Top negotiators from the EU and the U.K. will meet again tomorrow in London to try and overcome differences over how to improve cross-border trade in Northern Ireland. Expectations are low. Downing Street continues to demand removing the European Court of Justice oversight of the Northern Ireland protocol, and the Commission’s offer to facilitate the trade of goods is seen as insufficient. Overshadowing the talks is a dispute between London and Paris over access to U.K. waters, which is getting worse. France said yesterday that it will announce retaliatory measures against Britain as soon as today, as it blamed the other side of breaching the trade deal signed with the bloc following Brexit.

— Jorge Valero

What’s Happening
Poland Fined | The EU’s top court hit Poland with a record daily fine of 1 million euros yesterday for failing to comply with an order to dismantle a controversial regime for disciplining judges. It follows last month’s 500,000-euro daily penalty that Warsaw got over its failure to close a mine, as the legal dispute escalates.

Transitory inflation | The European Central Bank is set to reassure consumers facing surging prices and investors wondering about the consequences that it’s just transitory and not about to spiral out of control. The governing council is meeting today amid growing energy costs and supply bottlenecks that are likely to show an acceleration in inflation that is already the fastest since 2008.

Helping Moldova | The EU and Moldova will strengthen their bilateral cooperation today, as its government struggles with an energy crisis. The Commission offered 60 million euros to the eastern European country yesterday to cope with mounting gas prices. The bloc is worried that Russia is weaponizing its energy supplies against the country.

Costa’s Troubles | Portuguese Prime Minister Antonio Costa may face early elections after parliament rejected his minority Socialist government’s 2022 budget. In an initial vote yesterday, the Communists and the Left Bloc joined other groups to oppose the spending plan. President Marcelo Rebelo de Sousa has said that if the budget is rejected he’ll dissolve parliament, which would likely lead to early elections as soon as January. 

In Case You Missed It
Nuclear Talks | Iran said it had agreed with the EU to restart big-power talks to revive the 2015 nuclear deal before the end of November, after negotiators from both sides met yesterday in Brussels. The U.S. has long said that it’s ready to resume talks to curb Iran’s nuclear ambitions in exchange for sanctions relief. It’s still unclear when and where the talks will take place.

Digital Rules | The European Parliament can’t yet agree on which big tech firms should be targeted by the Digital Markets Act, jeopardizing a deadline to vote on the proposal this year. MEP Evelyne Gebhardt said excluding AirBnB and Booking.com would be a “red line.” Lawmakers have ditched a Nov. 8 vote and are now trying to get a deal next month. Governments are also close to agreeing on their version of the rules.

Chip Deal | Nvidia’s planned takeover of U.K. chip developer Arm could increase prices and reduce innovation, the Commission said yesterday as it opened an extended investigation. A long list of industries could suffer from the deal at a time when more and better chips are sorely needed. Rivals might not want to share information with the merged company, the regulator said.

Green Buffers | The EU will decide in 2023 whether to recommend capital relief to banks supporting a green transition, two years earlier than planned, according to banking legislation proposed yesterday. Other options are to penalize lending to polluters, or a combination of the two. The proposal comes amid growing evidence that pledges to address rising temperatures are failing to achieve significant change.

Chart of the Day

The lingering effects of the pandemic, rising energy prices and supply bottlenecks are weighing on the German recovery. The government cut its GDP forecast for 2021 to 2.6% from 3.5% expected in April. The shortfall will be partially made up next year, with 2022 growth revised up to 4.1% in from 3.6%. Europe’s economic engine will return to its pre-pandemic level by the end of March, one quarter later than expected.

Today’s Agenda
All times CET.

• 1 p.m. Press conference by Commission President Ursula von der Leyen ahead of the G-20 Summit and in the UN Climate Change Conference (COP26)
• 1:45 p.m. ECB publishes monetary policy decisions, followed by press conference at 2:30 p.m.
• Ecofin holds an informal video conference on recovery plans for Estonia, Finland and Romania. 
• Clement Beaune, French minister for Europe, and Slovenian President Borut Pahor speak at EPC event on Europe in the global arena.