February 4, 2023

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The Spanish prime minister says Europe can learn from the Biden Act to lower inflation

Spanish Prime Minister Pedro Sanchez.

Anadolu Agency | Anadolu Agency | Getty Images

DAVOS, Switzerland — Spanish Prime Minister Pedro Sanchez told CNBC Monday that the European Union has something to learn from Washington and its new anti-inflationary policies, saying he hopes a trade war between the two sides can be avoided.

“We need to learn,” Sanchez told CNBC when asked about the inflation-lowering law, which the US hopes will make it the place for green investment.

“We need to fix some internal aspects of our industrial policies like state aid, reduce bureaucracy and try to send a message to industry all over the world that it’s Europe, and of course Spain, that’s a good place to locate it,” he added.

The sweeping US legislation, approved by US lawmakers last August, includes A record $369 billion in spending on climate and energy policiesIt received mixed reactions from 27 countries in the European Union. The European Commission, the executive arm of the European Union, had earlier stated that this was the case ‘Serious concerns’ About the design of financial incentives in the package.

The European Union has included points in the US Inflation Act that it believes may breach international trade rules. One of the biggest sticking points for Europeans is the tax breaks granted to electric vehicles made in North America. This may bring challenges to European automakers focused on electric vehicles, such as Volkswagen.

There have been suggestions that Washington could find ways for European companies to access these green subsidies, but this has further angered some European politicians. Belgian Prime Minister Alexandre de Croo, for example, recently It accused the United States of waging a “ferocious” campaign to attract companies to its shores with these measures.

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“I hope it doesn’t,” Sanchez said when asked about the possibility of a trade war between the United States and the European Union.

“I think we need this dialogue to reach an agreement,” he said.

“I think so [Russia-Ukraine] The war also shows us the importance of unity on the defensive side as well as on the economic side within Western countries.”