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EU Energy Subsidy Warning Risks Fiscal Crisis Amid Iran War

Financial Times Companies •
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European Commission officials are demanding member states limit energy subsidies, tax cuts, and price caps to prevent a potential fiscal crisis, fearing the Middle East conflict could trigger a third economic shock in six years. The bloc's executive body insists support measures be temporary and coordinated, warning excessive spending risks pushing governments deeper into debt after massive stimulus programs during the pandemic and Russia's Ukraine invasion. Brent crude prices briefly surged to $111.18 before retreating as the war enters its sixth week without resolution, highlighting the region's volatility. This stance underscores a critical tension between immediate consumer relief and long-term fiscal stability for the 27-nation bloc.