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The European Union is considering shelling out 40 billion euros, or $39.2 billion, to help households and companies amid soaring energy inflation, Bloomberg reported.
That will come out of the bloc's existing cohesion funds, with 500 billion euros originally earmarked to shield households and businesses from the energy crisis. The new measure will allow small- and medium-size firms to access financial support, and it will help fund government programs to help consumers pay their energy bills. It's expected to be important this winter, when supply shortages could deplete most of Europe's fuel storage and drum up prices, experts say.
The budget, which was expanded by 200 billion euros last week, faced concerns over the sustainability of EU debt. More debt could fuel recession risks, Reuters reported, which caused Germany to initially hold back support for the debt expansion.
But the government needs to take action considering the pain high prices will bring, EU cohesion and reform chief Elisa Ferreira said at an event on Tuesday, in regards the new 40 billion euro spending measure.
"Cohesion policy is not the European crisis response instrument, but nevertheless we had to react when citizens were really struck … We could not ignore the difficulties member states, small and medium companies and families are facing with present energy prices," she said.
Only a fifth of the existing funds have been spent so far, according to Reuters. EU leaders are set to discuss earmarking the additional 40 billion euros for combating energy inflation at a summit this week, where they'll also be reviewing other proposals to lessen the pain of rising energy prices.
