Welcome to the Euro Intelligence Podcast. I'm Wolfgang Munchau and with me are Zanzana Munchank and Jack Smith.

Today we would like to talk about the Inflation Reduction Act. Jack, can you explain to us what is the

inflation reduction act and why is this a problem for us Europeans?

Yeah, so I mean, the first thing is that the inflation reduction act kind of doesn't really

do what it says on the tin.

It's called that because they needed a nice name and they needed to convince Joe Manchin

to pass it.

The inflation reduction act really is a very large, basically omnibus tax and spending bill in the US. It has several

different components, but the biggest one and the one that is worrying the Europeans the most

is over basically the energy transition, the green transition, and the kinds of industries

that will be needed in the

US to help that move forward. It contains, and I'm just going to make sure that I have the

figures correct here, a kind of total subsidy package of about $369 billion US dollars to support

the development of renewable energy related industry in the U.S.

That is obviously a very large amount of subsidies, and that is really the core of the

problem that the European Union has with it is the fact that, you know, through these various

different industries and, you know, in terms of the kind of supply chains associated with those industries,

basically the amount of money that the Americans are putting into it will kind of like squeeze everybody else out.

That's a big problem for us Europeans.

Zuzana, you've written about the Franco-German response to this.

Now, traditionally, the biggest, most successful example of Franco-German cooperation is Airbus,

which was also set up in competition to an American predominance of a market.

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