Poland’s standoff with the EU may soon have concrete economic consequences as the country edges closer to becoming the first to be punished with a sanction procedure. The nation is refusing to comply with a ruling to close its controversial Turow lignite mine, and now owes more than 50 million euros in cumulative daily fines. As we told you Wednesday, the Commission is preparing to offset that penalty against EU funds allocated to Warsaw. The EU executive said yesterday that Poland has until Jan. 18 to meet its obligations — or in the first instance it would lose around 14 million euros plus penalty interest as early as the end of January. “There is an inevitability to the fact that when the Court of Justice has issued a fine to a member state, that money will one way or another be paid to the EU budget,” said Eric Mamer, the Commission’s chief spokesperson. - Jorge Valero

What’s Happening

Confronting Russia | The U.S. is putting pressure on European allies to agree on expanding sanctions against Russia, worried about slow progress despite weeks of talks to try to ward off a possible invasion of Ukraine, people familiar with discussions held this week told us. Presenting a united front on economic deterrence is a crucial lever in attempts to steer President Vladimir Putin away from military action, especially as there are no set dates for more talks.

Sanctions Blocked | Meanwhile, the U.S. Senate blocked a measure to impose new sanctions on the Gazprom-owned Nord Stream 2 pipeline after the Biden administration warned it could disrupt allied unity in the confrontation over Ukraine. The measure by Republican Senator Ted Cruz of Texas, which needed 60 votes to pass, failed on a vote of 55 to 44. “Russia has nakedly and unequivocally used energy as energy blackmail,” Cruz said.

Gas Link | The pipeline that will bring Russian gas to Germany still requires regulatory approval, and Josep Borrell warned yesterday that’s not the only issue. Referring to Moscow’s threatening behavior toward Ukraine, the EU’s foreign policy chief said that “you cannot imagine that we’re thinking on the one hand of imposing sanctions just in case and, on the other, opening the infrastructure.”

Rare Behavior | EU competition chief Margrethe Vestager said she’s “eagerly awaiting” Gazprom’s answers to questions about supply shortages, calling the Russian company’s restrictions on gas supply as European demand soars “rare behavior.” EU lawmakers called for a probe into whether Gazprom is abusing its power.

Tighter Sanctions | Lithuania is lobbying for tighter sanctions on Belarus’s potash industry as Alexander Lukashenko’s regime reaps the benefits of record-high fertilizer prices. EU sanctions potash from Belarus with potassium content of less than 40% or more than 62%, only about a fifth of Belarusian potash sales to the bloc in 2020.

Right Stimulus l Euro-region finance ministers on Monday will asses the impact of national and European stimulus packages, and compare the results against partners like the U.S. A senior EU official said the single-currency area’s policy package was quite well calibrated as it kept the economy afloat and saved jobs without creating imbalances.

In Case You Missed It

Ghost Flights | The Commission yesterday defended its “use-it-or-lose-it” airport slot rules after complaints by airlines including Lufthansa, which said the requirement forces it to fly empty planes, causing unnecessary carbon-dioxide emissions. Rivals like Ryanair accused the German carrier of exploiting climate issues to choke competition.

Deal Vetoed | Hyundai’s bid for Daewoo Shipbuilding was vetoed by the Commission yesterday over fears it would create an excessively powerful producer of liquefied natural gas carriers. The combined firm “would have been by far the largest player in the world,” facing competition only from Samsung, the EU executive said.

Diesel Shipment | European refiners are planning to send more diesel than usual to the U.S., where inventories are low and a cold snap has gripped the Northeast. Two relatively large tankers have been provisionally booked to ship more than 1 million barrels of ultra-low-sulfur diesel to the East Coast, according to fixture reports we compiled.

Bond Record | Europe’s debt market broke a record set in early 2020 with $113 billion of sales in a single week as borrowers rush to get ahead of rising interest rates. Portugal, Ireland and discount airline Wizz Air all raised funding. Jumbo-sized deals from supranational and sovereign issuers like Spain, French agency CADES and the European Financial Stability Facility also helped fuel the market’s fast start to the year.

Chart of the Day

Unlike the U.K., Germany isn’t facing empty supermarket shelves and that’s thanks to its migrant workers. Skilled migrants are filling a rising share of jobs for which companies have struggled to find workers — especially truck drivers — the Cologne Institute for Economic Research said in a report. In Britain, meanwhile, Brexit has exacerbated acute supply disruptions by choking off access to workers from the EU.

Today’s Agenda (All times CET)

• 12:45 p.m. Home Affairs Commissioner Johansson news conference in Berlin with German Interior Minister Faeser
• 2:30 p.m. French Foreign Minister Le Drian and EU foreign policy chief Borrell news conference after EU foreign ministers talks in Brest, France
• U.K. Foreign Minister Truss hosts Commission Vice President Sefcovic in England to discuss the Northern Ireland protocol
• Economy Commissioner Gentiloni holds conference call with CEO of Brussels Airlines