Europe’s energy policy is in for a wild ride. EU ministers are trying to sign off on suite of emergency measures when they meet in Brussels today, but it won’t wrap up without a spat. In the run-up, several member states had pushed the Commission to come up with a concrete plan for a gas-price cap as part of the package. But the proposal, published on Tuesday, is unlikely to ever be used because its unrealistically strict conditions are finding few fans among European leaders. Poland’s Prime Minister Mateusz Morawiecki said yesterday that he has “mixed feelings” about it, calling its high level “a cause for concern.” Spain’s energy chief Teresa Ribera went further, saying the proposal was a “mockery,” while officials at France’s energy transition ministry called it “insufficient.” - Katharina Rosskopf

What’s Happening

Cap Split | EU nations got bogged down yesterday on where to set a proposed G-7 price cap on Russian oil amid splits over how to design the plan, we’re told. The EU’s executive arm proposed a level of $65 a barrel, which Poland rejected as too generous to Moscow. Greece, with its shipping industry, didn’t want to go below $70, the upper end of the EU’s suggested range. Talks resume today, and a deal could be in the cards.

Energy Tracker | The European Council on Foreign Relations is launching its Energy Deals Tracker today, a tool providing details of energy agreements made within the EU-27 since January 2022.  Among the key findings is that Europeans in search of energy increasingly turn to the Middle East and North Africa, but also that generally the focus on clean energy sources is on the rise. 

Blocked Schengen | Austria says it will block Bulgaria and Romania from joining the Schengen area next year due to the growing number of asylum seekers reaching its territory. Chancellor Karl Nehammer first wants the governments of the two EU member states to show they are capable of protecting the bloc's external borders. 

Brexit’s Back | UK’s Chancellor of the Exchequer Jeremy Hunt said he wants to stick to the post-Brexit trade deal with the EU that former Prime Minister Boris Johnson signed, rejecting reports that Britain is considering a Swiss-style relationship with closer ties to the bloc. “I do not support, I have never contemplated any agreement which means moving away from the TCA,” Hunt said before the Parliament’s Treasury Committee.

Hungarian Funds | The Commission may suspend some of the funds allocated to Hungary as the country has failed to put into law measures meant to fight corruption and bolster the rule of law, we’ve been told. While Budapest has made progress, some issues remain. A final decision on suspending the funds would be made by EU member states next month. 

In Case You Missed It

ECB Hikes | Slovenia’s Central Bank Governor Bostjan Vasle signaled he backs another large increase in interest rates in December. The current tempo of hikes is “adequate and will continue at the next meeting,” he told Bloomberg Adria in an interview. Earlier this week, Portugal’s central bank chief Mario Centeno said that the ECB could slow down the pace. 

Parliament Cyberattack | The European Parliament website was hit by a DDoS cyberattack yesterday. A Pro-Kremlin group claimed responsibility for the incident, which was carried after the parliament adopted a non-binding resolution to declare Russia a state sponsor of terrorism, President Roberta Metsola said in a tweet. 

More Independence | Chancellor Olaf Scholz doubled down on his government’s promise to end Germany’s “one-sided dependence” on Russia and China for energy and trade, part of a sweeping rethink of the nation’s commercial ties triggered by the war on Ukraine. “The price of sitting on our hands would be incomparably higher,” Scholz said in a speech in Berlin. 

Swiss Talks | Switzerland made some progress in its long-running talks with the EU and will continue negotiations to resolve differences that derailed a previous deal. While the Swiss government noted positive developments concerning the free movement of persons and state aid, “a number of outstanding issues remain in these and other areas,” according to a statement. 

Derivatives Clearing | To reduce a reliance on the UK’s financial services sector, the EU will require derivatives traders to use accounts at clearing houses in the bloc for some transactions, we’ve been told. The Commission is expected to outline the measures next month.

License-Plate Spat | Serbia and Kosovo agreed to defuse tensions over a license plate policy, the EU’s top diplomat said yesterday. In a Twitter post, Josep Borell said that Serbia will stop issuing license plates with Kosovo cities’ designations. In return, Kosovo will “cease further actions related to re-registration of vehicles.”

Chart of the Day

Iceland’s central bank raised borrowing costs to the highest since 2010, extending one of the region’s longest-lasting tightening campaigns to bring inflation under control. The seven-day term deposit rate was increased by 25 basis points to 6% yesterday. The country is likely to suffer inflation averaging 8.3% this year, almost double the pace of 2021, according to OECD forecasts published this week, which also showed the economy outperforming all others in the Nordic region. Officials also raised their growth forecast significantly for 2023, anticipating expansion of 2.8%. 

Today’s Agenda (All times CET.)

• 10:15 a.m. Press conference with Commission President Ursula von der Leyen, Finnish Prime Minister Sanna Marin and Estonian Prime Minister Kaja Kallas from New Bauhaus Event “Into the Woods” in Finland
• 11 a.m. Lars Danielsson, Swedish ambassador to EU, speaks on priorities for EU presidency
• EU Energy Ministers meet in Brussels 
• European Parliament votes on €18 billion aid package for Ukraine
• Justice Commissioner Didier Reynders meets representatives of Twitter and Meta in Dublin, as well as Helen Dixon, data protection commissioner
• Vice President Maros Sefcovic participates in meeting of the Conference of Parliamentary Committees for European Affairs on EU-UK relations