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Morning opening: Spain moves first to help with energy prices
Spain is set to put forward a number of emergency tax cuts this morning to counter the economic impact of the Iran war.
The measures – set to be presented at a press conference 11am local time – are expected to include lowering VAT tax on fuels to 10% from 21%, according to early media reports, alongside other changes, including to the hydrocarbon and electricity duties, intended to help with growing energy prices.
Reuters says that change to the hydrocarbon levy itself alone is likely to lead to an immediate reduction in the price of diesel and petrol between 0.30 and 0.40 euros.
Spain’s prime minister, Pedro Sánchez, has been a leading European voice critical of US and Israeli strike in Iran, repeatedly sounding alarm about its likely economic impact on Europe.
Ministers said earlier this week the measures would include aid for economic sectors most exposed to the crisis, but added that the country’s high generation of renewable energy meant its economy was less exposed to the impact of oil price spikes caused by the war, Reuters noted.
But other countries may now follow as the European Commission president, Ursula von der Leyen, signalled last night that there was some intent to move in this area.
Speaking after a meeting of the European Council, she said that electricity is often taxed higher than gas and that needs to change, while proposing to reduce grid charges. She also suggested some flexibility on the use of state aid to help with growing energy costs.
Separately, we will keep an eye on the final moments of the parliamentary campaign in Slovenia, local races in France and Germany, and the Italian judiciary referendum – all taking place this weekend.
It’s Friday, 20 March 2026, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
