Morgan Stanley| According to a Bloomberg report, the German chancellor and his party will ask the EU to create a joint financing system to help compete against green energy subsidies in the US. The article also referred to increased subsidies for batteries, green hydrogen, and increased deployment of clean/green technologies. A positive market reaction is expected, especially from stocks benefiting from a European version of the Inflation Reduction Act to attract capital to Europe and accelerate investments in energy transition to ensure and strengthen energy security. In line with this, European Commission President Ursula von der Leyen said yesterday in Davos that the EU will develop a regulatory framework to boost its green industry and back it with funding. Rob Pulleyn believes this regulation will aim to counter the risks of relocation due to foreign subsidies and put Europe at the forefront of innovation with a view to “net zero” by the year 2050 Although there are not yet many details, Pulleyn believes that this framework will focus on strengthening wind and solar energy production, and speeding up permitting processes for clean energy deployment, as well as boosting new technologies (batteries and hydrogen). That said, Pulleyn expects a positive market reaction, especially for the stocks most exposed to green/clean energy: RWE, EDP, Orsted, Engie.