Brussels is once again looking to London — with concern rather than any lingering affection. Officials are preparing for Boris Johnson’s government to introduce legislation within weeks to override parts of the Brexit deal that it agreed with the bloc after years of painstaking negotiations. Tensions continue to escalate and a potential trade war is looming. Foreign Secretary Liz Truss said yesterday that the UK would prefer a deal, but that Britain has to act because of the situation in Northern Ireland. The EU is ready to suspend the entire trade accord if Johnson makes good on his threats, and the bloc warned it’s prepared to use “all measures” to punish the UK if the bill is enacted.

— John Follain

What’s Happening

Hungary’s Price | Hungary told EU counterparts that it will cost at least 770 million euros to revamp its oil industry as they wrangle over a proposed embargo on Russian supplies, we’re told. Prime Minister Viktor Orban’s government said 550 million euros would be needed to overhaul its refineries to comply with the ban, and another 220 million euros for a pipeline from Croatia.

Oil Hazard | Berlin risks running out of fuel unless German officials can find a way to keep a Cold War relic from falling victim to geopolitics. A plan to ban Russian oil imports by the end of the year threatens to choke off supplies to a refinery in the town of Schwedt on the Polish border, which could cripple the capital and much of eastern Germany in the process.

Power Plan | The EU will outline today exactly how it plans to rid itself of around two thirds of its Russian gas dependence this year. It will require a raft of measures, from boosting renewables to seeking alternative fossil fuel sources, and possibly emergency caps on gas prices should prices soar again. Watch out too for a boost to energy efficiency targets and a campaign to get citizens to use less power.

Russian Gas | European energy giants are pressing ahead with plans to keep buying Russian gas as the EU’s guidelines appeared to allow them to do so without breaching sanctions. Even as conflicting messages continue to emerge from Brussels over the legality of complying with Moscow’s demands to pay for gas in rubles, Italy’s Eni said it was opening a ruble account to keep the gas flowing.

Ukraine Priority | Ukraine’s application to join the EU will be a top priority for the Czech Republic when it takes over the rotating presidency from July, Foreign Minister Jan Lipavsky told us. He said that he was convinced Ukraine could beat back Russia’s invasion because of the delivery of modern, western-made heavy weapons to Kyiv that outclass Moscow’s Soviet-era arms and older designs.

In Case You Missed It

Marshall Plan | Group of Seven finance ministers meeting in Bonn this week will discuss an aid package to cover Ukraine’s immediate financial needs, according to officials. US Treasury Secretary Janet Yellen called for a Marshall Plan for Ukraine; the EU will propose issuing joint debt and explore using proceeds from assets seized from sanctioned oligarchs to fund the reconstruction, according to a draft proposal we’ve seen.

German Guarantees | Germany is open to discussing a broad set of measures to help Ukraine rebuild once Russia ends its war, including offering EU guarantees for financing, we’re told. Berlin’s preference would be to mobilize billions of euros via the European Investment Bank, which would then issue an EU guarantee for investors.

Fracking U-Turn | Less than two years ago, Engie scrapped plans to buy US liquefied natural gas, handing a victory to environmentalists that urged the French energy giant to drop the purchase on pollution concerns. Fast forward to 2022 and that deal has been signed, along with agreements to bring American fracked gas to European shores. Here’s what changed.

Biden Support | US President Joe Biden invited the Swedish prime minister and Finnish president to visit the White House in a show of support for their bids to join NATO, and Germany said it would work to ensure the accession process is swift. Meanwhile, First Minister Nicola Sturgeon said Scotland is committed to rejoining NATO along with the EU should it gain independence from the UK after Russia’s invasion of Ukraine heightened security risks.

Green Journey | The war in Ukraine is helping to accelerate the rollout of the EU’s green agenda as climate change remains the defining challenge of our time, Commission Vice-President Valdis Dombrovskis said at the Brussels Economic Forum. Commission Official Alessio Terzi said that "people, planet and prosperity are not only compatible but inseparable" in his book "Growth for Good" launched during the forum.

Chart of the Day

The euro-area economy grew more than initially estimated at the start of the year as the region moved past a wave of Covid-19 infections and defied headwinds from the early days of the war in Ukraine. Economic output rose 0.3% in the first quarter, exceeding a flash reading of 0.2%, according to Eurostat figures released yesterday. Employment, meanwhile, gained 0.5% over same period.

Today’s Agenda
All times CET.

• 10 a.m. Microsoft President Brad Smith speaks at Bruegel think tank event
• 10.30 a.m. College meeting
• 2.40 p.m. European Parliament President Roberta Metsola meets Moldovan President Maia Sandu; 3 p.m. Sandu addresses European Parliament; 3.40 p.m. Metsola, Sandu joint press conference
• 4 p.m. Commission President Ursula von der Leyen, German Chancellor Olaf Scholz participate in summit on offshore wind in the North Sea, hosted by Danish Prime Minister Mette Frederiksen
• EU foreign policy chief Josep Borrell participates in EU-Armenia Partnership Council; meets Moldova’s Sandu at 5.30 p.m.
• French Digital Minister Cedric O and Facebook whistleblower Frances Haugen meet with European Parliament lawmakers to discuss digital law
• European Parliament debates proposal for global minimum tax
• European Parliament panel votes on Social Climate Fund
• Economy Commissioner Paolo Gentiloni in Bonn for G-7 meeting of finance ministers and central bank governors

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