EU plans emergency aid on food prices

The European Union is to launch emergency aid measures for the EU citizens and industries hit hardest by soaring food and fuel prices, the head of the bloc's executive said on Friday.

The EU is also planning to create a fund to support agriculture in developing countries, European Commission President Jose Manuel Barroso said after a meeting in Brussels with EU heads of state and government.

Rising prices are "a global problem, and even Europe cannot solve it alone. Governments are free to act with emergency measures for the most vulnerable parts of society," he said.

At the summit, Barroso unveiled a raft of measures aimed at helping both poor households and the fishing industry.

For poor households, the commission head said that the bloc would increase its budget for emergency food aid from 300 million euros (465 million dollars) to 500 million euros per year.

He pointed out that EU rules allow governments to boost their own handouts to poor households and even to companies, if these do not distort competition within the EU.

For the fishing industry, which has been particularly vocal in its complaints about rising fuel prices, Barroso proposed increasing the amount of direct aid the EU should pay to fishers, as long as this was accompanied by a reduction in fishing capacity, which the commission has long sought.

He said that EU rules would allow governments to bring in measures such as reducing excise duties on energy and taxing energy companies' windfall profits.

Money to help farmers in developing countries produce more food would serve as part of a long-term plan to boost global production.

The commission has not yet finalized the proposal for the fund, leaving unclear how much money would be provided. However, Barroso said that the money would be drawn from current EU budgets.

Earlier this year, officials proposed transferring some money from the bloc's agricultural aid fund to set up such a development package, because EU farmers are currently benefiting from high prices and need less aid than usual.

However, Barroso repeated that the only long-term solution for the EU would be to adjust to high energy prices and to reduce its consumption while diversifying its energy supplies.