U.S. President Joe Biden has sparked new tensions with his attempt to defuse nervousness about Russia’s military build-up on the border with Ukraine. Eastern European countries reacted critically to his proposal that a handful of NATO allies could meet with Russia on the issue. We’re told that one government in the region is furious and seeking immediate clarification, and that the unease on the eastern flank, once dominated by the Soviet Union, centers on just what kind of concessions might be made. The worry is over any political guarantees, as well as potential curbs on NATO’s freedom of movement and its ability to carry out operations. Biden meanwhile moved to reassure Ukraine, pledging not to hold talks about the country’s future without its representatives at the table.

— Jorge Valero and John Follain

What’s Happening
Tweaking PEPP | The European Central Bank is studying whether to tweak how it reinvests its emergency bond purchases to help countries weather future market turmoil, we are told. It could expand the period of time in which it rolls over maturing securities and apply more flexibility to the geographic allocation of such buying in the pandemic bond-purchasing programme (PEPP).

Stimulus Exit | Our latest poll of economists suggests that the ECB will seek to cushion its exit from emergency bond-buying next year before a stronger inflation outlook allows for an end to all quantitative easing in 2023. Policy makers will decide on Thursday to stop net purchases under their 1.85 trillion-euro pandemic plan in March, according to the survey, with a temporary boost to the pace of its regular program expected to soften the impact.

French Presidency |  After Emmanuel Macron outlined his priorities for France’s presidency of the EU, journalists mostly quizzed him about the clash between holding the rotating post for the first half of 2022 and running for re-election in April. He could have postponed France’s turn to avoid mixing national politics with the bloc’s broader agenda, and senior officials advised him to do that, but he chose not to, people familiar with the discussion told us.

Platform Problems | Shares in food delivery companies slumped yesterday after the EU proposed rules that would push digital platforms to classify workers as employees rather than self-employed. The move could cost the gig economy 4.5 billion euros more a year. Jobs Commissioner Nicolas Schmit said a failure to hold digital platforms to the same social protections standards as other firms would open a “Pandora’s box.”

Foot Dragging | The Commission isn't dragging its feet on keeping Poland and Hungary in line with the rule of law, according to its top budget official. Gert Jan Koopman told lawmakers that both countries have to respond by the end of January to letters warning that EU funds could have been subjected to corruption or fraud.

In Case You Missed It
Transatlantic Tech | Margrethe Vestager used a trip to Washington to nudge her American colleagues to implement tougher rules on data protection. “It is high time,” she said, “for the land of the free to have a federal digital privacy law.” The EU’s digital and trade chief also pushed the U.S. to use EU rules on illegal content as inspiration to fight the “dangers posed by algorithmic amplification” evidenced by the storming of the Capitol and a Facebook whistleblower’s revelations.

China Spat | The EU raised concerns over a growing dispute between Lithuania and China to the World Trade Organization. China has applied “unannounced sanctions” on Lithuanian products, the EU told WTO Director-General Ngozi Okonjo-Iweala, who discussed it with Chinese Premier Li Keqiang, according to a diplomatic memo we’ve seen. EU requests for meetings with Chinese officials in Beijing have been turned down, citing Covid-19.

Amazon Hit | Amazon was fined more than 1.1 billion euros in an Italian antitrust probe that accused the retail giant of “harmful” practices, one of the largest penalties handed out by a European regulator. The U.S. multinational, which said it will appeal, leveraged its dominant position to force companies to use its logistics services, according to the Italian regulator.

City Hopes | The City of London’s top representative is hopeful an agreement will be reached with the EU on the recognition of the equivalence of their regulatory regimes in financial services. Vincent Keaveny, the new Lord Mayor of London, also told us that “we’ve worked out how to manage Brexit on a day-to-day basis.”

Croatian Accession | EU justice and interior ministers gave “unanimous support” to Croatia’s accession to the Schengen area. Member states agreed the Adriatic nation, which joined the EU in 2013, has met all the conditions to take the first step toward entering the border-free area.

Chart of the Day

Austria announced yesterday that citizens will face fines of up to 3,600 euros from February if they don’t get vaccinated against Covid-19. With a relatively low 74% of its population having received the required jabs, Austria was the first major country to make inoculation mandatory, sparking protests. Some European countries have made the shots obligatory for certain professions, while Greece followed the Austrian example but only for citizens over 60s.

Today’s Agenda
All times CET.

• 11:30 a.m. NATO’s Stoltenberg, French Foreign Minister Le Drian and French Defense Minister Parly news conference in Paris
• 12 p.m. German Foreign Minister Baerbock news conference with Polish counterpart after talks in Warsaw
• 1:30 p.m. German Chancellor Scholz, French President Macron news conference after talks in Paris
• 4 p.m. Scholz, Commission President von der Leyen news conference after talks in Brussels
• 5:30 p.m. Scholz talks with Council President Michel in Brussels, followed by a joint news conference
• 8 p.m. Scholz, Stoltenberg news conference after talks in Brussels
• EU justice and home affairs ministers meet in Brussels
• EU foreign policy chief Borrell in Liverpool, U.K., for G-7 ministers meeting