EU Announces Green Subsidy Plan to Rival U.S. Inflation Reduction Act

The European Commission announced new rules (Reuters) that will allow green industries in European Union (EU) countries to receive subsidies that “match” those offered outside the bloc. Under the new rules (FT), subsidies must be requested by a lower-income European country or by a group of three countries in which two are a from less wealthy region. The rules aim to prevent local businesses from moving to the United States for subsidy benefits offered under the Inflation Reduction Act (IRA).

European Commission President Ursula von der Leyen is currently in Washington, where she and U.S. President Joe Biden are due to discuss European firms’ eligibility for IRA benefits. Europe’s largest carmaker, Volkswagen, has stalled plans to build a new plant in Europe after discovering it could receive nearly $11 billion in U.S. incentives.

Analysis

“The United States and Europe could fashion a ‘green peace’ on subsidies, accepting rather than warring over each other’s schemes until zero-carbon industries achieve the necessary reach and scope to meet consumer demand,” the Roosevelt Institute’s Todd N. Tucker and Felicia Wong write for Foreign Affairs.

“The EU’s tough stance on the IRA has ebbed in recent weeks, with other officials suggesting that the EU’s own incentives are equal or greater than some of the benefits offered in the US law,” Bloomberg’s Alberto Nardelli writes.

Pacific Rim

China Swears In Xi for Third Term as President

The country’s legislature unanimously approved (SCMP) Xi’s new term. Li Qiang and Ding Xuexiang, longtime aides close to Xi, are expected to be sworn in as China’s premier and executive vice premier, respectively.

This Backgrounder examines Xi’s power over the ruling Chinese Communist Party.

Micronesia: Outgoing President David Panuelo wrote a letter (The Guardian) to the country’s lawmakers and state governors that described Chinese efforts to bribe and bully Micronesian officials and outlined a possible diplomatic shift toward recognizing Taiwan.

South and Central Asia

Australia, India Pledge to Accelerate Trade Deal

Australian Prime Minister Anthony Albanese said the countries agreed to an early conclusion (Reuters) of the deal and said he hoped it can be finalized this year. While the two countries signed a free trade agreement last year, progress on this much larger deal has been halted for more than a decade.

Afghanistan: The Islamic State in Khorasan claimed responsibility (AP) for an attack that killed the governor of Balkh Province yesterday.

Middle East and North Africa

Riyadh Reportedly Seeks U.S. Security Guarantees in Exchange for Normalizing Israel Ties

Riyadh is also demanding the United States’ assistance in developing its civilian nuclear program and reducing restrictions on arms sales to Saudi Arabia, the New York Times reported.

Egypt: Cairo announced its plans to withdraw (Reuters) from the world’s only treaty covering the grain trade, saying its participation provided “no added value.” Egypt is one of the world’s largest wheat importers.

This In Brief discusses how Russia’s war in Ukraine has amplified food insecurity in the Middle East and North Africa.

Sub-Saharan Africa

Mali Junta Delays Constitutional Referendum Set for March

Mali’s military leaders said the referendum will be “slightly postponed” (AFP) but that the junta will still maintain a previously agreed timeline for a return to civilian rule. The referendum will set the stage for elections scheduled for February 2024.

Zambia: Anti-graft authorities arrested the country’s chief auditor (Bloomberg) on corruption charges.

Europe

Macron, Sunak Talk Migration in Paris

France and the United Kingdom (UK) held their first leaders’ summit (Le Monde, AFP) in five years today. Bilateral relations have improved under UK Prime Minister Rishi Sunak, who asked French President Emmanuel Macron for France’s participation in a new pact to address illegal migration across the English Channel.

For Foreign Affairs, CFR’s Matthias Matthijs discusses how Sunak is resetting relations with Europe.

Americas

Letter Claims Gang Turned In Members Who Killed Americans

Police in Matamoros, Mexico, found five men with their hands bound (WaPo). A note accompanying the men claimed to be from a Gulf Cartel faction and condemned the recent killings of two Americans. The note said the gang wanted to “hand over” those responsible.

Brazil/Uruguay: The two countries agreed to several joint infrastructure projects (MercoPress), including developing a waterway, building a bridge, and making an airport binational. Brazil also invited Uruguay to the Group of Twenty (G20) conference it will host next year.

United States

Labor Shortage Plagues U.S. Plans to Build Domestic Chip Industry

The lead contractor for Intel’s new complex in Ohio, the chipmaker’s first U.S. project in forty years, is struggling to find local workers, Bloomberg reported. Analysts say a countrywide labor shortage could slow U.S. efforts to boost domestic chip manufacturing.

Friday Editor’s Pick

Australia’s ABC uses data from laser scanners and drones to create 3D models that document the damage war has wrought on Ukraine’s cultural sites.

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