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France, Germany test water on US green subsidies

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France, Germany test water on US green subsidies

Germany’s Economy Minister Robert Habeck and French Finance Minister Bruno Le Maire will head to Washington next week to press concerns about U.S. climate subsidies and urge a favourable treatment of European businesses.

While European leaders welcome the new impetus towards green energy transition given by the Biden administration’s so-called Inflation Reduction Act, they also fear that the $369 billion of subsidies largely targeting North America-based manufacturers could lure companies away from Europe.

Some in Europe argue the subsidies breach World Trade Organization rules, but there is no appetite for a trade war with the United States and a recognition that Europe’s best hope lies in influencing how the scheme is applied in practice.

“From the point of view of German industry, it is important the implementation guidelines of the U.S. authorities now avoid discrimination as far as possible,” said Tanja Goenner, general director of Germany’ BDI industry association.

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Habeck and Le Maire are due to meet U.S. counterparts on Tuesday, two days before an EU summit where leaders will study plans to boost state aid and other moves to allow Europe to compete as a hub for electric vehicles and other green products.

The discussion in Germany focuses on potential disadvantages for a local automotive industry that has been the backbone of Germany’s exporting success for decades but which now faces an unprecedented challenge from the shift away from fossil fuels.

SEEKING COMPARABLE TREATMENT

Under IRA, new electric vehicle tax credits apply to those with final assembly as well as key inputs made in North America, which includes Canada and Mexico – countries that have free trade pacts with the United States.

One focus of the Franco-German trip is to seek treatment for Europe comparable to that for Mexico and Canada, a senior EU official said.

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“If Ministers Habeck and Le Maire succeeded in doing that, it would be a great success,” Mercedes-Benz’s head of external affairs MBGn.DE said.

The U.S. Treasury Department said in December that electric vehicles leased by consumers could qualify for up to $7,500 in commercial clean vehicle tax credits, a decision that would make those assembled outside North America eligible. One goal of the Washington visit is to confirm that is indeed the case.

Still, while the potential for leased European vehicles to be covered by the subsidy is welcome, it would only apply to a portion of European vehicle exports, said Hildegard Mueller, president of Germany’s VDA auto association.

Experts estimate that about half of the German electric vehicles registered in the United States are leased.

While the scale of the U.S. subsidies has attracted most attention, the EU has large potential resources of its own. A German government source said an initial analysis showed they could even be comparable to those available under IRA.

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Chancellor Olaf Scholz said last month almost 180 billion euros would be available for 2023-2026 under the German climate and transformation fund, a supplementary budget to push green investments, while the IRA’s $369 billion covers 10 years.

THE REAL PROBLEM

“The amounts of subsidies in Europe are in line or even more than those in the United States, that is not the problem,” said one senior European Union official.

“The real problems are the incentives to make firms move production to the United States,” said the official, referring to the local content requirements.

Yet, Europe’s carmakers insist there is a risk that business will be tempted to shift towards the United States as the U.S. provisions combine with other production factors to make Europe look less attractive.

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“Due to the IRA and the very high electricity and energy prices, especially in Germany, Europe is becoming less and less competitive,” a spokesperson for Volkswagen said.

To ensure Europe can compete with the United States, the European Commission on Wednesday proposed measures including loosening EU state aid rules and repurposing existing EU funds. 

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Estonia summons Russian embassy chief over GPS jamming

Estonia summons Russian embassy chief over GPS jamming

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Estonia summons Russian embassy chief over GPS jamming

Estonia’s foreign ministry has summoned the head of the Russian embassy in Tallinn to protest the jamming of GPS signals, the Baltic country said on Wednesday.

Estonia accuses neighbouring Russia of violating international regulations by disturbing GPS navigation in airspace above the Baltic states, echoing concerns from airlines that say they have contended with such interference for months.

The Estonian foreign ministry on Wednesday summoned Russia’s charge d’affaires to convey its message. Moscow and Tallinn last year expelled each other’s ambassadors as relations deteriorated in the wake of Moscow’s full-scale invasion of Ukraine in 2022.

“Jamming the GPS signal is an element of Russia’s hybrid activities, disrupting everyday life and threatening the security of allies,” Estonian Foreign Minister Margus Tsahkna said in a statement.

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Russia’s foreign ministry did not immediately respond to a request for comment.

GPS, short for Global Positioning System, is a network of satellites and receiving devices used for positioning, navigation and timing on Earth in everything from ships and planes to cars.

The jamming of GPS signals can be disruptive to commercial airliners but they can usually navigate by other means.

Finnish carrier Finnair last month said it would pause all flights to Tartu in Estonia to allow the local airport to upgrade its navigation system, which has so far relied only on GPS.

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Australia boosts funds to Taiwan-ally Tuvalu amid Pacific contest for influence with China

Australia boosts funds to Taiwan-ally Tuvalu amid Pacific contest for influence with China

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Australia boosts funds to Taiwan-ally Tuvalu amid Pacific contest for influence with China

Australia will quadruple its financial assistance to Tuvalu, a Pacific Island nation at risk from rising seas, to cement a landmark climate migration and security deal as China also courts small island states.

On a visit to Tuvalu, foreign minister Penny Wong said on Wednesday evening Australia has committed A$110 million ($72.27 million) in its national budget to Tuvalu.

The sum includes A$50 million ($32.85 million) to build the first undersea cable connecting the island’s residents to global telecommunications services, and A$19 million for a land reclamation project to fortify Tuvalu’s coastline from rising seas.

Another A$15 million will be spent on a national security coordination centre, as well as A$10 million in direct budget support.

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The funding is a significant boost on the A$17 million ($11.17 million) Australia provided to Tuvalu in 2023-24.

China’s ambitions for a greater security presence in the Pacific became an election issue in Tuvalu in January, as two leadership contenders said Tuvalu should consider switching ties from Taiwan to Beijing for more funds, and revise a new security pact with Australia.

Neighbour Nauru cut ties with Taiwan a fortnight before Tuvalu’s vote, after China built a port and promised more aid.

Tuvalu’s new prime minister Feleti Teo pledged to stick with Taiwan, and to ratify the Falepili Union signed with Australia in November. The treaty allows Tuvalu citizens to migrate to Australia for work or study, while recognising Tuvalu continues to exist despite the rising sea levels.

“Australia has provided a security guarantee to support Tuvalu in a humanitarian disaster, a pandemic or the event of attack,” Wong said in a speech on Wednesday evening.

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“It is also the first time in history that two nations have agreed in a legally binding instrument that statehood endures in the face of sea level rise,” she added.

The treaty allows Australia to vet Tuvalu’s deals with third countries in a broad range of security areas from ports to telecommunications.

On Thursday, Wong and Teo are expected to say that the security cooperation does not limit Tuvalu’s ability to enter into diplomatic agreements with other nations, according to an advance copy of a joint statement viewed by Reuters.

“We recognise that the people of Tuvalu deserve the choice to live, study and work elsewhere, as climate change impacts intensify at home,” the text of the statement reads.

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Probe launched after Boeing cargo plane lands in Istanbul without front landing gear

Probe launched after Boeing cargo plane lands in Istanbul without front landing gear

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Probe launched after Boeing cargo plane lands in Istanbul without front landing gear

A FedEx Airlines Boeing cargo plane landed at Istanbul Airport on Wednesday without its front landing gear, a Turkish Transport Ministry official said, adding there were no casualties and authorities had launched an investigation.

The aircraft, flying from Paris Charles de Gaulle Airport, informed the control tower in Istanbul that its landing gear had failed to open and touched down with guidance from the tower, managing to remain on the runway, a ministry statement said.

Airport rescue and fire fighting teams were scrambled before landing, but no one was injured. The ministry gave no reason for the failure.

The aircraft involved is a nearly 10-year-old Boeing 767 freighter, one of the most common cargo planes and based on the 767 passenger model dating back to the 1980s.

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An official from Turkey’s transport ministry said its teams were conducting examinations at the scene as part of the ongoing investigation, but did not provide further details.

Boeing referred queries to FedEX, which said in a statement it was coordinating with investigation authorities and would “provide additional information as it is available”.

Video footage obtained by Reuters showed sparks flying and some smoke as the front of the plane scraped along the runway before coming to a halt and being doused with firefighting foam. No fire appeared to have broken out.

The video showed the pilots holding the plane’s nose above the runway for several seconds after the main wheels had touched the ground, apparently executing the emergency drill for landing with a retracted nose gear that pilots train for, according to the SKYbrary aviation database.

In June last year, a small 22-year-old Boeing 717 flown by Delta Airlines made a similar smooth landing without a nose gear in Charlotte, North Carolina, in an incident later blamed on a fractured component.

The runway was temporarily closed to air traffic, but other runways at Istanbul airport were still operating normally, the airport operator IGA said.

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Manufacturers are not typically involved in the operation or maintenance of jets once they enter service, but Boeing has been under intense media and regulatory scrutiny following a series of incidents on its smaller 737.

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