A cautious optimism ran among the Europeans gathered high up in the Swiss Alps for the annual meeting of the World Economic Forum this past week. There were hopes that the region might cast off the gloomiest economic forecasts and avoid a recession this winter, helped by lower natural gas prices.

But when pondering Europe’s longer-term future, there was plenty of fretting over US President Joe Biden’s Inflation Reduction Act. The concern was voiced loudly in the ski town of Davos, Switzerland, that the law’s provision for $US369 billion ($530 billion) toward low-emissions energy and green technology would draw vast sums of investment and jobs away from Europe, cementing fears of deindustrialisation on the continent.