Starting in October, investors will be able to get their hands on EU bonds stamped with a green label showing that their money will only be used to fund environmentally friendly projects across the region. With the bloc set to become the biggest green issuer in the world — using the assets to finance almost a third of its landmark 800 billion-euro recovery plan — there will likely be strong appetite from increasingly sustainability-conscious fund managers. Indeed, they can invest confident that the proceeds won't be used to fund gas or nuclear power projects. There is one drawback though — the debt won't yet be issued under the bloc’s own green-bond rules, which it wants to become the gold standard globally, as those still need to be signed off by the EU parliament and member states. - John Ainger and John Follain

What’s Happening

Fine Poland | Poland faces fines for failing to meet an EU ultimatum to halt a controversial regime to discipline judges, further escalating a clash over the rule of law in the bloc’s biggest eastern member. The European Commission will ask the EU Court of Justice for financial penalties against Poland for ignoring a binding court order in July to “immediately suspend” its judicial discipline system.

Debt Question | The candidates aiming to succeed Angela Merkel have been mostly silent on a key topic for Germany: how to finance the spending needed to retool the country for a digital, climate-friendly future. For now, the parties are talking publicly more about the need to reinstate debt controls, even as they quietly explore ways to get around those limits.

Hungarian Casinos | Prime Minister Viktor Orban, whose government is also under pressure from the commission, extended his allies’ Budapest casino licenses until 2056  — acting less than a year before hotly contested parliamentary elections. Orban, who will seek a fourth term next year, is facing the strongest challenge yet from opposition forces.

No Renegotiation | Commission Vice President Maros Sefcovic travels to Northern Ireland today for several days of talks focused on resolving the post-Brexit dispute with the U.K. Sefcovic insisted ahead of the trip that this can be done within the Northern Ireland Protocol, telling reporters the EU “is not aiming to renegotiate.”   

Europe 2050 | The EU should focus on forging strong regulations for emerging technologies like blockchain and energy storage, securing access to critical raw materials and building a strong defense capability, according to an annual strategic report the commission releases today. The chaos in Afghanistan points to "the need to provide the EU with a greater ability to act on defense and security matters," Sefcovic said.

In Case You Missed It

E-Identity | Covid-19 may help in making progress on digital identities for EU citizens. European Council President Charles Michel said at an event in Estonia that he’s convinced talks with the commission and parliament will make “a lot of progress” — and added it helps that the pandemic showed the digital approach offers “very concrete and useful solutions.”  

Record Low | Merkel warned that the Social Democrats would lead Germany in the wrong direction in an unusually direct intervention in the election campaign, as her conservative bloc slumped to a new low. Support for the Christian Democrat-led bloc dropped two percentage points to 19%, its lowest level in any voter survey in the post-war era. The SPD gained two points from a week ago to 25%.

City Erosion | London’s role in the global financial system will be eroded further without changes to taxes, visas and international investment, according to one of the City’s main lobbying groups. TheCityUK called for more deals with international regulators, after the post-Brexit trade deal with the EU left out the industry, with talks on equivalence making little progress.

Post-Covid Boost | Higher vaccination levels appear to be boosting France’s economic outlook, with confidence surveys and key indicators nearing pre-pandemic levels this summer.

Chart of the Day

European countries could face severe drought twice as frequently in the coming decades if they fall short in cutting emissions, according to new research that shows how shifting rain patterns will expose more people to climate risk. A study by the journal Frontiers in Water signals risks for agricultural yields, hydropower generation and river transportation. 

Today’s Agenda (All times CET.)

• 10.30 a.m. Weekly meeting of College of European Commission
• Maros Sefcovic, vice president of the commission, visits Northern Ireland for talks on post-Brexit clash 
• Ylva Johansson, commissioner for home affairs, is in London for meeting of G-7 interior and security ministers