The European Commission said on Monday it plans to ease state aid rules to allow member states to provide greater financial support to businesses struggling with rising energy and fertilizer costs.
According to Commission President Ursula von der Leyen, the measures are intended to deliver fast and targeted assistance to mitigate the economic shock caused by the conflict involving Iran.
Under the proposal, EU countries would be allowed to mobilize more public funds to help companies cover fuel and fertilizer expenses, particularly in sectors most affected by rising prices, such as agriculture, road transport, and shipping.
The move comes as energy markets remain under pressure. According to Reuters, oil prices rose by around 6 per cent on Monday, climbing above 100 dollars per barrel after the United States announced a blockade of vessels departing from Iranian ports, raising concerns about prolonged disruptions to oil and gas supplies.
As part of a broader response package, the Commission is proposing adjustments to EU state aid rules that would enable governments to partially compensate companies for the increase in fuel and fertilizer costs compared to pre-conflict levels.
The draft also suggests increasing the maximum level of support available to energy-intensive industries, allowing subsidies to exceed 50 per cent of their electricity costs.
Several EU countries including Germany, Italy, Poland, and Hungary have already introduced measures such as fuel price caps and tax reductions to cushion the economic impact of rising energy costs.
Member states are expected to provide feedback on the proposals before the Commission adopts a final version later this month. The measures would be temporary and specifically aimed at addressing the impact of the current energy crisis.
The Commission oversees state aid within the European Union to ensure that government support does not distort competition within the single market.
Recent reports indicate that European gas prices are up by 48 per cent and Brent crude oil prices by 41 per cent compared to pre-conflict levels. The Commission aims to coordinate an EU-wide response, including tax and fee reductions, to soften the impact of the surge in energy prices.
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