Brussels pitches state subsidy bonanza to combat Iran war energy shock
The European Commission is considering providing sweeping government subsidies to European businesses, as Brussels races to shield the EU’s economy from the surge in energy prices sparked by the Iran war.
According to a draft Commission proposal seen by Euractiv, the EU executive will allow member states to significantly increase subsidies for heavy industry by allowing the state to cover 70% of wholesale power bills until December 31 2026, up from 50% today. Like under the current rules, the measures would set a floor of €50 per megawatt-hour and are capped at half of consumption.
The initiative, which was announced by Commission President Ursula von der Leyen on Monday and has been circulated to member states, also proposes allowing firms to combine multiple sources of state aid to gain a boost of up to 50% in their subsidy rate.
“This goes much further than the current state aid rules,” said Philipp Jäger, a senior fellow at the Jacques Delors…
