European Commission President Ursula von der Leyen said Sunday that Europe must “adjust our own rules to make it easier for public investments” due to rising concerns that the new and beefed-up energy incentives and subsidies contained in the Inflation Reduction Act (IRA) signed into law by President Joe Biden will create a flight of billions in investment capital to the U.S., largely at Europe’s expense. “The new assertive industrial policy of our competitors requires a structural answer,” von der Leyen said.
Von der Leyen’s statements came amid accusations from some European leaders that the new IRA measures put their continent at a competitive disadvantage for the attraction of new capital, and that the U.S. has been profiteering from the war on Ukraine being mounted by Russia. Politico recently quoted one unidentified European official as saying “The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons.”
A spokesperson for Biden’s National Security Council responded to that accusation by pointing out that “The rise in gas prices in Europe is caused by Putin’s invasion of Ukraine and Putin’s energy war against Europe, period.” The charge that the U.S. is profiteering as a country related to exports of LNG into Europe or anywhere else is a bit of a fallacy, given that these sales are all market-based arrangements conducted by private companies.
