EU to subsidize soaring household fuel prices amid Ukraine crisis

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Flames from a gas burner on a stove are seen February 1, 2017 in this illustration photo taken at a private home in Nice, France. REUTERS/Eric Gaillard

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BRUSSELS, March 15 (Reuters) – EU finance ministers agreed on Tuesday to subsidize fuel prices for households and offer support to businesses hit by soaring energy prices in the wake of Russia’s invasion of Ukraine, said French Finance Minister Bruno le Maire.

“This war in Ukraine is leading to a sharp increase in the price of raw materials, especially gas and food. This calls for a coordinated economic response from European states,” the Mayor told a press conference after chairing the discussions between EU ministers.

The Mayor, whose country holds the six-month rotating EU27 presidency, said the joint strategy was based on European Commission proposals to ease restrictions on EU state aid to help deal with the emergency in Ukraine.

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“The strategy is based on three axes. First, support for all households affected by the sharp rise in fuel prices. We have done this in France and many other European countries have done the same or plan to do so,” Le Maire said.

“It would be a kind of discount on prices at the pump. Many, many people have no choice but to drive to work. The household support that we deem necessary,” he said declared.

The second support measure aimed to help businesses hardest hit by soaring gasoline prices. Help would come in the form of government-backed loans or grants for energy-intensive businesses.

The third measure was to diversify energy sources to become independent of Russia, which is the bloc’s leading energy supplier, supplying 45% of its gas, more than a quarter of its oil and half of its coal.

“We must build our energy independence as quickly as possible. We must accelerate investments, we must diversify energy sources, we must diversify sources of supply, we must build up stocks,” said the Mayor.

European Commission Vice-President Valdis Dombrovskis said EU countries could finance such investments from very cheap loans available under the EU’s recovery fund which remained untapped.

“There are still 200 billion euros in loans that member states can apply for until August 2023 to fund more investment and reform,” Dombrovskis said at the press conference.

“It’s a huge sum that can be used to meet some of the challenges posed by the conflict – for example, to accelerate the development of renewable energy.”

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Reporting by Jan Strupczewski; Editing by Nick Macfie

Our standards: The Thomson Reuters Trust Principles.


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