Tag: tax

Joe Biden’s European friends may be miffed about his climate law.

But the U.S. president’s America-first, subsidy-heavy approach has actually gained some grudging — and for a Democrat unlikely — admirers on the Continent: Europe’s conservatives.

Within the center-right European People’s Party, the largest alliance of parties in the European Parliament, officials are smarting over why their own politicians aren’t taking a page from the Biden playbook.

Their frustration is homing in on European Commission President Ursula von der Leyen — a putative conservative the EPP itself helped install. Officials fear they have let von der Leyen lead the party away from its pro-industry, regulation-slashing ideals, according to interviews with leading party figures.

Biden’s law has now brought their grumbling to the surface.

On Thursday, a wing of EPP lawmakers defected during a Parliament vote over whether to back von der Leyen’s planned response to Biden’s marquee green spending bill, the Inflation Reduction Act (IRA). Their concern: it doesn’t go far enough in championing European industries.

Essentially, they want it to feel more like Biden’s plan.

The IRA was an “embarrassment” for Europe, said Thanasis Bakolas, the EPP’s power broker and secretary general. The EU “had all these well-funded policies available. And then comes Biden with his IRA. And he introduces policies that are more efficient, more effective, more accessible to businesses and consumers.”

A bitter inspiration

European leaders were blindsided last summer when Biden signed the IRA into law.

Since then, they have complained loudly that the U.S. subsidies for homegrown clean tech are a threat to their own industries. But for the EPP, ostensibly on the opposite side to Biden’s Democrats, the law is also serving as bitter inspiration.

“It’s a little bit like in the fairy tale, that someone in the crowd — and this time it wasn’t the boy, it was the Americans — pretty much pointing the finger to the [European] Commission, and saying, ‘Oh, the king is naked?’” said Christian Ehler, a German European Parliament member from the EPP.

Under the EU’s centerpiece climate policy, the European Green Deal, the European Commission, the EU’s policy-making executive arm, has doggedly introduced law after law aimed at squeezing polluters from every angle using tighter regulations or carbon pricing. The goal is to zero out the bloc’s net greenhouse gas emissions by 2050.

Biden’s IRA approaches the same goal by different means. It is laden with voter- and industry-friendly tax breaks and made-in-America requirements. Viewed from bureaucratic, free-trading Brussels, Biden’s climate policy looks more sleek, geopolitically muscular — and, notably for the EPP, more appealing to voters on the right than anything actually coming out of the EPP-led Commission.

For some, the sense of betrayal isn’t directed at Washington, but inward.

“We learned that we lost track for the last two years on the deal part of the Green Deal,” said Ehler, who is using his seat on Parliament’s powerful Committee on Industry, Research and Energy to push for fewer climate burdens on industry. “We are in the midst of the super regulation.”

The irony is that Biden and the Democrats probably wouldn’t have chosen this path were it not for Republicans’ decades-long refusal to move any form of climate regulation through Congress.

The IRA was a product of political necessity, shaped to suit independent-minded Democratic senators such as Joe Manchin of coal-heavy West Virginia. If Biden and his party had their druthers, Biden’s climate policy might have looked far more like the Brussels model.

Let’s get political

As party boss, Bakolas is preparing the platform on which the EPP — a pan-European umbrella group of 81 center-right parties — will campaign for the 2024 EU elections.

He is also flirting with an alliance with the far right, meaning the center-right and center-left consensus that has dominated climate policy in Brussels could break up. Bakolas advocates “a more political approach.”

“We need to do the same [as the U.S.], with the same tenacity and determination,” he said.

One big problem: It’s hard for the European Union, which doesn’t control tax policy, to match the political eye-candy of offering cashback for electric Hummers (something Americans can now claim on their taxes).

“Can Europe, this institutional arrangement in Brussels … act as effortlessly and seamlessly as the American administration? No, because it’s a difficult exercise for Europe to reach a decision … but it’s an exercise we need to do,” said Bakolas.

In other words, the EPP is looking to emulate Biden’s law — at least in spirit, if not in legalese.

The conservative thinking is beginning to coalesce into a few main themes: slowing down green regulation they feel burden industry; using sector-specific programs to help companies reinvest their profits into cleaning up their businesses; and slashing red tape they say slows already clean industries from getting on with the job.

EPP lawmaker Peter Liese said he had been “desperately calling” for these red-tape-slashing measures. He was glad to see some in von der Leyen’s contested IRA response plan. But Liese and the EPP want more.

“We can have an answer of the two crises, the two challenges, that we have: the climate crisis and challenge for our economy, including the IRA,” said Liese.

Green groups and left-wing lawmakers argue the EPP is simply using the IRA and Europe’s broader economic woes as a smokescreen to cover a broad retreat from the Green Deal. In recent months the party has blocked, or threatened to block, a host of green regulations proposed by the Commission.

“This is like trying to put on the ballroom shoes of your grandfather and trying to do a 100-meter sprint,” Green MEP Anna Cavazzini told Parliament on Wednesday.

Bakolas rejected that.

He said the party had finally woken up to the need to set a climate agenda that better reflected its own, center-right, free-market ideals.

“What the IRA did,” he said, “is to ring an alarm bell.”