The new year started just like the old one ended: With a quest for Covid-19 measures that slow the virus’s march without smothering the economy — and people’s lives. EU members agree the best remedy is vaccination. “Most of the problems we have stem from the unvaccinated," Italian Prime Minister Mario Draghi said at a press conference yesterday evening. What the 27-member bloc can’t agree on is how to ensure everyone gets the shot. While some like Austria are moving to implement a vaccine mandate and France’s Emmanuel Macron says he wants to make life for the unvaccinated as difficult as possible, others won’t go that far. The Belgian government wants to give people a “free choice,” Prime Minister Alexander De Croo said, and Ireland “will maintain” a system of voluntary vaccination, Taoiseach Micheal Martin told reporters in Cork. While their strategies diverge, omicron rages on.

— Katharina Rosskopf

What’s Happening
Sassoli Dies | David Sassoli, the president of the European Parliament, died at 1:15 a.m. today in Aviano, Italy, where he was hospitalized, spokesman Roberto Cuillo said on Twitter. The 65-year-old was suffering from a “serious complication due to a dysfunction of the immune system,” an earlier statement said. “I’m at a loss for words,” EU Executive Vice President Frans Timmermans said in a tweet.

Digital Rules | EU governments and lawmakers hold their first talks today on the Digital Markets Act, aiming to thrash out rules that will curb Big Tech’s behavior. The European Parliament has been trying to get the new law to apply more widely to services including web browsers, virtual assistants and connected TVs.

Targeting Separatists | The EU is looking to counter secession threats by Bosnian Serbs, including possibly suspending some funds and financial assistance. Sanctions would require unanimity in the bloc, which is lacking, but we’re told that about 10 member states have asked for other options to rein in disruptive moves by Bosnian Serb leader Milorad Dodik.

Energy Consultation | The Commission extended its consultation period for taxonomy legislation, which could provide a temporary green label to gas and nuclear energy. The Platform on Sustainable Finance and the Member States Expert Group now have until Jan. 21 to deliver their feedback, which otherwise would have been due tomorrow.

German Flexibility | Germany is open to progress in negotiations on an EU-wide deposit-guarantee scheme, Finance Minister Christian Lindner told reporters yesterday in Berlin before discussing inflation risks with Eurogroup President Paschal Donohoe.  

In Case You Missed It
Macron Leading | As French elections draw closer, bookmakers favor Macron winning the presidential race in April with a likelihood of 66.2%, barely changed from 66.4% in the previous week, according to data compiled by analysis platform Wettbasis. According to an IFOP poll published yesterday, the president would receive 27% in the first round of the election, with Marine Le Pen at 17.5%

Fly Again | EU member states have agreed to lift the air travel ban on southern African countries, which will allow more travel to resume. Visitors from the region will still be subject to health measures applicable to travelers from third countries. Learn more.

Monetary Reset | The ECB may be among the most dovish central banks, but it’s still at least a year ahead of the Fed in returning monetary policy to pre-pandemic levels, according to UniCredit’s chief European economist. That’s “striking” in light of U.S. economic growth, labor shortages, an outperforming equity market and exchange-rate trends, said Marco Valli, who argued that 2022 is more likely to put the Fed behind the curve in normalizing policy than show the ECB overreacting to inflation. 

Dutch Cabinet | Dutch King Willem-Alexander swore in the new (but all in all, old) cabinet yesterday. “Rutte IV” brings back familiar names — for example, former Finance Minister Wopke Hoekstra swapping places with former Foreign Minister Sigrid Kaag, who tested positive for Covid over the weekend. 

Chart of the Day

Tensions between Russia and the West have helped push European natural gas prices to record highs. While the European Central Bank has already thrown in the towel on energy prices falling in 2022, the danger is they rise further. Should negotiations with President Vladimir Putin break down, higher gas prices could see euro-area inflation end the year substantially above the ECB’s 2% target, according to research by Bloomberg Economics. Emboldened by the persistent overshoot, there’d be a risk of hawks on the Governing Council pushing for an early end to bond buying, Bloomberg economists for the euro area and Russia write.

Today’s Agenda
All times in CET.

• 11 a.m. ECB President Christine Lagarde, German Finance Minister Lindner speak at handover ceremony for new Bundesbank President Nagel
• 4 p.m. European Medicines Agency holds regular Covid briefing
• EU Justice Commissioner Didier Reynders video call with Meta VP Nick Clegg
• EU Council President Charles Michel meets French President Emmanuel Macron in Paris