EU allows Spain, Portugal to spend to ease energy prices

Jun 9, 2022, 4:13 AM | Updated: 6:01 am

BRUSSELS (AP) — The European Union will allow Spain and Portugal to use billions of euros in state aid to help ease the burden of spiraling electricity prices on consumers in the Iberian Peninsula as Russia’s war in Ukraine exacerbates an energy squeeze.

The 8.4 billion euros ($9 billion) in aid — 6.3 billion euros ($6.8 billion) for Spain and 2.1 billion ($2.3 billion) for Portugal — is intended to help to pay the fuel costs of electricity producers. The European Commission, which polices state aid rules, is permitting the program to run for a year.

The war in Ukraine has caused gas prices to rise, creating a knock-on effect for the already soaring electricity prices in the two countries.

Spanish Prime Minister Pedro Sánchez welcomed the decision, predicting Thursday it would bring an immediate reduction in household electricity prices of up to 20%.

His Portuguese counterpart, António Costa, said after weeks of negotiations with its EU partners the Iberian countries had “come a long way … to shield businesses and families from the surge in prices.”

The decision also protects Iberian consumers against future rises “if the war in Ukraine goes on for longer or worsens,” Sánchez said.

Spain and Portugal signed off on a temporary cap on natural gas prices last month in a coordinated move described by Portugal’s environment minister as an “unprecedented” bid to temper soaring energy prices and inflation.

The move approved in Brussels late Wednesday skirts EU common market rules, but the EU’s executive commission said it was permitting it, “recognizing that the Spanish and Portuguese economies are experiencing a serious disturbance.” It means that gas used for power generation will average just under 50 euros ($54) per megawatt-hour until May 31, 2023.

Spain believes it will immediately reduce costs for a third of domestic consumers and 70% of industry. But some Spanish energy companies have criticized the plan, citing concerns that the new rules will distort the market.

Commission Executive Vice-President Margrethe Vestager said the program would also allow Spain and Portugal to reform their electricity systems in line with climate change goals and “ultimately mitigate even further the effects of the energy crisis on final consumers.”

___

Follow AP’s coverage of the Ukraine war at https://apnews.com/hub/russia-ukraine

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

An elderly woman wearing a mask pushes her wheelchair past residents lined up for coronavirus testi...
Associated Press

Beijing mandates COVID vaccines to enter some public spaces

TAIPEI, Taiwan (AP) — The Chinese capital has issued a mandate requiring people to show proof of COVID-19 vaccination before they can enter some public spaces including gyms, museums and libraries, with exceptions only available to those who cannot be vaccinated for health reasons. The health app that shows a person’s latest PCR test results […]
45 minutes ago
FILE - Phoenix Mercury center Brittney Griner during the first half of Game 2 of basketball's WNBA ...
Associated Press

Griner’s Moscow trial resumes amid calls for US to seek deal

MOSCOW (AP) — Jailed American basketball star Brittney Griner returns to a Russian court on Thursday amid a growing chorus of calls for Washington to do more to secure her release nearly five months after she was arrested on drug charges. Griner was detained in February at Moscow’s Sheremetyevo Airport after vape canisters with cannabis […]
45 minutes ago
In this photo taken with low shutter speed, Muslim pilgrims pray as others circumambulate around th...
Associated Press

A hajj closer to normal: 1 million Muslims begin pilgrimage

MECCA, Saudi Arabia (AP) — It is a scene that stirs hope — and relief — for Muslims around the world. One million pilgrims from across the globe amassed on Thursday in the holy city of Mecca in Saudi Arabia to perform the initial rites of the hajj, marking the largest Islamic pilgrimage since the […]
45 minutes ago
Workers wearing protective gear direct arriving passengers to quarantine hotels in the Hong Kong In...
Associated Press

Hong Kong lifts flight ban citing ‘little effect’ on COVID

HONG KONG (AP) — Hong Kong announced Thursday it is shelving a COVID-19 measure that has resulted in dozens of canceled flights in recent months and thwarted travel plans for thousands. Starting Thursday, the city will no longer ban arriving airline flights just because they’d brought in passengers infected with COVID-19, the government announced. “The […]
1 day ago
FILE - Lawyer Bernard Collaery, left, addresses the media as lawmaker Andrew Wilkie, right, looks o...
Associated Press

Australia drops charge against lawyer over spying claim

CANBERRA, Australia (AP) — Australia’s new government on Thursday dropped the 4-year-old prosecution of a lawyer over his alleged attempt to help East Timor prove that Australia had spied on the then-fledgling nation’s government in 2004 during multibillion-dollar oil and gas negotiations. Attorney-General Mark Dreyfus maintained the longstanding government stance of refusing to confirm or […]
1 day ago
FILE - Britain's Northern Ireland Secretary Brandon Lewis arrives at 10 Downing Street, to attend a...
Associated Press

UK’s Johnson defiant even as opponents tell him time is up

LONDON (AP) — British Prime Minister Boris Johnson has rejected clamors for his resignation from his Cabinet and across the Conservative Party, digging in his heels Thursday even as dozens of officials quit and previously loyal allies urged him to go after yet another scandal engulfed his leadership. A group of Johnson’s most trusted Cabinet […]
1 day ago

Sponsored Articles

...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
...
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
EU allows Spain, Portugal to spend to ease energy prices