The European Commission said on Monday it wants to allow countries to allocate more public funds to help businesses pay fuel and fertilizer bills, as governments rush to mitigate the economic impact of rising prices due to the war in Iran.Oil prices surged above $100 a barrel on Monday after the U.S. military announced a blockade on ships entering and leaving Iran, sparking fears of prolonged disruptions to oil and gas shipments. As part of a broader package of measures Brussels is preparing to respond to rising energy prices, the Commission proposed on Monday to amend EU state aid rules to allow for more public spending on sectors severely hit by rising fuel costs, including agriculture, road transport, and shipping within Europe. These changes would permit governments to cover part of the price increases that companies have paid for fuel or fertilizer compared to prices before the U.S.-Israeli war on Iran began on February 28. The EU's draft plan includes raising the maximum cap on the share of aid that energy-intensive industries can receive to help them pay electricity bills to over 50 percent. European governments, including those of Germany, Italy, Poland, and Hungary, have already taken a series of financial measures, including fuel price caps and tax cuts, in an attempt to contain the economic fallout from the war on Iran. Governments will submit their feedback on the EU's proposals before the Commission finalizes the version by the end of the month. The proposed changes will be temporary and applied exceptionally to address the energy-related consequences of the war on Iran. The Commission is ensuring that state aid provided by countries locally does not interfere with the principle of competition in the EU's single market.
