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Mark Rutte opposes using new funds to combat threats posed by US green tech subsidies.

Speaking to journalists on Tuesday, Dutch Prime Minister Mark Rutte said the best way to save EU industry from the lure of US subsidies is to reform national policies, not shower companies with money. Rutte made his remarks at the office of the Dutch embassy in Brussels, according to a report in POLITICO.

The statements followed after Rutte met with European Commission President Ursula von der Leyen and Belgian Prime Minister Alexander De Croo. He stressed the need for “deeper reforms”, adding that some European countries spend too much on their pension systems, and that money could be better spent on “innovation and green tech”.

Reallocate existing funds

Rutte is a prominent spokesman of the so-called “frugal” group of European countries led by The Netherlands, Denmark and Sweden. The group is characterized by fiscally conservative countries that often find themselves at odds with other EU members when it comes to budget issues.

Fiscal conservatism seems to be re-emerging in discussions on how the EU should act to preserve European industry in the face of the Inflation Reduction Act (IRA), which introduces massive subsidies for green businesses in the US.

Given the skyrocketing EU energy costs and the lure of greener pastures in the US, Brussels fears that European industry will move out of the union.

European Commissioners are calling for a new round of subsidies to help keep industry in Europe, but Rutte appears to oppose such a measure. While he acknowledged that the IRA “forces us to think about how we organize ourselves” to remain competitive, he also suggested that EU subsidies should remain unaltered.

When asked about changing EU aid rules in reaction to the IRA, however, he was conciliatory. “I can accept some changes as long as they are limited”, the prime minister said.