, which still has to be approved by EU member states and lawmakers, would temporarily re-write strict rules that regulate when and how individual countries are allowed to subsidize industries within their borders.
Ursula von der Leyen, president of the European Commission, said the measure “will allow — for the first time — public support for European 'first-of-a-kind' production facilities, which benefit all of Europe,” noting that money will be handed out “under strict conditions” that maintain fairness within Europe’s highly integrated economy.Many details about the plan, including exactly what types of projects will be eligible to receive the funds, remain unclear.
Mattingley-Scott says executives at many European tech companies “are waiting with bated breath” to see what the law means “in terms of funding and funding initiatives.”The move comes in response to a chip shortage and supply chain crisis that has injected instability into the global economy and widespread fears that countries and regions are falling behind in an economy that’s moving quickly.
“[W]e are putting everything in place to secure the entire supply chain and avoid future shocks to our economy like we are seeing with the current supply shortage in chips,” according to Thierry Breton, another European Commission official. He hopes the move will encourage a “rebalancing [of] global supply chains” by augmenting Europe’s capacity to do everything from R&D to manufacturing.
There are still open questions about how Europe will fully fund the plan, though. Some $30 billion will be paid for with public funding, and another $12 billion from private investment. The big question, though, is the matter of"public funding.