions already agreed in the European Council held this Thursday.

To begin to forge that consensus, they will meet again on February 9. But the solution goes through a difficult balance. On the one hand, Brussels must streamline the processes by which State aid is granted to companies. This could be heard in almost any delegation this Thursday. The president of the European Commission herself, Ursula von der Leyen, has been saying it openly for days. And she has transferred it to the presidents of State and Government in a letter sent this Wednesday: “We have to facilitate public investment to promote this unprecedented transition.” And she aimed to simplify State aid for renewable energies, industrial decarbonization processes or strategic products in the transition (batteries).

On the other side of the scale is the single market and the unequal fiscal capacity of the Twenty-seven to distribute aid among their companies. Germany, as it has already shown during this crisis, can draw on the checkbook. He announced an anti-crisis plan of 200,000 million euros that raised criticism in Brussels, Paris, Rome, Warsaw or Budapest. Its bonds with the highest credit rating in the markets and a volume of public debt close to 60% of GDP give it margin. Others like the Netherlands, Finland or Denmark also have it. On the other hand, there are countries that do not have this capacity.

“We need an equal competition and defend our green technology project,” claimed French President Emmanuel Macron, implicitly admitting where his weakness lies. You are not alone. The same happens with Italy, Greece or Belgium. “It looks like a game about who has the biggest pocket. In the end we have pressure from the United States and we need a response that respects the single market, which is our greatest asset and we have to preserve it,” added Belgian Prime Minister Alexander de Croo. Spain believes that it has a margin: if nothing goes wrong, before 2026 it should have close to an additional 100,000 million from Brussels between the Recovery plan and the Repower plan, plus what has already been granted from the first part of the fund to get out of the covid-19 crisis, close to 70,000 million.

In that bloc, the voices of those who ask for a response similar to the one with the coronavirus are growing. Namely: a common financing tool that allows everyone to respond with a certain equality without this depending on the budgetary power of each one. Von der Leyen, for the moment, talks about a sovereign fund that promotes investments. But it remains to be seen if in Brussels they think it is necessary to put new money on the table —financed with common debt such as the Recovery Fund—, or if it is enough to redirect already budgeted items. A week ago the president of the Eurogroup, Pascal Donohoe, responded to EL PAIS that “there is only consensus to use the tools already agreed upon”. Turning the sentence upside down, the Irishman came to admit that it will be difficult to agree on a fund with new resources. If the debate finally opens, it is easy to assume how each State will align.

The positions will be very similar to those already drawn on the gas price correction mechanism. Since the European Executive raised its inapplicable proposal, two clear sides have been seen that, on the other hand, are quite similar to the historical ones in recent decades: the countries of the north and those of the south. The first, with Germany, the Netherlands or Austria, do not want any type of limit on gas prices, but now that it is already on the table, they are betting on a design that prioritizes security of supply above all else, regardless of the price. to turn off. The latter, among which Spain stands out, although there are also France, Portugal, Poland or Italy, defend a mechanism that is operational and can come into force if the price of this fuel reaches the levels of last August.

The European Council has finally addressed the debate, but it has not gone down – as far as is known – to the details. It is thought to be too technical for the leaders of the 27 member states themselves to deal with. The solution has been to commit to their energy ministers resolving it next Monday, “strengthening solidarity through better coordination of gas purchases, especially with the joint EU purchasing platform, cross-border gas exchanges and indices of reliable prices.