By Foo Yun Chee
BRUSSELS (Reuters) – The European Commission plans to seek feedback on whether the 27-country bloc needs to loosen state aid rules to allow governments to support companies affected by the U.S. Inflation Reduction Act, two people familiar with the matter said.
The $430 billion act, which grants consumers tax credits for U.S.-produced electric vehicles (EV) and other green products, has triggered fears it could disadvantage European Union companies and tempt businesses to relocate to the United States.
While Germany, France, Italy and others have called for more subsidies or a similar EU law, others point to the billions of euros already pumped into companies in recent years to counter the COVID-19 pandemic and the impact of the war in Ukraine.
The EU executive will ask countries if looser state aid rules known as the temporary crisis framework adopted in March for businesses hit by the war in Ukraine should be extended to companies affected by the U.S. subsidy law, the people said.
The Commission, which will decide after the consultation, did not immediately respond to a request for comment.
(Reporting by Foo Yun Chee; Editing by Alexander Smith)
