EU to Allow Higher Deficits for Energy Relief Tied to Fossil Fuel Cuts

Member states will receive extra budget flexibility to address higher energy prices connected to the Iran war. The flexibility is conditional on measures that also reduce fossil fuel consumption. The policy responds to price pressures that have raised costs for households and businesses across the region.

Officials said the approach aims to balance immediate relief with longer-term shifts away from fossil fuels. Details on the size of the allowed deficits or the specific programs that will qualify have not yet been released.