In an interview with ZEIT ONLINE, our Deputy Director Nils Redeker comments on the USA's new Inflation Reduction Act. While the law enraged policymakers across the E.U. over provisions deemed protectionist, it also triggered a debate about possible European industrial policy responses.
"The Inflation Reduction Act touches on a core dilemma of industrial policy in the European Union," Redeker says. State aid law prohibits protectionist subsidies like those in the U.S. because individual financially strong nations like Germany could distort competition among E.U. states.
However, according to Redeker, new thinking is needed in the current situation. "In my view, we cannot avoid organising a European industrial policy."
Read the full article (in German) here.