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Why big Italian companies are bashing Germany and France on anti-US state aid

Why big Italian companies are bashing Germany and France on anti-US state aid

Stefano Firpo, director of Assonime (the association of large Italian companies), criticizes the EU for the easing of state aid which favors Paris and Berlin. Meanwhile, the Franco-German couple is going to the United States to find an agreement with Biden. Facts, comments and insights

An "free everyone" indiscriminately on state aid" is a trap that would penalize Italian companies compared to their French and German competitors. The European Union must "avoid wrong answers, such as responding with a buy Europe to buy America ".

Stefano Firpo, general manager of Assonime (the association of Italian private and public joint-stock companies), formerly in Intesa Sanpaolo with Corrado Passera and then in the ministries of technological innovation and economic development, expresses a substantially contrary opinion on the Green Deal Industrial Plan , the European Commission's plan to aid green industry in response to subsidies from the US Inflation Reduction Act .

THE CRITICAL ASPECTS OF THE EUROPEAN PLAN ON STATE AID

The industrial plan of Brussels, in fact, proposes a relaxation of the community legislation on state aid, in order to allow member countries to better support companies operating in strategic sectors for the ecological transition.

However, Giorgia Meloni's executive is very critical of this measure because it thinks it will end up putting Italian companies at a competitive disadvantage compared to German and French companies, which can count on the support of governments with more spending possibilities .

Of the €672 billion in state aid the Commission approved in 2022, Germany was worth 53 percent of the total sum and France 24 percent; Italy, on the other hand, only 7 percent.

WHAT FIRPO SAID ABOUT STATE AID

Interviewed by Corriere della Sera , Stefano Firpo said that, with regard to state aid, “the requests of France and Germany for a general loosening of the constraints on public aid cannot be satisfied. Countries with more limited spending margins would be penalized and above all one cannot think of going it alone: ​​not even Germany can sustain muscular competition with the United States and China”.

"If we want to loosen the rules on state aid", he added, "everything must be aimed at the resources of the PNRR, REPowerEU and the cohesion funds". With regard to the European sovereign wealth fund, proposed months ago by the President of the Commission Ursula von der Leyen and supported by Italy, Firpo thinks it is an “interesting proposal. But we cannot say that European resources are lacking in this phase”: the Green Deal Industrial Plan, in fact, does not provide for new funding but reuses resources already allocated.

MORE US-EU ALIGNMENT

According to the general director of Assonime, the European Union should not start a war on subsidies with the United States – that is to say "respond with a buy Europe to buy America " ​​by Joe Biden -, but rather seek a commercial collaboration with Washington.

“We need to work to ensure that American measures in favor of the green transition are open to including European products. There is room for an agreement and, among other things, we Italians are the most interested in avoiding protectionist tendencies. We owe almost 35% of our gross domestic product to exports, the third highest level in Europe after Germany and Spain, with an annual growth of 20.5% in the first eleven months of 2022”.

MINISTER URSO'S OPINION

“It is crucial for us that global trade remains open,” Firpo said. "In this I share the approach of Enterprise Minister Adolfo Urso when he speaks of a 'state strategist', not 'sovereign', not protectionist".

Urso's position is substantially the same as Firpo's. In fact, the minister thinks that the easing of state aid regulations "could aggravate the European question, because there are countries like Germany that have important and significant resources for investing, and other countries like Italy […] that have no these national resources to invest”. And he believes that "it would be wrong" to start a trade war with the United States "because it would divide the West"; instead, the bloc should join in competing with China on clean technologies, from solar panels to batteries for electric vehicles.

THE FRANCO-GERMAN MISSION IN WASHINGTON

Speaking of Europe-America coordination, tomorrow the German and French ministers of the economy, Robert Habeck and Bruno Le Maire, will meet in Washington with the US secretary of the Treasury Janet Yellen. Paris and Berlin want the Biden administration to extend subsidies guaranteed to US, Canadian and Mexican companies that produce clean technologies to European allies.

– Read also: Here are the requests of France and Germany to Biden on green subsidies

Urso commented on Habeck and Le Maire's trip, telling La Repubblica that he hoped that the two “will achieve positive results for everyone, because we believe transatlantic dialogue is fundamental. We knew that France and Germany were planning the mission. Italy is acting to unite the European Union and we are convinced that the positions must be fully expressed by the European presidency and the Commission. We need a common, assertive answer that unites and does not divide Europe and that is positive and not opposed to the American one, for a truly competitive and supportive industrial policy”.

“I think they too are acting in the same direction,” he concluded.

THE INDUSTRIAL REVOLUTION OF SUSTAINABILITY

According to Stefano Firpo, a "strong point" of the Inflation Reduction Act "is that it highlights how the challenge of the environmental and green transition is manufacturing: we need solar panels, we need equipment and systems for the energy efficiency of buildings, we need to build electrolysers, we need batteries and inverters, we need to invest in clean technologies”.

“The message coming from America”, he continues, “is that the green transformation is done with industry, developing its production capacity. Instead, we need to get out of a European attitude that over many years has thought of decarbonisation somewhat against industry”.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/stefano-firpo-aiuti-di-stato-industria-verde-europea/ on Mon, 06 Feb 2023 09:02:32 +0000.