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The Biden administration’s massive energy transition spending plans risk hurting the relationship between the U.S. and the EU by pushing the latter closer to China, the bloc’s trade commissioner has warned.
According to Valdis Dombrovskis, as quoted by the Financial Times, the Inflation Reduction Act, which stipulates spending of some $369 billion, most of its for the energy transition, could make “overtures and propositions” from China to the EU more appealing.
Should this happen, he went on to add, it “may work against the stated aim of the Inflation Reduction Act”.
Earlier this month, French President Emmanuel Macron also criticized the Biden administration’s spending bill, saying it could fragment the West. The warning came after Macron slammed the IRA during a visit to the U.S., saying it would hurt the competitiveness of European businesses.
“The choices of the past few months, in particular the IRA, are choices that will fragment the west,” the French president said during his visit to Washington, as quoted by the FT. “We need to co-ordinate and re-synchronise our policy agendas.”
Separately, he said that the EU should come up with an in-kind response to the IRA, and soon.
"When you have two superpowers massively subsidise some sectors, you could decide not to do anything, to respect the rules and the purity of (free-market) doctrine ... but nothing much will be left (in Europe) in the end," the French president said earlier this month, as quoted by Reuters.
He then went on to suggest the EU spends the equivalent of 2 percent of its combined GDP on such a spending plan.
The European Commission has also chimed in, saying the billions in green energy and EV subsidies that the IRA envisages are discriminative towards European Union companies and represent a threat to the EU’s industrial base.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
The United States claims to be an ally of the EU as long as the EU does America’s bidding which is to use it in the fight against both Russia and China and when this is over to resume its objective of emaciating the EU.
The US provoked the Ukraine conflict and dragged the EU into it with the aim of weakening Russia and its strategic alliance with China and also slowing down the transition of the World Order from a unipolar system led by the United States into a multipolar one being ushered by Russia and China. As a result, the EU is paying a most horrendous price in crippling energy bills, shrinking economy with many industrial sectors either closing down or downsizing or relocating to where energy is cheaper and having to deal with a rampant inflation and a harsh recession.
It is very probable that America’s aim is to transform the EU into an American vassal or ultimately breaking up the Union altogether and erasing the euro from the face of the earth.
Any wonder then in the EU trade commissioner saying that the Biden administration’s massive energy transition spending plans risk hurting its relationship with the EU and pushing it closer to China? Or French President Emanuel Macron criticizing the Biden administration’s spending bill on energy transition saying it could fragment the West or slamming the “Inflation Reduction Act” (IRA) during a visit to the U.S. saying it would hurt the competitiveness of European businesses or accusing the US of double standards in selling its LNG to the EU at 3-4 times the price it sells it domestically. Referring to the IRA, President Macron went on to say "When you have two superpowers massively subsidise some sectors, you could decide not to do anything, to respect the rules and the purity of (free-market) doctrine but nothing much will be left (in Europe) in the end."
The only way for the EU out of this quagmire is to reconsider its stance vis-a-vis Russia and lift the sanctions on it in return for plentiful and cheap Russian oil and gas supplies on which Europe’s economy was built.
And as if this isn’t enough, the US is now provoking China on Taiwan ignoring the fact that such risky moves serve to cement further China’s relations with Russia and make Chinese President Xi Jinping more determined to unite Taiwan with the Chinese mainland even at the risk of a nuclear war with the United States and all for the US to just keep its hands on Taiwan’s micro-chip industry accounting to 70% of the world’s share to itself.
It seems that the United States is doing everything within its power to accelerate the fulfilment of an inner death wish.ahfT
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert