2 February 2024

US Democrat John Podesta, who is responsible for implementing the Inflation Reduction Act, in Washington, December 20, 2022.

John Podesta is an old veteran of politics, as we meet in the American series. The 74-year-old Democrat served in the shadow of Bill Clinton and Barack Obama, led Hillary Clinton’s presidential campaign in 2016 and is now an adviser to Joe Biden. And as such responsible for the implementation of the famous Inflation Reduction Act (IRA), which intends to reindustrialize America, thanks to massive subsidies for environmental transition.

Also read the column: Article reserved for our subscribers Jean Pisani-Ferry: “The American Inflation Reduction Act raises questions about the European Union’s climate strategy”

Artisan of the great adventure of globalization of the 1990s, under Clinton, he is now responsible for closing this chapter without qualms. “We are not going to apologize for the fact that American taxpayer dollars must finance American investments and jobs”he declared, Friday, February 24, in an interview with the FinancialTimesin the tone of the obvious.

An evidence that carries the seeds of an upheaval in international trade and a serious problem for Europe, built around the philosophy of free trade. “The United States is completing and accelerating its economic disengagement initiated since the end of Bretton Woods in 1971”says the economist Véronique Riches-Flores, in her last note of February 24.

“Risk of fragmentation”

On an official visit to the United States on November 30, 2022, President Emmanuel Macron already underlined a “risk of fragmentation of the West”. Since then, this European panic has been fueled by the very clear messages of industrialists from the Old Continent, who threaten to favor the United States in their new investment choices, given the tax breaks on offer and the price of energy.

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It is not fortuitous that the American measures concern the energy transition. In addition to the urgency to act, this is the sector most dependent on public subsidies for its development. The latest example to date is the attempt by offshore wind power producers in the United Kingdom, who are trying, according to the Financial Times, to renegotiate their contracts with the British government.

On the other side of the Channel, energy projects are accelerating, from Rome to Berlin, via Paris or Amsterdam. Should this be done by reserving aid for European investments and jobs? The French are for; the major exporters of the North, Germany in the lead, fiercely against, because they fear the spiral of retaliation which decimated the economy of the 1930s. Finding an agreement requires changing the European software and agreeing with the Americans. It’s not win.

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