March 30
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The European Commission's plans to create new funding for the green industry are facing growing opposition as seven EU countries openly rejected the idea in a letter from the EC.

The letter, dated Jan. 26 and seen by Reuters, is signed by the Czech Republic, Denmark, Finland, Austria, Ireland, Estonia and Slovakia and addressed to European Commission Vice President for Trade Valdis Dombrovskis.

Germany, the Netherlands and Belgium, while not signing the letter, also oppose any new EU co-borrowing, further expanding the list of countries likely to vote against such plans when EU leaders meet to discuss them Feb. 9-10.

All 10 countries say the EU should use funds already approved, not additional money.

The commission says new funds are needed to level the playing field between poorer and richer countries to help their green industries against competing with China and the U.S.

EU officials are particularly concerned that the U.S. Inflation Reduction Act, which offers $369 billion in subsidies to firms making electric cars, batteries, wind turbines or hydrogen in the United States, will poach companies from the EU.

The fight to keep Europe attractive to green industry is made even more difficult by energy prices, which are much higher in the EU than in the U.S., and by the EU's lengthy green investment approval processes.

In the letter, the seven countries said the EU must first spend the money it has already agreed to raise through the €800 billion Post-Pandemic Recovery and Resilience Fund (RRF) in grants and cheap credit.

Germany, the Netherlands and Belgium shared this view, pointing to unused loans from the recovery fund that governments did not apply for because they preferred grants.

The letter said that instead of looking for new money, the EU should cut red tape for investments and make progress on its Capital Markets Union, a project that has dragged on since 2014.

The Capital Markets Union would encourage the use of private capital in the EU.

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