The EU must avoid the “slippery road” of protectionism as it enters a fractious industrial showdown with the United States, European Parliament President Roberta Metsola told POLITICO in an interview Wednesday.
“Do we enter a subsidy war? I would very much caution against, but I fear when I see an increase in protectionist angles,” Metsola said, speaking at the gala to unveil the POLITICO 28 ranking of Europe’s most influential people in the coming year.
Europe is upset over provisions under Washington’s giant Inflation Reduction Act to provide billions of dollars worth of subsidies and incentives to its domestic green tech and electric vehicle sectors. The EU fears this could give U.S. manufacturers a competitive advantage at a time when European industrialists are facing severe economic pain linked to the post-pandemic recovery and eye-watering energy bills stemming from Russia’s war in Ukraine.
The subsidy scheme has even driven some in Europe to accuse Washington of profiteering while war rages on the European Continent.
Metsola said the EU should avoid the “slippery road of who goes to the very bottom of the protectionist race.” She added a caveat that some degree of state interventionism is also necessary to drive economic growth.
Instead, the bloc should try to gain a competitive edge globally by sticking to its democratic values and pursuing its climate agenda, she said. “I want to look at us competing on our climate goals rather than on how we close our arms and think that’s beneficial — because it’s not,” she said. “I think we should continue to insist that our way can work.”
Metsola also called for a more proactive approach to relations with Beijing and other countries in Asia, describing the EU’s industrial dependence on China as “economically huge.”
“We have not worked together with our Asian partners enough, so many trade deals are still outstanding on the table. Where are we? Why don’t we lead those debates rather than whine?” she asked.
As the EU hunts for more funding to help bolster the Continent’s industrial base, Metsola said a complete revision of the EU’s budget was the only way to ensure soaring inflation and interest rates don’t make the bloc’s historic COVID borrowing worthless.
If 2023 fails to live up to being “the year of competitiveness” and recovery, Metsola suggested that her 2.5-year mandate will be dominated by battling crises.
Accusations of cronyism
Metsola, a Maltese politician and long-time MEP from the center-right European People’s Party, also robustly defended herself against allegations of cronyism over how she appointed her group’s candidate to the most senior civil service role in the Parliament.
Alessandro Chiocchetti, who currently serves as Metsola’s head of Cabinet, won the role through a series of backroom deals first reported by POLITICO last summer. He is set to take up the role of Parliament’s secretary-general in the new year, after agreements were struck in September with other political groups that were criticized by transparency advocates.
“What I would change is I would codify the rules that we set up [and] I insisted on, in order not to have any other civil servant in this town with three decades of experience go through what the next secretary general of the European Parliament went through,” said Metsola.
She also mentioned that she read POLITICO “every morning, all summer” as the scandal was covered.