Since the end of 2022, the European Union has been scrambling to respond to the US Inflation Reduction Act (IRA). The American law is a stimulus package aimed at reducing inflation, but it has become most famous as the channel through which the Biden Administration was able to introduce a significant amount of business-friendly anti-climate change subsidies and tax cuts.
In the latest effort to address concerns that the IRA gives unfair competitive advantage to American companies, EU Commission President Ursula von der Leyen introduced a new plan to stimulate green investments during her special address at the 2023 World Economic Forum’s annual meeting in Davos: the EU’s Green Deal Industrial Plan. To support this plan, the president of the European Commission foresees the adoption of a new Net-Zero Industry Act and a European Sovereignty Fund.
