European officials are pushing back on an idea promoted by US Treasury Secretary Janet Yellen that’s aimed at setting a price cap on Russian oil sales. One alternative would involve easing the EU’s ban on insurance for crude shipments from Russia by linking it to prices — a step that would require reopening the penalties text that took weeks of agonizing talks to hash out. Yellen wants to avoid spillover effects from high oil prices but some European countries are leery of anything that could reignite already settled arguments and weaken the sanctions regime. Meanwhile, a separate Italian proposal to cap natural-gas prices in Europe is gaining traction across the region as countries increasingly see it as the “only solution” to soaring costs, Energy Minister Roberto Cingolani said yesterday.

— Katharina Rosskopf and Kevin Whitelaw

What’s Happening

Gas Alarm | Germany is preparing to trigger the second stage of a three-stage emergency gas plan, a person familiar with the matter told us, in a move that may mean passing along higher prices to industry and households. The government in Berlin is seeking to reduce gas use to shore up inventories after Russia cut deliveries last week through a key pipeline by about 60%.

Rate Demands | The ECB should exit sub-zero interest rates after the summer, according to Governing Council Member Peter Kazimir. “Negative rates must be history by September,” the Slovak official told reporters in Bratislava yesterday, adding that there’s a consensus that a half-point hike that month is “highly probable.”

Green Food | The EU is sticking with its aim of halving the use of chemical pesticides by 2030, even as agriculture comes under pressure from shortages sparked by Russia’s war on Ukraine. The commission will propose legally binding targets to implement its plan, which focuses on safe alternatives, EU officials told us.

Not With Us | The French Republicans party won’t form an alliance with President Emmanuel Macron after his group lost its outright majority in the lower house of parliament on Sunday. “Those who voted for us didn’t do it so that we would enter some kind of coalition,” party head Christian Jacob told reporters after meeting with Macron at the Elysee palace.

Swedish Identity | Amineh Kakabaveh, a former Peshmerga fighter, is at the center of the dispute with Turkey over Sweden’s NATO bid. The Swedish lawmaker cast a key vote that saved Magdalena Andersson’s government and, in return, won promises to expand cooperation with a Syrian Kurdish political party, whose armed wing Erdogan wants Sweden to designate a terrorist entity. Read more here.

In Case You Missed It

Kaliningrad Crunch | Nikolai Patrushev, the secretary of Russia’s Security Council traveled to Kaliningrad amid a growing standoff with the EU after Lithuania blocked the transit of sanctioned goods to the Baltic exclave. The Foreign Ministry in Moscow threatened “retaliatory measures” but Vilnius rejected Russia’s charges of a blockade.

Ukraine Rebuilding | Ukraine may need as much as 1 trillion euros in aid to repair the damage inflicted by Russia’s invasion, according to Werner Hoyer, the president of the European Investment Bank, the EU’s lending arm. Europe “will have to play the biggest role” in this effort, he told  journalists in Frankfurt.

Italian Split | The largest party in Italian Prime Minister Mario Draghi’s governing coalition split yesterday after Foreign Minister Luigi Di Maio quit over its refusal to back military support for Ukraine. Di Maio said that he was leaving the Five Star Movement, which he used to lead, and would start a new parliamentary group.

Google Headaches | Google brought an end to a dispute with publishers after winning regulatory approval for commitments the company made in France. But it’s under investigation by Germany’s antitrust watchdog amid concerns over potentially illegal terms for the use of its maps platform. The Federal Cartel Office said yesterday it opened a formal probe after initial findings suggest that the US giant is limiting options to use alternative map providers.

Hungarian Anti-Taxers | Hungary’s parliament approved a ruling-party resolution rejecting the global minimum corporate tax, in a sign of entrenched opposition to the initiative from the eastern member state. The resolution cites the economic fallout from Russia’s war on Ukraine as a reason for rejecting the 15% minimum corporate-tax rate, which is higher than Hungary’s 9% level.

Chart of the Day

Stripping Russian diesel out of Europe’s supply-chain is easier said than done. The country remains by far the EU’s biggest external supplier, even after the war began. Soaring prices and an exceptionally tight global market are also making it hard to turn away fuel, wherever it’s from. Almost four months after the invasion of Ukraine began, European nations are still importing huge quantities of Russian fuel. So far this month, the continent has received close to 14 million barrels of diesel-type fuel from countries that used to be part of the Soviet Union, according to Vortexa Ltd. data compiled by Bloomberg. The vast majority, if not all, of that fuel originated in Russia.

Today’s Agenda
All times CET.

• 10.30 a.m. Meeting of the College of Commissioners 
• 3 p.m. Croatian Prime Minister Andrej Plenkovic addresses European Parliament
• 3:05 p.m. German Chancellor Olaf Scholz delivers a statement to the lower house of parliament in Berlin on the upcoming EU/G-7/NATO summits
• 4:15 p.m. Scholz adviser Joerg Kukies interview at Bloomberg's Future of Finance event in Frankfurt
• Commission President Ursula von der Leyen participates in the European Parliament's joint debate
• EU foreign policy chief Josep Borrell holds videoconference call with G-7 foreign ministers
• European Parliament votes on Fit for 55 measures
• Vice President Vera Jourova speaks at 2022 EU-US Defense & Future Forum in Washington