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European Commission President Ursula von der Leyen gestures to US President Joe Biden before making a statement about Russia at the US Chief of Mission residence in Brussels, on March 25, 2022.InternationalIndiaAfricaEuropean Commission President Ursula von der Leyen is in Washington for talks with President Joe Biden. The White House previewed the meeting as a friendly get-together between allies to discuss issues of common concern. Behind the scenes, however, the EU is facing a life-or-death crisis threatening to leave its economy in ruins. Sputnik explains.“President Joe Biden looks forward to welcoming President Ursula von der Leyen of the European Commission to the White House,” White House Press Secretary Karine Jean-Pierre said in a prepared press statement about Friday’s meeting.“The leaders will review the strong cooperation between the United States and the European Union to support Ukraine as it defends its sovereignty and democracy and to impose costs on Russia for its aggression. They will also discuss US-EU coordination to combat the climate crisis through investing in clean technology based on secure supply chains. The leaders will take stock of the joint Task Force on Europe’s Energy Security that they established one year ago, which has helped the EU reduce its dependence on Russian fossil fuels and accelerate its green transition. They will also discuss other international security challenges, including our work together to address the challenges posed by the People’s Republic of China,” Jean-Pierre said.This warm, fuzzy rhetoric and lofty ambitions conceal trade tensions, soaring energy costs pummeling the European economy, and raging disagreements related to the Inflation Reduction Act, a US law promising “green” subsidies to industry which Brussels fears could pluck major producers from the bloc and entice them to relocate to America, threatening Europe with mass deindustrialization.EconomyIs Europe at Risk of Deindustrialization? German Carmaker Reportedly Prefers US for Battery Plant8 March, 11:41 GMTWe can only guess what will be said in the closed-door exchange between von der Leyen and Biden about the need for Europe to “accelerate its green transition,” especially as more and more European countries move to reopen dirty, coal-fired power plants to address shortages of natural gas after rejecting Russian energy. US energy producers haven’t exactly rushed to bail the Europeans out over the past 12 months, with French President Emmanuel Macron complaining recently about the US reaping “unearned superprofits” on energy via a “geopolitical war” in Europe, and about Washington’s “double standards” on subsidies for industry.Moscow first warned the EU about the “suicidal” implications of its energy policy last spring, stressing that the economic competitiveness the bloc’s industries have enjoyed thanks to cheap Russian oil and gas would be undermined, perhaps “irrevocably.” A year later, despite experiencing one of the warmest winters on record, entire sectors of European industry, especially energy-intensive areas such as chemical, steel, and aluminum producers, are facing their worst energy crisis in decades, dim prospects for recovery, and a “new normal” of gas prices which are more than double what they were on average between 2010 and 2020.Will von der Leyen be able to drive these concerns home to Biden during their talks? Will she even try? If discussions on the issue are held, it’s almost certain that they won’t be made public.
Last fall, Macron and German Chancellor Olaf Scholz pledged to join forces to cushion the blow of the Inflation Reduction Act, which promises about $370 billion in subsidies for US producers in “green” industries. Berlin has sought to resolve the differences through negotiations, with German Finance Minister Christian Lindner warning last month that Europe simply can’t win in a subsidies race with the United States and its powerful dollar-printing machine.“We want to achieve as much non-discriminatory treatment for EU products and companies as possible, avoiding distortions of the level playing field,” a European Commission spokesperson told US business media on Friday ahead of von der Leyen’s meeting with Biden.The two leaders are expected to try to smooth over the subsidies spat and agree on a “path forward,” with US business media alluding to a possible compromise deal that would allow European companies to take advantage of US subsidies for electric car batteries without relocating to the US. Whether this would be enough of a concession to satiate European businesses and nip the subsidies spat in the bud remains to be seen, particularly in light of the €175 billion+ in economic losses borne by EU countries thanks to the Ukraine crisis in 2022 alone.
Biden reportedly hopes to impress upon von der Leyen the need for the European Union to take a more hawkish stance on China, with Brussels said to be open to talks on new bloc-wide restrictions on the export of advanced microchip technology to the Asian giant. Possible “unprecedented sanctions” against Beijing are also reportedly “high on the agenda” of Friday’s talks, to be implemented if China provides military assistance to Russia in Ukraine (Beijing has vocally pledged not to do so, and laid out a 12-point peace plan last week meant to bring the Ukraine crisis to an end, which Kiev and its Western sponsors have largely ignored).WorldBiden Says Sees No Benefit in China’s Ukraine Peace Plan, Doubts Beijing Will Arm Russia25 February, 11:14 GMTVon der Leyen hinted at openness to a new, tougher line on China during a visit to Canada earlier this week, telling Canadian Prime Minister Justin Trudeau on Tuesday that Brussels needs to “de-risk” its “dependency” on Chinese rare earth minerals, which currently account for 98 percent of the bloc’s imports.
Finally, the leaders are also broadly expected to discuss new ways to continue the Ukraine proxy war against Russia amid dwindling weapons and ammunition stocks, and fewer and fewer means to pressure Moscow through sanctions. Biden and von der Leyen’s talks could include the outlines of a new agreement on additional economic support for Kiev, according to reports.
Conflict of Interest?
Von der Leyen’s Washington trip comes on the heels of reports this week that the US views her as the main candidate for general secretary of NATO to replace Jens Stoltenberg after he retires in the fall. It’s unknown whether von der Leyen, who served as German defense minister between 2013 and 2019, will be swayed to take the job of chief administrator of the Western alliance. If she is seriously considering the offer, that may compromise her position on the concessions she’s ready to make in talks with Biden in her capacity as European Commission president.