European competitiveness at risk due to heavy bureaucracy and permitting
Multinational executives and senior politicians have urged Europe to reduce regulatory barriers in order to improve its competitiveness and make it easier for companies to invest in green projects.
This comes in response to the US Inflation Reduction Act (IRA), a package approved in August 2022 which provides $369bn of incentives for green investments in the US.
The legislation has faced criticism from Japan and the EU, who fear it will lead companies to invest in the US rather than Europe.
Ilham Kadri, the CEO of Solvay, a Belgian-based chemicals multinational, stated at the World Economic Forum in Davos that “Europe has a huge challenge and huge risk of deindustrialisation,” citing the “heavy” permitting and bureaucracy in Europe as a significant obstacle to investment.
Dutch Prime Minister Mark Rutte echoed these concerns, stating that the IRA presents an opportunity for Europe to adapt its state aid rules and provide more subsidies for industry.
