We said yesterday that Europe is not much to achieve by its own means the industrial and technological sovereignty demanded by a geopolitical scenario of blocks and a withdrawal of globalization that began a couple of decades ago and that threatens a prolonged cycle of undisguised protectionism. The old continent has been slow to understand that the rules of the economic game have changed and that the players they go free, disregarding friendships or conflicts of another nature.
Legalistic to the point of self-harm, Europe has lately admitted that the competition is not only military against the new Russian tsars and economic against Asia, but that it has a very aggressive economic component and it is also against its North American Atlantic partner. Entangled in a defense of democratic values on the continent and in the territorial integrity of sovereign countries, more aware of the icy wind that comes from the east than from the Atlantic, it has reacted late to US protectionist initiatives.
The European leaders censured the nationalist decisions of Donald Trump, whether political or economic, that there were both, and welcomed a change in tone from the new American administration, without repairing, or repairing too late, that in economic and industrial matters Biden was just one more diplomatic appendage to the America First that had shaken world economic status half a dozen years earlier.
The industrial withdrawal of the United States, initiated as a response to the imbalances generated by globalization, which had first upset the British to the point of madness with their particular Brexit and many European countries with the appearance of dangerous pockets of populism of various kinds, is a done a few years ago. It began with the massive repatriation of dividends pocketed by multinationals (a kind of tax amnesty that recapitalized the country and freed large American corporations), and culminated in a package of subsidies of nearly 400,000 million dollars for companies that relocate its production on American soil to absorb the delay that the country has in the green economic transition, with the euphemistic name of the Inflation Reduction Act.
In Brussels, a vast program of aid to the Member States of the Union had already been launched to readapt production models towards a more resilient industry, and balance economies eminently concentrated in services, whether they had added value or not. From a historic resignation to manufactures, with the only exceptions of Germany, France and northern Italy, one went, due to supervening circumstances, to trying to recover the lost sovereignty in health, industrial, technological and defense matters, after verifying the nakedness in which nations found themselves when the pandemic subjected them to an unexpected and severe stress test.
The Union has given full freedom to the Governments of each country to focus the destination of the money, in very large amounts and partly lost and partly at a political price, provided that they industrially strengthen their economies, complete the energy transformation and close the circle of digitization, in which Europe walked at very different speeds. The particular European governance, with slow decision-making first and highly bureaucratized capillary execution later in each country, has prevented a radical change in the economies from becoming visible. Meanwhile, the United States has put its centralized financial muscles in motion to quickly seduce big business, to the point that many native Europeans have weighed anchor to America.
The alarm has been unleashed by Volkswagen, which has acknowledged seriously studying taking its new car battery plant there, instead of locating it in Eastern Europe, where, in addition to having much more sparing aid, it has a geopolitical risk a few kilometers away without resolution in sight. But a few large energy companies, some of them Spanish, had already decided in the past months to bet on North American stimuli. The list of last-minute projects is abundant, with at least a dozen technology, automobile and energy companies for which there is no other country than the one that facilitates business at a reasonable cost.
Europe prepares, quickly and quickly, a financial antidote that neutralizes relocation. It does so in a more modest amount than the Americans and leaves the administration of subsidies to compensate the American El Dorado in the hands of the Governments. And it does so by breaking the sacrosanct limitation of State aid in the Union, a pillar of the defense of competition that makes sense in an imperfect union of 26 countries and 26 different interests, but its invocation can be counterproductive if you compete with a giant like the American
But it collides once again with poorly resolved governance, the different ways of understanding the functioning of the economy and nationalist bureaucracies. The urgency comes when the countries have to face very dangerous levels of indebtedness, in full escalation of interest rates and with renewed threats of sanctions and censorship from Brussels if they break, which will break, the fiscal seams. The worst scenario for Europe and for Spain.
Jose Antonio Vega is a journalist
Follow all the information of Five days in Facebook, Twitter y Linkedinthe en nuestra newsletter Five Day Agenda
