Explainer: Why the U.S. Inflation Reduction Act has Europe up in arms

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Explainer: Why the U.S. Inflation Reduction Act has Europe up in arms
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French President Emmanuel Macron will use a state visit to Washington this week to press European Union concerns about the United States' huge new green energy subsidy package.

, possibly with an arrangement agreed at an EU-U.S. Trade and Technology Council meeting on Dec. 5.

However, a riposte from Europe would likely face resistance from more traditionally free trade friendly nations such as the Netherlands and Sweden.France has led calls for Europe to respond with state support of its own for European companies, including through a "buy European act" and large-scale subsidies.

Vice-Chancellor Robert Habeck, a green politician who met Macron last week, has gone so far as to say the EU could set targets for domestically produced products. European governments can also pool resources to subsidise cross-border projects deemed to be in the broader EU interest, but getting such initiatives approved by the European Commission can often prove long and complicated.

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