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The EU considers simplifying the rules on state aid before US law – sources

FILE PHOTO.  European Union flags fly in front of the European Commission headquarters in Brussels, Belgium.  March 19, 2019. REUTERS/Yves Herman
FILE PHOTO. European Union flags fly in front of the European Commission headquarters in Brussels, Belgium. March 19, 2019. REUTERS/Yves Herman

By Foo Yun Chee

BRUSSELS, Dec 13 (Reuters) – The European Commission plans to seek views on whether the 27-nation bloc needs to ease state aid rules to allow governments to support companies hit by the US Inflation Reduction Act. said two people familiar with the matter.

This $430 billion law, which gives consumers tax credits for electric vehicles and other green products produced in the United States, has sparked fears that it could hurt companies in the European Union and tempt companies to relocate to USA.

While Germany, France, Italy and other countries have called for more subsidies or a similar law from the EU, others point to the billions of euros that have already been pumped into companies in recent years to counter the COVID-19 pandemic and the impact of the war in Ukraine.

The Community Executive will ask the countries if the laxer rules on state aid, known as the Temporary Crisis Framework and adopted in March for companies affected by the war in Ukraine, should be extended to companies affected by the US subsidies law, according to the people cited.

The commission, which will decide after consultation, did not immediately respond to a request for comment.

(Reporting by Foo Yun Chee; Editing in Spanish by Benjamín Mejías Valencia)

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