The European Union presents the “Green Industrial Plan” (analogous to the US Green New Deal) designed to “ensure the EU’s clean technological leadership in the green industry”.
It is a socialist-oriented program that aims to plan the relocation and redeployment of numerous industries associated with clean energy, including million-dollar subsidies for selected countries, protectionist clauses, and a higher projected fiscal deficit for the coming years.
The Socialist MEPs’ draft focus on allocating resources to solar and wind energy, heat pumps, and “green batteries”.
Clearly, these industries’ development and geographical location will not come from a market allocation but will be a matter of centralized planning organized by the European Administration.
It is estimated to allocate an amount of up to 20 billion euros in additional subsidies to those already approved so far by the European Parliament. This amount will be aimed at “accelerating the green transition and reducing the bloc’s dependence on fossil fuels from Russia.
The funds will be allocated according to the European Union’s planning and distributed among the different member countries according to their degree of dependence on fossil fuels and the development of renewable energies.
60% of the resources to finance the subsidies will come from the EU Innovation Fund, and the remaining 40% from the advance sale of emission allowances from the ETS system.
One of the main problems of the socialist project is the extreme protectionism it professes, seeking to compensate in some way for the measures adopted by President Joe Biden through the Inflation Reduction Act of 2022.
Instead of applying dissuasive tariff measures as had occurred during the trade war between China and the United States, the new conflict is based on subsidies to purchase import substitutes.
In practice, domestic subsidies function as disguised tariffs, with the caveat that they avoid violating tariff agreements.
It should be recalled that the EU had already approved the launching of a package of up to €5.2 billion for the financing of green infrastructure, subsidies for microchip production centers, and to strengthen import substitution with the United States and China.
The protectionist escalation threatens to provoke a trade war that would put in check all the advances in international openness captured until the first decade of the 2000s.
With information from Derecha Diario