EU Resists Emergency Tourism Measures Amid Iran War

The European Union has stated that the impact of the Iran war on tourism is not severe enough to warrant emergency measures for airlines, such as waiving obligations to compensate passengers for flight cancellations. According to draft EU guidelines, high fuel prices do not count as an extraordinary circumstance that would allow airlines to avoid compensating passengers for cancelled flights.

European airlines have largely weathered the crisis so far, with hedges cushioning costs even as jet fuel prices have risen nearly 84% since the U.S.-Israeli war with Iran began on February 28. The EU guidelines emphasize that no jet fuel shortages have been reported in the European Union, and local fuel shortages could justify avoiding passenger compensation.

Meanwhile, European governments' blanket measures to shield households and businesses from high energy prices could significantly impact public finances if they grow. Federico Barriga-Salazar, Fitch Ratings' head of Western Europe sovereign ratings, noted that risks to the energy outlook mean some countries could potentially provide more support going forward.

Portugal's government is preparing a draft bill to impose a windfall tax on energy companies profiting from the energy price surge amid the Iran war. Finance Minister Joaquim Miranda Sarmento stated that Portugal would seek the highest possible level of coordination with other countries and learn from each other about potential measures being prepared.

EU proposals to tighten cybersecurity by phasing out equipment from Chinese suppliers risk costing the bloc over $400 billion in the next five years, according to a study commissioned by China's Chamber of Commerce to the EU (CCCEU). The study, carried out by KPMG, estimates that forced replacement of Chinese suppliers across 18 critical sectors would incur costs between 2026 and 2030. Germany is expected to bear nearly half of this burden, with a projected cost of $170.8 billion.

The proposed EU cybersecurity rules aim to phase out components and equipment from 'high-risk' suppliers in critical sectors, drawing criticism from China's telecoms giant Huawei. Beijing has threatened countermeasures against the EU if substantial changes are not made to the proposed rules. The European Commission also recommended restricting the use of EU funds for projects involving power inverters from 'high-risk suppliers', which could lead to a remote shutdown of an EU member's electricity networks.