As clouds continue to gather over the European economy, governments are trying to send reassuring signals about the readiness to weather the turbulence. Today, finance ministers meet as markets are starting to penalize sovereign debt from southern members and Russia continues to squeeze gas supplies to the bloc. German Finance Minister Christian Lindner insists he isn’t concerned about the risk of fragmentation in the euro area, while Spanish Economy Minister Nadia Calvino said he welcomes the decisive reaction from the ECB. And Eurogroup president Paschal Donohoe said he is “absolutely confident" about the resilience of the euro area in dealing with energy disruptions and other challenges. Political statements aside, markets around the world continued to tumble as recession fears resurfaced with central banks raising rates in a struggle to tame inflation.

What’s Happening
Ukraine’s Path | The commission is set to recommend today that Ukraine and Moldova be granted candidate status in a symbolic step toward becoming EU members, we’re told. They will have to meet conditions on the rule of law, justice and anti-corruption. Georgia is also expected to get a nod once it meets certain conditions. Member states still need to sign off, but Ukraine’s odds improved after a hearty endorsement by Olaf Scholz, Emmanuel Macron and Mario Draghi during their trip to Kyiv.

Zero Gas | Europe risks running out of natural gas stockpiles in the middle of peak winter demand should Russia’s supplies via a critical pipeline stop completely, according to researcher Wood Mackenzie. In the worst-case scenario, where the Nord Stream pipeline to Germany is shut totally, Europe will fail to reach storage levels the EU has ordered by the start of the heating season in November.

Hungary’s Limbo | All eyes are on Hungary which threatened to stall the EU’s efforts to agree on a global minimum tax, just as the bloc was on the verge of a breakthrough after negotiating tweaks to get Poland’s backing. Budapest’s reversal in position from last year is a blow to the delicate and drawn-out negotiations on the international initiative on taxation.

Bring Back | Macron may need France’s most popular politician back in his team. Former Prime Minister Edouard Philippe has become the key to salvaging Macron’s second-term agenda, which is at risk from a surprisingly strong surge by left-wing opponents. Philippe’s goals stretch on a longer time frame that includes the next presidential election in 2027, even if he won’t say directly that he plans to run.

In Case You Missed It
Bond Buying | Bond-buying under any new anti-crisis tool from the ECB would probably involve selling other securities in its portfolio so purchases don’t upset efforts to curb record inflation, we are told. Policy makers are determined to neutralize any interventions in debt markets so they don’t exacerbate upward price pressures and seek to conclude work on the new instrument in time for their July meeting. We’ve also heard that Christine Lagarde told euro-area finance ministers yesterday that the new anti-crisis tool will kick in if borrowing costs for weaker nations rise too far or too fast. 

Sugar Prices | European sugar prices, already the highest in four years, will keep climbing as producers pass on higher costs and supplies remain tight, the region’s top sugar company Suedzucker said. That could further push up food prices that are near a record and have contributed to soaring inflation.

Heavy Metal Airship | Helium-filled passenger airships made by a venture backed by Iron Maiden frontman Bruce Dickinson will soon be sailing Spanish skies. Air Nostrum, a regional partner carrier for Iberia, signed an agreement with the UK’s Hybrid Air Vehicles to be the launch airline for its Airlander 10 aircraft seating 100 passengers to enter service in 2026.

Gazprom’s Win | Russian gas giant Gazprom is benefiting from soaring prices in Europe even if shipments to its biggest market are now lower, CEO Alexey Miller said in a speech at the St. Petersburg International Economic Forum. Russia’s year-to-date supplies outside the former Soviet Union, dropped 29% compared with the same period in 2021. Meanwhile, Enel sold its entire stake in its Russian unit

Chart of the Day

Europe’s biggest economies are seeing near-record amounts of solar power as a heat wave spreads across the southwest of the continent, boosting demand for electricity to keep people cool. Solar met almost a quarter of all energy demand in five of Europe’s biggest power markets on Wednesday. The increase in low-carbon generation is the culmination of years of government policies to boost green capacity and accelerating this is seen as a key way to reduce reliance on Russian gas in the next decade. By the middle of the next decade there will be times during the day when all electricity demand can be met with renewables, according to network operators in the UK and Germany.  

Today’s Agenda
All times CET.

• 2:30 p.m. Vice Presidents Dubravka Suica, Vera Jourova and Maros Sefcovic speak to reporters on the Future of Europe Conference

• Commission President Ursula von der Leyen and enlargement commissioner Oliver Varhelyi hold news conference on the membership bids by Ukraine, Moldova and Georgia

• 3:00 pm EU finance ministers hold news conference after meeting 

• Von der Leyen participates virtually in Major Economies Forum on Energy and Climate hosted by US President Joe Biden