All eyes are on the new round of post-Brexit talks today in Kent, England. U.K. Foreign Secretary Liz Truss will welcome Commission Vice President Maros Sefcovic for a two-day powwow to find a solution out of the Northern Ireland Protocol limbo. Ahead of their first face-to-face meeting since Truss took over the talks with the EU, she said a “pragmatic approach’’ will be required from the bloc to help fix the many problems caused by the agreement. Truss flagged last week she’s prepared to unilaterally override parts of it if talks with the EU fail. She faces a fraught choice between picking a fight with the EU that would curry favor with her Conservative Party faithful or cutting a deal to avert a trade war. Read our preview of the negotiations. -Lyubov Pronina

What’s Happening

No Clear Path | A second round of talks over the Ukraine crisis concluded without a clear path forward. The U.S. said that Russia must decide if it wants to resolve the standoff or is seeking a pretext to invade its neighbor following a massive buildup of troops on the border in recent weeks. 

Prudent Italy | Prime Minister Mario Draghi is working on a spending package that won’t require going to Italy’s parliament to ask lawmakers to revise the budget and expand the deficit, people familiar with the matter said. The measures could be announced as early as next week and would require just 2 billion euros. Any additional spending will probably come after a new president — possibly Draghi himself — is elected later this month.

Carbon Reform | The lead lawmaker steering the overhaul of the EU’s carbon market is set to propose some temporary opt-outs from a planned extension of the cap-and-trade program as soaring energy prices send shockwaves through the region’s economy. German lawmaker Peter Liese is outlining temporary exemptions from a new market for heating and transport fuels, according to a draft report we’ve seen.

Holding Back | The EU is preparing to withhold budget payments to Poland for refusing to comply with a daily fine that’s now swelled to 50 million euros. Brussels has sent Warsaw three requests for payment tied to Poland’s refusal to close a lignite mine, warning that an additional a late fee would also begin accruing.

Macron’s Ace | When France heads to the polls later this year, incumbent Emmanuel Macron has a potential ace up his sleeve: a surprisingly robust economy. His rivals may be trying to entangle him in a messy debate about identity and immigration, but the president’s supporters are urging him to lean on his economic record to defend his place in office. 

In Case You Missed It

$1 Trillion Bill | Europe will get stung this year with the biggest energy bill in a decade as hyperinflation in natural gas and power prices hits homes and factories across the continent, according to Citigroup. Using current forward prices, the region’s total primary energy bill will come in at about $1 trillion, the bank estimates.

Blame Russia | Fatih Birol, the head of the International Energy Agency, blamed Russia for an energy crunch that’s hurting economies across Europe. He said Russia could boost gas deliveries to the continent by at least a third from current levels, but it’s keeping spot sales capped despite high prices. That’s the equivalent of 3 billion cubic meters a month, or a new liquefied natural gas cargo arriving every single day.

Google’s Offer | Google offered to rein in its News Showcase service in a bid to defuse a clash with Germany’s increasingly combative antitrust regulator. The Federal Cartel Office, which last week put Google under increased scrutiny using its new powers, said the search giant has agreed to no longer integrate the news service in its search function. 

Visa Waiver | The Commission said partial suspension is needed to mitigate risks posed by Vanuatu’s so-called golden passports. The South Pacific archipelago’s investor-citizenship programs present serious deficiencies and security failures, such as granting citizenship to applicants listed in Interpol’s databases, no systematic exchange of information with the applicants’ country of origin and a very low rejection rate.

German Vaccination | Chancellor Olaf Scholz issued a strong appeal for Germans to get vaccinated against Covid-19, saying failing to do so puts others at risk as the nation grapples with the fast-spreading omicron variant. Speaking to parliament yesterday, Scholz reaffirmed his support for making shots compulsory for all adults, saying the measure is needed to ensure health-care services don’t get overwhelmed.

Chart of the Day

Germany’s population is aging and the impact is starting to get real, according to Holger Schaefer, senior economist with the IW economic institute in Cologne. In 2022, the workforce is set to shrink by more than 300,000 people as more reach retirement age than start working, and it will get worse in the coming years, he said on Twitter. By the end of the decade, there could be more than 5 million fewer workers, unless immigration can plug the gap.

Today’s Agenda (All times CET.)

• 9 a.m. EU vice president Margaritis Schinas and Home Affairs commissioner Ylva Johansson address parliament on temporary measures for migration and asylum crisis related to Belarus
• 4:30 p.m. German Chancellor Scholz to hold a press conference after talks the Dutch Prime Minister Mark Rutte
• 6 p.m. Admiral Rob Bauer, chair of NATO Military Committee, holds press conference in Brussels following meeting of NATO military chiefs
• EU financial regulations chief Mairead McGuinness meets Kristine Braden, CEO of Citigroup Global Markets Europe
• EU Vice President Valdis Dombrovskis participates in a meeting with the Trade and Technology Council Working Group via video conference
• Justice Commissioner Didier Reynders holds a video conference with Dutch Prime Minister Rutte