EU leaders are bracing for heated negotiations about how to tackle the energy crisis at a Brussel summit that’s likely to last until the wee hours. The biggest sticking point is to find consensus on whether — and how exactly — to pave the way for measures to cap soaring gas prices. In a bid to curb the crisis, leaders will also look back on the Covid-19 pandemic, when the bloc broke one of its biggest taboos by mutualizing debt. While fiscal hawks are pushing back against a repeat of the recovery fund, some, including Germany, would back joint debt to prop up struggling economies. - Ewa Krukowska and Natalia Drozdiak

What's Happening

Loose Grip | Europe has worked hard to fill up gas reserves, but the inconvenient truth is that national governments have little to no control over supplies. Only about 10% of stored gas is under the direct control of public officials, according to data compiled by Bloomberg. The rest is in the hands of international trading companies, power utilities and industrial groups, and companies are free to sell to the highest bidder. 

Drone Sanctions | The EU agreed to sanction three Iranian individuals along with one entity for providing Russia with drones used to attack Ukraine. The entity, Shahed Aviation Industries, is responsible for the design and development of the drones. Meanwhile, Iran’s Supreme Leader Khamenei lauded their reputation.

Purse Strings | Germany is dragging its feet on approving €3 billion euros in loans for Ukraine and completing the release of the €9 billion package promised by the EU in May. Berlin told member states earlier this week that there was no financing gap in Ukraine until the end of the year. For that reason, it considered it unnecessary to urge EU leaders to complete the approval of the remaining tranche when they meet in Brussels today and tomorrow, sources tell us.

Gas Bill | Germany is at risk of wasting billions of euros by building out liquefied natural gas imports instead of moving toward sustainable alternatives like energy efficiency, according to a new report by think tank E3G. The country could be on the line for about €200 billion of additional costs for gas imports by the end of the decade, causing a doubling of bills for consumers, and should instead focus on more sustainable measures. 

In Case You Missed It

Martial Law | Russian President Vladimir Putin ordered the extension of martial law in four occupied zones of Ukraine and dramatically stepped up security in nearby regions as Kyiv’s forces continue to press their advance against his troops. Meanwhile, over 6 million people who fled their homes because of the invasion have since come back to Ukraine, with most returning from elsewhere in the country.

Double Digits | The euro zone’s first-ever brush with double-digit inflation was revised away by a fraction in a fuller sample of data for September that still revealed rampant price pressures bearing down on the region. The annual rate of increase, a record in the history of the single currency, is now measured at 9.9% instead of 10%, Eurostat said yesterday.

Sweet Vodka | Italy’s Silvio Berlusconi said he’s exchanged letters and gifts with Putin, according to audio obtained by an Italian newswire, underscoring how the country’s new governing coalition may come under pressure from within to soften its support for Ukraine.

Swedish Legacy | Sweden’s new government condensed its environment ministry in a move that critics say sets the stage for policies that threaten the climate targets. The country’s legacy as a front-runner on climate matters is coming under question after Prime Minister Ulf Kristersson decided the new environment minister will work under the ministry for enterprise and energy. 

Trade Plunge | Brexit resulted in a “substantial negative impact” for trade in both directions between the EU and the UK, according to Ireland’s Economic and Social Research Institute. Trade from UK to the EU dropped 16%, while there was a 20% decline in trade from the EU to the UK, compared to a no-Brexit scenario, the group said yesterday.

Chart of the Day

Inventories of diesel, the fuel that powers vast parts of the European economy, are forecast to plummet this winter as supplies from Russia are cut off. The amount stored in northwest Europe will sink to 210.4 million barrels in February, the lowest it has been since at least 2011, according to consultancy Wood Mackenzie. 

Today's Agenda (All times CET.)

• 9:45 a.m.: Press conference with NATO Secretary General Stoltenberg and Swedish Prime Minister Kristersson in Brussels
• 12:30 p.m.: EPP leaders gather at pre-party summit in Brussels
• 12:30 p.m.: Renew leaders gather at pre-party summit in Brussels
• 2:15 p.m. EU leaders arrive for summit in Brussels