Germany and France Push for Huge Spending to Compete With US

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France warned that European businesses will need to unleash investments on a nearly unparalleled scale to keep from falling behind US and Chinese firms as countries revamp their

economies to make them more climate friendly. German Chancellor Olaf Scholz and French President Emmanuel Macron met in Paris Sunday to discuss how the European Union should

respond to President Joe Biden’s Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade to benefit US companies. The EU

argues that the law, which came into effect this year, doesn’t comply with international rules and would unfairly entice companies to shift investments to the US from Europe. The

bloc’s leaders will meet next month to discuss their options, one of which is to file a complaint with the World Trade Organization. “The first thing is to make sure we as

the European Union are not treated worse than immediate neighbors such as Canada and Mexico, for example — that cannot be accepted,” Scholz told a joint news conference with

Macron at the Elysee palace, adding that the US has signaled “great understanding” on this point. “I’m currently very confident we’ll reach a necessary understanding during the

first part of the year.”