The European Parliament is gearing up for a vote on the polarizing topic of whether gas and nuclear energy can — under certain circumstances — be considered as green. Their inclusion in the EU’s Taxonomy, a list of economic activities seen as in line with the bloc’s goal of climate neutrality by the middle of the century, has drawn heavy criticism from scientists, environmental campaigners and even the environmental investment industry who say it tarnishes the EU’s ambition to set the “gold standard” for green finance. The discussion has heated up even more since Russia’s invasion of Ukraine, with the region wanting to rid itself of fossil fuels from Moscow, while the role of gas as a bridge fuel from coal has been brought into question amid soaring prices. The crucial vote is expected to be tight and depends not only on how many deputies break with their country’s stance, but also on how many actually turn up.

— John Ainger and Katharina Rosskopf

What’s Happening

Conditional NATO | NATO paved the way for Sweden and Finland to join, but Turkey is threatening to veto their accession. The country will not ratify membership of the alliance for the applicants unless they combat terrorism and extradite suspects, Foreign Minister Mevlut Cavusoglu has said.

Johnson Clings On | Boris Johnson is digging in, after the resignation of two of the most senior members of his government. The prime minister appointed Nadhim Zahawi as his new Chancellor of the Exchequer, replacing Rishi Sunak, while Steve Barclay takes Sajid Javid’s former role as health secretary.

Open Arms | The European Parliament approved Croatia’s entry into the euro area with 539 votes in favor, 45 votes against and 48 abstentions. With that, the newest EU member state has taken the next hurdle to introducing the common currency on January 1. 

Work-from-Home | The Dutch parliament approved legislation to establish working from home as a legal right, making the Netherlands one of the first countries to grant remote working flexibility by law. The legislation still needs a nod from the Dutch senate before its final adoption.

Icelandic Hopes | Iceland’s central bank governor, Asgeir Jonsson, said he would welcome a course of interest rate hikes by the ECB as the Nordic island nation mulls its own further tightening to tame inflation. “That would make our life easier,” Jonsson told us. He praised the US Federal Reserve for its accelerated pursuit of rate increases. 

Chip Plants | Skeptics may be critical of chipmaker Intel’s transition into making the most cutting edge semiconductors, but the East German town of Magdeburg is banking on it. Intel chose Magdeburg — a city still struggling to close the productivity gap with the west of the country — as the home of its European expansion. Read more about whether the city and its savior, Intel, can both restore their former glory.

In Case You Missed It

Climate Emergency | Italy declared a state of emergency in five northern and central regions, as drier-than-usual conditions and an early summer heat wave wreak havoc on agriculture and power supplies. The government led by Prime Minister Mario Draghi will set aside 36.5 million euros in drought relief funds. 

Gas Bailout | Germany’s cabinet rushed through legislation allowing it to rescue struggling energy companies as Russia’s squeeze on gas supplies rips through the industry and threatens the wider economy. Uniper, whose business depends on cheap Russian gas, is set to be the first to receive government support. Officials said the company needs as much as 9 billion euros.

Not for you | Spain’s planned tax on utilities’ windfall profits will be designed so that it will be paid by power companies and not passed on to customers, Deputy Prime Minister Teresa Ribera told local tv. Ribera reaffirmed Spain aims to set up the new levy so it can take effect from January 2023. 

Balkan Hopes | If North Macedonia approves an EU proposal for a deal with Bulgaria, it can hold first an intergovernmental conference — the formal start of EU negotiations — within days, European Council head Charles Michel said at a news conference in Skopje yesterday. The proposal will be discussed in the North Macedonian parliament. 

US Pressure | The US government is pressuring the Netherlands to ban ASML from selling to China mainstream technology essential in making a large chunk of the world’s chips, expanding its campaign to curb the country’s rise, we’ve heard. The moves risk a newly cozy relationship between the EU and US on tech and trade.

Chart of the Day

The Spanish government will allocate an extra 1 billion euros to the military this year as part of its pledge to raise defense spending. The increment is in line with Spain’s commitment to beef up its defense budget to as much as 2% of gross domestic product over this decade. NATO members agreed in 2006 to spend at least that on defense, but Spanish military spending currently stands at 1.02%, the lowest of any member of the alliance except Luxembourg.

Today’s Agenda
All times CET.

• 11:15 a.m. European Parliament press conference presentation of the priorities of the Czech Presidency
• Commissioner Jutta Urpilainen visits New York to participate in the High-Level Political Forum and the UN retreat
• Commissioner Kadri Simson delivers a keynote speech at the Connecting Green Hydrogen Europe 2022 Conference and at the REPowerEU conference ‘Regional Partnership for Accelerated Energy Transition