Bloomberg: EU spends over €10 billion on energy crisis response

Countries of the European Union (EU) have allocated more than €10 billion to support consumers and businesses amid rising energy prices caused by the conflict in Iran, Bloomberg reported on April 28.

“European Union states have committed over €10 billion ($11.7 billion) to shield consumers and businesses as the Iran war drives up energy prices, but [...] most of the measures are poorly targeted,” the report says, citing research by the Bruegel think tank.

According to experts, around 80% of this spending, including broad tax relief measures, is non-targeted and contradicts European Commission recommendations on temporary and targeted interventions. The highest expenditures were recorded in Spain, followed by Germany.

The energy shock is worsening the EU’s economic outlook, increasing pressure on budgets and affecting growth and inflation, particularly in the bloc’s largest economy. The situation is further aggravated by the fact that the EU has not yet recovered from the 2022 crisis triggered by the conflict in Ukraine.

Amid the ongoing conflict, fossil fuel costs have already risen by more than €20 billion, while oil prices have exceeded $110 per barrel. The world is facing the largest disruptions in oil and gas supplies in history, driven by restrictions on shipping through the Strait of Hormuz due to the Middle East conflict.

The crisis is felt most acutely in Europe and Asia, where prolonged supply disruptions are expected. As a result, several governments are being forced to introduce measures aimed at addressing energy shortages.