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BRUSSELS, Belgium — The EU said Wednesday that it would loosen its spending rules to help member states manage soaring energy prices sparked by the Middle East war.
EU economy commissioner Valdis Dombrovskis said Brussels would allow more leeway for measures that help countries move away from dependency on fossil fuels.
"We see that the energy crisis is more protracted than initially envisaged. The Strait of Hormuz is still closed," Dombrovskis said, referring to the channel through which about a fifth of global oil passes.
Shipping through the key Gulf strait has been heavily restricted since the outbreak of war, following US-Israeli strikes on Iran in late February.
Italian Prime Minister Giorgia Meloni last month asked the EU to relax its fiscal rules, seeking an exemption for energy spending in line with the one granted by Brussels for defence expenditure.
While the commission heeded Meloni's call, it also delivered a rebuke of specific measures Italy has taken so far to address the price spike.
Dombrovskis said moves such as Italy's slashing of excise duties on fuel would not be exempt from inclusion in an assessment of Rome's public spending.
Support measures that could benefit from the exemption include encouraging the uptake of electric vehicles, changes in home heating systems from oil and gas to heat pumps, domestic solar installations, electricity storage, and batteries, Dombrovskis told reporters before the announcement.
It would apply only to measures taken since February and member states must formally trigger the budget exemption clause.
But he offered further reassurances to EU states that Brussels was "monitoring the situation very closely and stand ready to propose measures as necessary".
The announcement came as the European Commission issued reports on the fiscal health of each member state including Italy.
The EU executive told Italy to ensure any steps it takes to "mitigate the impact of the hike in energy prices are temporary, targeted at protecting vulnerable households or at addressing the needs of energy-intensive firms".
