EU countries are worried that Germany’s €200 billion borrowing plan will reopen economic divisions the bloc had managed to bridge during the Covid crisis. “While Germany can afford to borrow 200 billion euros on financial markets, some other EU member states cannot,” Internal Market Commissioner Thierry Breton told finance ministers yesterday. Germany’s Christian Lindner countered that the aid is spread over several years and won’t be fully used if not needed: “We’re showing Putin that we’re using our economic strength to protect ourselves.” With no meeting of the minds on the issue, any emerging divergence within Europe could further hobble an economy that is already at risk of falling into recession over the winter.

What’s Happening
Sanctions Hitch | EU countries got closer to a deal on a new sanctions package against Russia amid pressure to punish the countr for escalating its war in Ukraine and illegally annexing four territories there. The key remaining hitch has been an accord on details of a price cap on Russian oil sales to third countries, where there’s been pushback from some seafaring nations.

Brexit Talks | The EU and UK re-started talks over their post-Brexit relationship, in a sign tensions may be easing eight months after negotiations reached a stalemate. While occasional contact over technical aspects of the Northern Ireland protocol have continued, the Commission said that this week marks the first meaningful talks since February.

Debt Solidarity | Commissioners Breton and Paolo Gentiloni wrote a joint op-ed arguing the current energy crisis calls for the issuance of joint-guaranteed debt similar to what was done during the pandemic. “This is an opportunity to reaffirm — through determined action — the principles of solidarity and acting together.”

Gas Cutback | Natural gas prices in Europe fell amid signs the continent will be able to navigate this winter with sufficient inventories, an influx of LNG and steps taken by the EU to contain the crisis. Meanwhile, Gazprom told European customers that part of the Nord Stream network could still transport fuel — but only on the new pipeline that Germany ditched in February in protest over Russia’s invasion.

Real Estate | Russia’s invasion of Ukraine caused energy and food prices to skyrocket, prompting central banks to unleash their most aggressive round of monetary tightening this century and threatening the foundations of Europe’s decade-long real estate boom. With a funding gap looming, landlords could turn into distressed sellers.  

In Case You Missed It
Euro Adoption | Bulgaria’s political limbo could complicate the country’s path to joining the single currency, Deputy Prime Minister Atanas Pekanov told us. “It is definitely more difficult to go through all the processes sufficiently if you don’t have a stable government,” he said, although he stood by a 2024 target date. 

Hungarian Funds | Hungary’s parliament approved the first of more than a dozen anti-corruption measures to unlock billions in EU funds. The vote was held just hours after lawmakers started to debate the bill, underscoring Prime Minister Viktor Orban’s rush to access money seen as crucial for Hungary’s battered economy. Parliament is all but certain to back four additional anti-graft bills today.

Latvian Government | Latvia’s president tapped Prime Minister and Putin-critic Krisjanis Karins to start talks on forming a new government. President Egils Levits demanded a detailed list of reforms before he formally nominates a prime minister after Nov. 1. 

German Reparations | Poland’s foreign minister signed a diplomatic note to Berlin yesterday, officially seeking World War II reparations from Germany.  The Polish government released a controversial report last month, estimating the costs of damage from the Nazi regime at about $1.3 trillion. 

Nokia Scandal | A government body found that the Dutch prime minister’s office didn’t archive text messages on his old Nokia phone sufficiently because Mark Rutte “forwarded or paraphrased chat messages and then deleted the original chat message.” He has since switched to an iPhone.

Chart of the Day 

The European market for Russia’s seaborne crude is drying up as sanctions draw nearer, and the country’s Asian customers aren’t picking up the slack like they once were. With just over two months until an EU ban comes into effect, shipments to the bloc plus the UK are down by about 60% from where they were before Moscow’s troops invaded Ukraine. Customers in northern Europe in particular have slashed their purchases.

Today’s Agenda 
All times CET.

• 2 p.m. German Chancellor Olaf Scholz, Dutch Prime Minister Rutte hold news conference after German-Dutch “climate cabinet”

• 2:30 p.m. Parliament press conference following the vote on the EU common charger proposal

• Commission President Ursula von der Leyen meets with French President Emmanuel Macron

• Climate chief Frans Timmermans attends pre-COP27 events in Kinshasa, Democratic Republic of the Congo 

• EU foreign policy chief Josep Borrell speaks to the European Parliament on protests in Iran

• College of Commissioners meeting in Strasbourg