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The European Commission is allowing EU countries to grant green companies hundreds of billions of euros in tax breaks to keep them in European territory. Current strict state aid rules should be set aside until 2025.
Editorial office / Brussels

The European Commission announced this on Wednesday. The support for companies is intended to ensure that companies making sustainable products stay in Europe. The United States is trying to lure these companies away with lower energy prices and the so-called Inflation Reduction Act, a $369 billion support package.

EC president Ursula von der Leyen said that in response, European member states may use existing European subsidies to prevent the exodus of green companies. This includes, for example, the RepowerEU budget, originally intended to encourage the phase-out of Russian fossil fuels. Still €220 billion is left from this package. She also mentioned Invest EU and the Innovation Fund.

Sovereignty fund

For the longer term, the Commission wants to create a European sovereignty fund with even more aid money. This could make Europe less dependent on other countries, such as China, which is currently the biggest producer of raw materials indispensable for the energy transition. EU leaders discuss this at the EU summit in Brussels on 9 and 10 February.

Smaller countries, including the Netherlands, are criticising the plans. They would lead to inequality because smaller EU countries could offer companies less support than France and Germany, for example. The Netherlands would also not want the EU to borrow any more money for the sovereignty fund.

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