FirstFT: EU will simplify aid rules to compete with Biden’s climate package

Good morning. The EU must “simplify and adapt” its rules on state aid to counteract the competitive effects of the US’s new $369bn climate package, European Commission president Ursula von der Leyen said yesterday.

Europe should “adjust our own rules to make it easier for public investments”, von der Leyen said in her first public response to Washington’s green energy subsidy scheme, which EU leaders say risks “fracturing” transatlantic unity by luring European companies to relocate.

Washington’s measures have soured ties between Washington and Brussels and triggered a chorus of demands from EU states for a competitive response, fuelling fears of a trade war.

“The new assertive industrial policy of our competitors requires a structural answer,” von der Leyen said.

The potentially far-reaching proposals from the head of the EU’s executive underscore the scale of concern in Brussels about the US Inflation Reduction Act. EU and US officials are due to meet to discuss the topic today.

US president Joe Biden has called the legislation the most “aggressive action” his country has taken to confront the climate crisis. But European allies complain that measures including tax credits and subsidies for products such as electric vehicles give US-based enterprises an unfair advantage and will encourage EU industries to relocate.

Von der Leyen said yesterday that in response, the EU must overhaul its public investment regulations and reassess whether “new and additional funding at the EU level” was required. Brussels should also continue to demand the US adjust the IRA to resolve contentious issues, she said.

“There is a risk that the IRA could lead to unfair competition, could close markets and fragment . . . critical supply chains,” von der Leyen said. The EU should “take action to rebalance the playing field . . . [and] improve our state aid frameworks”.

Five more stories in the news

1. Chinese cities ease Covid restrictions after nationwide protests Chinese cities loosened zero-Covid restrictions over the weekend — such as requiring PCR tests to travel on public transportation — building expectations that Beijing could ditch the pandemic policy that has kept the country isolated for nearly three years and battered the economy.

2. Iran signals end to morality police who upheld Islamic dress code Iran’s prosecutor-general, Mohammad Jafar Montazeri, confirmed last week that the country’s Guidance Patrol (the morality police) has shut down. The announcement comes after nearly three months of protesting over the death of 22-year-old Mahsa Amini, who had been arrested for allegedly failing to observe the Islamic dress code.

3. Opec+ is ready to adjust oil output as Russia embargo looms Today will be one of the most dramatic shifts in global oil markets in decades, when the EU will bar seaborne Russian oil imports in retaliation for Moscow’s invasion of Ukraine. Opec and its allies vowed yesterday to stand ready to take “immediate” action to stabilise global oil markets.

4. Kyiv and Baltics hit out at Macron’s stance on Russia French president Emmanuel Macron faced strong criticism from Kyiv and in Baltic nations yesterday after he suggested Russia would need to be given security guarantees as part of future negotiations to end the war in Ukraine.

5. US says Chinese solar companies have been evading tariffs On Friday, The US commerce department said it has found that Chinese solar manufacturers have been avoiding tariffs by assembling panels for export to America in south-east Asia. The preliminary findings are the result of a long-running probe into China’s dominance over the solar industry’s supply chain.

The day ahead

WHO meeting The World Health Organization will meet in Geneva to review the new pandemic accord.

Criminal trial for Brussels bombings Belgium’s biggest criminal trial on the 2016 Brussels attacks that killed 32 people and left hundreds injured, is due to start today.

St Nicolas Eve the Netherlands celebrate on the night before Sinterklaas

Cricket match It’s the last day of the first England vs Pakistan Test match in Rawalpindi, Pakistan

Economic indicators A variety of Purchasing Managers Indexes are released today: in the US, November ISM non-manufacturing PMI data; in China, Caixin general services PMI data; in Russia, November S&P Global Services PMI; in the UK, November S&P Global/Cips Composite PMI; and in the EU, November S&P Global Composite PMI

What else we’re reading

How Sam Bankman-Fried blurred lines between FTX and Alameda The FTX founder insisted that he had walled himself off from trading and risk management at the Alameda Research trading firm, which he majority-owned, but also admits to closer involvement than he had previously disclosed, saying that “we kind of lost track of positional risk”.

The humbling of Xi Jinping Three years of lockdowns, mass testing and Covid detention centres have finally caused public frustrations to boil over in China, resulting in nationwide protests and even calls for Xi to step down. The dissent will go down as a remarkable moment in modern Chinese history and evidence that the country’s much-vaunted “social stability” is much more brittle than it seems.

Simon Schama: art versus the tyrants With the streets of China and Iran recently “alive with infuriated, chanting crowds, so tired of being institutionally deceived”, the historian reflects on how poetically charged words, images and music can be deployed as unlikely weapons. “Culture can do this because it can connect with human habits, needs and intuitions in ways that expose the inhuman hollowness of official propaganda,” he writes.

Musk’s experiment in chaos management at Twitter 2.0 As with much of his behaviour since the takeover of Twitter, last week’s spat with Apple has shown Elon Musk’s restless appetite for controversy and attention. Most people who take public companies private are only too eager to retreat from the public eye. For Musk, the opposite has applied, writes Richard Waters.

Ukraine war exposes ‘hard reality’ of west’s weapons capacity Nearly 10 months into Russia’s full-scale invasion of Ukraine, the allies that have backed Kyiv’s war effort are increasingly concerned by the struggle to increase ammunition production as the conflict chews through their stockpiles. “What matters is production. Production really matters,” said one expert.

Home

Rather than restoring a house “perfectly”, restore it to imperfection. Pristine is passé — and there’s a new, sustainable aesthetic that showcases the scars of the past while preserving a building’s history and collective memory.