BERLIN (Reuters) - The European Union does not want to wage a subsidy war against the United States over its Inflation Reduction Act, EU Commissioner Paolo Gentiloni said in Berlin on Tuesday.
The EU Commission plans to present a package to promote European industry on Wednesday in response to the U.S. government's 370-billion-dollar subsidy package to promote climate-friendly technologies.
The EU said in December it would adapt its state aid rules to prevent an exodus of investment triggered by the Inflation Reduction Act, fearing it might lure away EU businesses and disadvantage European companies.
"This is a challenge for our competitiveness on top on already existing challenges," Gentiloni said.
A draft of the Commission's plan to support industries facing U.S. and Chinese competition, seen by Reuters on Monday, said it would produce a simpler regulatory framework for manufacturers of technologies deemed key to meeting the EU's climate change goals, including faster permitting procedures.
"We will not start this discussion from the end, meaning the funding," Gentiloni said.
The European Commission will not propose any new joint EU borrowing, a draft of its "Green Deal Industrial Plan" showed on Monday.
(Reporting by Christian Kraemer; writing by Matthias Williams and Maria Martinez; Editing by Paul Carrel and Rachel More)