Italy is facing more political upheaval. Prime Minister Giuseppe Conte will hand in his resignation to President Sergio Mattarella today to avoid a damaging defeat in the Senate and maneuver to return as the head of a new government. The idea is that by preemptively offering his resignation, Conte will then get asked to return, according to officials who asked not to be identified discussing confidential deliberations. Conte’s second government has been in turmoil since a junior ally abandoned it on Jan. 13, and the political crisis could hardly have come at a more difficult time. The Italian Treasury is starting to factor in a bigger hit to the country’s battered public finances this year as another extended lockdown holds back the recovery, Bloomberg’s Alessandra Migliaccio and Chiara Albanese report. Treasury models suggest the budget deficit may reach as much as 9.2% of output this year, according to a senior government official.

What’s Happening
Vaccine Anger | EU regulators proposed requiring drug companies to declare exports of coronavirus vaccines in advance as the bloc seeks to step up inoculations. The planned “transparency mechanism” comes after the Commission expressed “deep dissatisfaction” with delivery delays by a disclosure by AstraZeneca, which faces a fresh grilling at mid-week.

Tougher Rules | The Commission proposed stricter curbs on travel, recommending that even people visiting the EU for essential reasons be required to show a negative Covid-19 test taken at the earliest 72 hours before departure. For arrivals from countries where a worrying mutation has been detected, the EU's executive arm wants self-isolation, quarantine and contact tracing for as many as 14 days.

Lockdown Warning | Doctors in France raised the alarm as new, more contagious variants of the coronavirus spread. Prime Minister Jean Castex hinted yesterday that tougher measures might be needed to contain the disease. Meanwhile, the U.K. is “actively” working on a plan to quarantine arriving travelers in hotels to guard against infections from abroad, Prime Minister Boris Johnson said.

Inoculation Politics | Europe’s effort to ramp up Covid-19 vaccinations has opened the door to another opportunity for Russia to wield influence in its confrontation with the West. Ukraine is the biggest of only a handful of countries on the continent not to begin vaccinations, and that could have geopolitical consequences and heap pressure on its president. Read our in-depth report for more.

Pumping Money | The European Central Bank will be in the market “for an extended period of time” to ensure the economy has ample access to affordable funding to cope with the pandemic and its aftermath, President Christine Lagarde said. “The ECB will make sure that financing conditions are preserved at a favorable level,” she said at a Davos Agenda panel discussion on Monday.

In Case You Missed It
Going Green | Europe’s central banks are ramping up their efforts to support green finance as authorities contemplate how to fight climate change while rebuilding their economies after the pandemic. The latest initiative includes a fund launched by the Bank for International Settlements for green-bond investments by central banks that the ECB committed to buy into yesterday.

London Desks | Financiers in the British capital are discovering that EU warnings over the cost of Brexit are more than tough talk. TP ICAP, the world’s largest interdealer broker, was prevented from serving all its EU clients because it hadn’t completed its planned relocation of staff to Paris. Here’s more on the forced exodus from London.

Doubling Down | The newly elected leader of Chancellor Angela Merkel’s Christian Democratic party said he will stand by his support for the disputed Nord Stream 2 pipeline, despite growing criticism of the Russian gas project. Armin Laschet, a potential chancellor candidate for Germany’s conservative bloc, also criticized U.S. sanctions against the project, noting that Russia supplies American energy needs as well.

On Track | The French Finance Ministry said the EU hasn’t requested extra time for talks about changes to power-market regulations that would affect Electricite de France. The verbal intervention came after EDF shares fell the most on record yesterday after BFM Business reported that the Commission wants another six months for talks on regulatory reform.

Diplomatic Questions | EU foreign-policy chief Josep Borrell said he will travel to Moscow next week and express objections to the jailing of Alexey Navalny. Russian authorities ratcheted up the threat of prosecution after tens of thousands of people took to the streets across the world’s largest country in support of the opposition leader. 

Chart of the Day

The pandemic has probably boosted remote working permanently, according to Deloitte’s annual Readiness Report, which suggests a third of employees will work from home even after restrictions end. The survey of more than 2,000 managers and public-sector business leaders worldwide highlights how investments that allow home-working will be increasingly important. Just 22% of respondents said their organizations had the technologies they needed before the pandemic, and 42% said they developed them out of necessity during the crisis.

Today’s Agenda
All times CET.

• 11 a.m. Commission President Ursula von der Leyen speaks at the Davos Agenda Week
• 1 p.m. German Chancellor Merkel gives speech at the Davos event
• 1 p.m. Press conference with Commission Vice President Valdis Dombrovskis on the impact of free-trade agreements on the EU’s agricultural sector
• 3 p.m. French President Emmanuel Macron delivers Davos address
• 5:15 p.m. European Medicines Agency Director Emer Cooke will be quizzed by members of the European Parliament’s Environment, Public Health and Food Security Committee on vaccine authorization, availability and deployment
• EU’s climate chief Frans Timmermans participates in the Climate Adaptation Summit 2021
• NATO Secretary General Jens Stoltenberg will meet with the foreign affairs ministers from Greece and Lithuania