BRUSSELS, Jan 25 (Reuters) - EU antitrust chief Margrethe Vestager on Wednesday pushed back against calls by France, Germany, Italy and other EU countries for more subsidies to companies, warning that such artificial aid would not boost the bloc's competitiveness.
Vestager's warning, her strongest to date, came as the 27-country bloc seeks to counter the $430 billion U.S. Inflation Reduction Act amid fears that this may tempt businesses to relocate to the United States.
"Now there is an idea emerging that we can use state aid - not just to address the gaps in private sector activity - but as the key tool to boost competitiveness. This will not work," Vestager told a state aid conference for EU countries.
"First, because long-term competitiveness relies on robust and fair competition, and more importantly on the level playing field in the single market. It cannot be based on the artificial, short-term boost that subsidies can provide, and should provide," she said.
Vestager said a fruitless subsidy race would cost taxpayers dearly, with only a handful of companies and shareholders the winners.
The European Commission is seeking input from EU countries on its proposals to ease state aid rules including tax breaks to counter the U.S. green energy subsidy package. (Reporting by Foo Yun Chee; Editing by Kirsten Donovan)
