EU readies sovereignty fund to fight off US, Chinese competition


EU chief Ursula von der Leyen on Tuesday announced the preparation of a "sovereignty fund" and a Net Zero Industry Act, both intended to defend Europe's industrial base from subsidised US and Chinese competitors.

The European Sovereignty Fund would come as "part of the mid-term review of our budget this year", Von der Leyen said in a speech at the World Economic Forum in Davos. The Net Zero Industry Act is intended to boost clean technologies.

Von der Leyen launched the idea of the fund in September last year, saying it was necessary for Europe to "adapt to the new global realities".

Singling out areas "as varied as batteries, hydrogen, semiconductors and raw materials," Von der Leyen said the time had come "to take these efforts to the next level to increase Europe's strategic autonomy".

The Net Zero Industry Act would propose a series of clean technology objectives for 2030 and is aimed at competing with the US Inflation Reduction Act, a $369 billion green subsidy package that the EU fears will damage European industries.

"It is no secret that certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies," according to Von der Leyen.

But US climate envoy John Kerry countered that countries complaining about the act should instead try to imitate the United States.

Von der Leyen also took aim at Chinese subsidies for its domestic clean technology industries.

(With newswires)

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