State aid, even the Frugal ones against Germany. Meloni-Rutte phone call: “Let’s work together”

Bruno Le Maire and Robert Habeck flew to the United States to try to convince the US secretary of state, Janet Yellen, to accept some EU requests on the application of the Inflation Reduction Act (IRA), the maxi subsidy plan to support the industry in the “green” transition. They did so with their backs covered by the plan presented in recent days by Ursula von der Leyen, which according to Le Maire is the first step towards the birth of a “European IRA”. But in Brussels the positions of the governments are anything but solid, given that the front of the countries skeptical about the easing of the rules on state aid – for various reasons – is increasingly large.

The case is destined to raise tension at the extraordinary European Council which will open on Thursday, given that there was already an appetizer during the meeting of the General Affairs Council today. The summit revealed that “member states have different opinions on what the response should be” to the American subsidy plan, explained Jessika Roswall, Swedish minister for EU affairs, who heads the rotating presidency. France and Germany appear to be the only two states fully satisfied with the plan presented by the European Commission, given that various discontents emerge from the others.

There are two fronts on which the political battle between the 27 delegations is taking place: the first concerns the easing of restrictions on state aid, which will extend until 2025, and the second concerns the possibility of financing them with common instruments. On the first, there is a heterogeneous coalition of countries that has already expressed doubts about the plan put on the table by the Commission, for which a consultation has been launched which will close on 13 February. In December, Poland joined some Northern European countries (Denmark, Sweden, Finland, Ireland and the Netherlands) in signing a letter inviting the Commission to be cautious and in recent days, after the presentation of the EU executive plan, the Czech Republic, Slovakia, Hungary and Latvia also joined the call. “We don’t want there to be excessive flexibility in the rules on state aid: we have to respond to the IRA, but we have to be very careful” said Tytti Tuppurainen, Finland’s EU affairs minister. The Nordics, moved by the defense of the free market, do not welcome public subsidies to industry, while the Eastern countries fear that this could create disparities between the industries of the Old Continent.

It is the same concern of the Mediterranean countries, as Prime Minister Giorgia Meloni recalled during a telephone conversation with Dutch Prime Minister Mark Rutte: “We have common challenges and for this reason we have decided to work together in view of the extraordinary European Council” said the Dutch Prime Minister . But the aims are different: Italy is in fact trying to exploit this situation to ask for new common financing instruments. But the margins are very narrow and in fact the reference to a new fund similar to “Sure”, opposed by the Netherlands itself, has already been eliminated in the new draft conclusions of the European Council.

Speaking at the meeting in Brussels, Minister Raffaele Fitto reiterated that “Italy’s priority is to strengthen the competitiveness of European industry, avoiding solutions that create unequal conditions between those who have fiscal space and those who do not, with the consequent risk of fragmentation of the internal market”. For this reason, the Italian government is asking for the establishment of a debt-financed common fund, but is immediately ready to give its green light to the new rules on state aid in exchange for greater flexibility on the Pnrr and on the cohesion funds.