Beyond fears of energy rationing and wild price spikes, EU energy ministers on Friday will also confront the risk of energy markets breaking down. Several hundred local German utilities are coming under strain and need support, according to the head of the country’s largest energy lobby group.

Aside from fanning inflation, the crisis is sucking up capital to guarantee trades amid wild price swings. European energy trading is being strained by margin calls of at least $1.5 trillion, putting pressure on governments to provide more liquidity buffers, according to Norway’s Equinor.

Countries like Sweden and Switzerland are already acting to prevent a “Lehman” moment, as power companies face sudden cash shortages. Spain’s deputy prime minister Teresa Ribera said the EU should take action to ease liquidity woes utilities are currently facing, suggesting a clawback mechanism like Spain uses to curb power costs.  

What’s Happening
Pollution Looming | Poland may consider distributing anti-smog masks this winter as limited supplies and high prices of gas and coal make it more likely that people will resort to burning trash to heat their homes. “Of course the smog is a problem and we can’t play it down,” said the country’s health minister, Adam Niedzielski. 

Military Service | Latvia moved closer to reintroducing military conscription after scrapping it 15 years ago, as the country seeks to bolster its defenses to deter Russian aggression. The government gave preliminary approval for the measure yesterday. Once approved by parliament, conscription would be back in place from next year and apply to men aged 18 to 27. 

Purchase Postponed | Italy’s state-backed lender is leaning toward postponing its offer for Telecom Italia’s network until after elections on Sept. 25. Mario Draghi’s government discussed for months a potential merger between the network and a smaller, state-backed rival. Cassa Depositi e Prestiti was expected to make its bid around mid-September but political uncertainty surrounding the vote suggests a delay.

Czech Race | Petr Pavel, a retired NATO military officer, launched his campaign for the Czech presidency as a potential front-runner in next year’s contest, which could see him face off against the country’s controversial former billionaire premier.

In Case You Missed It
Anti-Corruption Agency | Viktor Orban signed a decree to establish an anti-corruption agency, a potentially bold step to address graft and rule-of-law concerns that have blocked crucial EU funding. The agency will be tasked with intervening in cases where Hungarian authorities have failed to prevent “fraud, conflict of interest, corruption and other illegalities or irregularities,” according to the decree.

Merger Axed | Illumina’s $7 billion takeover of cancer-test provider Grail Inc. was vetoed by the EU because the deal would have “stifled innovation and reduced choice” in the emerging market for blood-based early cancer detection tests. Illumina, whose proposed remedies were deemed insufficient, said it plans to appeal.

Russian Visas | The EU proposed to make it more expensive and harder for Russian tourists to travel to the bloc, in a move that will likely increase tensions between Moscow and Brussels. “Russian citizens should not have easy access to the EU,” Commissioner Ylva Johanson, in charge of home affairs, told reporters.

Gas Savings | Italy published a plan to reduce gas consumption by as much as 8.2 billion cubic meters this winter. It involves increasing output from coal and other power stations, and shortening winter heating in houses and offices by two weeks. The government even encouraged citizens to turn off stoves once the pasta water starts boiling.

Chart of the Day

• European households will benefit from at least 375 billion euros in government aid to stem whopping energy bills this winter, yet there’s a risk the flood of spending won’t bring enough relief. The divergent solutions to Russia’s squeeze on natural gas supplies may end up being only temporary fixes since wholesale prices are set to remain far above historic norms. In August, the average price offered to domestic customers in the largest European countries was 67% higher than a year ago for electricity and 114% higher for gas, according to consultancy VaasaETT.

Today’s Agenda
All times CET

• 10:30 a.m. Meeting of the College of Commissioners

• EU health ministers meet in Prague

• Economy Commissioner Paolo Gentiloni and Financial Regulation Commissioner Mairead McGuinness speak at Bruegel think tank