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Europe's energy crisis: EU calls for relief funds to help consumers

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European Commissioner for Energy Kadri Simson delivers her speech at the European Parliament in Strasbourg.
European Commissioner for Energy Kadri Simson delivers her speech at the European Parliament in Strasbourg.   -   Copyright  AP Photo/Jean-Francois Badias, Pool

The European Union has urged member states to provide relief funds to consumers affected by rising gas and electricity prices.

EU Energy Commissioner Kadri Simson said the bloc should provide "targeted support" to citizens and small businesses that were hardest hit.

"Direct payments to those most at risk of energy poverty, cutting energy taxes, shifting charges to general taxation, are all measures that can be taken very swiftly under EU rules," Simson told the European Parliament on Wednesday.

"The immediate priority should be to mitigate social impacts and protect vulnerable households, ensuring that energy poverty is not aggravated," she added.

Businesses could also receive relief through "state aid or by facilitating longer-term power purchase agreements".

In recent days, France and Spain have called for a change to the rules governing EU energy markets as the price surge ramps up already-high utility bills.

The rising prices have increased pressure on many EU citizens already hit hard by the coronavirus pandemic. The 27-country EU currently imports about 90% of its natural gas needs.

Simson said the European Commission will present a "toolbox" next week of short- and medium-term measures for countries to take.

Criticism has been mounting the EU's climate change-fighting policies to achieve carbon neutrality are fuelling the problem.

"The reason why the prices are up is the fault of the commission," Hungarian Prime Minister Viktor Orban said, brandishing the Green Deal an "indirect taxation" on home and car owners.

"We have to change some regulations, otherwise everybody will suffer,” he told reporters at an EU summit in Slovenia.

But EU Commission Executive Vice-President Frans Timmermans said that the EU climate law is a "guiding principle".

"The quicker we increase our renewable energy sources, the quicker we can protect our citizens against price hikes in the traditional energy area," Timmermans said.