The EU’s dispute with its largest trading partner will escalate today as the bloc steps up cases at the World Trade Organization against China over coercive practices. The European Commission will request establishing a panel to address Beijing’s restrictive measures on Lithuanian exports that have sunk the inflow of goods from the Baltic nation. In addition, the Commission will seek a WTO verdict on Chinese decisions to limit patent holders ability to exercise their rights even in third countries. Consultations with China “did not bring us to satisfactory results,” EU trade chief Valdis Dombrovskis told us. Some of these coercive measures are a “recurring pattern” by Chinese authorities, he added.

—Katharina Rosskopf and Jorge Valero

What's Happening

Hikes Incoming |  One week before the next EU energy ministers’ meeting, the Czech Republic proposed another compromise for a broader gas price cap — lowering the intervention threshold to €220 from the €275 suggested by the European Commission, according to a document we’ve seen. But member states still don’t see eye to eye, with one group demanding a far lower cap, while the other would prefer no cap at all.

Hikes Incoming |  The ECB is just over a week away from its next monetary policy decision, which according to investors’ expectations will bring a half-point increase, lifting the deposit rate to 2%. Still, Governing Council member Constantinos Herodotou told us that “we are very near the neutral range.”

Blocked Oil |  Some 20 vessels holding 18 million barrels of crude oil have been waiting for several days to leave the Black Sea. Turkey is preventing the tankers from continuing their voyage, insisting the ships have a letter from their insurer guaranteeing coverage while in Turkish waters. The move follows EU and UK sanctions that only allow insuring vessels carrying Russian crude if the oil is bought at or below $60 a barrel.

Energy Rodeo | Europe is likely to pull through the next two winters as it makes up for dwindling Russian natural gas flows with supplies from elsewhere and reduces demand, according to Engie Chairman Jean-Pierre Clamadieu. “For this winter, the feeling is that we’ll manage,” he said at a conference yesterday. Next year will depend on the weather, Europe’s ability to keep buying liquefied natural gas and energy conservation, he added. 

In Case You Missed It

German Nod | Germany’s top court dismissed two cases challenging the country’s approval of the EU’s €800 billion pandemic recovery fund. While there are “serious doubts” that the fund is in line with the bloc’s treaty provisions, the concerns aren’t grave enough to warrant the Federal Constitutional Court stepping in, the judges ruled.

Funds Deadlocked | The EU’s standoff with Hungary deepened as a dispute over the fate of $14 billion of funding for Budapest scuppered attempts to push through crucial aid for Ukraine. Hungarian Finance Minister Mihaly Varga said at a meeting in Brussels that his country would veto the €18 billion support package for Kyiv. Ministers dropped the adoption of Hungary’s €5.8 billion Covid-recovery plan from their agenda in response. Learn what else happened. 

Silent Chainsaws | The EU will set mandatory rules to curb its role in global deforestation through the supply of key commodities like rubber and palm oil. Environmental groups applauded the agreement, heralding the rules as a world first approach, with the World Wildlife Fund calling it “groundbreaking” and Greenpeace saying that it would lead to chainsaws falling silent. The palm oil lobby was less impressed.

Increasing Buybacks | Europe’s top banks are set to pay out more money to investors through share buybacks next year even as the ECB urges them to use the tool cautiously, according to analysts at JPMorgan. Lenders will probably spend €30.6 billion combined to repurchase their shares, 12% more than this year.

Chart of the Day

Kosovo will submit a formal application for EU membership by the end of the year, according to President Vjosa Osmani. The EU needs to move from words to deeds when it comes to welcoming new members, Osmani told reporters as she arrived at the Western Balkans summit in Tirana yesterday. Kosovo has been in “100% alignment with the EU on every single foreign policy and security decision,” she added. “Aligning on sanctions against Russia as well as in rejecting every single malign influence and factor such as Russia and China.” At the same time the bloc may grant Bosnia-Herzegovina official candidacy status as early as on Dec. 15 during a summit in Brussels, we were told. 

Today's Agenda

All times CET

• 10.30 a.m. Weekly European Commission College meeting
• 11:45 a.m. Swedish Prime Minister Ulf Kristersson and European Parliament President Roberta Metsola holds news conference
• 12.45 p.m. NATO foreign ministers meet in Bucharest, with news conference by NATO chief Jens Stoltenberg
• 2:30 p.m. Kyiv mayor Vitali Klitschko speaks to European Parliament panel